January 31, 2019

How is Mediation Gaining Popularity in India?

When will mankind be convinced and agree to settle their difficulties by arbitration? – Benjamin Franklin

Concept of Mediation

“Mediation” is a method of dispute resolution in which one or more impartial third parties with his specialized communication skills and negotiation techniques intervenes in a conflict or dispute with the consent of the participants and assists them in negotiating a consensual and informed agreement. From Lord Krishna negotiating between Kauravas and Pandavas in the Mahabharata, to family elders resolving domestic issues, to panchayats providing community mediation, there exists a strong culture of mediation in India. Mediation is, in fact, the past and historically most effective way that societies have resolved their differences outside of resorting to the courts or violence. Now, it is has become the new buzzword in law.

Development and Evolution of Mediation in India

The 1st mediation training session was conducted in Ahmedabad in the year 2000 by the Institute for the Study and Development of Legal Systems (ISDLS), a non-governmental organization based in San Francisco, California, USA. It was succeeded by a few advanced training workshops conducted by a public charitable trust “Institute for Arbitration Mediation Legal Education and Development”, settled by two senior lawyers In Ahmedabad.

The Chief Justice of India formally introduced the Ahmedabad Mediation Centre on 27th July 2002. The value of mediation and the need to implement Sec. 89 of the Civil Procedure Code, 1908 was the agenda. These conventions and training sessions maintained in order to get the concept of mediation and arbitration in the mainstream for dispute resolution.

In order to be formally trained as a mediator in India, an individual must undergo a 40-hours’ training programme and conduct 20 mediation sessions under the Mediation and Conciliation Project Committee (MCPC). Since the early 2000s, 52 judicial mediation education programmes have been facilitated in various parts of the country. About 869 members of the judiciary have undergone the 40 hrs of training.

Types of Mediation

Mediation in India is divided into three categories which are commonly followed:

Court-annexed mediation

This applies to cases which are filed in the court or are pending in the court. The mediation services are rendered by the court as a part and parcel of the same judicial system. The Rules framed by Supreme Court and High Courts in pursuance of Section 89 of Civil Procedure Code, 1908 venture with Court-annexed mediation. The mediation centers have been established by the SC, HC’s and may district courts in the country and services provided to the litigants is either free of charge or minimally charged. The process of mediation is conducted within the court complex. The agreement arrived at are recorded in a compromise document and then sent back to the Court for a final decree and no appeal lies through Court-annexed mediation.

Court referred mediation

It employs to cases which the Court would refer for mediation and are governed by the rules framed by High Courts in pursuance of Section 89 of Civil Procedure Code, 1908 and the Legal Services Authorities Act, 1987. In times of legal position laid down by Hon’ble Supreme Court of India in Afcons Infrastructure Ltd. and Anr. V. Cherian Varkey Construction Co. Pvt. Ltd. and Ors., (2010) 8 SCC 24, a dispute referred for mediation by the court will be deemed to be a reference to Lok Adalat and the provisions of LSA shall apply as if the dispute were referred to a Lok Adalat under the provisions of LSA. The control and jurisdiction over the matter are retained with the court and the mediation settlement reached before a mediator is placed before the court for recording the settlement and disposal of the matter. Court applies the principles of Order XXIII Rule 3 of CPC and passes decree/order in terms of the settlement in regard to the subject-matter of the suit/proceedings. In regard to the matters/disputes which are not the subject-matter of suit/proceedings, the court will order that the settlement shall be governed by Section 21 of Legal Services Authority Act, 1987and shall be final and obligatory on all the parties to the dispute and no appeal lies to any court against the award. This type of mediation is commonly used in Matrimonial disputes, particularly divorce cases.

Private Mediation

When the parties undertake mediation individually, individualistic Court proceedings, it is termed private mediation which can be used for disputes pending in Court as well as pre-litigation disputes. There is no law governing private mediation in India. In separate mediation, qualified mediators contribute their services on a fee-for-service basis to the various stakeholders which are, the Court, the governmental sector, members of the public and business houses. Private mediations are being availed of by parties to settle high-value commercial and family disputes. As the law is not currently available to provide enforceability to a settlement at private mediation, the settlement terms are executed as a contract u/s 74 of the Arbitration and Conciliation Act, 1996 which are binding and has the same validity as an arbitral award. In case the dispute is still pending in Court, parties have the option to file the settlement in court for a decree and in case of pre-litigation mediation, parties have the option to name the mediation process as a conciliation’.

Legislative Recognition

The law relating to mediation in India is incorporated in the following legislation:

Industrial Disputes Act 1947, which provides for mediation of industrial disputes by officers appointed by the government;
Section 89 of the Code of Civil Procedure, 1908;
Arbitration and Conciliation Act 1996 (specifically Part III);
Hindu Marriage Act 1955, the Special Marriages Act 1954 and the Family Courts Act 1984, which require the court in the first instance to attempt mediation between parties;
Legal Services Authorities Act 1987, which provides for setting up Lok Adalats;
Section 442 of the Companies Act 2013, which provides for referral of company disputes to mediation by the National Company Law Tribunal and Appellate Tribunal read with the Companies (Mediation and Conciliation) Rules, 2016 (notified on 09th September 2016); and
Section 12A of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, which provides for mandatory pre-institution mediation in those cases where no urgent interim relief (such as an injunction) is being sought by the parties to the dispute.
Section 32(g) of the Real Estate (Regulation and Development) Act, 2016, which provides for amicable conciliation of disputes between the promoters and allottees through dispute settlement forum set up by consumer or promoter associations.

The Consumer Protection Bill, 2018 passed by Lok Sabha on December 20, 2018, provides for reference of a dispute to Mediation as an ADR Mechanism and settling up of a Consumer Mediation Cell. The District, State or the National Commission may direct the parties to give a written consent to settle their dispute by mediation if there is an element of a settlement between the parties.

Mediation Institutions

The court-annexed mediation centers are the most eminent mediation institutions in India. The Supreme Court, almost all 24 High Courts and district courts in India have mediation centers. These courts exercise original and appellate jurisdiction across the entire range of litigation. The country’s first court-annexed mediation center was set up in the Madras High Court in 2005, and soon this model was emulated in other high courts. The courts have given the lead in institutionalizing mediation, presenting training, certification, referrals, etc.

The establishment of court-annexed mediation centers has led the path for emergence and growth of private mediation institutes throughout the length and breadth of the country viz.:

ASSOCHAM International Council of Alternative Dispute Resolution (AICADR), New Delhi
International Centre for Alternative Dispute Resolution (ICADR), New Delhi
Centre for Advanced Mediation Practice (CAMP), Bangalore
Centre for Alternative Dispute Resolution, Mumbai
Indian Institute of Arbitration & Mediation (IIAM), Cochin
India International ADR Association (IIADRA), Cochin
Mediators India, Chennai
Foundation for Comprehensive Dispute Resolution (FCDR) , Chennai
Meta – Culture Consulting, Bangalore
Prachi Mediation Chamber, Mumbai
Bangalore International Mediation, Arbitration and Conciliation Centre (BIMACC), Bangalore
Institute for Arbitration, Mediation, Legal Education and Development (AMLEAD), Ahmedabad
Alternative Dispute Resolution(ADR) Centre, Kerala (an initiative of the Centre for Public Policy Research)

Areas of dispute for mediation

Mediation is used in implicitly the entire range of business and commercial disputes, employment and workplace disputes, housing and property disputes, family disputes, technology and intellectual property disputes, company and shareholder disputes, disputes relating to sports and media laws.

The Supreme Court of India in Afcons Infrastructure Ltd. and Anr. V. Cherian Varkey Construction Co. Pvt. Ltd. and Ors. (2010) 8 SCC 24, held that the following categories of disputes are normally considered unsuitable for ADR process

(i) Representative suits involving public interest
(ii) Election to public offices
(iii) Suits for grant of probate or letters of administration
(iv) Allegations of fraud, fabrication of documents, forgery, etc
(v) Protection of courts (claims against minors, deities and mentally challenged)
(vi) Suits for a declaration of the title against the Government
(vii) Cases involving prosecution for criminal offences.

The following categories of cases are normally suitable for ADR processes:

(i) Trade, commerce, contracts, corporations, property, construction, banking/financial, shipping and real estate;
(ii) Matrimonial disputes, custody cases, maintenance, partition or division of family property;
(iii) Disputes between neighbours, employers and employees;
(iv) All cases relating to tortious liability;
(v) All consumer disputes.

The above categorization of cases as “suitable” and “unsuitable” is not exhaustive or rigid. They are representative in referring a dispute/case to an ADR process.

Developments in Online Dispute Resolution (ODR)

Online dispute resolution (ODR) is the modern and digitized iteration of the traditional ADR with the major noticeable difference only being the use of machines and networking for communication. With the rapid development of the Internet and electronic commerce, Online Disputes Resolution has been labeled “a logical and natural step” as it promotes the expeditious resolution of disputes.

Notable cases

In Salem Advocate Bar Association, Tamil Nadu vs Union of India, the Supreme Court held that Section 89 of Civil Procedure Code, 1908 originated by Civil Procedure Code (Amendment) Act, 1999 was constitutionally valid and would help in speedy disposal of cases in the trial courts and the appellate courts and established a committee to, inter alia, draft rules on mediation and create a report on effective case-control and be followed while taking recourse to the Alternate Disputes Resolution (ADR) referred to in Section 89 to reduce the burden on courts and the Committee was requested to file its report within a period of fourmonths for consideration. It was also noted that the formulated model rules may be adopted by the concerned High Courts to give effect to Section 89(2)(d) of the Code.

The Committee filed its reports on the issues identified in Salem Bar – (I). Another Supreme Court Bench, comprising Justice Y.K. Sabharwal, Justice D.M. Dharmadhikari, and Justice Tarun Chatterjee, extensively reviewed the submitted reports in Salem Advocate Bar Association, Tamil Nadu vs Union of India, (2005) 6 SCC 344 [Salem Bar-(II)] and noted that Civil Procedure Alternative Dispute Resolution and Mediation Rules, 2003 and Model Case Flow Management Rules will facilitate in allocation of effective administration of justice and directed the Registrar Generals, Central Government and State/Union Territories to file a progress report with respect to the adoption of the rules developed in the Salem Bar I Committee reports, within 4 months of the date of the judgment.

The Supreme Court in K. Srinivas Rao v. D.A. Deepa (2013) 5 SCC 22 decided on 22^ndFebruary, 2013held that the criminal courts dealing with the complaint under Section 498-A IPC should refer the parties to mediation center before they take up the complaint for hearing, if they feel that there exist elements of settlement and both the parties are willing.

The Supreme Court in State of Madhya Pradesh v Madan Lal (2015) SCC OnLine SC 579 decided on 01.07.2015 held that there could be no mediation between the accused and the victim in cases of rape.

The Delhi High Court in the case of Division Bench of Delhi High Court in Turning Point vs. Turning Point Pvt. Ltd FAO (OS) 263/2017 & CM Nos. 35553-54/2017¹⁵, pronounced on August 2, 2018, expressed its view that the Appellant and the Respondent ideally should negotiate their differences by mediation.

The Supreme Court of India in Moti Ram (D) Thr. L.Rs. and Anr. vs. Ashok Kumar and Anr. (2011) 1 SCC 466¹⁶ stressed that mediation proceedings are strictly confidential and observed that the mediator should send the settlement agreement signed by the parties to the Court without mentioning what transpired during the mediation proceedings when successful and in other cases i.e. when unsuccessful the mediator should simply state that mediation has been defeated.

Mediation in India: Recent developments

The Ease of Doing Business Task Force at the Central Government has asked the Ministry of Law and Justice to take necessary steps to introduce a stand-alone law to regulate pre-litigation voluntary mediation in May 2017. In February 2016, the law ministry had mooted a note on similar lines, backing a new law on mediation.

Mediation was central to the discussions at the recent three day (12^th to 14^th May, 2017) event Global Pound Conference Series India 2016 – 2017titled “Shaping the Future of Dispute Resolution and Improving Access to Justice” held at the Judicial Academy, Chandigarh. Familiarity with the dispute resolution process was known as the biggest influencer when lawyers make recommendations to parties about procedural options for resolving commercial disputes.

The Two-day conference (27^th-28^thJuly, 2018) on National Initiative to Reduce Pendency and Delay in Judicial Systemwas organized by Supreme Court of India in collaboration with the Indian Law Institute, New Delhi to deliberate on the issue of pendency and delay in the judicial system.

The panel of prominent legal luminaries headed by Hon’ble Shri Justice Dipak Misra, the then Chief Justice of India deliberated on the concept of ‘case and court management system’, ‘methods of promoting Alternative Dispute Resolution’, ‘greater use of technology to attempt to plug the gaps in justice delivery’ by taking immediate appropriate measures of identifying the cases which need urgent attention and quick disposal and suggested to strive for more alternative methods of dispute resolution in various forms like arbitration, mediation, pre-litigation mediation, negotiation, Lok Adalats, etc., and employ ADR techniques through courts as courts are empowered to do so under section 89 of Civil Procedure Code, 1908 and urged the judicial officers to interact with the parties diligently to explore the possibility of ADR, wherever possible and advocated that subordinate judiciary should be trained on these aspects during their induction training days itself and highlighted that ADR mechanism can be taken online via the use of technology in making justice dispensation system more efficient and fast.