The Mediation Bill, 2021 (“Bill”) was introduced in the Rajya Sabha on December 20, 2021 however due to significant opposition, the Bill was sent to the Committee on Law and Justice for further scrutiny. Mediation is a form of alternative dispute resolution, where parties attempt to settle their dispute outside courts with the assistance of an independent third person called the mediator. The object of the Bill is to facilitate and promote mediation in India, particularly institutional mediation for the resolution of disputes. It also aims to encourage community mediation and make online mediation an acceptable and cost-effective process. It proposes to bring a codified law on mediation and provide for enforcement of settlement agreements resulting from mediation. This article strives to highlight the salient features of the Mediation Bill 2021.
SALIENT FEATURES OF THE MEDIATION BILL, 2021
1. Definition and Applicability: Section 2 of the Mediation Bill defines ‘domestic mediation' as one conducted in India, where:
- All or both parties habitually reside in or are incorporated in or have their business in India.
- The Mediation Agreement provides that the Mediation Act, 2021 would apply to the mediation.
- The mediation is international mediation.
‘International mediation' as per Section 3(f) of the Bill is defined as mediation that relates to commercial disputes arising out of legal relationships, contractual or otherwise, under the law in force in India and where at least one of the parties, at the time of conclusion of that agreement, is:
- An individual who is a national of, or habitually resides in, any country other than India.
- Body corporate including limited liability partnership of any nature, with its place of business outside India.
- An association or body of individuals whose place of business is outside India.
- The government of a foreign country.
2. Mandatory pre-litigation mediation and settlement: Section 6 (1) of the Bill makes it mandatory for the party to take steps to settle the disputes by pre-litigation mediation in accordance with the provisions of the Bill before filing any suit or proceeding in any Court or Tribunal, and the same may be carried out irrespective of the existence of any Mediation Agreement. This section thus makes pre-litigation mediation mandatory.
3. Disputes not fit for mediation: Section 7 of the Bill states that mediation under this Bill shall not be conducted for the resolution of any dispute or matter contained in the indicative list under the First Schedule. The matters contained in First Schedule includes (i) disputes relating to claims against minors or persons of unsound mind, (ii) disputes involving prosecution for criminal offences, (iii) disputes affecting the rights of third parties, (iv) disputes relating to levy or collection of taxes, etc. The First Schedule also provides that the central government may amend this list of disputes that are not fit for mediation.
4. Mediation process and Time-limit for completion of mediation: Mediation proceedings will be confidential. A party may withdraw from mediation after the first two mediation sessions. A period of 180 days from the commencement of mediation has been stipulated for its completion, with a further extension for an additional period of 180 days with the consent of parties as per Section 21 of the Mediation Bill. In case of court annexed mediation (i.e., mediation conducted at a mediation center established by any court or tribunal), the process must be conducted in accordance with directions or rules framed by the Supreme Court or High Courts as per Section 26 of the Bill.
5. Recognition and enforcement of domestic and international Mediation Settlement Agreements: A ‘Mediated Settlement Agreement' has been defined under Section 22 to mean and include an agreement or interim agreement in writing between some or all parties resulting from mediation which settles some or all the disputes between such parties and which is authenticated by the mediator.
The Bill has incorporated Section 28 to recognize domestic mediation as final and binding between the parties and the person claiming thereunder. The Bill provides that a Mediated Settlement Agreement can be enforced in accordance with the provisions of the Code of Civil Procedure, 1908.
6. Grounds to challenge a Mediated Settlement Agreement: The Bill provides certain grounds to challenge the Mediated Settlement Agreement. Section 29(2) of the Bill lays down four grounds of challenges for a domestic Mediated Settlement Agreement:
a) Fraud b) Corruption c) Impersonation and d) relating to disputes not fit for mediation.
7. Recognition of institutional mediation: Section 3(l) of the Draft Bill defines a ‘Mediation Service Provider' as a body or organization that provides for the conduct of mediation and has in place procedures and rules to govern the conduct of the mediation in conformity with the Bill. Lok Adalats constituted under the National Legal Services Authorities Act, 1987 and mediation centres annexed to courts are also included in the term ‘Mediation Service Provider'.
As per Sections 41 and 42 of the Bill, Mediation Service Providers shall be graded by the Mediation Council of India and shall be required to maintain a panel of mediators, provide infrastructure and facilities for the efficient conduct of mediations, register and file Settlement Agreements, amongst other functions.
8. Online mediation: Chapter VII of the Bill recognizes online mediation setup including pre-litigation mediation conducted by using applications and computer networks, resorted to either wholly or in part, at any stage of the mediation process, with the written consent of the parties. The process of conduct of all such online mediations shall be in such manner as may be specified.
9. Establishment of the Mediation Council of India: Chapter VIII of the Mediation Bill envisages the establishment and incorporation of the Mediation Council of India by the Central Government and lays down its broad duties, powers, and functions.
10. Community mediation: The Mediation Bill under Chapter X provides for the kind of disputes wherein community mediation may be resorted to i.e., any dispute likely to affect peace, harmony and tranquility amongst the residents or families of any area or locality. It also lists out the kind of persons which may be included in the mediation panel by the concerned authorities, i.e., persons of standing and integrity who are respected in the community, representative of area/resident welfare associations etc. Further, Section 45 of the Bill spells out the procedure for community mediation.
ANALYSIS AND CONCLUSION
There was no separate legislation in India up until now that was enacted solely for the purpose of mediation. Therefore, the initiative to have a codified law on mediation is a positive step as it will have a beneficial effect in reducing the backlog of cases in the Indian judicial system to a great extent and shall also provide justice to the people in a timely manner.
However, there are some areas of the Bill that may require clarity. Firstly, it is not clear in the Bill as to which entities will be recognized by the Council as mediation service providers, hence clarity on the same is required. Secondly, the Bill does not provide any details pertaining to the qualifications or capacities of a trained mediator. Thirdly, the provision of a mandatory pre-litigation mediation mechanism could pose a challenge and would defeat the essence of mediation where the parties are unwilling to mediate and would rather prefer to litigate. To avoid this, a choice may be given in the Bill with respect to the consent of the parties to participate in the pre-litigation mediation. Lastly, the requirement in Section 18 of the Bill that the mediator shall communicate ‘the view of each party to the other to the extent agreed to by them' could give rise to a possible conflict of interest, besides conflicting with the requirement of confidentiality of the mediation process.
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