An overview of the mediation bill, 2021- An analysis through

benefits and drawbacks

Abstract

In a mediation, the parties meet with a third party who is neutral and objective and who helps
them negotiate their disagreements. Mediation is one of the techniques of Alternate Dispute
Resolution which help in solving disputes outside the court. As there is no standalone legislation
to provide rules and framework for Mediation recently the Mediation Bill 2021 was introduced
which provided framework for mediation in India. The Main Questions which need to be
answered are whether or not firstly, mediation is helpful in Indian Law and societal
Circumstances, secondly the Bill which has been brought are there drawbacks to it, if there are
certain Drawbacks to it are there solutions which could be accepted to to overcome these
drawbacks, this paper also analyses the benefits of such a legislation. As the cases in Indian
courts are rising day by day and the pressure on the judicial system is increasing is mediation the
correct way to decrease such pressure.

Keywords – Alternate Dispute Resolution, Standalone Legislation, Mediation Bill 2021,

Benefits, Drawbacks, Solutions.

Introduction

Alternative dispute resolution (ADR) is a term used to describe methods for resolving conflicts
that do not involve the traditional judicial system. Arbitration, negotiation, mediation, and Lok
Adalats are ADR techniques used in India. Through a voluntary procedure called mediation,
parties attempt to resolve disagreements with the aid of a neutral third party. Instead of forcing a
resolution on the parties, a mediator fosters an atmosphere where they can work out their
differences. There are no rigid or legally-binding rules of procedure in mediation; it is up to the
parties to decide how it will go.

Currently, mediation in India can take one of three forms:

 1. Court-Referred (under the Code of Civil Procedure, 1908, judges can refer cases to
mediation)1,2
2. Private (for example, under a contract with a mediation clause), or
3. When required by a specific statute.

Private ADR and Mediation Centers, as well as those established by courts or tribunals, offer
mediation services. According to information from the National Legal Services Authority for the
years 2021–2022, India has 570 mediation centers, 16,565 mediators, 464 ADR centers (397 of
which were operational), and over 53,000 cases were resolved through mediation.3

A number of statutes have mediation provisions, including the Code of Civil Procedure (1908),
the Arbitration and Conciliation Act (1996), the Companies Act (2013), the Commercial Courts
Act (2015), and the Consumer Protection Act (2019). Mediation is referred to as a tried-and-true
alternate to conventional conflict resolution techniques by the Project Committee on Mediation
and Conciliation of the Supreme Court of India. Due to India's membership in the Singapore
Convention on Mediation, laws controlling both local and international mediation should be
adopted (officially known as the United Nations Convention on International Settlement
Agreements Resulting from Mediation).

The basic goal of an ADR mechanism is to bring justice through the parties' consent in the
shortest amount of time possible, without any delays like in litigation. Four ways to settle a
disagreement were identified by an ADR mechanism: arbitration, conciliation, mediation, and
negotiation.

However, specifically when it comes to mediation, an impartial third party, the conciliator or
mediator, helps the parties to a disagreement come to a mutually satisfactory and agreed-upon
resolution through this non-binding process. Through the mediation process, disputing parties
enlist the help of an impartial third party to serve as a mediator.4

1
The Code of Civil Procedure 1908 s 89
2
Afcons Infrastructure Ltd vs Cherian Varkey Construction Co , Civil Appeal No 6000 of 2010 (Supreme Court of
India)
3
Settlement through Mediation Report (April 2021 to March 2022), National Legal Services Authority.
4
Avtar Singh, Law of Arbitration & Conciliation and Alternative Dispute Resolution system (Eastern Book
Company, 10th edition) page no. 520
Principles for mediation

Like other processes, mediation has its own essential tenets that aid in reaching an amicable
resolution to issues between the parties. Some basic principles

1. Parties should participate voluntarily

2. Confidentiality matters in the process
3. Mediators are impartial
4. An agreement has to be settled with the satisfaction of parties concerned
5. Mediation is without prejudice to other procedures

Advantages of Mediation

“Discourage litigation. Persuade your neighbors to compromise where you can. Point out them
how the nominal winner is often the real loser – in fees, expenses and waste of time.” -Abraham
Lincon

Abraham Lincon has rightly said that the nominal winner in litigation is also a real loser,
therefore mediation should be practiced due its following advantages:

1. Informality – No formal court procedures or legal precedents are followed during

mediation. The parties are not forced to agree to a decision by the mediator The decision
to resolve a dispute belongs with the parties themselves, and they can seek to coming up
with innovative solutions.

2. Privacy and confidentiality – The mediation meeting is held in a discreet location, like a
conference room at one of the Arbitration Associations. There is no public record of
mediation. The secrecy of it is upheld.

3. Time and cost savings – Mediation generally lasts a day. Due to highly technical
problems and/or several parties, complex matters may take longer. Mediation typically
saves a lot of money because it doesn't require the formalities associated with litigation.
 4. Control – The decision to participate in mediation is up to the parties. At any time
throughout the mediation, a party may opt to stop taking part. Mediators assist parties in
keeping the reins on the negotiation process.

Laws on Mediation and its Recent Developments

Section 89 of the CPC5 was amended in 2002 to give judges the authority to send cases that
"included elements of settlement" for resolution outside of court. The Honorable Supreme Court
ordered the appointment of a committee to create model rules outlining the mediation process in
Salem Bar Association v. Union of India6. As a result, the Mediation and Conciliation Project
Committee7 will, among other things, fund training programmes, certify mediators, offer grants,
and run awareness campaigns.

In 2003, the Law Commission of India created a consultation paper on alternative dispute
resolution and mediation rules in accordance with the aforementioned judgement, and other High
Courts adopted it to create their own Mediation Rules.

The Companies Act8 makes reference to mediation and asks for the establishment of a mediation
panel, to which the parties or the court may submit a dispute at any point throughout the
proceedings in an effort to reach a mutually agreeable resolution. 2018 saw the addition of
Section 12A9 to the Commercial Courts Act, 2015, which states that parties must first pursue
pre-institution mediation before filing a lawsuit that does not call for urgent interim relief.
Additionally, procedures have been added particularly to encourage plaintiffs to voluntarily
follow this course of action. For instance, if the matter is finally resolved utilizing an alternate
dispute resolution mechanism, Section 16 of the Court Fees Act, 1870 10 provides for the
reimbursement of all court fees.

5
Code of Civil Procedure (Amendment) Act, 1999, No 46, Acts of Parliament, (India), came into effect in 2002.
6
Salem Bar Association v Union of India [2005] 6 SCC 344
7
The Committee was constituted by the Chief Justice of India, Honourable Mr Justice R C Lahoti by order dt. 9
April 2005.
8
The Companies Act 2013 s 442
9
Inserted via The Commercial Court, Commercial Division and Appellant Division Of High Courts (Amendment)
Act, 2018, No 28, Acts of Parliament, (India)
10
Code of Civil Procedure (Amendment) Act 1999
Despite these advancements, India currently lacks a statute specifically addressing mediation.
Courts had to close their doors and go online when the pandemic hit in 2020. The burden has not
changed, notwithstanding the possibility that the dispute resolution process has.

The government has lately been ordered by the Supreme Court to examine the viability of
passing an Indian Mediation Act.11

The Mediation Bill, 2021

It was introduced in Rajya Sabha on 20th December, 2021 and was been referred to the standing
committee by the Rajya Sabha Chairman for the examination of the bill. This bill had been
introduced with the aim of reducing the burdens on the courts by way of out-of-courts
settlements. The present draft plan consists of 10 schedules and 65 clauses. It covers a wide
range of topics, including the institutional mediation framework, the creation of a regulatory
body, the recognition of organizations that mediate disputes, the role, credentials, and training of
mediators, community mediation, online mediation, the resolution of cross-border disputes
through mediation, pre-litigation mediation that is required, and the enforcement of mediated
settlement agreements. The said bill also appoints Mediation Council (chapter VIII, clause 33 12)
to overview the bill and examine it carefully. The mediation settlement agreement (clause 22 13)
will be treated as the judgement only, with full legal enforceability as soon as the mediation
settlement agreement had been registered within 180 days.

Importance of the bill

Before the introduction of this bill, there had not been any standalone legislation for mediation
so the introduction of this bill was of prime importance. This bill takes into account that the
institutional mediation is different from the mediation under Companies Act and so has special
provisions for the institutional mediation under various clauses 14. One of the aim of the bill is

11
M R Krishna Murthi v New India Assurance Co Ltd [2020] 15 SCC 493
12
The Mediation Bill 2021 cl 33
13
The Mediation Bill 2021 cl 22
14
Mr. kartikeya Awasthi, ‘How is mediation under Companies Act different from private institutional mediation’ <
https://viamediationcentre.org/readnews/MTAyMg==/How-is-mediation-under-Companies-Act-different-from-
private-institutional-mediation>accessed 13 December 2022
also to promote community mediation where the mediation provides efficient ways to resolve
conflicts and differences among individuals, groups, and organizations.

This bill also gives way to online mediation which is been clearly specified in chapter VII, clause
22(6)15 whereby right is been given to the parties as to whether they want physical or online
mediation. This will help to save time and in maintaining the confidentiality of the whole
mediation process as nobody is allowed to record the proceeding as has been mentioned in
clause 23(2)16.

This bill is also very clear in nature as it not only mentions cases where the mediation process
will be applicable but it also situations where this won’t be applicable for e.g., in criminal
proceedings. All the situations where this won’t be available has been mentioned in 1 st schedule
of the bill17.

Though this bill has made pre-litigation mediation compulsory. It also gives rights to the parties
to approach the court directly without any pre- mediation process if there is any urgent matter
which cannot be resolved by mediation. So, this involuntary binding pre- litigation mediation is a
bit flexible in nature.

India being a signatory to Singapore Convention allows international mediation but at the same
time it does not apply to cases where an order or decree has already been passed which means
Singapore Convention would not have any retrospective affect in India which is a positive thing
and in line with the Indian Constitution.18

Challenges towards the bill

The mandatory pre-litigation mediation takes away the rights of the individuals under article 21 19
as we have the right to access to justice which is our fundamental right and clause 20 20 of the bill
clearly lays down that in a case where any of the party is not able to attend the first two sessions
of the mediation process without any reasonable cause will be incurring a cost taking into
consideration the conduct of the parties. Before this bill, mediation was always a voluntary
15
The Mediation Bill 2021 cl 22(6)
16
The Mediation Bill 2021 cl 23(2)
17
The Mediation Bill 2021 schedule I
18
‘Singapore Convention on Mediation’, < https://www.singaporeconvention.org/convention/text> accessed 11
January 2022
19
The Constitution of India 1950 Art 21
20
The Mediation Bill 2021 cl 20
process21 and after this it is mandatory to try mediation before any litigation process for civil and
commercial cases, now this might also lead to delaying the cases as it is a possibility that the aim
for this bill will only be invalidated, which was for reducing the burden on the courts. Now, if
the mediation process becomes compulsory, eventually it is a possibility that the burden will
shift to the mediation council.

On one hand, the online mediation will save time but the time period mentioned for the
completion of the whole process is irrelevant. Clause 21 22 says that the mediation process should
be completed within 180 days which in itself is a huge time for completion of a case and in this
also an exception has been provided that in case the parties agree the time period could further
be extended by 180 days. This would also lead to delayed justice which is also one of our right
mentioned in article 21 and this delay in justice might also lead to a political benefit. Earlier, the
rules for mediation were set according to the parties but now, not only the process had been
involuntary but also, the courts (high court, or supreme court) has the power to set out the rules
for mediation has been mentioned in clause 26.

Clashes have been found with the bill and section 12A of the Commercial Courts Act 23 as there it
says that pre-litigation mediation is not mandatory and will depend on the parties as all the cases
are not substantive in nature, some are procedural as well in which mediation should not be
mandated.

Solutions

The time limit set out for the completion of the mediation process could be reduced so that
justice is not being delayed in any inordinate ways. The applicability of the bill should also be
extended to the non- commercial courts. Pre-litigation mediation should be turned from
compulsory to voluntary as the main purpose of the bill is to reduce the burden of the courts and
not to bind the parties to go through a mandate process which they don’t feel like going through
and just forcing them to do nothing. Under the bill, the council will discharge its major functions
only by taking the approval of the Central government but the question again arises as to whether
the role of government should be a necessary or not Because this also takes away the tag of the
21
Mediation Training Manual of India, Mediation and Conciliation Project Committee, Supreme Court of India
22
The Mediation Bill 2021 cl 21
23
The Commercial Courts Act 2015 s 12A
process being voluntary and with the rules and regulations been decided by the parties. So, one
solution for this problem could be the limit on the control been exercised by the central
government which could be the council needs to take the approval from the government only in
the essential functions and not for every function.

Conclusion

Although the idea of mediation is not new to Indian civilization, it is also true that the mediation
process needs to be governed by a codified law. The idea of mediation is not trivial; it plays a
crucial part in the litigation process and speeds it up, which lessens the load on the judicial
system. Earlier, mediation in India was governed by the judicial decisions and so the coming of
the mediation bill was a positive approach and it can also solve the backlog been created because
of no codification of the mediation laws. Also, India is dedicated towards providing ease of
doing business for the entrepreneurs and this bill will help to do so. But the bill has some glitches
in it which needs to be resolved through judicial interpretations or legislative amendments. So,
this bill could pave a way for sustainable solution and can also solve the problem of case
pendency.