MEDIATION BILL, 2021-Need, Significance, Salient Feature Of Mediation Bill 2021-Challenges in Mediation Bill 2021
AUTHOR: SHRADDHA EASWARAN
WHAT IS THE MEDIATION BILL 2021?
Mediation Bill, 2021 is a legal framework to promote, consolidate, facilitate, and strengthen Mediation proceedings in India.
The Mediation Bill 2021 was introduced in the Rajya Sabha on December 20, 2021, and the Parliamentary Standing Committee was tasked with reviewing the Bill. On July 13, 2022, the committee's report is completed and delivered to the Rajya Sabha.
The Committee's report makes significant recommendations for amending the Mediation Bill in order to institutionalize mediation and create the Mediation Council of India.
In the voluntary collaborative process of mediation, disputing parties identify difficulties, discuss possibilities, weigh alternatives, and come to an amicable solution. A non-adversarial, confidential resolution of conflicts is facilitated by trained mediators.
According to Section 4 of the Mediation Bill 2021, mediation is "a process, whether referred to by the expression mediation, pre-litigation mediation, online mediation, community mediation, conciliation, or an expression of similar import, whereby party or parties request a third person referred to as mediator or mediation service provider to assist them in their attempt to reach an amicable settlement of a dispute," while Section 3(e) defines institutional mediation.
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NEED OF A MEDIATION BILL 2021
Arbitration, mediation, conciliation, negotiation, and Lok Adalat are all forms of alternative dispute resolution used in India. All of these offer a method for resolving conflicts outside of traditional courts.
In mediation, a mediator does not enforce any decision or settlement on the parties; instead, they facilitate communication to discuss their differences and come to an amicable agreement. Currently, mediation does not have a standardized legal procedure and is not overseen by a specific authority.
So, there is a need for a legal framework that can govern Mediation in India and this Bill will fulfill the such necessity.
There are currently different ways to start the mediation process:
- First, through the Code of Civil Procedure, 1908's Section 89,
- if there is any contract between the parties that has a clause for mediation, or
- if it is specifically included in any statute that directs the court to order mediation between the parties.
Ambiguities predominate and cannot be eliminated due to the lack of official authority and standardization in the procedure. Adequate mediation legislation must be passed in this circumstance in order to lessen ambiguity. Additionally, this will relieve the courts of the burden of ongoing litigation. In the case of M.R. Krishna Murthi v. New India Assurance Co., the Supreme Court acknowledged the necessity and offered similar recommendations.
A bill on mediation was submitted to the parliament in 2020 with this goal in mind, and it has since been referred to several standing committees for advice and recommendations.
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OBJECTIVES OF THE MEDIATION BILL 2021
The Bill includes a number of commendable provisions, including provisions relating to the timely completion of mediation proceedings, community mediation, and the establishment of a Mediation Council of India to institutionalize mediation.
Some objectives of the Mediation Bill include:
⦁ To give Parties the right to seek urgent interim relief through the mediation prior to the start of, or during the continuation of, court proceedings.
⦁ To mandate individuals attempt to resolve civil or business issues through mediation before going to any court or tribunal. After two mediation sessions, a party may end the mediation. The parties may extend the 180-day mediation period by an additional 180 days if they agree to do so.
⦁ To establish India's Mediation Council. Its duties include recognizing mediation service providers, mediation institutes, and mediators (which train and certify mediators).
⦁ To specify which issues are unsuitable for mediation (such as those involving criminal prosecution, or affecting the rights of third parties). This list may be changed by the national government.
⦁ To choose any person as a mediator if both parties agree to it. If not, they may submit an application to a mediator service provider to have one of its mediators appointed.
⦁ The agreements reached through mediation will have the same legal power and effect as court orders.
⦁ To define some legal terms and lays forth a uniform mediation process that must be followed throughout the nation.
⦁ To spread awareness of mediation, a less time-consuming and more affordable way to settle conflicts, in order to decrease the number of cases that are now ongoing in court.
⦁ Pre-litigation mediation is also included under the bill, which defines its position.
⦁ Additionally, the object of the Bill is to specify the authority and duties of courts and tribunals during the mediation process.
In mediation, a third party acting impartially serves as the mediator. The norms of confidentiality, neutrality, impartiality and party participation are not currently enforced by any authority. But if the Bill is approved and put into effect, it will address these circumstances and make clear the status of mediation processes and their applicability.
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SALIENT FEATURES OF THE MEDIATION BILL 2021
The Bill is broken down into 10 schedules, 11 chapters, and several sections and clauses. The Bill's various chapters include:
⦁ If the government enacts the bill, Chapter 1 discusses the name, scope, and start date of the Act.
⦁ The application of the Bill is explained in Chapter 2.
⦁ The idea of mediation, pre-litigation mediation, mediation agreements, and the authority of courts and tribunals to refer parties to mediation are all explained in Chapter 3.
⦁ Chapter 4 goes into more detail on mediators, including their hiring, firing, compensation, benefits, and replacement.
⦁ The mediation process and other nuances are described in Chapter 5 of the book.
⦁ The enforcement of mediated settlement agreements is covered in more detail in Chapter 6.
⦁ The idea of online mediation is explained in Chapter 7.
⦁ The creation of the Mediation Council of India and its other requirements are outlined in Chapter 8.
⦁ Institutions and service providers for mediation are covered by Chapter 9.
⦁ Community mediation is explained in chapter ten.
⦁ Chapter 11 is a supplemental chapter that addresses cash, accounts, and audits related to mediation.
APPLICATION OF THE ACT
The Bill's applicability is described in Section 2 of the Bill. It stipulates that mediation will take place, if:
Every party to a dispute either resides in India, or incorporated, or conducts business here. Alternatively, a mediation agreement may provide that any such issue would be settled by mediation in accordance with Bill's provisions.
Additionally, it states that it will not be applicable if one or both parties are Central, state, or local governments, agencies, public bodies, companies, local bodies, or entities that are controlled by them unless the dispute is one of commercial nature.
MEDIATORS
The term "mediator" is defined as a person designated to conduct mediation proceedings under the Bill and who is also registered under one with the council in Section 3(h) of the Bill. Chapter IV also covers mediators, their selection, dismissal, and the parties' preferences.
TERMINATION AND REPLACEMENT OF MEDIATOR APPOINTMENTS
The parties have the authority to select a mediator for their disputes and the procedure for the mediator's appointment is provided under Section 10 of the Bill. According to the Bill, the person must be certified to serve as a mediator.
The mediation service provider shall assign a mediator from the panel within 7 days if the parties are unable to agree on a mediator or if the mediator decides or declines to act as a mediator in their case. The service providers must take the parties' preferences into account while doing this.
Additionally, Section 13 permits the mediator to be dismissed for the following reasons:
On application of the parties, a conflict of interest, or if he decides not to participate as a mediator himself.
Within seven days of such termination, the service provider will choose a mediator from the panel once more. (Section 14.)
MEDIATOR'S ROLE
The mediator is required to carry out the following duties:
A mediator is required by Section 12 to reveal any situations that could compromise the secrecy of the proceedings, his objectivity, or result in a conflict of interest. The right to object has been granted to the parties following such disclosure. The mediator's responsibility is to lead mediation sessions.
He will provide them objective advice so they can end their dispute amicably (Section 17). Additionally, he will guarantee that the norms of voluntariness, confidentiality, and the parties' right to self-determination are upheld throughout the procedures.
Additionally, he will choose the terminology to be utilized during the mediation process and work to resolve any misconceptions between the parties as well as their questions and concerns.
However, in accordance with Section 19 of the Bill, he will not serve as an arbitrator, the party's counsel, or as a witness in any legal proceedings.
FUTURE OF MEDIATION IN INDIA - MEDIATION BILL, 2021
In India, mediation is not a new trend. However, parties are hesitant to choose it as their preferred means of resolving disputes. One of the main reasons is that, to this day, all mediated agreements, with the exception of those pushed through the courts, don't have specified legal backing.
The Bill seeks to address this looming problem. With this Bill, India will have a separate Mediation governing statute. Parties will rely upon its provision to enforce settlement agreements in the court order, and the parties may also get an opportunity to rely upon the provision in future legal actions.
Enforcing mediated settlement agreements will steer parties toward a more affordable alternative and lessen reliance on the already overworked court system.
CHALLENGES TO THE MEDIATION BILL 2021/AGREEMENT
With the intention of reducing the backlog of court proceedings, the bill was introduced in the Rajya Sabha in December 2021. The Rajya Sabha Chairman immediately referred the measure for consideration once it was introduced. The Mediation Bill, 2021 has not been passed, because it lacked certain features.
What Problems Has the Panel Highlighted?
⦁ Pre-Litigation: The panel brought up a number of crucial points, such as the coercive and obligatory nature of pre-litigation mediation.
⦁ Making pre-litigation mediation mandatory may cause case delays and give truant litigants another tool to postpone case resolution. The panel disagreed with the draft's clause 26 which empowers the supreme court or the high court to enact pre-litigation laws that suit them.
⦁ Non-Applicability to Non-Commercial Disputes: The members questioned whether Bill's provisions applied to disagreements or issues of a non-commercial nature involving the government and its agencies.
⦁ Regarding the Chairperson and Members of the proposed Mediation Council, the panel also discussed their credentials and appointments.
Which recommendations are made?
⦁ Pre-Litigation: It was suggested to make pre-litigation mediation optional and to introduce it gradually rather than all at once for all civil and business conflicts. Before requiring it in additional case types, pre-litigation mediation should be investigated as part of the Commercial Courts Act, 2015.
⦁ Chairperson selection: The panel proposed that the Chairperson and Members of the Mediation Council of India be appointed by the Central Government using a selection committee. According to the bill, those working on "Alternative Dispute Resolution" issues are eligible to serve as council members and chairman if they demonstrate "ability" and "knowledge and experience" in mediation.
⦁ Establishment of Mediation Council in Every State: Mediation councils should be established in every state given the extensive range of responsibilities assigned to the Mediation Council of India. These State Mediation Councils should carry out any tasks that the Mediation Council of India may define while operating under its general supervision, direction, and control.
⦁ A distinctive registration number-Each mediator should receive a special registration number from the Mediation Council, and provisions should be added to the bill allowing the Mediation Council to regularly evaluate the mediator by holding training sessions and requiring the mediator to earn a certain number of credit points each year in order to be qualified to mediate disputes. The proposed Mediation Council of India should be designated as the central body for the registration and accreditation of mediators rather than a number of other organizations.
⦁ Reducing Time Limit: The panel suggested lowering the time limit from 180 days to 90 days and further recommending a 60-day extension term rather than the 180-day maximum.
⦁ Reframing Definition: They also suggested rephrasing the revised definition of mediation, which should be included in clause 3 rather than clause 4.
MEDIATOR’S VIEWPOINT
From the mediator’s viewpoint, the Bill is lacking in nuance. The Bill's Section 15 links the jurisdiction of a mediation session to the jurisdiction of the courts.
In cases where the court has jurisdiction to hear the dispute, mediation is therefore not required. If the judgment is in relation to the CPC and conflicts of laws, parties in an ADR system are allowed to choose the mediation as well as the court's jurisdiction. The Bill also does not address the repercussions of a mediated settlement agreement that is not registered or stamped.
The introduction of this Bill is unquestionably a good thing. India will be one of the few nations in the world if the proposal is passed into law. If passed into law, India will join Singapore, Hong Kong, Brazil, and the US as the only countries in the world with their own statute on business mediation.
The Singapore Convention on Mediation, to which India is a party, will offer the much-needed domestic legal framework to enforce international mediated settlement agreements under the new law (when it is passed), making it even more pertinent.
Additionally, it will significantly increase investor trust in India. But the Bill is far from finished in its current form. To strengthen the Bill, it is urgently necessary to fix its inconsistencies.
CONCLUSION
The Bill is a positive move in the direction of India's goal of enhancing corporate accessibility. However, it features a number of contradictions that will probably be resolved by court intervention or legislative revisions.
The proposed legislation would require mediation before starting any civil or business legal actions. Mandatory pre-litigation mediation is frequently seen as being in conflict with the core idea of voluntariness that underlies this procedure.
This viewpoint is a little erroneous because parties are not forced to settle disputes; rather, they are just encouraged to use an alternative method of dispute resolution. While Bill's procedures are designed to provide the law structure, several of its provisions appear to undermine the informal and straightforward approach typically associated with mediation.
We anticipate that mediation will continue to be a viable response to the growing backlog of cases rather than degenerating into a type of mock litigation.
