India: Mediation

Last Updated: 14 September 2018
Article by R. K Dewan & Co

Compiled by: Sachi Kapoor | Concept & Edited by: Dr. Mohan Dewan

Traditional litigation has witnessed inordinate delays due to the time taken and expenses incurred. In order to facilitate this process, Mediation has seen a considerable rise especially due to its speedy disposal and amicable approach.

Mediation is preferred since it is a non- binding process i.e. the parties retain the right to accept or decline the settlement offer at the end of the process. Mediation is a voluntary, party-centered and structured negotiation process of resolving issues which has gained immense popularity worldwide and is ever increasing in its demand.

How is Mediation helpful?

Mediation accelerates the process of solving the issue between two conflicting parties. It maintains an amicable, dignified and civilized relationship for future interactions between such parties as both parties voluntarily agree to a common ground. Results are achieved in a shorter span of time. The Code of Civil Procedure, 1908 inserted Section 89 via an amendment in 2002. This section authorizes the Court to convert a civil suit into 'outside court form of settlement' in cases where the scope of settlement is visible. This clearly displays the propagation of Mediation.

In a recent decision passed by the Delhi High Court in Turning Point vs. Turning Point Pvt. Ltd, August, 2018, the Division Bench expressed its view that the Appellant and the Respondent should ideally have negotiated their differences by the method of mediation and agreed to co-exist. This particular view by the Divisional Bench clearly marks the rising importance of Mediation as a successful Dispute Resolution method.

Pre-Instituted Mediation: Further in May, 2018, the Government of India introduced the Commercial Courts, Commercial Division and Commercial Appellate Division of High Court (Amendment) Ordinance of 2018, with the purpose of making pre-institution mediation mandatory before filing a commercial dispute under the Commercial Courts Act, 2015 (the "Act"). This was inserted as Section 12A which compels the parties in an ongoing commercial dispute under this Act to be referred to Pre-Instituted Mediation under the Legal Service Authorities Act, 1987 with an exception that the dispute is of urgent matter and requires interim relief. The time period allotted for the completion of this process of mediation is three months and can be extended up to a period of another two months with the consent of the parties.

Implication of the Limitation Act: It is important to note that if the parties are undergoing mediation under this Act, then the mediation period has to be excluded from the calculation of the limitation period under the Limitation Act, 1963.

If the parties reach an agreement, it shall be binding and have the same effect as Arbitral Award under the Arbitration and Conciliation Act, 1996, therefore cannot be disputed unlike a usual Mediation Process. The inclusion of the above mentioned 'Mediation Specific' section clearly brings to spotlight the increasing demand and success rate achieved by Mediation.

In November 2017, the Delhi HC held that, the formulation of Mediation and Conciliation Rules, under the CPC, is not only restricted to civil suits but also for mediation in matters referred by the court concerning Criminal Cases as well as proceedings under S.138 (Cheque Bounce cases) of the Negotiable Instruments Act.

Requisites for Mediators: There are no binding regulations in India for qualifications of Mediators. However, as per the guidelines laid down by the Mediation Training Manual of India by the Supreme Court a minimum a forty hours course must be completed by the mediators. This course covers the following aspects: the theory of mediation, role-playing/demonstrations of mediation proceedings as well as shadow mediations that one must complete under a trained mediator. The curriculum also includes the history of mediation, ethics of a mediator, role of judges, parties and advocates, types of mediation and conflict resolution. The format of the course as well as the curriculum includes topics that are covered by most internationally recognized mediation training programs.

As per Salem Advocate Bar Association v. Union of India, 2005, Judges and lawyers are not required to undergo a mediation course. However, the adverse methods in which Judges and Lawyers are trained to resolve disputes is likely to affect the essence of mediation in furtherance of which, the opinion to mandate such guidelines are awaited.

We too, believe that cases resolved by the means of Mediation have seen a higher success rate. Interestingly, Mediation method is not only successful in Commercial Disputes, Negotiable Instruments Act or IP infringement cases but in all kinds of disputes, including Family matters. So let us all adopt Mediation and agree to disagree!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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