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Mediation Bill 2021: Issue And Challenges

On 20 December 2021, the Mediation Bill 2021 introduced in the Rajya Sabha, with the Parliamentary Standing Committee being tasked with a review of the Bill. The committee's report finalizes and submitted to Rajya Sabha on July 13, 2022. In its report, the Committee recommends substantial changes to the Mediation Bill, aimed at institutionalizing mediation and establishing the Mediation Council of India[1].

Mediation is a voluntary collaborative process where individuals who have a conflict with one another identify issues, develop options, consider alternatives and develop a consensual agreement. Trained mediators facilitate open communication to resolve differences in a non-adversarial, confidential manner.

Unlike arbitration, which is a process of Alternative Dispute Resolution (ADR) somewhat similar to trial, mediation doesn't involve decision making by the neutral third party. Mediation is a means to resolve disputes without resorting to litigation or other adversarial modes of dealing with conflict. By seeking a "win-win" solution, acceptable to both sides, mediation promotes better understanding among disputants.

In the mediation bill 2021, section 4 define the term mediation as:

"A process, whether referred to by the expression mediation, pre-litigation mediation, online mediation, community mediation, conciliation or an expression of similar import, whereby party or parties, request a third person referred to as mediator or mediation service provider to assist them in their attempt to reach an amicable settlement of a dispute", whereas section 3(e) define institutional mediation and section 3(f) define international mediation.

The concept of mediation is not new for the Indian justice system. It is follow from the centuries in the form of panchayat system. In which respected elder of the village work as a mediator between the parties and help to resolve their dispute. Such traditional mediation continues to be utilized even today in villages.

Also in pre-colonial period, mediation was popular among the businessman. Impartial and respected businessmen called Mahajans were requested by business association members to resolve disputes using an informal procedure, which combined mediation and arbitration. Another form of early dispute resolution used by the tribe is pancha. Pancha is the wise man or leader of the tribe who generally resolve the community dispute.

Here the disputing member of a tribe meet with pancha to present their grievances and to attempt to work out a settlement. Later on British introduce an alternative dispute resolution (ADR) in India. Which use to settle a dispute between intra-governmental disputes between government agencies and undertakings, in labour disputes and in public utility services disputes. The legislature by the Code of Civil Procedure (Amendment) Act, 1999, amended section 89 of the CPC with effect from 1.7.2002 whereby mediation was envisaged as one of the modes of settlement of disputes. The amendment in Section 89 was made on the recommendation of the Law Commission of India and the Justice Malimath Committee.

It was recommended by the Law Commission that the court may require attendance of parties to the suit or proceeding to appear in person with a view to arrive at an amicable settlement of the dispute between them and make an attempt to settle the dispute amicably. Justice Malimath Committee recommended making it obligatory for the Court to refer the dispute, after issues are framed, for settlement either by way of Arbitration, Conciliation, Mediation or Judicial Settlement through Lok Adalat.

It is only when the parties fail to get their disputes settled through any of the Alternative Dispute Resolution methods that the Suit could proceed further. Thus Section 89 has been introduced to promote alternative methods of dispute resolution. Hon'ble Mr. Justice R.C. Lahoti, the then Chief Justice, Supreme Court of India constituted a Mediation and Conciliation Project Committee (then chaired by Hon'ble Mr. Justice N. Santosh Hegde). A Pilot Project on Mediation was initiated in Delhi in the month of August, 2005.

The first batch of Senior Additional District Judges were imparted Mediation Training of 40 hours duration. The trained mediators started judicial mediation from their chambers in the end of August, 2005. Thereafter, 24 more Additional District Judges have been trained as mediators during the month of September and November, 2005[2].

About Meditation Bill

The bill began with the chapter one which deal with Short title, extent and commencement. The main concept bill is started with the chapter two, under which section 2 deals with application.

This section stated that, this Act shall apply where mediation is conducted in India:
  1. All parties reside/incorporated in India
  2. the mediation agreement provides that any dispute shall be resolved in accordance with the provisions of this Act; or
  3. there is an international mediation. Section 3 deal with the definitions like section 3(f) "international mediation" means mediation undertaken under this Act and relates to a commercial dispute arising out of a legal relationship, contractual or otherwise, under any law for the time being in force in India, and where at least one of the parties, is:
    1. An individual who is a national of, or habitually resides in, any country other than India; or
    2. A body corporate including a Limited Liability Partnership of any nature, with its place of business outside India; or
    3. An association or body of individuals whose place of business is outside India; or
    4. The Government of a foreign country.

Mediation agreement:

Section 5 deal with it, mediation agreement shall be writing between parties and anyone claiming through them. It contain all or certain disputes which have arisen or which may arise between parties. Sub-section (3), A mediation agreement is in writing, if it is contained in or recorded as:
  1. Any document signed by the parties;
  2. An exchange of communications or letters including through electronic form as provided under the Information Technology Act, 2000;
  3. Any pleadings in a suit or any other proceedings in which existence of mediation agreement is leged by one party and not denied by the other.

Pre-litigation:

Section 6 said any party before filing any suit or proceeding of civil or commercial nature in any court, mandatory to first resolve their dispute through mediation process under this act. Irrespective of the existence of any Mediation Agreement. The court and tribunal may at any stage of proceeding refer the party to mediation if they request.

Disputes or matters not fit for mediation:

Section 7(1) A mediation under this Act shall not be conducted for resolution of any dispute or matter contained in the indicative list under the First Schedule. Some important point in first schedule is:
  1. Claims Against Minors/Unsound Mind,
  2. Prosecution Of Criminal Offences,
  3. Affecting The Rights Of Third Parties,
  4. Matter Relating To Levy Or Collection Of Taxes.

Withdrawal by parties from mediation. Time-limit for completion of mediation: - section 20(1) a party may withdraw from mediation at any time after the first two mediation sessions. (2) Where any party fails to attend the first two mediation sessions without any reasonable cause which resulted in the failure of mediation, the court or tribunal, in subsequent litigation on the same subject matter between the parties, may take the said conduct of such party into consideration and impose such costs as deems fit.

Section 21 (1) mediation shall be completed within a period of 180 days from the date fixed for the first appearance before the mediator. Matter where a Court annexed mediation, deal under section 26, in which the procedure of conducting mediation shall be such as may be determined under the practice directions or rules, by whatever name called, framed by the Supreme Court or the High Courts.

Confidentiality:

Section 23
  1. Subject to the other provisions of this Act, the mediator, mediation service provider, the parties and participants in the mediation shall keep confidential the following matters relating to the mediation proceedings, namely:
    1. Acknowledgements, opinions, suggestions, promises, proposals, apologies and admissions made during the mediation;
    2. Acceptance of, or willingness to, accept proposals made or exchanged in the mediation;
    3. Documents prepared solely for the conduct of mediation or in relation thereto.
  2. No audio or video recording of the mediation proceedings shall be made or maintained by the parties or the participants including the mediator.
  3. Any communication or information which use during the mediation, shall not be used as evidence by any party in any court or tribunal.

Enforcement of mediated settlement agreement:

28(1) Mediation signed by the parties and authenticated by the mediator shall be final and binding on the parties and persons claiming under them respectively and enforceable. (2) The mediated settlement agreement shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a judgment or decree passed by a court, and may, accordingly, be relied on by any of the parties or persons claiming through them, by way of defence, set off or otherwise in any legal proceeding.

Challenge to mediated settlement agreement:

Section 29(2) a mediated settlement agreement may be challenged only on all or any of the following grounds, namely:
  1. Fraud;
  2. Corruption;
  3. Impersonation;
  4. Where The Mediation Was Conducted In Disputes Or Matters Not Fit For Mediation.
Sub section (3) an application for challenging the mediated settlement agreement shall not be made after 90 days have elapsed from the date on which the party making that application has received the copy of mediated settlement agreement.

Online mediation:

under section 32(1) Online mediation including pre-litigation mediation may be conducted at any stage of mediation under this Act, with the written consent of the parties including by the use of electronic form or computer networks but not limited to an encrypted electronic mail service, secure chat rooms or conferencing by video or audio mode or both.

Establishment and incorporation of Mediation Council:

central government by the notification establish a council to perform a duties and discharge function mention under this act. This council formerly known as Mediation Council of India. Describe under section 33, sub-section (1).

Composition of Council:

Section 34(1) The Mediation Council shall consist of the following members, namely:
  1. A person of ability, integrity and standing having adequate knowledge and professional experience or shown capacity in dealing with problems relating to law, alternate dispute resolution, public affairs or administration to be appointed by the Central Government as a "Chairperson".
  2. A person having knowledge and experience in law related to mediation or alternate dispute resolution mechanisms, to be appointed by the Central Government as a "Full-Time Member";
  3. An eminent person having experience in research or teaching in the field of mediation and alternate dispute resolution laws, to be appointed by the Central Government as a "Full-Time Member";
  4. Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and Justice or his representative not below the rank of Joint Secretary appointed as a "Member, ex officio";
  5. Secretary to the Government of India in the Department of Expenditure, Ministry of Finance or his representative not below the rank of Joint Secretary appointed as a "Member, ex officio";
  6. Chief Executive Officer appointed as a "Member-Secretary, ex officio"; and
  7. One representative of a recognised body of commerce and industry, chosen by the Central Government as a "Part-Time Member".

Community Mediation:

Chapter X, section 44 sub-section (1), of the bill describe the community mediation as "Any dispute likely to affect peace, harmony and tranquillity amongst the residents or families of any area or locality may be settled through community mediation with prior mutual consent of the parties to the dispute".

Whereas sub-section (2) said that any of the parties shall make an application before the concerned authority constitute under the Legal Services Authorities Act, 1987 or District Magistrate or Sub-Divisional Magistrate in areas, then such concerned authority constitute a panel of 3 mediator who deal with the said dispute and if in area where no such authority has been constituted, then refer a dispute to mediation. Sub-section (5), list out the kind of persons which may be included in the mediation panel by the concerned authorities, i.e.,
  1. Persons of standing and integrity who are respectable in the community;
  2. Any local person whose contribution to the society has been recognised;
  3. Representative of area or resident welfare associations; and
  4. Any other person deemed appropriate[3].

What are the concerns with the Bill on the report of Parliamentary standing committee:

Parliament standing committee finalise the report and submitted to Rajya Sabha on July 13, 2022. Under this report committee raise some concerning point of the bill which are, the report noted that section 2(2) of the bill has provisions to exclude the Central and state governments from non-commercial disputes with the government as one of the parties. The committee further recommended not excluding government-related disputes from the bill's ambit because most of the litigation in which the government is a party.

Committee another observation is that the definition of International Mediation in the bill under section 3(f) in which the provision of the Singaporean Convention are incorporated. It is objectionable point by the committee because India has not yet ratified UNISA (United Nations Convention on International Settlement Agreement).

The report noted that section 6,7,8,9 and schedule 1 are interconnected and contradictory at a same time. Section 6 mention the pre-litigation mediation in which matter pending in the tribunal will also send for mediation. "The Committee fails to understand as to how the matter pending before a tribunal will be treated as pre-litigation mediation," said the report. It further recommended section 6, 7, 8 and 9 to rearrange for better clarity.

Making the pre-litigation mediation mandatory may actually result in delaying of cases and may prove to be an additional tool in hands of litigants to delay the disposal of cases," the committee said. It suggested reconsidering the compulsory provisions of pre-litigation mediation. Panel recommended to make pre-litigation mediation optional and further introduced it in a phased manner instead of introducing it with immediate effect for all civil and commercial disputes.

Another observation by the panel is the time limit of the mediation process which takes 180 days is too long and for this panel recommend to reduce this time limit to 90 days and also reduce further extension to 60 days instead of 180 days.

Committee also recommend that the Central Government can appoint the Chairperson and Members of the Mediation Council of India through a selection committee. The panel was against Section 26 of the bill, which deal with "Court annexed mediation" which gives power to the Supreme Court or the High court to make laws of pre-litigation according to them[4].

Conclusion:
Mediation is not a new concept for the Indian society but it is also true that we need a codified law by which the mediation process can proceed. Mediation is not a small concept it play a very vital role in the litigation process as well expedite it, which reduce the burden on judicial system.

We all know that how much cases are pending in the court recently an estimation given by the law minister Kiren Rijiju on August 2, 2022 in Rajya Sabha said that more than 71,000 cases are pending with the Supreme Court, in which over 56,000 civil matters and over 15,000 criminal matters and out of which more than 10,000 are awaiting disposal for over a decade. While 40,28,591 cases were pending in the various High Courts in 2016, their numbers wnet up to 59,55,907 as on July 29 this year -a rise of 50%[5].

Earlier the mediation process was run only on the concept which derive from the Supreme Court judgement such as Saleem Bar Association vs Union of India (2005). M. R. Krishna Murthi vs The New India Assurance (2019) and B.S Jhoshi and other vs State of Haryana (2003). So, the initiative to have a codified law on mediation is a positive step as it will have a beneficial effect in reducing the backlog of cases in the Indian judicial system to a great extent and shall also provide justice to the people in a timely manner.

But the bill also has some major glitch point which may to reconsider such as section 2(2), where central and state government from non-commercial disputes, excluded from the mediation proceeding which very controversial because most of the cases like taxes, where the government is the party and it is necessary through mediation proceeding to end this litigation because such types of cases only consume the government time and money.

Some clarification is needed in the section 6, 7, 8 and 9 on the bill which are interconnected and contradictory to each other. Another point for consideration is Pre-litigation where the bill mandate the pre-litigation mediation proceeding in every case. Which should be change into a mandatory to optional because mandatory made unnecessary burden on the mediation proceeding and mediation centre then face same problem which is in the conventional court.

Lastly some other point where the bill is completely silent and it is necessary to clarify that point for better proceeding like bill is not mention any description about the qualifications or capacities of a trained mediator. However the step taken by a government is better for the judicial system as well for societies because Mediation take a less cost, result in more lasting agreements than litigation, and can be used for emotionally sensitive disputes where other forms of conflict resolution are in appropriate. In the mediation both the party make their mutual decision and that the decision became a final one which make the win-win situation for both parties. Whereas in the conventional litigation judgment or order are come for any one's favor and other is liable to follow that order.

ENDNOTES
  1. https://www.thehindu.com/news/national/explained-the-mediation-bill-2021/article65967986.ece
  2. https://delhicourts.nic.in/dmc/history.htm
  3. https://legalaffairs.gov.in/sites/default/files/mediation-bill-2021.pdf
  4. https://www.hindustantimes.com/india-news/parliamentary-panel-submits-report-on-mediation-bill-2021-101657774975373.html
  5. https://www.thehindu.com/news/national/more-than-71000-cases-pending-in-supreme-court-of-which-10000-cases-await-disposal-for-over-a-decade/article65726459.ece

Written By: Akshay Mishra - Prof. Rajendra Singh (Rajju Bhaiya) university, Prayagraj
Email: [email protected]

 

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