Institutional Mediation is a process of dispute resolution. The Rules for
Mediation are mentioned under Commercial Courts Act, 2015. An Amendment or new
rules passed in 2018 now makes it compulsory to exhaust the pre-institution
mediation and settlement proceedings before initiating any legal proceedings in
court. Institutional Mediation is defined under Section 12A of the Commercial
It defines the roles and procedure of the Mediator. It is a Time
Bound process which saves Time and Cost of both the parties and there are
certain guidelines fixed for the mediator to be followed. The Success Rate of
the Mandatory Mediation is 65% and 97% in Voluntary Mediation.
History of Institutional Mediation:
Israel is where Alternative Dispute Resolution [ADR] became famous in the Past.
Around 960 B.C., King Solomon served as middleman between two ladies in ancient
Israel. This Conflict is Arguably most well known custody case in History. In
the aforementioned case, 2 ladies argued over who was the true mother of the
child. A solution that would benefit both equally was put up by the King Solomon
in ancient Israel. Because of their Impartial Approach to Conflict Resolution,
Mediators are essentially required in instances that are resolved outside the
This method has been used by the mediators to resolve civil disputes
between Israeli Citizens and persons of other Nations hundreds of years later.
After Israel proclaimed its Independence from Palestine in 1948, community
mediation centers were established to settle the conflicts. These centers for
dispute mediation are crucial in reducing political tensions between the two
History of Institutional Mediation in India:
The Industrial Disputes Act, 1947, led forth specific guidelines for Out of
Court conflict resolution, this is where, mediation was formally included into
the Indian Legal System during the PostBritish Era.
The Draft Mediation Bill, 2021 was presented to the Rajya Sabha on December 20,
2021 and referred to the Parliament Standing Committee the same day in order to
further concretise a statutory framework for mandatory mediation in certain
cases of civil and commercial disputes and strengthen the mediation process in
The Standing Committee submitted its report on July 13, 2022.
Key Issues of the Bill:
Contrary to arbitration or litigation, mediation is a voluntary technique for
resolving disputes with the parties' consent that excludes their adjudication.
Pre-litigation mediation for commercial and civil disputes is required by the
Mediation Draught Bill. The mediation process, which is essentially a voluntary
mechanism, is defeated by this. If the parties are averse to mediation, it might
potentially add to the delay in the dispute's resolution.
If a corporation could be a Mediation Service Provider it is not specified in
the Draft Bill.
The Bill states that the majority of the Council's duties would be carried out
through the issuance of regulations, which must be done with the permission of
the Central Government. Only if a government decision must be made in order for
the Council to carry out its mission would it be acting in a nominal capacity.
Even the government could participate in mediation procedures in some
circumstances, creating a conflict of interest. Additionally, the Draught Bill
does not address the obligations or repercussions of failing to register a media
The Bill does not include any language addressing settlement agreements reached
after foreign mediation that took place outside of India. India signed the
Singapore Convention in August of this year, although it has not yet been
approved. The execution of cross-border settlement agreements that come about as
a result of international mediation is covered by the Convention. Neither Part I
nor Part III of the Bill address this.
The confidentiality obligations of both the disputing parties and the mediator
are discussed in Section 22 of the law. The clause, however, makes no mention of
any penalties or liabilities that might be imposed for wilful violations of this
principal goal of maintaining confidentiality.
Need for a Mediation Bill in India:
As of August 2, 2022, there were 71,411 cases still pending before the Supreme
Court of India, of which 56,365 were civil cases and 15,076 were criminal cases.
As of July 29 of this year, 25 High Courts across the nation had 59,55,907 cases
pending. 4.13 crores of cases are backlogged in lower courts. This demonstrates
how the Indian court system is overburdened due to a shortage of judges,
adaptable rules, and resources.
To clear her case backlog, India still has a
long way to go. As a result, ADR, and Mediation in particular, are indispensable
in addressing the issue of arrears and delays, making it crucial to place it
within certain regulatory constraints.
The Code of Civil Procedure or the guidelines established by the mediation
offices of several High Courts previously served as the mediation's standards of
However, the central government has just introduced a draught mediation bill
that aims to legitimise and institutionalise the mediation process in India.
With the passage of the bill, mediation may become more widely used to get quick
and enforceable remedies in an unofficial setting where the parties actively
participate. Consequently, the need for this bill increases.
The Parliamentary Standing Committee on Law and Justice has suggested some
significant amendments in the bill, although it has not yet been ratified. The
bill's passage will usher in a new era of conflict resolution in the nation, and
its passage is eagerly anticipated.
Related Landmark Cases:
Singapore Convention and its effect on Mediation in India:
- AfconsBelowLtd.v.M/sCherianVarkeyConstructions, 2010
- B.S. Krishna Murthy v. B.S. Nagraj
India is one of the 55 nations that have ratified the United Nations Convention
on International Settlement Agreements, also known as the Singapore Mediation
Convention. By establishing uniform, standardised methods to handle commercial
disputes internationally, this Convention intends to promote global trade.
However, India has not yet ratified this, which makes it crucial for India to do
so in order to benefit fully from mediation.
A settlement agreement obtained through international "commercial" mediation
would become legally binding upon ratification, in accordance with Article 3 of
the Singapore Convention. Additionally, the ratification would make domestic
laws consistent with the Convention. Additionally, Article 5(1)(e) stipulates
that the mediators must adhere to a set of norms that will guarantee a
professional and moral atmosphere for mediation.
Written By: Diva Singh