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Institutional Mediation: Evolution, Impact on Indian Law

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 Courts Act.

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 Court.

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 nations.

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 India.
 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 settlement agreement.

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 conduct.

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:
  1. AfconsBelowLtd.v.M/sCherianVarkeyConstructions, 2010
  2. B.S. Krishna Murthy v. B.S. Nagraj

Singapore Convention and its effect on Mediation in India:
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

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