“The process of talking to two separate people or groups involved in a disagreement to try to help them to agree or find a solution to their problems”
-Meaning of ‘Mediation’, Cambridge Dictionary
On November 5 2021, the Ministry of Law and Justice released the draft of the Mediation Bill, 2021 (“Draft Bill”) which comprises 51 pages and includes 7 Schedules. The Draft Bill is modelled substantially on the United Nations Convention on International Settlement Agreements Resulting from Mediation (“Singapore Convention”). The objective is to position India as a strong centre for Alternate Dispute Resolution (ADR) and adhere to the Singapore Convention as it is a signatory since August 7, 2019.
THE GOOD AND THE BAD AND THE INCLUSIVE
To position itself as a strong destination for FDI and commercial collaborations of larger businesses, India has to offer a sustainable solution to dispute resolution to both, businesses and international commercial contracts. It is evident from its framing, that the Central Government is keen on keeping a close vigil on the process and degree of dominance in the management of formalising mediation in India for the first time.
The construct of the Mediation Council of India and the specific appointments thereunder, empowering the Lok Adalats’ role in court annexed mediation, establishing a consortium of trained and accredited mediators are all promising processes. Although the limited grounds to challenge the Council’s decision and autonomy in decision making could lead to excessive government control with reduced flexibility, mediation could benefit from.
The Draft Bill has included other enactments, to land an inclusive outcome.
- Agreements considered void under the Contract Act, 1872 would be considered, unlawful as Mediated Settlement Agreement.
- Agreements electronically signed under the Information Technology Act, 2000 would be treated for Online Mediation.
- Has proposed amendments to the Arbitration and Conciliation Act, 1996, the Code of Civil Procedure, 1908 and the Commercial Courts Act, 2015.
- Empowered the Lok Adalats formed under the Legal Services Authorities Act, 1987.
PRIMARY STRUCTURE
The Draft Bill has 4 parts with detailed provisions on formalising the process of mediation, with thresholds for quality of mediators, mediation service providers, centralised mediation council in India and a detailed layout for Mediated Settlement Agreement, domestic and international.
The Draft Bill aims at formalising mediation through constructs of organisations, body corporate, consortiums of mediators and custodians of procedures improve the quality of mediators and improvised processes for the conduct of the mediation.
It introduces:
- Mediation Council of India (Section 35), a central corporate body, with formal appointments to be made by the Central Government.
- Mediation Service Providers (Section 43), organisations recognised by the Council for conducting mediation as per rules framed, it also includes Lok Adalats constituted under the National Legal Services Authorities Act, 1987.
- Online Mediation (Section 32) as a recognised mode of mediation.
- Detailed provisions on Mediation Settlement Agreement (Section 21) including the signing of online mediation agreements and what constitutes a mediation agreement.
It protects:
- confidentiality.
- self-disclosure of Conflict of Interest by the Mediator.
- disclosure and admissibility of the mediation process.
- time-bound completion; and
- from the mandate of a Mediator by terminating the mandate.
It formalises:
- mediation
- mediators
- Mediation Service Providers
- Community Mediation
- Mediated Settlement Agreement
- allegiance to Singapore Convention
- exceptions to Mediation
Some other features include:
- The mediation has to be completed within 90 days from its commencement and further extend to 90 days if the parties consent.
- Mandating the pre-litigation mediation to settle the disputes.
- The due recognition with a detailed procedure for the enforcement of both domestic and international Mediation Settlement Agreements by the respective High Courts
- Introducing Community Mediation
CONFIDENTIALITY IN THE MEDIATION PROCESS
Only in the following circumstances can the mediation process be made known to others:
- professional misconduct or malpractice,
- threat or plan to commit an offence punishable under law,
- information against domestic violence or child abuse and
- statements posing imminent threat to public health or safety.
Enforcement of International Mediated Settlement Agreements can be refused by a High Court on grounds of contravention with public policy, among others.
COMPOSITION OF THE MEDIATION COUNCIL OF INDIA
The Mediation Council of India will be a body corporate to be headquartered in Delhi. The Bill provides for its establishment by the Central Government by notification in the official Gazette with a common seal and in perpetuity with rights to hold movable and immovable property.
Appointments under the Council would be made by the Central Government:
- The Chairperson, an ex-judge of the Supreme Court, Chief Justice of a High Court, Judge of a High Court or a person eminent with experience in the conduct or administration of mediation.
- Full-Time Member (1), a person with knowledge and experience in law related to ADR.
- Full-Time Member (2), an eminent academician with experience in research and teaching in mediation and ADR law;
- Member, ex-officio (1), Secretary to the GoI, in the Department of Legal Affairs, Ministry of Law and Justice or a representative not below the rank of Joint Secretary.
- Member, ex-officio (2), Secretary to the GoI, in the Department of Expenditure, Ministry of Finance or a representative not below the rank of Joint Secretary.
- CEO, Member Secretary. Ex-Officio
The Chairperson and the Full-Time Members are empowered to hold the office for a term of 4 years from the date of appointment and are eligible for reappointment. Although the Chairperson and the Full-Time Members cannot hold the office beyond 70 and 67 years of age, respectively. The salaries and allowances of these appointments can be determined by the Central Government.
The Council is heavily empowered, acts or proceedings of the Council cannot be considered invalid due to:
- a vacancy or defect in the constitution of the Council;
- defect in the appointment of the Chairperson or a Member;
- irregularity in the procedure of the Council not impacting the merits of the case. (Section 37)
The Council is expected to frame policies and guidelines to promote domestic and international mediation, frame rules for the conduct of mediation, lay norms for accreditation, education and certification of mediators, develop India as a centre for mediation, manage the mediators and lay ethical conduct for mediators (Section 42). With the significant chunk of the burden of the Draft Bill being placed in the Council, it will build dependency on one hand and on the other, cultivate centralisation.
At the Community Mediation level, a District Magistrate or the Sub-Divisional Magistrate is empowered to constitute a panel of mediators under the State, District or Taluka Legal Services Authority along with women representation.
DISPUTES WHICH CANNOT BE MEDIATED ON
Disputes involving:
- fraud, fabrication of documents, forgery, impersonation and coercion;
- claims against minors and claims under the Rights of Persons with Disabilities Act, 2016 and Mental Healthcare Act, 2017 and Order 32 of CPC
- non-compoundable criminal offence without the order of a court
- matters in conflict with public policy or basic notion of morality or justice
- complaints against discipline or misconduct of professional practitioners
- rights of a third party who are not party to the mediation
- matters under the Patent Act, 1970, the Copyrights Act, 1957, the Green Tribunals Act, 2010, Competition Act, 2002, TDSAT, Electricity Act, 2003, Petroleum and Natural Gas Regulation Board Act, 2006, SEBI, Land Acquisition Laws and any other subject-matter as may be notified by the Central Government;
- levy, collection of penalties under direct or indirect tax or refunds.
CONCLUSION
Up until now, India not only did not have a dedicated statute to mediation, it had sporadic mentions in the Arbitration and Conciliation Act, 1996 (Section 30), along with the Industrial Disputes Act, 1947 (Section 4), the Mediation and Conciliation Rules, 2004 as framed by the DHC; and the Code of Civil Procedure, 1908 (Section 89 r/w Order X Rule 1-A)
This mention in the CPC got shot down in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd, SC, 2010, where the SC found Section 89 lacking in clarity and offering a clear platform for a case for mediation. The absence of uniform rules of procedure for mediation, would additionally render implementation, difficult.
Ten years later, India has its Draft Bill!
This is only for informational purposes. Nothing contained herein is, purports to be, or is intended as legal advice and you should seek legal advice before you act on any information or view expressed herein.
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Source: Legalaffairs.gov.in