Some provisions require clear definitions for certain expressions, such as ‘public policy’, ‘gross impropriety’. The process potential of some other determinations needs to be explored

By Neil Hildreth

According to the National Judicial Data Grid, nearly 40 million cases are pending in India’s various courts. Mediation, a form of alternative dispute resolution (ADR), is one of the proposed solutions to address such dependency. Mediation is not a new concept in India. Article 89 of the Code of Civil Procedure 1908 (CPC), introduced in 2002, introduced mediation as one of the means of settling disputes. In addition, various legislations such as the Companies Act 2013, Arbitration and Conciliation Act 1996 and Commercial Courts Act 2015 provide for mediation.

While the number of cases referred to mediation has increased, certain challenges remain that hinder the growth of mediation as a viable ADR. Lack of specific legislation and reluctance of the parties to mediate are two such challenges. Against this background, the Center has submitted the Draft Mediation Act 2021.

While the bill is a step in the right direction, there are certain areas that need attention. Some of these are highlighted here.

The bill introduces the concept of “public policy” as a ground for challenging a settlement. This concept appears to have been taken from the Arbitration and Conciliation Act 1996. However, the bill does not specifically define its broad outline, leaving the potential for abuse by parties seeking to derail settlements.

Likewise, the bill allows a party to challenge the settlement on the grounds of “gross impropriety,” without even defining the term. In the absence of a defined term, interested parties may argue bias of some of the mediator to challenge a settlement, which could lead to lengthy lawsuits, derailing the purpose of the bill. The bill provides for ‘community mediation’ to maintain peace, harmony and tranquility between the residents of, or families in, a community. However, such ‘community mediation’ may prove to be contrary to individual rights in general and women’s rights in particular. “Community Mediation” can be prone to similar criticisms that khap panchayats have faced in the past. The bill aims to introduce mandatory pre-litigation mediation, which requires the presence of parties at at least two mediation sessions. Such an approach not only imposes the mediation process on unwilling parties who have no intention of reaching a settlement, but also burdens them with the additional costs of mediation (Article 30 provides that the costs of mediation are borne by the parties). This approach may not prove to be cost effective. In addition to providing a negative list of cases that are not suitable for mediation, it may be wise to limit the mandatory pre-litigation mediation process to only a few cases where mediation has been demonstrated. Article 29 provides for contesting a mediation settlement/agreement on the grounds of, among other things, corruption, impersonation and fraud. Furthermore, this provision prohibits any dispute of a mediation agreement after the expiration of 90 days from the date of receipt of the mediation agreement. However, the bill should calculate the limitation period from the date the party becomes aware of the existence of such grounds and not from the date of receipt of the mediation agreement. It would be unfair to forbid any party, especially disadvantaged parties, to challenge a settlement based on the date of the settlement rather than the amount. ‘mediation procedure. However, it does not provide for approaching the court after the mediation procedure, but prior to the implementation of the mediation agreement. Nor does the bill specify under which provision international mediation would take place in India, which concerns non-commercial disputes arising from a foreign law. This would give rise to disputes where the mediated settlement is challenged on the grounds of lack of jurisdiction. In addition, there is uncertainty about the consequences of not registering a settlement agreement.

The existing legislative framework has contributed to a feeling of insecurity in mediation and there is no denying that the bill is a welcome first step in the right direction; not only does having a specific provision legitimize mediation, but it also promotes public confidence in what is a very useful tool for quickly resolving disputes out of court.

However, the bill poses some questions that must be answered before it is passed. In addition to smoothing out the problem, the government should also take measures to promote mediation among the general public, by creating general awareness. The first step in this direction would be to draft a guideline for public enterprises to resolve the dispute through mediation. As the largest litigator, the government should set an example for citizens.

The author is Executive Director, Lumiere Law Partners.
With contributions from Rahul Jain, Director, Lumiere Law Partners

This post Rethink the concept of the Mediation Act: some provisions require clear definitions

was original published at “https://www.financialexpress.com/opinion/relook-the-draft-mediation-bill-some-provisions-will-need-clear-definitions/2463151/”