The persistent backlog of pending cases inventory ranging from the district
courts up to the supreme court paved the way for the establishment of
Alternative dispute mechanisms in India. In simple words mediation is a way to
resolve conflicts between two or more parties with the support of a neutral
party to arrive at a compromise in simple words is mediation.
The meaning of mediation if applied in the literal sense, India is no new to
this system of mediation, with gram panchayats serving as the mediator. There
exists another contention that the earlier forms of Mediation, it was
historically more ancient than the present-day Anglo-Saxon adversarial system of
However, the legal recognition of Mediation began with the Industrial Disputes
Act 1947. Section 4 of the act appoints conciliators who are "charged with the
duty of mediating in and promoting the settlement of Industrial disputes." An
amendment to the Code of Civil Procedure was passed by the Indian Parliament to
insert section 89 which provides for the referring of cases pending in courts to
the ADR mechanisms including mediation.
This occurred under the
recommendations of the Law Commission of India and Malimath Committee Report But
legally, the foremost detailed training for mediators occurred in Ahmedabad in
2000, which was conducted by the American Trainers from the Institute for the
Study and Development of Legal Systems. 27th July 2002 saw the inauguration of
the first lawyer-managed mediation centre, the Ahmedabad Mediation Centre which
was formally inaugurated by the then CJI. The Amendment Act was put forth in the
year 1999. But the same was brought into effect in 2002.
But this section was
put to test in the Salem Bar Association, Tamil Nadu VS Union of India
the main issue was Whether the 1999 and the 2002 Amendments to the Code of Civil
Procedure were constitutionally valid. For this very purpose, a Committee headed
by a former Judge of the Supreme Court and the Chairman, of the Law Commission
of India was formulated to ensure that the amendments become effective and
result in a quicker dispensation of justice.
This committee filed a report which
was in 3 parts. Report one touches on the grievances relating to the amendments
of eh code and the recommendations of the committee. The 2nd report touched on
various points in connection with the draft rules for ADR and mediation. It also
is comprised of model rules. The 3rd report delves into the conceptual appraisal
of case management.
The committee also framed rules explaining the procedure for
mediation. In compliance with this judgement, the Law Commission of India
drafted a consultation paper on Alternative Dispute Redressal and Mediation
Rules 2002 which was later taken by several other high courts to formulate their
own rules for mediation.
In 2013, the mechanism of Mediation held a place in section 442 of the Companies
Act, 2013 which touches on establishing a Mediation and Conciliation Panel.
The support India showed be it intentionally or unintentionally for mediation by
becoming a signatory at the UN Convention on International Settlement Agreement
is also another step adding to the evolution of recognizing mediation.
The Commercial Courts Act 2015 by way of Amendment in 2018, incorporated
Chapter III A titled Pre-Institution Mediation and Settlement which necessitates
mediation before the institution of a suit for commercial matters. The object of
section 12A of this act was to promote speedier justice and improve India's
ranking in the Ease of Doing Business report released annually by the World
Bank. The question of whether section 12A was mandatory or directory was
subjected to judicial interpretation.
The Bombay High Court in Deepka Raheja v.
Gango Taro Vazirani
held that section 12A is not a directory but rather
mandatory. The Calcutta High Court maintained emphasis on the interpretation
of the term shall in section 12A to hold that the same is mandatory.
Madras High Court in its decision in the Shahi Exports (P) Ltd. v. Gold Star
Line Ltd., 2021, took a varied stand to consider section 12A of the Act as not
mandatory. The same was justified by the high court in lines that the right
to justice is a constitutional right and one can't be deprived of the same on
the mere basis of not instating mediation.
Such varied interpretations were settled upon with the judgment from the apex
court in Patil Automation Private Limited & Ors. V. Rakheja Engineers Private
. In this case, the bench of KM Joseph and Hrishikesh Roy answered
this issue to hold that section 12A of the Commercial Courts Act 2015 is
mandatory and any suit violating the same, the plaint of the case would be
rejected under Order VII Rule 11 of the Code of Civil Procedure. The Court
highlighted the same as a compulsory provision by touching on the legislative
intent of the Amendment Act. Moreover the language in this section, the term
shall be meant to assist the Court to hold the provision mandatory.
High Court in M/s. Micro Labs Limited V. A Santhosh upheld the decision of the
Patil Automation case and dismissed the micro lab's case as the parties didn't
undergo mediation and urgent interim relief was not contemplated.
After this case, an interesting question as to whether the plaintiff possesses
the exclusive authority to determine the necessity for urgent relief was brought
before the Madras High Court. Though the Supreme Court has taken up the matter
of section 12A's mandatory nature, there was a contrasting Judgement in the
Madras High Court in the case of Junior Kuppanna Kitchens Private Limited v.
Kuppanna Foods and others (CS (Comm.Div.)No.200 of 2022) . Thus through a
notification dated 15.06.2023, the different views in M/s. Micro Labs Limited V.
A Santhosh and Junior Kuppanna Kitchens Private Limited v. Kuppanna Foods
others case, relating to the maintainability of Commercial suits without
availing Pre-Litigation under section 12A of the Commercial Courts Act, 2015,
"When the suit is filed with the application for interim relief, (i)Whether it
has to be left to the plaintiff that whenever an application is filed,
Pre-Litigation Mediation need not be resorted to? (or) (ii)Whether the court has
to decide that the interim relief was imminently necessary to entertain the suit
without resorting to mediation? 
This case is yet to be decided.
Despite such developments, a comprehensive piece of legislation dedicated to
mediation arose only after the pandemic. The apex court in its judgment in 2020,
 directed the government to consider the feasibility of enacting an Indian
Mediation Act. Such formalization will help to have a uniform procedure. This
later led to the Mediation Bill 2021 which requires individuals to try to settle
civil or commercial disputes via mediation before approaching court. The same
got tabulated into the Mediation Act which introduces a non-adversarial process
driven by impartial mediators which thus provides an efficient and
cost-effective alternative to litigation.
The contemporaneous enactment of Mediation Act, 2023 has indeed strengthened the
ADR system and has filled the lacuna in the law, as India as a nation did not
have any standalone legislation in this arena. The act provides for community
mediation, online mediation and has even touched on pre-litigation mediation by
mandating the same. It has also focussed on the aspects where mediation is not
the permitted mode of dispute resolution.
India as a country has been a strong stakeholder in framing laws in all
concerned arenas and mediation or ADR has never been an exception. But with
regard to mediation, this is the first statute that India has for a law on
- Section 4(1) of Industrial Disputes Act
- Section 89 of Code of Civil Procedure, Amendment Act 1999
- AIR 2005 S.C. 3353
- Section 442 of Companies Act 2013
- The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018 No. 28 OF 2018
- Deepak Raheja v. Gango Taro Vazirani, 2021 SCC OnLine Bom 312
- Ganga Taro Vazirani v. Deepak Raheja, 2021 SCC OnLine Bom 195
- Shahi Exports (P) Ltd. v. Gold Star Line Ltd., 2021 SCC OnLine Mad 16514
- Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd., 2022 SCC OnLine SC 1028
- Micro Labs Limited vs. A. Santhosh (14.09.2022 � MADHC) : MANU/TN/7367/2022
- Notification No.178/2023
- M.R. Krishna Murthi v. New India Assurance Co. Ltd, (2020) 15 SCC 493, (India)
Written By: Pooja Padmanabhan