Introduction: The introduction of the Mediation Act, 2023, marks a significant step towards modernizing and streamlining the process of dispute resolution in India. By focusing on mediation as an alternative dispute resolution (ADR) method, the Act aims to resolve ‘Commercial Disputes’ as defined under the Commercial Courts Act, 2015, efficiently and effectively. This initiative not only provides a structured framework for mediation but also promotes a faster resolution of disputes, thereby reducing the burden on the judiciary. The Act incorporates several sections from the Arbitration and Conciliation Act, 1995, and introduces comprehensive provisions for the conduct of mediation, including pre-litigation mediation, the appointment of mediators, and the enforcement of mediated settlement agreements. This article delves into the key features of the Mediation Act, 2023, and its impact on the dispute resolution landscape in India.
In order for a dispute to be resolved through mediation, there should be :
I) A separate mediation agreement in writing, or
II) There should be a clause in the contract.
However, even if a mediation agreement exists or not, subject to other provisions of this Act, the parties may voluntarily with mutual consent may settle disputes through pre-litigation mediation in accordance with provisions of this Act, before filing a suit of civil or commercial nature.
A Mediator, to conduct a pre-litigation mediation, can be appointed if he is,
– registered with the Mediation Council (This council is not yet formed as on the day or preparing this note) ; or
– empaneled by a court-annexed mediation center; or
– empaneled by an Authority constituted under the Legal Services Act, 1987; or
– empaneled by a mediation service provider recognized under the Act.
I) However, a court can refer a dispute relating to compoundable offences, including matrimonial offences which are compoundable, to mediation;
II) The outcome of such mediation is not deemed to be a judgment or decree of court, and can be further considered by the court.
To facilitate settlement of disputes as referred above, mediator is not bound by :
– Code of Civil Procedure, 1908
– The Evidence Act, 1872.
Time limit for completion of mediation
Within a period of 120 days, but can be extended for further 60 days.
Appointment of a Mediator
– A mediator can be a person of any nationality, unless otherwise agreed upon by the parties;
– the parties are free to agree upon the name of the mediator and procedure for his appointment;
– In the event of parties not reaching agreement to name a mediator, the party seeking mediation has to apply to a mediation service provider for the appointment of a mediator.
Mediator to disclose his integrity
The person appointed as a mediator has to disclose before commencing mediation, his integrity, independence (or impartiality) or any issue that may raise to conflict of interest.
Mediated settlement agreement including the settlement through online mediation, shall be registered with an Authority constituted under the Act.
If a dispute is not settled within the time prescribed or the mediator is of the view that settlement is not possible, he shall prepare a non-settlement report.
Cost of mediation
Cost of mediation has to be specified. All costs of mediation including charges of mediator, and the charges of mediation service provider shall be borne equally by the parties.
Enforcement of mediated settlement agreement
Subject to the provisions of the Act, the mediated settlement agreement shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 in the same manner as if it were a judgment or decree passed by a court.
Challenge to mediated settlement agreement
Either party may file an application before the court or a tribunal of competent jurisdiction.
The grounds on which challenge can be done are all or either of the following :
– mediation conducted in disputes or matters not fit for mediation
Online mediation including pre-litigation mediation may be conducted at any stage of mediation under this Act, with written consent of parties by the use of electronic form or computer networks, electronic mail service, video conferencing or audio conferencing or both.
Any dispute likely to affect peace, harmony and tranquility among the residents of any area may be settled through mediation with prior mutual consent of parties.
The Authority or the District Magistrate or the Sub-Divisional Magistrate shall notify a permanent panel community mediators, which may be revised from time to time.
Mediated disputes may involve Central or state governments, public bodies, corporations and local bodies as parties.
Disputes or matters not fit for mediation:
– matters involving probate of a will;
– matters of criminal nature.
– claims against minors, deities
– persons of unsound mind
– registration, discipline, misconduct of a professional, medical practitioner, legal practitioner, dentist, architect, chartered accountant.
– disputes affecting the rights of a third party who is not party to the mediation, except in matrimonial disputes where interest of a child is involved.
– a tribunal constituted under the National Green Tribunal Act,2010
– issues connected with direct and indirect taxes or refunds.
– Issues under the Competition Act,2002, Telecom Regulatory Authority of India
– Commissions and Appellate Tribunal for Electricity
– Petroleum and Natural Gas Regulatory Board
– Securities and Exchange Board of India
– Land acquisition and determination of compensation
– Any other subject matter of dispute which may be notified by the Central Government.
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I recently attended an event on this Act organised by IMC Chamber of Commerce & Industry, where the speaker was a senior counsel. He is of the view that :
– The Mediation Act, 2023 has been brought about basically keeping in view the foreign investors as they dislike our judiciary for the delays. Also the Arbitration & Conciliation Act, does not facilitate early settlement of disputes.
– If the mediator does not disclose his integrity in writing, the party may file complaint against him at magistrate’s court.
– For early results, parties should come for settlement and not for fighting.
Conclusion: The Mediation Act, 2023, represents a transformative approach to dispute resolution, emphasizing mediation over litigation to settle commercial disputes. Its provisions cater to the needs of both domestic and foreign investors by offering a quicker and more amicable resolution process. The Act not only ensures the integrity and impartiality of mediators but also facilitates the enforcement of mediated settlement agreements akin to court judgments or decrees. Moreover, the inclusion of online mediation and community mediation broadens the scope of this ADR mechanism, making it accessible and practical for a wide range of disputes. As businesses and legal practitioners adapt to this new framework, the Mediation Act, 2023, is poised to become a cornerstone in the pursuit of a more efficient, harmonious, and investor-friendly dispute resolution system in India.
Writer: Guruprakash N. Bhambore| Secretary | The Bombay Commodity Association Ltd | Mumbai