CS Jayanti Agarwal

Background: –

Section 442 which was enacted on 1st April’ 2014 authorizes Central Government to maintain a panel of experts to be called as “Mediation Panel” for mediation between parties during pendency of any proceedings before Regional Director, Central Government or Tribunal or Appellate Tribunal.

On 9th September’2016, Ministry of Corporate Affairs has come up with Companies (Mediation and Conciliation) Rules, 2016 which provides rules and guidelines for empanelment as Mediators or Conciliators. This Article contains highlights of the above Rules in a precise manner.

Section 442 of the Companies Act’ 2013 along with related Rules can be viewed from the below link.

http://www.mca.gov.in/SearchableActs/Section442.htm

http://taxguru.in/company-law/companies-mediation-conciliation-rules-2016.html

FORMS UNDER THE COMPANIES (MEDIATION AND CONCILIATION) RULES

SL. NO.

FORM NUMBER

PURPOSE OF THE FORM

 1.

 Form MDC – 1

Application to the Regional Director by any person who intends to get empanelled as mediator or conciliator and possesses the requisite qualifications.

 2.

Form MDC – 2

Application to Central Government or Tribunal or Appellate Tribunal for referring any matter pertaining to any pending proceeding.

Below are the Highlights of Companies (Mediation and Conciliation) Rules, 2016:

1. Regional Director shall prepare a panel of experts, willing and eligible to be appointed as mediators or conciliators.

2. Applications shall be received by the Regional Director during the month of February every year which shall be effective from 1st April of every year.

3. For the FY 2016-17, the Regional Director may call for application within 60 days from the date of publication of these Rules and prepare the panel for the current Financial Year within 30 days.

4. Qualifications for Empanelment:

A person shall not be qualified for being empanelled as mediator or conciliator unless:

a. he has been a Judge of the Supreme Court of India,

b. he has been a Judge of the High Court,

c. he has been a District or Sessions Judge,

d. he has been a Member or Registrar of a Tribunal constituted at the National level,

e. he has been am officer in the Indian Corporate Law Service or Indian Legal Service with 15 years of experience,

f. he is a qualified legal practitioner for at least 10 years,

g. he is a professional in continuous practice for at least 15 years (CA, CS, or CWA),

h. he has been a Member or President of any State Consumer Forum,

i. he is an expert in mediation and conciliation & has successfully undergone training in mediation and conciliation

5. Disqualifications for Empanelment:

A person shall be disqualified for being empanelled as mediator or conciliator if he:

a. is an undercharged insolvent or has applied to be adjudicated as an insolvent and his application is pending,

b. has been convicted of any offence involving moral turpitude,

c. has been removed or dismissed from the Government service or any Corporation owned or controlled by the Government,

d. has been punished in any disciplinary proceeding,

e. has, in the opinion of the Central Government, such financial or other interest In the subject matter of dispute which is likely to affect his functions as a mediator or conciliator

6. On receipt of application under Rule 6(2), the Central Government or the Tribunal or Appellate Tribunal shall appoint one or more experts from the panel.

7. The Regional Director may be recording reasons in writing and after giving an opportunity of being heard, remove any person from the panel.

8. Any person, who intends to withdraw his name from the Mediation and Conciliation panel, may make an application to the Regional Director indicating the reasons of withdrawal and the Regional Director shall take a decision within 15 days of receipt of such application and update the Panel accordingly.

9. The mediator or conciliator shall attempt to facilitate voluntary resolution of the dispute by the parties, and communicate the view of each party to the other, assist them in identifying the issues, reducing misunderstandings, clarifying priorities, emphasizing that it is the responsibility of the parties to take decision which affect them and he shall not impose any terms of settlement on the parties.

10. The process of any Mediation and Conciliation under these Rules shall be completed within a period of 3 months from the date of appointment of expert or experts from the Panel.

11. All the parties in the proceeding shall act in good faith with the intention to settle the dispute.

12. The mediator or conciliator shall follow all the Ethics as prescribed in Rule 28.

13. The parties in any proceeding shall not initiate any arbitral or judicial proceeding which is the subject matter of the Mediation or Conciliation except where such proceedings are necessary for protecting his rights.

Extract of Section 442 of Companies Act, 2013

442. Mediation and Conciliation Panel

(1) The Central Government shall maintain a panel of experts to be called as the Mediation and Conciliation Panel consisting of such number of experts having such qualifications as may be prescribed for mediation between the parties during the pendency of any proceedings before the Central Government or the Tribunal or the Appellate Tribunal under this Act.

(2) Any of the parties to the proceedings may, at any time during the proceedings before the Central Government or the Tribunal or the Appellate Tribunal, apply to the Central Government or the Tribunal or the Appellate Tribunal, as the case may be, in such form along with such fees as may be prescribed, for referring the matter pertaining to such proceedings to the Mediation and Conciliation Panel and the Central Government or Tribunal or the Appellate Tribunal, as the case may be, shall appoint one or more experts from the panel referred to in sub-section (1).

(3) The Central Government or the Tribunal or the Appellate Tribunal before which any proceeding is pending may, suo motu, refer any matter pertaining to such proceeding to such number of experts from the Mediation and Conciliation Panel as the Central Government or the Tribunal or the Appellate Tribunal, as the case may be, deems fit.

(4) The fee and other terms and conditions of experts of the Mediation and Conciliation Panel shall be such as may be prescribed.

(5) The Mediation and Conciliation Panel shall follow such procedure as may be prescribed and dispose of the matter referred to it within a period of three months from the date of such reference and forward its recommendations to the Central Government or the Tribunal or the Appellate Tribunal, as the case may be.

(6) Any party aggreived by the recommendation of the Mediation and Conciliation Panel may file objections to the Central Government or the Tribunal or the Appellate Tribunal, as the case may be.

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