Posted in GS 2, Editorial Analysis, Governance

Mediation Act, 2023

 September 23, 2023  Leave a comment
Mediation Act

Syllabus:
GS2: Dispute Redressal Mechanisms and Institutions
Source: The Hindu – 23/09/2023
Context:
The President of India gave her assent to the Mediation Bill and the Mediation Act, 2023 (“Act”) came into force.

Content

  • Mediation Act 2023 has been brought to enhance the efficiency of mediation and establish a comprehensive legal framework for its practice in India.
  • It aims to promote and facilitate mediation, especially institutional mediation, for resolution of disputes, commercial or otherwise, enforce mediated settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as acceptable and cost effective process and for matters connected therewith or incidental thereto.

Key Provisions of the Act

Applicability

  • All or both parties who habitually reside or are incorporated or have their place of business in India.
  • Parties to a mediation agreement which provides for disputes to be resolved in accordance with the provisions of the Act.
  • Parties where there is an international mediation.
  • The applicability of the Act does not include any and all non-commercial disputes wherein, one of the parties is the Central Government or a State Government, or agencies, public bodies, corporations and local bodies, including entities controlled or owned by such Government.
  • Any commercial dispute with the Government can be the subject matter of mediations.
  • It is also pertinent to note that while the terms ‘habitually reside’ and ‘place of business’ were not originally defined in the Bill, the Act defines the term ‘place of business’.

Pre-litigation Mediation

  • The Act seeks to provide for voluntary and mutual consented pre-litigation mediation between the parties for settlement of any dispute before filing any suit or proceedings of civil or commercial nature in any court.
  • The Act does not define the term ‘disputes’, the definition of the term ‘pre- litigation mediation’ includes settlement of disputes prior to the filing of a suit or proceeding of civil or commercial nature before a court or notified tribunal.

 Mediators

  • The parties are free to decide on the mediator as well as the procedure to appoint a mediator.
  • The Act does not specify any qualification/s for the person to be appointed as a mediator.
  • If the mediator is of a foreign nationality, he or she must possess such qualification, experience and accreditation as may be specified.
  • In the event the parties fail to come to a consensus on the appointment of the mediator and the procedure for such appointment, they may apply to a mediation service provider for the appointment of a mediator.

Mediation Proceedings

  • The Act specifies that, unless otherwise agreed on mutual consent, the mediation shall be undertaken within the territorial jurisdiction of the court or tribunal of competent jurisdiction.
  • The Act does not bind the mediator by the provisions of Code of Civil Procedure, 1908, or the Indian Evidence Act, 1872.
  • The Act also seeks to conclude the entire mediation in a time bound manner within 120 days which may be extended by a further period of 60 days.

Enforcement of Mediated Settlement Agreement

  • As per the provisions contained in the Act, a Mediated Settlement Agreement will be final, binding and enforceable in the same manner as if it were a judgement or decree passed by the court.
  • While the Code of Civil Procedure, 1908 as such is not applicable to the mediation proceedings, the provisions thereof will govern the enforcement of Mediated Settlement Agreement to the extent they are relevant to such enforcement.
  • Mediation Settlement Agreement may be challenged; however, the Act provides for limited grounds for such challenge, namely, fraud, corruption, impersonation and where the dispute and/or matter was not fit for mediation.

Mediation Council of India

  • The central government will establish the Mediation Council of India (“Council”) as per the constitution prescribed under the Act.
  • The Council has been constituted to register, recognize and regulate mediation institutions and mediators in India.
  • The Council is also tasked to promote international and domestic mediation in India, facilitate and conduct continuous training, education and certifications in mediation, and also maintain a depository of mediation settlement agreements made in India.

 Online Mediation

  • The Act allows for pre-litigation meditation to be conducted online thereby eliminating geographical barriers for the parties involved.

Community Mediation

  • The Act has introduced the concept of community mediation whereby any dispute affecting the peace, harmony and tranquility amongst the residents or families of any area or locality may be settled through mediation with the prior mutual consent of the parties to the dispute.

Challenge to a mediated settlement agreement

  • A mediated settlement agreement can be challenged by either party before the court or tribunal of competent jurisdiction by filing an application within 90 days on the grounds of  (a) fraud; (b) corruption; (c) impersonation; and (d) dispute not being fit for mediation.

Need for a Mediation Act

  • Mediation as an alternative method of resolving disputes alleviate the burden on the Indian judicial system and promote faster dispute resolution.
  • The Act encourages the use of institutional mediation,for resolving disputes.
  • It provides a legal framework for enforcing mediated settlement agreements.
  • The Act recognizes community mediation as a valid form of dispute resolution.
  • It acknowledges online mediation as an acceptable and cost-effective process.
  • The Act lays down a time-bound procedure for conducting mediations in India, ensuring timely resolution.
  •  It emphasizes confidentiality in mediation proceedings, allowing parties to freely discuss their issues.
  • The Act introduces disclosure safeguards for mediators to ensure transparency and impartiality.
  • First step in ensuring the wider implementation of streamlined methods for dispute resolution.

Salient features of the Mediation Act

  • The Act recognizes various forms of mediation, including pre-litigation mediation, online mediation, community mediation, and conciliation.
  • It lays down a time-bound procedure for conducting mediations in India, including timelines, appointments, and confidentiality.
  • The Act provides for the enforcement and challenge of domestic mediated settlement agreements.
  • Agreements resulting from successful mediation will be legally binding and enforceable, just like court judgments.
  • It establishes a regulator called the Mediation Council of India to regulate mediators and mediation institutions.
  • It introduces disclosure safeguards for mediators.
  • It also applies to mediations where there is an international mediator or commercial disputes involving the central or state government.
  • The Act does not apply to Lok Adalat and Permanent Lok Adalat proceedings under the Legal Services Authorities Act, 1987.

Concerns and Criticisms

  • The shift from the voluntary nature of mediation to mandatory participation is a concern.Critics argue that this may deter parties from engaging in the process willingly.
  • Another criticism is regarding the composition of the Mediation Council of India.Unlike other professional regulators like the Bar Council of India (BCI), the Mediation Council lacks adequate representation of experienced practitioners, leading to questions about its effectiveness in regulating the mediation profession.
  • The requirement for the Council to obtain prior approval from the Central government for its regulations has raised concerns about potential government involvement as a party to mediations, potentially compromising neutrality.

Way Forward

  • Awareness Campaigns: Conducting awareness campaigns to educate the public about the benefits of mediation and its role in dispute resolution.
  • Training Programs: Organizing training programs for mediators to enhance their skills and ensure high-quality mediation services.
  • Incentives for Mediation: Introducing incentives such as tax benefits or reduced court fees for parties opting for mediation instead of litigation.
  • Monitoring and Evaluation: Establishing a monitoring and evaluation mechanism to assess the effectiveness of the Mediation Act, identify areas for improvement, and make necessary changes.

Practice Question:
Explain the significance of the Mediation Act, 2023, in India’s legal framework and its role in reducing court delays and rising costs. Discuss how Alternative Dispute Resolution methods, particularly mediation, address these challenges.  

Reference

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