Blog Details

In December 2021, Union Law Minister Kiren Rijiju tabled the Mediation Bill in Parliament. The Bill was controversial, and it was sent to the Committee on Law and Justice for additional scrutiny. This article gives an overview of its salient features.

Salient Features:

1.Parties to civil or business disputes should attempt to resolve their dispute through pre-litigation mediation before going to court, according to Section 6 of the Bill. In order to preserve the interests of the parties involved in a court case while mediation processes are ongoing, it is also proposed that courts and tribunals be granted the authority to send parties to mediation.

2. Any conflicts of interest that would cast doubt on a potential mediator's independence and objectivity must be disclosed. According to the bill, parties have the right to discontinue with any mediator who has disclosed inaccurate or fraudulent information regarding a conflict of interest.

3. To resolve mediation-related conflicts, Section 22 of the Bill proposes a "Mediated Settlement Agreement" (the "Agreement"). Once it has been signed by all parties and validated by the mediator, this Agreement will have the same legal force as a decision or decree. The Agreement will conform to the Civil Procedure Code's rules and will be binding on all parties involved.

4. To challenge fraud, corruption, gross impropriety, or impersonation in the event of a breach of this Agreement by the aggrieved party, you must file a lawsuit against the violator in a court of competent jurisdiction under Section 29(2) of the Bill.

5. The Bill suggests creating a body corporate called the Mediation Council of India (the "Council") with the purpose of promoting and governing both domestic and foreign mediation in India. To be members of this body, it is suggested that judges of the Supreme Court or High Court, famous individuals and academicians in the field of mediation, and important government figures be chosen.

6. Chapter 10 of the Bill acknowledges community mediation as a dispute resolution method for issues involving the community that could jeopardise peace and harmony. The responsible authority may appoint three mediators, who must be of exemplary character and reputation in the community or representatives of welfare organisations.

7. An Agreement to which the Government is a party shall not be executed without the prior written authorization of the Competent Government Authority. Furthermore, measures made in good faith by the central or state governments, their employees, council members, mediation centres and service providers are immune from legal action.

8. The Indian Contract Act, the Arbitration and Conciliation Act, and the Code of Civil Procedure are only a few of the important laws that the Bill intends to change in order to simplify the adoption of mediation in India.

Scope of Mediation:

The Bill includes pre-litigation mediation, online mediation and conciliation as types of mediation. A mediation proceeding must be completed within 180 days of the date of the first appearance before the mediator. Under the terms of the Bill, anyone of any nationality may serve as a mediator provided that they meet certain conditions; this would allow them to choose whether to use a mediation service provider as a mediator or any mediator of parties choice. 

Online mediation, which is governed by Chapter 7 of the Bill and includes pre-litigation mediation carried out via apps and computer networks, has been granted the authority to create regulations for its use.

GREY AREAS IN THE LEGISLATION:

1. The Bill clarifies that one of the grounds on which an international mediated settlement can be challenged is if it is in contravention with the public policy of India. The Bill then borrows the language from the Arbitration Act, which states that fundamental policy of Indian law is in contravention with an international mediated settlement if it is in conflict with any existing law or rule of practice.

The term ‘fundamental policy of Indian law’ has not been defined in the Bill, leaving it up to the Courts to determine. Even though Courts have attempted to clarify its meaning in recent years, ambiguity remains and this has led to abuse by parties of the public policy ground to delay enforcement of awards. This problem will likely occur with respect to international mediated settlements as well and calls for more clarity.

2. The Bill is vague about the grounds for challenging a domestic mediation settlement. The lack of clarity may provide a big leeway to parties to resist enforcement of a settlement agreement by bringing any and all challenges under the term ‘gross impropriety’.

3. The bill did not recognize the confidentiality that every meditation must recognize. For example, Rule 20(2) of the Civil Procedure Mediation Rules stipulates that “when a party gives information to the mediator subject to a specific condition that it be kept confidential, the mediator shall not disclose that information to the other party”. This principle is absent from the bill and replaced by a more generalised principle which lacks sufficient nuance.

Conclusion:

The government's efforts to enact a standalone mediation law should be applauded. This will help to clear up the backlog of cases in the Indian legal system, as well as streamline the process for resolving legal disputes. The government must also be clear which organisations will be accepted as mediators by the Council. The Bill should provide a choice and state that only particular sorts of disputes should be sent to pre-litigation mediation. If parties wish to litigate, they will find it difficult to apply pre-litigation mediation.