Mediation in India

In India, mediation can be a statutory requirement, generally before institution of a suit (majority of cases), or a court referred (rare) or a contractual i.e. requirement of private contract between parties (gaining momentum).

There is no specific law of mediation in India. However, the mediation is recognised in India under different statutes. The same is summarised below:

  • Civil and Commercial Matters
    • The Civil Procedure Code, 1908 – Court annexed mediation u/s.89 r/w Order 10 and rules framed by High Courts and Sec.16 of the Court Fees Act, 1870; Compromise of Suit per Order 23 r/w Rules 3, 3A, 3B; Order 27 Rule 5B; Family matters per Order 32A Rule 3

Court annexed mediation status:

The Supreme Court, all the High Courts, and District Courts now have full-fledged mediation centres.

  • Mandatory pre-institution mediation under the Commercial Courts Act, 2005 – Sections 2(c), 12A r/w the Commercial Courts (Pre-Institution Mediation and Settlement) Rules 2018
    • SARFAESI Act – Section Section 11 – conciliation or arbitration
    • Mandatory conciliation (before arbitration) under the Micro Small and Medium Enterprises Development Act, 2006 – section 18 – Facilitation Council and eSamaadhan Scheme of Government
    • Mediation and Conciliation Panels under
      • the Companies Act, 2013 – Section 442 r/w the Companies (Mediation and Conciliation) Rules, 2016 – for mediation between the parties during the pendency of any proceedings before the Central Government or the Tribunal (NCLT) or the Appellate Tribunal (NCLAT) under the Companies Act
      • Real Estate (Regulation and Development) Act, 2016
    • Disputes relating to formation, management or business of producer company shall be settled by conciliation or by arbitration as provided under the Arbitration and Concilliation Act, 1996 as if parties to the dispute have consented in writing for the same. [Section 378Z-O of the Companies Act, 2013]
    • The Legal Services Authorities Act, 1987 – Lok Adalats – Chapter VIA and Sections 22A to 22E
    • Conciliation under Part III of the Arbitration and Conciliation Act, 1996
  • Consumers related matters
    • Mediation cells under the Consumer Protection Act, 2019 – the Consumer Protection (Mediation) Rules and Regulations 2020 – click here to know more.
    • Ombudsperson is empowered to act as mediator in complaints from consumers in electricity – Section 42 of the Electricity Act 2003
    • For telecom disputes – the TRAI Act 1997. However individual consumers cannot avail it. It is only for group of consumers. Individual consumers may compliant under the Consumer Protection Act 2019.
    • Insurance Ombudsman Rules 2017 for consumer disputes with insurance companies .
    • RBI ombudsman for complaint against banks and NBFCs
  • SEBI Act 1992 – Section 15JB(3) – Ombudsman to promote settlement of complaint by agreement or mediation.
  • Labour laws
    • the Industrial Disputes Act, 1947 – Conciliation u/Sections 2(p), 4, 5, 12(3) and (4), and 18(3)
    • Provisions of Industrial Disputes Act is made applicable to newspaper employees, sales promotion employees and bead and cigar workers and thus have conciliation procedure is applied for resolving their disputes
    • the Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act 1981 – Ss.4 and 5 r/w Chapter VI of the Rules of 1984
    • Some State Laws on labour also provides for conciliation – Kerala Agricultural Workers Act 1974, Kerala Headland Workers Act 1978, Madhya Pradesh Industrial Relations Act 1960, Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971, etc.
  • Personal and matrimonial matters
    • The Hindu Marriage Act, 1955 and the Special Marriages Act, 1954 -Section 23(2) – court in the first instance to attempt mediation between parties – r/w the Family Courts Act1984 and rules framed thereunder by States in India
    • The Protection of Women from Domestic Violence Act, 2005 – requires appointment of counsellor
    • Conciliation under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 – Section 10
    • Conciliation under the Maintenance and Welfare of Parents and Senior Citizens Act, 2017
    • The Gram Nyayalayas Act, 2008

Since there is no single statute on mediation, contractual and private mediations are based on mutually agreed terms of mediation, including confidentiality clause, without prejudice clause and implementation and enforceability clause on settlement agreement that may be arrived at.

The role of advocate in mediation is gaining momentum with cautious approach. Still, majority of lawyers are apprehensive of loss of their remuneration which they would earn in traditional court litigation.

Online mediation / Online Dispute Resolution (ODR) is also gaining momentum in India. Though, appropriate safeguards are applied by mutual agreement on confidentiality, not recording online sessions and restricting participants / access to room from where online participation is made and records are shared through mutually acceptable secured means.

Still offline or online mediation has a base of willingness of parties to settle dispute through mediation and acceptance of independence of mediator / organisation providing mediation services.

The draft Mediation Bill 2021

While India is signatory of United Nations Convention on International Settlement Agreements Resulting from Mediation (New York, 2018) (the “Singapore Convention on Mediation”), but has not ratified it yet. Department of Legal Affairs of the Ministry of Law and Justice has recently placed on its website the Draft Mediation Bill 2021 for public comments.

The said Bill of 2021 proposes to ratify the Singapore Convention on Mediation and mandates pre-litigation mediation in civil and commercial litigation. Mediation is a voluntary process and the draft Bill requires that parties make a good faith attempt to settle their dispute amicably. Mediator explains the mediation process in a substantive session. However, for urgent interim reliefs parties may approach courts without first attempting mediation. It also provides for community mediation. It proposes to exclude limitation period for time taken in mediation and also recognises confidentiality, settlement agreement and its enforceability as of decree of court. It proposes to create the Council of Mediation with which Mediator, Mediation Institution and Mediation Service Provider needs to register. The Council will frame regulations for them including for qualification, experience and accreditation requirement of mediator. It proposes to recognise foreign mediators and settlement agreement reached outside India.

About Mediator:

The mediator is understood to be a catalyst (as an agent in chemistry) or a facilitator (being a neutral person) to arrive at mutually agreeable settlement by and between disputing parties. He is someone in whom confidence is posed in by parties as an independent, neutral person with skill to facilitate an attempt of parties to settle their disputes outside the arbitration and litigation process.

Mediator does not intervene in the process of arriving at settlement by parties. He is not an adjudicator or arbitrator who imposes his decision. He does not express opinion on right and wrong, ethical or otherwise or take sides. He does not validate or condemn act of parties.

Mediator is an independent professional with skills of mediation. His independence and role as mediator is accepted voluntarily by parties. Mediator is someone before whom parties, in private sessions, can openly express their feelings about the problem. He helps parties see the core issue and surrounding emotions (like separating a needle from a haystack), and invite parties to see the future for themselves – on the issue and/or relation with other parties. He facilitates parties to arrive at settlement and often brings to their attention any deviation from the goal of arriving at solution/settlement.

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Chamber of Prakash K. Pandya

Advocate, Mediator and Insolvency Professional

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