Future of Dispute Resolution By Way of Mediation

“Prescribing Mediation As A Mandatory First Step For Resolution Of Every Allowable Dispute Will Go A Long Way In Promoting Mediation. Perhaps, An Omnibus Law In This Regard Is Needed To Fill The Vacuum.”

Recently, Hon’ble Chief Justice Of India, J. N. V. Ramana Proposed That Mediation Should Be Made Mandatory Before Every Allowable Dispute Which Is Filed Before Courts In India. From The India-Singapore Mediation Summit To Inauguration Of The International Arbitration And Mediation Centre In Hyderabad, CJI N. V. Ramana Reiterated The Judiciary’s Support For Alternative Dispute Resolution (“ADR”) And Mediation In Particular. The Said Sentiment Is Resonated By Other Judges Of The Hon’ble Supreme Court Of India. Further, Recent Amendments To Statutes Including The Commercial Courts Act, 2015 Etc. Clearly Showcases The Legislature’s Push For Mandatory Pre-Litigation Mediation In Commercial Matters. Such Initiatives By The Judiciary And The Government Have Made Us Wonder Whether The Future Of Dispute Resolution Belongs To Mediation. Before We Analyze Success Of Mediation, It Is Important To Understand The Contours Of Mediation.

History Of Mediation In India

Mediation As A Dispute Resolution Method Is Not Alien To Indians. Mediation Played An Important Role In Indian Mythology. In Mahabharata, Lord Krishna Tried To Mediate Disputes Between The Kauravas And The Pandavas. Subsequently, The Panchayat System Played A Pivotal Role As A Neutral Third-Party Mediator Between Parties Wanting To Settle A Dispute At The Community Level. In Indian Families, Elders Have Opted For Mediating Disputes Between Family Members. In British India However, The Traditional Indigenous Dispute Resolution System Could Not Work Out Due To The Establishment Of Courts. Mediation Has Always Been A ‘Go-To’ For Maintaining Relations Yet Solving Disputes In All The Asian Countries Including India.

What id Mediation? How is it conducted?

Mediation Is One Of The Non-Adversarial Alternative Dispute Resolution Mechanisms. It Is A Party-Centric Process Wherein A Mediator, A Neutral Third Party Uses Effective Skills To Help Parties To Amicably Resolve Disputes Between Them. The Mediator Helps The Parties In Understanding The Other Parties’ Perspective And Therefore, This Process Focuses More On The Settlement Of The Dispute Rather Than An Adjudication Of The Dispute On Merits. The Process Is Completely Confidential And Voluntary. The Parties Can Call It Off At Any Time During The Mediation Process.

The Mediator Does Not Propose Settlement Options To The Parties, Rather With His/Her Specialized Skills; He/She Helps The Parties Towards A Collaborative Outcome. Mediation Opens Avenues For Parties For Future Collaborations As It Helps Parties In Maintaining Their Relations. It Resolves Disputes Without The Parties Needing To Approach Courts And Accordingly, Helps Parties Resolve Their Disputes In A Speedier And Cost-Efficient Manner.

Statuatory recognition of ADR

Section 4 Of The Industrial Disputes Act, 1947 Provided For Exploring The Settlement Of Industrial Disputes Through Conciliation Officers Appointed In This Regard. Special Marriage Act, 1954 And Hindu Marriage Act, 1955 Also Have Similar Provisions To Explore Reconciliation Or Settlement Arising Out Of Matrimonial Disputes.

Section 89 Of The Code Of Civil Procedure, 1908 Provided For Reference Of Pending Court Proceedings To Inter Alia, Arbitration, Mediation, And Conciliation For Settlement Outside The Court. The Same Was Applicable To Cases Pending Before The Courts Wherein The Courts Are Of The Opinion That A Settlement Could Be Explored In The Concerned Matter.

Section 442 Of The Companies Act, 2013 Provides For Avenues To Settle Disputes Which Were Pending Before The Central Government Of The Tribunal Or Appellate Tribunal Under The Companies Act. Rule 3 Of The Companies (Mediation And Conciliation) Rules, 2016 Provides For Maintaining A Panel Of Mediators And Conciliators To Enable The Parties To Explore Settlement Of Disputes.

There Has Been An Increased Reliance On Mediation By The Legislature In Different Statutes. Recently, By An Amendment To The Commercial Courts Act, 2015, Section 12A Has Been Inserted To Provide For Mandatory Pre-Litigation Mediation In Cases Wherein No Urgent Reliefs Were Sought. This Is A Major Breakthrough As The Same Makes It Mandatory For Commercial Disputes, Which Involve A Claim Of More Than INR 3 Lakhs, To Explore Mediation Before A Commercial Case Could Be Filed Before Any Commercial Court In India. Additionally, The Consumer Protection Act, 2019 Provides For Reference Of The Dispute To Mediation. Further, Even Courts In India Including The Apex Court Have Time And Again Widened The Scope Of Mediation To Include Cases Relating To Trade, Commerce, Contracts, Consumer Disputes, And Even Tortuous Liability.

Future of Mediation

Mediation Provides A Voluntary, Time-Bound, Cost-Efficient, And Confidential Mode Of Dispute Resolution For Parties. Upon Successful Conclusion Of The Mediation, Parties Enter Into An Agreement Recording Their Settlement, And The Same Is Governed By The Provisions Of The Contract Law. With The Increased Adoption Of Mediation In The Country, In MR Krishna Murthi V. New India Assurance Co. Ltd. (2019), The Hon’ble Supreme Court Emphasized The Need For A Law Governing Mediation In India. Moreover, At The Recent India-Singapore Mediation Summit, Even The Hon’ble CJI Suggested The Same. While The Arbitration And Conciliation Act, 1996 Governs Arbitration And Conciliation In India, There Emerges A Need For A Statute To Govern Mediation Proceedings. Mediation In Particular And ADR, In General, Have The Potential To Reinstate The Sanctity Of Contracts Entered Into Between The Parties, Ranging From An Online Order Of Product To Any Large Stake Investment.

When We Live In A Society Where We Enter Into Agreements Almost On Every Walk Of Life, Disputes Are Inevitable. E-Commerce Has Made It Easier For Parties To Buy Anything From A Safety Pin To A Laptop. The E-Commerce Market In India Is Expected To Grow To USD 200 Billion By 2026. Courts In India Are Overburdened With A Backlog Of Cases. Around 4 Crore Cases Are Currently Pending Before District Courts In India, Out Of Which Around 70% Of Cases Are Pending For More Than 1 Year And Around 40% Of These Cases Are Pending For More Than 3 Years. Accordingly, A Speedier And Cost-Efficient Mode Of Dispute Resolution Is The Need Of The Hour.

Online Dispute Resolution Fills The Lacunae And Provides A Time-Bound, Cost-Efficient Mode Of Dispute Resolution And The Same Is Being Increasingly Adopted In India.

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