Institutionalising Mediation in India: A Critical Appraisal of the Mediation Act, 2023

INTRODUCTION

The Indian judiciary has one of the busiest dockets among nations worldwide. As of 2023, more than five crore cases were still pending at various levels in the judiciary.¹ This issue has been central to discussions surrounding policies on Alternative Dispute Resolution (ADR) for several decades. While mediation is a known option for dispute resolution that can complement traditional methods of adjudication, its implementation has been informal and sporadic up to this point. The Mediation Act, 2023² is India's boldest legislative effort to date to make changes in this arena. This is because it makes provisions for a statutory mechanism for mediation. How successful this act will be remains to be seen from the issues it raises rather than solves.

LEGISLATIVE BACKGROUND AND STRUCTURAL SHIFT

The process of enacting a specific mediation legislation was neither speedy nor easy. The Code of Civil Procedure, 1908 has governed civil procedure in India for over a century. However, the specific statutory basis for directing disputants to mediation was introduced only in 1999, through Section 89,³ inserted by the Code of Civil Procedure (Amendment) Act, 1999. This section granted courts the authority to send disputes to different ADR methods such as mediation after pleadings had been closed. However, in practice, Section 89 did not serve its intended purpose efficiently.⁴ The Supreme Court was forced to issue some guidelines on how the provision would be implemented, which is not normally a judicial responsibility.⁵

A parliamentary standing committee reviewing the previously enacted legislation on mediation, such as the Arbitration and Conciliation Act, 1996, Commercial Courts Act, 2015 and the Legal Services Authorities Act, 1987, pointed out that there was a lack of a uniform legal basis for mediation in India, which could provide it with both legality and process.⁶ The Singapore Convention on Mediation (United Nations Convention on International Settlement Agreements Resulting from Mediation, 2019)⁷ made such reforms even more necessary due to India being a signatory to the Convention and thus having to meet its requirements concerning the enforceability of mediated settlements across borders. Ratification of the Convention required India to have a legal system in place to facilitate the process.

KEY FEATURES AND EMERGING CONCERNS

In terms of structural reforms brought about by the Act, the most important change is the introduction of mediation before going to civil and commercial courts.⁸ The process involves an obligation to mediate before suing any party, which should be accomplished in a specified timeframe. On the surface, such a move seems quite positive, as one would want to stop the disputes as soon as possible and limit the number of disputes coming into the court process. There is some merit in such logic. Research shows that mediation in commercial settings tends to yield better results if the parties try to solve their disputes without becoming too adversarial against each other.⁹ Nevertheless, the implications of this rule can be quite complex.

Indeed, the dilemma in relation to compulsory mediation can very well be termed philosophical in nature as much as it is practical. The ability of the mediator to actually mediate lies in the willing participation of the disputing parties in the process. In case of compulsory participation in mediation, the dynamic completely changes. As pointed out earlier, the Law Commission of India's 129th report had warned about the dangers inherent with mandatory referral schemes in the case of mediation because it may end up becoming only a procedure without substance.¹⁰ The Act takes care of this issue in its scheme by allowing the parties the choice to opt out if they don't want to participate further after the first meeting. However, it remains to be seen if opting out turns out to be a matter of shame socially or procedurally.

Regarding enforceability, this Act departs considerably from the previous system. Under Section 27, an authentic agreement between the parties reached during mediation must be final, binding and enforceable like a decree of a court.¹¹ It is a very innovative step, theoretically. One of the main deterrents from going through the process of mediation in the old system was the possibility that the decision agreed upon through mediation might need a judicial sanction before being put into force, thus defeating the very purpose of using mediation as an efficient method. The 2023 Act addresses this concern by providing that such an agreement will automatically take effect without the need for judicial confirmation; however, under Section 28, limited exceptions to this rule exist. These challenges to the agreement's authenticity and validity mirror those available under the Act of 1996¹² for challenging arbitral awards.

This Act has also provided for the formation of the Mediation Council of India under Chapter VI,¹³ a statutory body responsible for mediator and mediation service provider registration. The Council is further responsible for formulating standards of practice and monitoring the professional conduct of members of the profession. This has been done to address the lack of an authoritative body regulating the mediation process in India. Currently, there are many institutions providing training to mediators, but they do not coordinate to ensure uniformity in their processes. This council aims at ensuring some level of coordination and control over the mediators. It remains to be seen how effectively it achieves these objectives and much of this depends upon certain issues which are not addressed by the act, such as independence, curriculum and monitoring.

The imposition of the time-bound approach to mediation under the Act, with the requirement to conclude the procedure within 180 days with a further period of 180 days, if agreed upon,¹⁴ deserves attention too. It is true that without a time limit, the very concept of mediation can become a tool of procrastination, allowing parties to waste time and return to litigation after some time. Nevertheless, a strict limitation imposed on a process that by nature should be flexible can undermine the quality of mediation.

The concept of confidentiality is viewed as a fundamental principle of the mediation process under Chapter VII of the Act.¹⁵ Mediators, as well as the parties involved and their agents, are obliged to refrain from divulging any information received through the mediation process. This practice adheres to international standards. According to the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Mediation 2018,¹⁶ confidentiality is regarded as an integral aspect of the mediation process. In India, the lack of adequate safeguards for maintaining confidentiality in mediation had previously discouraged legally astute parties from opting for the mediation process, apprehensive about potential use of any admissions made during sessions in future litigation.

CONCLUSION

Ultimately, viewed against comparable international frameworks, the Mediation Act, 2023 occupies a middle position on the spectrum between voluntary and mandatory mediation regimes. Both the Singapore Mediation Convention and the Mediation Act of Singapore, 2017,¹⁷ preceding the Indian law, have laid greater stress on voluntariness and party autonomy than the Indian Act. In its 2008 directive on mediation,¹⁸ the European Union has chosen not to require all civil disputes to undergo a pre-litigation process, but some EU countries have tried out various referral systems. The Indian system of making the pre-litigation process mandatory and allowing an opt-out resembles systems followed by Italy and Turkey, where the impact of mandatory referral on the number of cases has been felt, but has also faced criticism for making mediation procedural rather than substantive.

The most fundamental structural problem that might exist within the Act may be one that is beyond the scope of any law itself: that of a shortage of mediators. At present, India does not possess an adequate number of skilled mediators to handle pre-litigation disputes across the nation's civil courts. Once constituted, the Mediation Council would find it imperative to facilitate a substantial rise in the training capabilities, which would play an essential role in determining its success. A mediator who has been inadequately trained and views mediation as some kind of adjudication could harm the entire process, resulting in a settlement that fails to achieve durability or consensus.

In this sense, the Mediation Act, 2023 marks a significant legislative achievement. It brings together a range of fragmented provisions, sets up institutional structures, tackles issues of enforcement and establishes a regulatory body where there was none before. In an Indian context where mediation had always shown promises but lacked statutory recognition, this piece of legislation constitutes real development. But when it comes to the Indian legal tradition, the gulf between legislative intentions and practical challenges proves to be quite large indeed. The Act is based on an infrastructure that has yet to be put in place, on a regulatory authority that has yet to prove itself both independent and capable and on a change in mentality among practitioners and litigants that can only come through practice. With a properly constituted Council, effective mediator training and a more proactive judiciary, the Act could be truly groundbreaking.

References

1. Department of Justice, Government of India, Pendency of Cases in Courts (Annual Report 2022-23). ↩
2. Mediation Act 2023. ↩
3. Code of Civil Procedure 1908 (India), s 89. ↩
4. Salem Advocate Bar Association v Union of India (2003) 1 SCC 49, [11]. ↩
5. Salem Advocate Bar Association v Union of India (2005) 6 SCC 344. ↩
6. Department-Related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice, 117th Report on the Mediation Bill, 2021 (Rajya Sabha, 13 July 2022). ↩
7. United Nations Convention on International Settlement Agreements Resulting from Mediation (adopted 20 December 2018, opened for signature 7 August 2019) UNGA Res 73/198. ↩
8. Mediation Act 2023, s 6. ↩
9. Carrie Menkel-Meadow, Mediation: Theory, Policy and Practice (2nd ed, Routledge 2018) 112. ↩
10. Law Commission of India, 129th Report on Urban Litigation: Mediation as Alternative to Adjudication (1988) para 5.7. ↩
11. Mediation Act 2023, s 27. ↩
12. Mediation Act 2023, s 34. ↩
13. Mediation Act 2023, ch VI (ss 33-44). ↩
14. Mediation Act 2023 (India), s 18. ↩
15. Mediation Act 2023, ch VII (ss 22-26). ↩
16. UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation 2018, art 9. ↩
17. Mediation Act 2017 (Singapore), Cap 173A. ↩
18. Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters OJ L136/3. ↩