Mediation Bill, 2021: Promotion of Mediation & Concerns

In News

• The Mediation Bill, 2021 was introduced in the Rajya Sabha in 2021.
  • The Parliamentary Standing Committee on Law and Justice also recommended changes to the Mediation Bill.

Why does India need to promote mediation?

• Statutes: 
  • While there is no standalone legislation for mediation in India, there are several statutes containing mediation provisions, such as 
    • The Code of Civil Procedure, 1908, 
    • The Arbitration and Conciliation Act, 1996, 
    • The Companies Act, 2013, 
    • The Commercial Courts Act, 2015, and 
    • The Consumer Protection Act, 2019. 
• The Mediation and Conciliation Project Committee opinion:
  • The Mediation and Conciliation Project Committee of the Supreme Court of India describes mediation as a tried and tested alternative for conflict resolution. 
• Singapore Convention on Mediation:
  • As India is a signatory to the Singapore Convention on Mediation (formally the United Nations Convention on International Settlement Agreements Resulting from Mediation), it is appropriate to enact a law governing domestic and international mediation.

Key features of the The Mediation Bill, 2021

• Aim:
  • The Bill aims to promote, encourage, and facilitate mediation, especially institutional mediation, to resolve disputes, commercial and otherwise.
• Proposal of mandatory mediation:
  • The Bill further proposes mandatory mediation before litigation. 
  • At the same time, it safeguards the rights of litigants to approach competent adjudicatory forums/courts for urgent relief. 
• Confidentiality & immunity: 
  • The mediation process will be confidential and immunity is provided against its disclosure in certain cases. 
• Mediation outcomes: 
  • The outcome of the mediation process in the form of a Mediation Settlement Agreement (MSA) will be legally enforceable 
    • It can be registered with the State/district/taluk legal authorities within 90 days to ensure authenticated records of the settlement. 
  • Challenging the outcome:
    • Since the MSA is out of the consensual agreement between the parties, the challenge to the same has been permitted on limited grounds.
• Mediation Council of India:
  • The Bill establishes the Mediation Council of India and also provides for community mediation.
  • The qualifications and appointment of the Chairperson and Members of the proposed Mediation Council: 
    • The Chairperson and full time Members to have ‘shown capacity’ and ‘knowledge and experience’ in ‘mediation.’ 
    • According to present provisions in the Bill, people dealing with problems relating to ‘Alternative Dispute Resolution’ can become members and chairman of the council.

Concerns 

• Criteria of mandatory mediation: 
  • According to the Bill, pre-litigation mediation is mandatory for both parties before filing any suit or proceeding in a court, whether or not there is a mediation agreement between them. 
  • Parties who fail to attend pre-litigation mediation without a reasonable reason may incur a cost. 
  • Article 21:
    • However, as per Article 21 of the Constitution, access to justice is a constitutional right which cannot be fettered or restricted. 
• Clause of court-annexed mediation:
  • Additionally, according to Clause 26 of the Bill, court-annexed mediation, including pre-litigation mediation, will be conducted in accordance with the directions or rules framed by the Supreme Court or High Courts. 
  • In countries that follow the Common Law system, it is a healthy tradition that in the absence of statutes, apex court judgments and decisions carry the same weight. 
  • The moment a law is passed however, it becomes the guiding force rather than the instructions or judgments given by the courts. 
    • Therefore, Clause 26 is criticised for being unconstitutional.
• Cross-border mediations in India:
  • The Bill considers international mediation to be domestic when it is conducted in India with the settlement being recognised as a judgement or decree of a court. 
  • The Singapore Convention does not apply to settlements that already have the status of judgments or decrees. 
  • As a result, conducting cross-border mediation in India will exclude the tremendous benefits of worldwide enforceability.

The Parliamentary Standing Committee recommendations 

• Gradual introduction:
  • Pre-Litigation Mediation should be introduced in a phased manner instead of introducing it with immediate effect for all civil and commercial disputes.
• Court annexed mediation:
  • Panel objected to Clause 26 of the Bill, as it is against the spirit of the Constitution. 
  • Specific provisions should be made about court annexed mediation in place of existing provisions of clause 26.
  • The panel provides that court annexed mediation including pre-litigation mediation in court annexed mediation centre shall be conducted in accordance with the practice, directions or rules by whatever name called by the Supreme Court or the High Court.
• Appointment of officials:
  • The appointment of the Chairperson and Members of the Mediation Council of India should be made by a selection Committee constituted by the Central Government.
• Definition of ‘mediation’:
  • The existing definition of ‘mediation’ needs to be reframed. Redefine the term ‘mediation’ such that it reflects the intent of the provisions contained in Clauses 17 and 18 of the Bill.

Way Ahead

• In order to enable a faster resolution of disputes, the Bill should be implemented after discussion with stakeholders. 
  • Such a bill will enable a faster resolution of disputes.
• It would result in the restoration of faith of the litigants in the judicial and law-making arms of the government.

Source: TH