SCOPE OF MANDATORY PRE-INSTITUTION MEDIATION IN INDIA

INTRODUCTION

Alternatives to the traditional litigation system are the first thing that crops up in the mind when one thinks about the Alternative Dispute Resolution. One of the major backlogs of Indian judiciaries is its failure to timely dispose of cases, resulting in year-long litigation and dissatisfaction among the people about the traditional court system. The history of India is evident that Alternative Dispute Resolution is not a new concept, rather it has been there in the Indian landscape since time immemorial. The backlogs of the Indian adjudicatory mechanism can be tackled in two ways. The first seeks the structural and procedural reforms in the court proceedings to make it work faster, and the second seeks to prevent disputes from reaching courts. The alternative Dispute Resolution mechanism falls in the latter category. However, it is high time to readdress the ADR mechanisms such as Arbitration, Mediation, Conciliation and treat it tantamount in value, significance, or effect to the traditional adjudicatory system because of its state of being able to resolve disputes of specific categories. Perhaps these mechanisms can play a vital role in clearing the backlog of the courts by resolving the dispute outside the court premises.

PRE-INSTITUTION MEDIATION IN A NUTSHELL

Pre-institution Mediation solely means mandating parties to give Mediation a shot. It doesn’t mean that parties are required to resolve their dispute through Mediation only, but to give an attempt to it. Mandatory Mediation can be provided in either of the three modes. First, some legislative schemes where a prior attempt to mediation is compulsory in order to initiate a proceeding before the court of law. It is also known as the automatic referral of parties to mediation. The second is known as court-referred mediation. Where the judge has the power to refer the case to mediation. The judge can do it with or without the consent of the parties. Third, a quasi-compulsory Mediation, where if the mediation is not given an attempt before court proceedings, then certain costs orders are passed. To know whether Pre-litigation Mediation is suitable in the Indian context, it is crucial to examine the pros of the policy of mandatory mediation.

ADVANTAGES OF PRE-INSTITUTION MEDIATION

  • Reduce the burden of the court: Mandatory pre-institution mediation is not only advantageous for the parties, but also to the Indian legal system. It reduces the burden of pending cases on the court, as the dispute will not reach the court at the first instance because of its ability to get settled through mediation.
  • Save relationships: one of the biggest advantages of mediation is that it brings parties together. In mediation, there is direct communication between the parties which strikes out the misconceptions and saves the relationship between them, and sometimes re-build the same.
  • Speedy process and confidentiality: when the parties attempt a mediation proceeding, it can be said that they will have control over the process. Hence, the chances of settlement are more and subject to the complexity of the dispute, it can be settled in two to three months. Besides the proceedings are very confidential because no one other than disputant parties is present during the session.
  • Reduces large litigation costs: The Mediation process being a less formal proceeding requires less preparation. The parties can settle at any stage of the session and hence, it is always less costly not only than litigation but among the other alternative dispute mechanisms.

EXISTING REGULATORY FRAMEWORK GOVERNING MEDIATION

Mediation is one of the ADR mechanisms, which is nothing but a facilitated Negotiation. The process is facilitated by a skilled neutral third party, called Mediator, to resolve the dispute amicably and promote the collaboration between the disputing parties, so that middle ground or a win-win situation can be achieved. In India, presently, there are three ways to initiate Mediation- firstly, by the court’s reference under section 89 of Code of Civil Procedure, 1908 or under section 37 of consumer protection ACT, 2019; secondly, by providing for specifically Mediation in a dispute resolution clause in contracts; and thirdly, as provided under section 12-A of the Commercial Courts Act, the mandatory pre-litigation Mediation.

  • Section 89 of Code of Civil Procedure, 1908: Since there is no umbrella legislation for governing Mediation in India, section 89 was incorporated in CPC,1908 in order to institutionalize ADR mechanisms. Where the civil court is of the opinion that the dispute has elements to get settled outside the court, it can refer the civil disputes to, among other methods, Mediation. In the landmark case of Salem Advocate Bar Association v. Union of India (AIR 2005 (SC) 3353), the Supreme Court constituted a committee that made sure the speedy delivery of justice by drafting the Model Rules,2003. These rules served as a model to different High Courts and helped in framing their own Mediation rules.
  • Mediation under special legislation: As a dispute resolution mechanism, provisions for Mediation can be seen in various legislations. For instance, section 37 of Consumer Protection Act, 2019 provides that if, in the opinion of the District Commission, at the first hearing or any later stage, a dispute has elements of a settlement outside the court, may refer the parties to Mediation with its consent. Similarly, the rules enshrined under the Consumer Protection (Mediation) Rules, 2020 make it crystal clear that generally all the matters under Consumer Protection Act, 2019 are referred to as Mediation except the matters listed under Rule 4. A Mediation and Conciliation Panel shall be maintained under section 442 of the Companies Act, 2013 by the central government for Mediation proceedings before the National Company Law Tribunal or National Company Law Appellate Tribunal or Central Government. According to this provision, parties are at the option to opt for a mediation process for settling their dispute, or the National Company Law Tribunal or National Company Law Appellate Tribunal or Central Government may suo moto refer the matter to mediation. It is also provided that the said referred matter shall be disposed of within three months.
  • Mandatory Pre-Institution Mediation under the Commercial Courts Act, 2015: The Commercial Courts Act was introduced for establishing the commercial courts, so that the commercial disputes of high value can be adjudicated separately, hence, speedily. The Commercial Courts Act, 2015 was further amended in 2018, and section 12-A was inserted. Section 12-A provides for an attempt to Pre-institution Mediation before going for litigation. It also provides that unless an urgent relief is required to be sought by the party, a suit cannot be instituted. The settlement reached through a Mediation shall have the same force as an arbitral award under section 30 of the Arbitration & Conciliation Act, 1996.
MANDATORY PRE-INSTITUTIONMEDIATION MODEL FOR INDIA: A SUGGESTION

Mandatory mediation in India should be introduced in a way that it does not go down a similar street as Arbitration in its underlying years and hence, it should be thoroughly examined and well thought out. There is a dire need for umbrella legislation for the mediation which can provide adequate safeguards against insignificant challenges to the mediated agreement. India should look forward and choose the Opt-in model for mandatory mediation, according to which the parties are mandated to attend an information session before initiating any kind of formal proceedings. In India, the awareness regarding the mediation process and its benefits is very low India, this can help in spreading the true values of mediation among the citizens. India has already introduced mandatory pre-litigation mediation under section 12-A of the Commercial Court Act, 2015, however, detailed study and proper cautions must be taken before making the mediation mandatory, so that it doesn’t hinder constitutional guarantees.

CONCLUSION

While Alternative Dispute Resolution as a whole, holds enormous potential, the greatest challenge India faces is that it hasn’t given enough importance to mediation advocacy as it should have. The lack of statutory support to mediation makes people think about the relevancy and enforceability of the mediated agreements. For making the pre-litigation mediation model successful in India, it is very crucial to selling the idea of mediation, so that parties wilfully opt for the mechanism. India needs a large school of trained mediators, who can encourage parties to settle during the process by their exceptional abilities. Regardless of the years of experience, the Bar Council of India should encourage lawyers to undergo mandatory training in mediation. Besides, infrastructure for the taking place of the mediation process is also needed. However, India needs a whole raft of preparation before opting for Pre-litigation Mediation fully.

Author(s) Name: Ritu Bhandari (Uttaranchal University, Dehradun)