Why mediation?

There could be various scenario for considering mediation to resolve existing or probable conflict.

One of the important reasons to opt mediation is that it allows you to resolve disputes on principles rather than on feelings or intuition of parties. It helps you prevents hasty decisions and avoid pressure – even when it is necessary to conclude dispute at the earliest.

Also, the common sense approach is to resolve disputes through mediation because it saves time and cost involved in arbitration or litigation in court. There is no certainty about the final outcome in arbitration or court litigation as the third party (arbitrator or judge) imposes (by adjudication) what she/he considers as fair and hence it is quite often neither parties are happy with the result/decision. And that leads to further litigation and bitterness in relationships.

Many a times, after initially launching litigation (which might have been launched in anger, to teach lesson or just to delay the matter), parties soon realise that it is not what they wanted. First thing, most people face in litigation is the sheer delay in outcome and the cost, besides efforts that goes into it. It also affects reputation, relationships (may be of several years old and/or possible future relationships), value erosion (particularly for entities whose shares/stocks are listed) and mental stress/health. As a result, focus often shifts from doing business to seeking ‘fairness’ from third party (arbitrator or Judge).

And where one goes through the roller coaster of loosing, winning, loosing, winning in litigation (remember roller coaster of emotions too), the final winner faces the harsh reality that final decree/award may not be honoured by the opposite party. And to make a final decree/award ‘the final’, one need to apply for execution proceedings in court! And execution proceedings itself can take several years. As an example, to buttress the point, consider the following observation of the Hon’ble Supreme Court:

Eviction order passed in 1989 yet not permitted to be executed by the judgement-debtor by initiating proceedings one after another!

“It is very unfortunate that an order which was passed in favour of the respondent judgment-creditor for eviction of the petitioner passed on 28.08.1989 is yet not permitted to be executed by the judgment-debtor by initiating the proceedings one after another. It is very unfortunate that even after a period of 33 years, the judgment- creditor in whose favour the order is passed in the year 1989 is not able to enjoy the fruit of the litigation and the decree passed in his favour.” In M. Chinnamuthu (Dead) v. Kamaleshan @ Shanmugam (Dead) Through Lrs. SLP (Civil) No. 2198 of 2022. Judgement dated February 18, 2022.

Also consider the number of pending cases and for how many years from here. At the end, litigants may wonder and tend to agree that ‘justice is an illusion‘ and it was mistake to litigate (though rarely openly admitted).

As a contrast, in mediation, parties to a dispute resolve their differences themselves with the help of a third neutral party (mediator). Mediator creates environment for communication, understanding underlying interests and available options. Instead of doing reality check at end (as in litigation), mediator facilitates reality check early on in mediation. No wonder most disputes are resolved by parties themselves, on a mutually agreed terms, that meets their respective underlying interests.

Mediation is a voluntary process – agreed by all disputing parties to attempt in good faith to resolve their differences. It maintains confidentiality (names of parties, their dispute and settlement terms etc. are not made public) and thus reputation and brand images are preserved. And more importantly and often, relations amongst parties are restored /improved or where parties so decides, consciously, to end relations without bitterness.

Mediation based on principles (as opposed to positions) can perhaps be used to establish long lasting peace without sacrificing concerns of justice, fair play and equity.

To the contrary of strong belief, mediation can work even when one of the disputing parties is strong (an elephant in the room) and other party is comparatively weaker or even miniscule.

Since mediation is not adversarial, it presents a possibility of looking at disputes not as “either or” approach or zero-sum games. In mediation, parties creates several possible options/possible solutions, and after evaluating them on mutually agreed objective criteria, finally they may agree to settle the dispute on a mutually agreed terms.

The best part is nothing is binding until final settlement is reached, written and signed. This allows party to work in good faith to resolve and openly discuss their respective concerns and interests. Advocate in mediation can represent parties in mediation and has a crucial role in making parties open, cautiously and gradually. Disputing parties too need to understand and pay their counsels (Advocate in mediation) in such a way that they are incentivised for mutually agreed terms of settlement than they might get over a period of prolonged litigation.

Out come in such a mediation provides an opportunity to reformulate relationships in the interests of all stakeholders, as it takes into consideration the future interests of parties, rather than past deeds (saying / actions) of parties.

Where mediation fails, parties still have options to come back to mediation or opt for conciliation, arbitration and court litigation.

Even cases pending before arbitrator or court may be referred to mediation.

There could be other scenario calling for mediation.

  • Say, businesses / corporates do negotiations. And when negotiations have reached an impasse, but both sides agree that they need help resolving the differences – particularly when both sides see 1+1 (i.e. their joining/working together) can make 11. In this scenario a neutral mediator is engaged to facilitate resolve the differences.
  • Also, when talks between negotiators turns into a dispute, they often develop negative opinions about each other. A negotiator might think, if only the other side was bargaining in good faith, we would have resolved this issue, probably long ago. Such views of parties sows seeds of skepticism and every proposal of other party gets biased with skepticism, which prevents them from reaching settlement. A mediator can help you overcome this barrier. 
  • In case of parties are in litigation for long and are looking for ‘face saving’ exit, mediation helps.

Still disputing parties are considering to litigate, before proceeding – consider what the Hon’ble Chief Justice of India, N. V. Ramana had to say about mediation:

  • “Reasons for conflicts are many. Misunderstandings, ego issues, trust and greed can lead to conflicts. Ultimately, small differences of opinion can lead to a major conflict. And even major conflicts can be resolved with some effort in understanding one other,” the CJI said. “My advice, after remaining in the legal profession for over 40 years, is that you must keep the option of knocking on the doors of a court as a last resort. Use this last resort only after exploring the option of ADR- arbitration, mediation and conciliation. Arbitration and mediation are efforts at restoring a relationship,” Justice Ramana said. See here.
  • Mahabharata teaches us significance of mediation, conciliation: CJI Ramana to business community Read here and here.

Present CJI, Hon’ble Shri Dr. DY Chandrachud, has in a recent public address supported Mediation and said Mediate, don’t litigate. (see here and here).

In 2005, the Indian government enacted the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, which mandates pre-litigation mediation in commercial disputes above a certain threshold.

The Supreme Court of India, under the leadership of various Chief Justices, has been promoting the use of mediation in various types of disputes, including commercial disputes, family disputes, and public interest litigation. In 2020, the Supreme Court launched the e-Committee initiative to enable online mediation and dispute resolution. The initiative aims to provide a platform for parties to resolve their disputes without having to physically appear in court, thereby reducing the burden on the judicial system.

Overall, the CJI and the Supreme Court of India recognize the potential of mediation as a means of dispute resolution and are working towards promoting its use in India.

To know about pendency of court cases in India, click here.

We assist you resolve dispute / impasse – by acting as Mediator as well as Advocate in Mediation.

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Advocate, Mediator and Insolvency Professional

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