Mediation Bill, 2021: House panel recommendations

News Highlights

Parliamentary Standing Committee on Law and Justice has recommended substantial changes to the Mediation Bill, meant for the institutionalisation of mediation and establishment of the Mediation Council of India.

Alternative Dispute Resolution (ADR) Mechanism

• The process in which disputes between the parties are settled or bring an amicable result without the intervention of a Judicial Institution and any trial is known as Alternative Dispute Resolution (ADR).
• In India, modes of ADR include arbitration, negotiation, mediation, and Lok Adalats.

What is Mediation in Indian Law?

• Mediation is a voluntary process in which parties try to settle disputes with the assistance of an independent third person (the mediator).
•  A mediator does not impose a solution on the parties but creates a conducive environment where they can resolve their dispute.  
• Benefits of Mediation
  • Quick and responsive.
  • Economical and there is no extra cost.
  • Harmonious settlement.
  • Voluntary and non-adversarial nature.
  • Flexibility and confidentiality of the process
  • It also helps reduce the case burden on courts

Mediation in India

1. Court referred (courts may refer cases to mediation under the Code of Civil Procedure, 1908).
2. Private (for instance, under a contract having a mediation clause), or 
3. As provided under a specific statute (such as the Commercial Courts Act, 2015, the Consumer Protection Act, 2019, or the Companies Act, 2013).

Who provided Mediation in India?

• Mediation services are provided by private ADR centres or mediation centres and centres set up by courts or tribunals (known as court-annexed mediation centres).   
• As per data published by the National Legal Services Authority for 2021-22, India had 464 ADR centres, and mediation settled nearly 53,000 judicial cases.

Background of Mediation Bill

• Various countries, including Australia, Singapore, and Italy, have standalone laws on mediation.
• 2019: The suggestion to enact separate legislation governing mediation in India has been made by the Supreme Court.
• 2021: The demand for a separate mediation law has led to the formation of the Mediation Bill, 2021.
• Later the Bill was referred to the Standing Committee on Personnel, Public Grievances, Law and Justice.

The Mediation Bill, 2021

• The Mediation Bill, 2021 Bill seeks to promote mediation, particularly institutional mediation, and provide a mechanism for enforcing mediated settlement agreements.
• Key Features of the Bill
  • Pre-litigation mediation: 
    • Before going to court or certain tribunals, parties must try to settle civil or commercial disputes through mediation.
    • Even if they fail to reach a settlement, the court or tribunal may at any stage refer the parties to mediation if they request the same.
  • Mediation Process: 
    • Mediation proceedings will be confidential and must be completed within 180 days.
    • Court annexed mediation must be conducted per the Supreme Court’s or High Courts’s rules. (Clause 26 of the Bill).
  • Disputes not applicable for mediation:
    • Disputes relating to claims against minors or persons of unsound mind.
    • Disputes involving criminal prosecution.
    • Disputes affecting the rights of third parties.  
  • Applicability:
    • The Bill will apply to mediations conducted in India: 
      • Involving only domestic parties.
      • Involving at least one foreign party and relating to a commercial dispute (i.e., international mediation
    • If the central or state government is a party, the Bill will apply to (a) commercial and (b) other disputes as notified.
  • Mediators:
    • Mediators may be appointed by: (i) the parties by agreement or (ii) a mediation service provider (an institution administering mediation).
    • They must disclose any conflict of interest that may raise doubts about their independence.
    • Parties may then choose to replace the mediator.
  • Mediation Council of India:
    • The central government will establish the Mediation Council of India.
    • The Council will consist of a chairperson, two full-time members (with experience in mediation or ADR), three ex-officio members (including the Law Secretary and the Expenditure Secretary), and a part-time member from an industry body.

Recommendations by Parliamentary Committee

• Against compulsory Pre-litigation mediation
  • Recommended compulsory provision of pre-litigation mediation should be reconsidered, and it should be offered as an option to only those willing to mediate.
• Opposing Clause 26 of the Bill 
  • The committee criticised the clause giving the powers to the court to make rules for ‘court annexed mediation’ unconstitutional. 
• Questions Non-applicability
  • The members questioned the non-applicability of the provisions of the Bill to disputes/matters of non-commercial nature involving the government and its agencies.
• Members of Mediation Council of India
  • The panel insists that the Chairperson and full-time Members have ‘shown capacity’ and ‘knowledge and experience’ in ‘mediation.’

Pic Courtesy: freepik

Content Source: The Hindu

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