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The Mediation Bill, 2023 successfully navigated through the legislative process, securing passage in the Rajya Sabha on August 1 and subsequently in the Lok Sabha on August 7 this year.

As per the text of the Bill, which was first introduced in the Rajya Sabha in 2021, the Bill aims

“to promote and facilitate mediation, especially institutional mediation, for resolution of disputes, commercial or otherwise, enforce mediated settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as acceptable and cost effective process and for matters connected therewith or incidental thereto.”

In the discourse on the draft legislation, Union Minister for Law and Justice, Arjun Ram Meghwal had underscored the issue of burgeoning case backlogs in courts across the country. An estimated count of 70,000 cases remains pending before the Supreme Court, while an additional 60 lakh cases await arbitration within various high courts, complemented by a substantial figure of 4 crore pending cases within the district and subordinate courts, he had said.

The Bill was introduced with the aim to reduce the number of pending cases through the encouragement of mediation, including online mediation, while also establishing provisions for the enforcement of settlement agreements arising from such mediation.

Lawbeat reached out to members of the legal community who expressed their appreciation for the Bill. They also underscored the noteworthy provisions of the Bill along with its objective.

Advocate Mohit Bakshi, Partner at DSK Legal, called the Bill a much-needed boost to alternative dispute resolution process in India.

The Bill is aimed at providing proactive and efficient resolution of disputes by providing an opportunity to the parties to resolve their disputes without resorting to the long and tedious process of litigation, said Advocate Bakshi.

Mandated timeline for the resolution of disputes:

He pointed out that the Bill not only makes mediation a voluntary process instead of a mandatory one, it also provides reasonable timeframe for completing mediation proceedings i.e. 180 days.

Formerly, the stipulated timeframe for concluding a mediation spanned 180 days, with the provision for extension by another 180 days i.e. 360 days in total.

Adv Bakshi highlighted that while a mandatory provision for opting for mediation as a process was counteractive to the process, a mandated timeline for the resolution of disputes is highly effective.

“The introduction of the bill as an autonomous law which focusses on solving disputes through a set stage that is non-adversarial and the voluntary nature of it, promotes choosing the alternative as against making it a mandate,” he said.

Mediation Council of India:

Concerning the legislature's objective to enhance mediation and alleviate the burden of case backlogs on the courts, Adv. Bakshi pointed out that the Bill also envisages setting up of Mediation Council of India which shall be inter-alia tasked with promoting domestic and international mediation, developing India to be a robust centre for domestic and international mediation.

Enforcement of a settlement agreement:

Moreover, he emphasised that an important aspect of the Bill is the enforcement of a settlement agreement.

As per the Bill, a settlement agreement, duly signed by parties and the mediator, shall be final and binding on both the parties.

“This means that as soon as the process comes to a close, the settlement agreement will be enforceable, as if it were a judgement or a decree passed by a court except in case of a mediated settlement agreement resulting from a community mediation,” said Adv Bakshi.

Advocate Pooja Tidke, Senior Partner, Parinam Law Associates:

a. The Bill seeks to mandate pre-litigation mediation between the parties for settlement of disputes prior to the filing of a suit or proceeding of civil or commercial nature. Akin to the Commercial Courts Act, 2015 the Bill does carve out the possibility of approaching a court or tribunal before commencement or during the continuation of mediation proceedings, in exceptional circumstances where a party requires urgent interim reliefs.

b. The Bill accords a wide range of powers and independence to a mediator whilst fully respecting the privacy of parties and confidentiality of proceedings, which is indicative of the thrust that the legislature seeks to place on mediation as being a viable dispute resolution mechanism for parties. For instance, a mediator is not bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872, and cannot be produced as a witness in any arbitral or judicial proceedings. All communications, materials, etc exchanged or produced by parties during mediation proceedings remain confidential and cannot be produced or relied upon in a legal proceeding. The Bill also upholds party autonomy in that it does not compel parties to arrive at a settlement or even participate in mediation proceedings beyond the second session. Parties are free to settle some or all of their disputes or even walk out of a mediation proceeding after the second session. Where the mediation fails, the Bill explicitly prohibits the mediator from making references in his/her report to a party's conduct during mediation or stating the cause of such failure. In my view these provisions are key in helping to create a safe environment in which parties can freely discuss and share their views, concerns, feelings, prejudices, etc. which goes a long way in amicably settling a dispute.

Advocate Devashish Godbole, Commercial Litigation Lawyer at Bombay High Court, said that the Mediation Bill, 2023 is a progressive legislation in the field of disputes and dialogues, with the goal of fostering and regulating the practice of mediation.

Adv Godbole opined that this Bill has upheld the broad proposition that mediation shall be more readily available and more widely accessible.

Significant Provisions:

Adv Godbole underscored the significant provision of the Bill. “The reason for non-settlement must be kept strictly confidential by the Mediator according to Section 21. Protection from admission and privilege from disclosure are provided by Section 23. All communications during mediation must be kept private. A mediated settlement must be the result of self-determination in order to meet the requirements of Section 2(h), which defines mediation. Moreover, In accordance with Section 24, any party may freely withdraw from the mediation at any point in time,” he pointed out.

Commercial disputes with the government:

Furthermore, he highlighted that Commercial disputes with the government are holistically covered under the Bill.

“If mediation plans or guidelines are developed further, any other disagreement with the government may be resolved through the process of mediation,” he added.

Voluntary pre-litigation mediation

Adv Godbole further pointed out that in the 2021 draft of the bill, the process of pre-litigation mediation was mandatory. However, now it is a voluntary process, allowing parties to choose whether or not to pursue pre-litigation mediation for resolving their disputes.

Limitations:

Adv Godbole also discussed the Limitations of the Bill. He highlighted that according to the the First Schedule, problems involving minors, people with intellectual  disabilities, a person of unsound mind , and people suffering from any disability having high support needs are "not fit for mediation" thereby rendering exclusion of the abovementioned  classes from the umbrella of mediation.

“The legislation allows them to have legal guardian representing their rights and interests but are still not eligible for mediation. Similarly, any disputes between professionals and the statutory authority governing them with matters related to registration and code of conduct are excluded,” he said.

He also pointed attention towards the Second Schedule which includes the list of respective laws where the Mediation Bill does not have an overriding effect on it.

Moreover, he stressed that since the process of Conciliation is done by authority like the Internal Complaints Committee, who is also the same authority to make findings in the adversarial enquiry they conduct, thus, there is a greater possibility of cases of abuse of adversarial process and decision making.

Advocates Payel Chatterjee, Partner and Shuchita Choudhry, Senior Associate at Trilegal, opined that in the Bill, mediation has been looked at purely as an alternate dispute resolution mechanism giving supremacy to the principles of party autonomy.

They highlighted that the Bill was amended from mandatory mediation to voluntary mediation on the recommendations of the Parliamentary Standing Committee which observed that “by mandating pre-litigation mediation, parties will have to wait for several months before being allowed to approach a court or tribunal. This may result in delaying of cases.”

“This is in stark contrast with the existing mandatory pre-institution mediation in commercial disputes provided under the Commercial Courts Act, 2015,” the lawyers said.

On the issue whether the parties will voluntarily opt for mediation, Adv Chatterjee and Choudhry opined that once the Mediation Council of India is constituted, pro-active steps need to be undertaken to promote mediation.

“Such steps to promote mediation could be inclusion of mandatory mediation/ multi-tiered dispute resolution clauses is contracts of the largest litigator in India, i.e., government/ public sector undertakings; collaborating with the business community, corporates, and in-house counsels to spread awareness; and demonstrate effectiveness of mediation with empirical data and share practical examples of success stories,” the lawyers said.

However, they believed that the Bill is a step in a right direction.

“The Mediation Bill, 2023 is a step in the right direction, reflecting clear intention of the legislators to give mediation its due! Like all other ADR modes, key is the intent of parties, which determines the faith of a dispute. The judiciary along with the legislature have taken strides to make mediation a success, here’s hoping with the new Bill in place, we will witness both private players and public-sector undertakings voluntarily opt for mediation and reaping the benefits of the Bill,” said Adv Payel Chatterjee.