Updated: Aug 16, 2020
This article has been authored by Saathi Mukherjee, a fifth year Student from Lloyd Law College, Greater Noida.
In India, Alternative Dispute Resolution (hereinafter referred as “ADR”) is understood as a term incorporating various mechanisms outside our traditional judicial system. It refers to various mechanisms such as Arbitration, Negotiation, Mediation, Conciliation, Lok Adalats, etc. Disputes are an inevitable part of our lives. Along with the nature of our dispute it is also very important for us to evaluate our approach towards it; the nature of our dispute can be either personal or commercial. One can either choose to go for adversarial system like litigation or the non-adversarial system like mediation and conciliation. The non-adversarial ADR mechanisms like mediation is informal, less complicated and more clients friendly. This mechanism promotes an environment that encourages healthy conversation between the parties. The goal is to help the parties to figure out their own solutions to their problems. This helps them understand their underlying interests and focus on solutions for the future than on judging what happened in the past. The four pillars of mediation- voluntariness, neutrality, confidentiality and party autonomy- make it stand out as a collaborative dispute resolution process.
ADR procedures can be initiated by the parties or may be compelled by legislations the courts or contractual terms. Mediation can be defined as “the attempt to settle a legal dispute through active participation of a third party (mediator) who works to find points of agreement and make those in conflict agree on a fair result.” The mediator facilitates the resolution of the parties’ disputes by supervising the exchange of information and the bargaining process. Mediation is usually a voluntary process although sometimes statutes, rules, or court orders may require the parties to opt for the process of mediation. It is true that all matters cannot be mediated. But the matters which can be mediated, comprise of, but are not limited to, the commercial, contractual disputes, consumer matters, housing courts, family courts and those involving tortious liability. Unlike the process of litigation where a judge imposes a decision over the matter, the parties and their mediator control the process like deciding where and when the mediation takes place, who can attend the session, how the mediation will be paid for, and how the mediator will interact with the parties.
If a resolution is reached, mediation agreements may be oral or written, and content varies with the nature of the mediation process. According to Section 74 of the Arbitration and Conciliation Act, a settlement agreement has the same effect as an arbitral award on agreed terms. The position in the Commercial Courts Act is also the same as a settlement in a pre-institution mediation proceeding under the Act and is given the same status as that of an arbitral award under the Arbitration and Conciliation Act. Such an arbitral award is enforceable as a decree of court as per Section 36 of the Act. In cases of settlements in court-annexed mediations, the settlement is enforced through the courts as the court passes an order or decree in terms of the written settlement. The mediation settlement can further be challenged in court. The vitiating factors are in the nature of fraud, coercion, corruption, incapacity of a party or the settlement being contrary to public policy or a fundamental policy of Indian Law. But in India, a mediator cannot be called to give evidence in relation to the mediation or the alleged settlement in any judicial or arbitral proceeding. There exists provisions to protect the confidentiality of the mediation process.
Mediation over the Years
The notion of Mediation in India is ancient and deep rooted. From family elders resolving domestic issues to the resolution of disputes at the community level through ‘Gram Panchayats’, there exists a strong culture of mediation in India. Over the years, there are few statutes which provide for mediation as a mode of settlement of disputes between parties. Commercial mediation was brought to life in 1996 when the Indian Parliament amended the Civil Procedure Code and introduced Section 89, which empowered courts to direct settlement of disputes by mediation amongst other techniques. This provision governs mediation in the court system in India. The year 1996 also saw the introduction of the Arbitration and Conciliation Act. The provisions of the Arbitration and Conciliation Act Part III govern private mediation in India. In the case Afcon Infrastructure Ltd v. M/s Cherian Varkey Constructionthe Supreme Court clarified that the words ‘mediation’ and ‘conciliation’ are used synonymously. In this case, the words ‘mediation’ and ‘mediators’ are used and that they should be used for ‘conciliation’ and ‘conciliators’ as well.
In another landmark case, B.S. Krishnamurthy v. B.S. Nagaraj, the Supreme Court directed the Family Courts to aim to settle matrimonial disputes through the process of mediation. Many Supreme Court decisions in the recent years have aimed to point out that the courts are gradually developing a favourable environment for mediation. Our judicial system has finally started to accept it as a short-term, structured, task oriented and ‘hands-on’ process. The process of mediation needs to be promoted and it is expected that after these cases, the popularity of mediation as a method will increase. In fact, during the proceedings of a major case like the Dr. M. Ismail Frauqui and Ors. v. Union of India and Ors. AIR 1995 SC 605, the Chief Justice of India himself came forward to conduct a session of Mediation between both the parties.
Current Jurisprudence of Mediation
At present, Mediation is accepted India as one of the dispute resolution mechanism but it still has a long way to go. In the past few years there has been various amendments made to statutes and many other provisions has been introduced by the Supreme Court of India and several High Courts which has widen the spectrum of mediation in our country as a whole. The following are the statutes which govern the proper functioning of the process of Mediation in India:
1. Section 89 read with Order X Rule 1A of the Code of Civil Procedure, 1908; According to this provision the Courts shall direct the parties to a dispute to opt for ADR as specified in Section 89(1) of the CPC that is Arbitration, conciliation judicial settlement including settlement through Mediation and Lok Adalat. The parties are not forced to go for these mechanisms but they are informed about various techniques of dispute resolution. Then the decision left to the discretion of the parties.
2. Section 4 of the Industrial Disputes Act, 1947; Conciliators appointed are assigned with the duty to mediate and promote settlement of industrial disputes with prescribed guidelines for conciliation proceedings.
3. Order XXXIIA of the Code of Civil Procedure; Rules 3 and 4 of the Order XXXIIA commends mediation. The legislators have very thoughtfully formulated this provision because the matters comprising of, personal, family, custody, matrimonial, maintenance and guardianship matters can be resolved more competently through a non-adversarial means.
4. Section 442 of the Companies Act 2013 read with Companies (Mediation and Conciliation) Rules, 2016; These provisions read together provide the referral of disputes to mediation by the National Company Law Tribunal and Appellate Tribunal.
5. Hindu Marriage Act, 1995 and the Special Marriage Act, 1954; There are provisions in the Hindu Marriage Act and the Special Marriage Act that requires the court to refer the disputed parties to mediation.
6. Section 32(g) of the Real Estate (Regulation and Development) Act, 2016; This section provides for amicable conciliation of disputes between the promoters and allottees through dispute settlement forum, set up by the consumer and promoter associations.
Mediation is immensely encouraged by the courts in India. Various High Courts have set up mediation centres within the premises of the courts. The Supreme Courts of India in the year 2015 established the Mediation and Conciliation Project Committee to supervise the effective implementation of mediation. A huge number of lawyers and other have been trained to become mediators, and the court also pays an honorarium to them. Large numbers of cases are being referred to mediation by courts. But despite of all the efforts, mediation has not been able to achieve great success in India.
Mediation needs to be promoted as a mechanism that complements the judicial process. To achieve acceptance and popularity of Mediation as the first step before approaching the court or any other Alternative Dispute Resolution mechanisms. It is very important to develop a sense of confidence in the process of mediation. Our goal must now be to create awareness regarding the same as it is important to promote mediation as a successful, revolutionary, economical and time-saving method for all the stakeholders.