This presentation discusses the question as to whether a statute on mediation is required to be enacted in India. It argues that an ADR code has to be enacted so that dispute and its resolution are seen holistically.
1. Mediation in India:
Need for a Legislation?
BADRINATH SRINIVASAN
MANAGER (LEGAL), BHARAT PETROLEUM CORP. LTD., NORTH
2. Why is this Question Relevant?
SCI Order dt. 05.03.2019 in M.R. Krishna Murthi v. The New India Assurance Co. Ltd., Civil Appeal
No. 2476-2477 of 2019:
“We recommend to the Government to examine the feasibility of setting up MAMA by making
necessary amendments in the Motor Vehicles Act itself. In fact, the way mediation movement is
catching up in this country, there is a dire need to enact Indian Mediation Act as well.” (Para 27)
“We impress upon the Government to also consider the feasibility of enacting Indian Mediation
Act to take care of various aspects of mediation in general.” [Para 39(a)]
High Level Committee to Review Institutionalisation of Arbitration Mechanism in India (2017):
“The Government may consider the feasibility of having a standalone legislation for mediation
after debate and discussions with the relevant stakeholders.” (p. 85)
3. Legal Framework for Mediation
Section 89 Code of Civil Procedure (as explained by Afcons Infrastructure)
Afcons Infrastructure ironed out problems with S. 89
Effecting compromise by court is not mediation
Construed S. 89(2) such that “mediation” is replaced by “judicial settlement” in S. 89(2)(c) and “judicial
settlement” is replaced by “mediation” in S. 89(2)(d)
Held, contra to text of S. 89, and rightly, that terms of settlement cannot be fixed in the preliminary
hearing but are more of an outcome of an ADR process
Disputes suitable and non-suitable for ADR
Once pleadings are exchanged & before framing issues, parties are to be explained the choice of five
ADR and sought their views on which one they wish to choose.
Legal Services Authority Act, 1987 and Court Fee Laws providing for refund of court fee
4. Other Legislations
Hindu Marriage Act 1955, the Special Marriages Act 1954 and the Family Courts Act 1984
Section 442 of the Companies Act 2013/the Companies (Mediation and Conciliation) Rules, 2016
Chapter IIIA (Section 12A) of the Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 and the Commercial Courts (Pre-institution
Mediation and Settlement) Rules, 2018.
Most Important: Section 12A(5): “The settlement arrived at under this section shall have the
same status and effect as if it is an arbitral award on agreed terms under sub-section (4)
of section 30 of the Arbitration and Conciliation Act, 1996…”
Section 32(g) of the Real Estate (Regulation and Development) Act, 2016
5. Why Mediation Framework is
Problematic?
Different frameworks for different types of mediation
Compulsory mediation in certain cases (commercial disputes and family disputes) while in
other cases there is none (motor vehicles, property).
Each operating in its own field
Training: Specialised training depending on the kind of dispute to be handled? Family
mediations and commercial mediations might entail different skill-sets.
No privacy in court annexed mediation in family cases- Too many people
6. Thinking Aloud: Wish list
1. Dispute Resolution Code- Holistic Dispute Resolution
2. Trained Professionals in different fields
3. Appropriateness
4. Negative incentives in litigation for rejection of settlement offers and ADR
offers
5. Government/ PSU litigation and ADR
6. Research and Standards Institution
7. 1: Dispute Resolution Code
Alternative Dispute Resolution Code?
CPC on the one hand & Arbitration, Mediation & Conciliation on the Other
Central Authority for laying down best practices and standards, and conduct
research
Specialised institutions all over the country providing various dispute
resolution services.
Experts in different fields and from different professions
Dispute to be handled holistically.
8. 2: Professional Training
Government sponsored training institutions providing training at nominal cost/ free
Well-trained professionals: Dispute Resolution Professionals, Counsellors, &
Managers
Training in mediation & other ADR as a necessary requirement for, becoming advocate
Government counsels, Legal officers in PSUs, designation as senior counsel, etc.
Open not only for lawyers but professionals from different fields
Tax incentives for mediators, advocates, mediation institutions and training institutes
Tapping hitherto untapped sources: Corporate counsel, junior advocates, and
homemakers
Holistic and specialized training to handle different kinds of disputes
9. 3: Appropriateness
Certain ADR processes are more appropriate in certain cases than others
Family disputes: Mediation
Motor Vehicles & Insurance Disputes: Conciliation/ Ombudsman/ AI Based
Commercial Disputes: Mediation/ Conciliation
Cases involving serious fraud: Litigation
List of types of disputes and appropriateness of dispute resolution process
Is such an exercise possible?
10. 4: Negative incentives for rejection of settlement
offers and ADR offers
Settlement- in the interest of justice
Advantages of settlement for parties & legal system is well known
Rejection of settlement offer during litigation/ arbitration should be for right
reasons
If party rejects settlement offer but loses, costs should be awarded accordingly
See, for instance, English Law, Civil Procedure Rules: Part 36 Offers
11. 5: Government/ PSU litigation and ADR
Government largest appellant
Reductionist approach
How can Government settle litigations?
Banks have OTS
What about PSUs and others?
Need for Government bodies to evolve settlement policies and mechanisms
Clear guidelines balancing transparency, eliminating corruption, and enabling
amicable settlement of disputes.
12. 6: Research and Standards Institution
Institution/ Centre of excellence focusing on research on dispute resolution
Practical aspects
Empirical
Regular publications of Guidelines, Best Practices, Model Rules, Codes of
practice, Standard fee schedules, etc.
Lay down standards (minimum or expected)
Collection of statistics from dispute resolution bodies & institutions (legal
framework is required)
Dispute resolution institutions should necessarily publish statistics pertaining
to disputes handled by it subject to confidentiality.
13. Mediation Related Issues
Boundaries of confidentiality & privilege: Whether applicable for:
Prevention of physical or psychological injury?
Prevention or revelation of commission or concealment of crime?
Threat to a party?
when proceedings against the mediator are filed for negligence or misconduct in mediation?
Mediator independence, conflict of interest, and immunity
Regulating ADR Professionals> ACI> ADRCI?
14. Mediation Related Issues- II
Private Mediation and Limitation Periods-
bona fide efforts at settlement and amendments to the Limitation law
Multi-tier Dispute Resolution clauses & commencement of arbitration
Define commencement & termination
Private Mediation and Status of Settlement Agreements?
Exemption for Settlement Agreements from stamp duty
Form, content, and validity of Mediation Agreements
15. Sum Up: Whether Legislation is Required?
Yes and no
Dispute resolution processes are operating in islands
Dispute is required to be seen holistically
Concerted action to address disputes
Need for a dispute resolution code/ ADR Code
Mediation, Conciliation, Arbitration, Lok Adalat, and their variants
Necessary for clarifying issues relating to mediation such as confidentiality, etc.
Promotion of institutional Mediation
Institutions to publish institutional statistics & statistics of ADR professionals
Model Agreements
16. Institutions fail not because of their rules but because
people making those institutions fail those rules
Thank You