The Mediation Bill, 2021: A Brief Analysis

By Mohammed Asif

Published On:- February 27, 2022 at 17:11 IST

Introduction

The Mediation Bill 2021, seeks to promote Mediation (Including online) and provide for enforcement of Settlement Agreements^[1] resulting from Mediation.

Generally, in the Disputes of Civil or Commercial, one must attempt to resolve his/her dispute by mediation before moving to the Court or Tribunal.

Various Acts or Laws in which Mediation is Expressed

• The Code of Civil Procedure, 1908
• The Arbitration and Conciliation Act, 1996
• The Companies Act, 2013
• The Commercial Court Act, 2015
• The Consumer Protection Act, 2019

Scope of the Bill

• Section 7^[2] of the Bill states that Disputes are not fit for Mediation, which include those relating to prosecution for criminal offenses, disputes involving an allegation of serious and specific Fraud, Fabrication of Documents, Forgery, Impersonation, and Coercion. However, certain provisions in the Bill may help in improving the law and order situation in a locality and or encouraged compounding of criminal offenses.
• The Bill provides for any dispute likely to violate law and order among the who are residing in any area or locality to be resolved by the community mediation. Any settlements so arrived at, however, shall not be enforceable as a judgment or decree of a civil court.
• It also states that the provisions of the Act shall not have an overriding effect on the Maintenance and Welfare of Parents and Senior Citizen Act 2007 and The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and others. It implies that if any dispute as referred above is resolved through mediation it may lead to a compounding of a criminal offense arising out of that civil or commercial dispute. Similarly, any local dispute can create a law and order situation and result in the filing of a criminal case. Those could be resolved through community mediation.
• Many serious offences are the consequences of minor issues, which are neither countered properly nor neglected. Therefore, though the proposed Bill fundamentally intends to solve civil and commercial disputes through mediation, it has wider scope to alleviate some of the pressure on law enforcement agencies.
• The law to prevent the Sexual harassment of women at the workplace has probably been kept out of its scope so that an internal or local compliant committee can take up conciliation and close the case locally without involving a third party in the detailed procedure. The law on the maintenance and the welfare of parents and senior citizens has also been kept out of its scope as offences under it are cognizable offences.
• Section 320 in the Code of Criminal Procedure provides for the compounding of certain criminal offences, which shall have the effect of the acquittal of the accused. They are about 43 criminal offences from body offenses to property offences, which can be compounded by the victim, and about 13 offences of comparatively greater gravity, which can be compounded with the permission of the court.
• Here the approach of the Bill is to secure friendliness between the parties so that peace is restored between them. A case can be compounded anytime before the verdict is given by the court.

Key features of the Bill

Section 2^[3]: Application of the Bill

The applicability of the Bill states that the mediation bill will apply to mediation conducted in India.

Even in commercial disputes where one party is a foreign entity based outside India, a person will have to try to settle a civil or commercial dispute through mediation, before approaching any court.

1. Subject to sub-section (2), this Act shall apply where mediation is conducted in India, and—

(i) All or both parties habitually reside in or are incorporated in or have their place of business in India; or

(ii) The mediation agreement provides that any dispute shall be resolved in accordance with the provisions of this Act; or

(iii) There is International Mediation.

1. The provisions of sub-section (1) shall not apply wherein one of the parties to the dispute is the Central Government or a State Government, or agencies, public bodies, corporations, and local bodies, including entities controlled or owned by such Government, except where the matter pertains to a commercial dispute:

Provided that nothing shall prevent the Central Government or a State Government from notifying, such kind of dispute, as it deems appropriate for such Government, for resolution through mediation under this Act, wherein such Government, or agencies, public bodies, corporations and local bodies including entities controlled or owned by them, is a party.

Section 6^[4]: Pre-Litigation Mediation

Pre-litigation mediation says that the courts may send parties to mediation in ongoing cases if the need is felt.

(1) Subject to other provisions of this Act, whether any mediation agreement exists or not, any party before filing any suit or proceedings of civil or commercial nature in any court, shall take steps to settle the disputes by pre-litigation mediation in accordance with the provisions of this Act:

Provided that pre-litigation mediation in matters of commercial disputes of Specified Value shall be undertaken in accordance with the provisions of section 12A of the Commercial Courts Act, 2015, and the rules made thereunder.

(2) The Provisions, of sub-section (1) shall apply to the tribunals notified by the Central Government or a State Government, as the case may be.

(3) For the purposes, of sub-sections (1) and (2), unless otherwise agreed upon by the Parties, Mediator,—

(i) Registered with the Council;

(Ii) Empanelled by the Court Annexed Mediation Centre;

(iii) Empanelled by an Authority Constituted under the Legal Services Authorities Act, 1987; and (iv) Empanelled by a mediation service provider recognized under this Act, shall conduct pre-litigation mediation.

Section 7^[5]: Disputes or Matters not Fit for Mediation

Disputes considered unfit for mediation include those which are about claims against minors and other disadvantaged groups or people.

It that courts are competent enough to refer the disputes to mediation which are about the compoundable offences arising out of the proceedings between the parties.

1. A Mediation under this Act shall not be conducted for resolution of any Dispute or matter contained in the indicative list under the First Schedule:

Provided that nothing contained herein shall prevent any court, if deemed appropriate, from referring any dispute to mediation relating to compoundable offences or matrimonial offences connected with or arising out of civil proceedings between the parties:

Provided further that the outcome of such mediation shall not be deemed to be a judgment or decree of the court referred to in sub-section (2) of section 28, and shall be further considered by the court in accordance with the law for the time being in force.

1. If the Central Government is satisfied that it is necessary or expedient so to do, it may, by notification, amend the First Schedule.

Section 10^[6]: Appointment of Mediators

Mediators can be appointed by the Parties themselves or by an institution set up for the purpose.

1. Unless otherwise agreed upon by the parties, a person of any nationality may be appointed as a mediator:

Provided that mediator of any foreign nationality shall possess such qualification, experience, and accreditation as may be specified.

1. The parties shall be free to agree upon the name of the mediator and the procedure for their appointment.
2. If the parties do not reach an agreement on a matter referred to in sub-section (2), then the party seeking initiation of mediation shall make an application to a mediation service provider for the appointment of a mediator.
3. Upon receiving an application under sub-section (3), the mediation service provider shall, within seven days, appoint,—

(i) The Mediator as agreed by the Parties; or

(ii) In case the parties are unable to reach an agreement as to the appointment of mediator or mediator agreed by them refuses to act as a mediator, a mediator from the panel maintained by it, with his consent.

1. The person appointed under clause (i) of sub-section (4) shall communicate his willingness or otherwise within seven days from the date of receipt of communication of such appointment.

Section 22^[7]: Mediated Settlement Agreement

For mediation, the agreements should be in writing and should be signed by the parties and validated or certified by the mediator whosoever.

And those agreements will be enforceable and will be binding on them as court judgments.

The settlement agreements can be challenged on the following grounds:

• Fraud
• Corruption
• Impersonation
• Disputes which are not fit for mediation

A mediated settlement agreement means and includes an agreement in writing between some or all of the parties resulting from mediation, settling some or all of the disputes between such parties, and authenticated by the mediator.

Chapter VIII^[8]: Mediation Council of India

The Mediation Council of India will be established by the Central Government.

This was enumerated broadly in Chapter VIII of sections 33-40 of the Bill.

This Chapter also lays down the following:

• Establishment and incorporation of Mediation Council
• Composition of Council
• Vacancies, etc., not to invalidate proceedings of Council
• Resignation
• Removal
• Appointment of experts and constitution of Committees
• Secretariat and Chief Executive Officer of Council
• Duties and Functions of the Council

Section 44^[9]: Community Mediation

This section provides for any Dispute likely to affect peace, harmony, and tranquility amongst the resident or families of any area locality to be settled through community mediation.

Any settlements so arrived at, however, shall not be enforceable as a judgment or Decree of a Civil Court.

1. Any dispute likely to affect peace, harmony, and tranquility amongst the residents or families of any area or locality may be settled through community mediation with prior mutual consent of the parties to the dispute.
2. For sub-section (1), any of the parties shall make an application before the concerned Authority constituted under the Legal Services Authorities Act, 1987 or District Magistrate or Sub-Divisional Magistrate in areas where no such Authority has been constituted, for referring the dispute to mediation.
3. To facilitate settlement of a dispute for which an application has been received under sub-section (2), the concerned Authority constituted under the Legal Services Authorities Act, 1987 or the District Magistrate or Sub-Divisional Magistrate, as the case may be, shall constitute a panel of three mediators.
4. For this section, the Authority or District Magistrate or the Sub-Divisional Magistrate, as the case may be, shall notify a permanent panel of mediators, which may be revised from time to time.
5. The following persons may be included in the panel referred to in sub-section (4)—

(a) Persons of standing and integrity who are respectable in the community;

(b) Any local person whose contribution to the society has been recognized;

(c) Representative of the area or resident welfare associations; and

(d) Any other person deemed appropriate.

1. While making panel referred to in sub-section (4) the representation of women or any other class or category of persons may be considered.

The provisions of the Act shall not have overridden effect, inter alia, on the maintenance and welfare of parents and Senior Citizen Act 2007 and the sexual harassment of women at workplace prevention, prohibition, and redressal Act 2013.

Why Mediation Bill is Needed?

In July 2021, the Chief Justice of India Justice N. V. Ramana while giving a speech at the India-Singapore Mediation Summit he said that “Mediation should be made mandatory as a First Step in Dispute Resolution and that a Law should be framed in this regard^[10]”.

The background of the discussion was the vast pendency of cases in India.

In his speech called “Mediation for Everyone, Realizing Mediation Potential in India”.

He emphasized the point that a movement needs to be launched to popularize mediation as it was a cheaper and faster dispute resolution mechanism.

Months later, in December 2021, the Chief Justice of India while addressing the curtain-raiser and stakeholders conclave of International Arbitration and Mediation Center IAMC at the International

Convention Centre Hyderabad stated that “The Court should be the Last Resort for Dispute Resolution. Therefore, one should look for the choices of Alternate Dispute Resolution^[11]”.

The Tamil Nadu mediation and Conciliation Center which is an initiative of the Madras High Court and India’s first court with the mediation center in every district which was inaugurated in 2005, has significantly reduced the pendency of referred cases.

Pros and Cons of the Bill:

Pros

• This Mediation Bill provides a kind of a structure, legitimacy, and something to work on further till now Mediation was just a part of the entire process of conflict resolution and it was a kind of a part of the main system of litigation but this bill would act as an independent Dispute resolution body.
• This system of conflict resolution by the people, for the people, and in the interest of the people existed much earlier. The Buddhist concept of Madhyamarg which is called the middle path is nothing but mediation.
• Disputing parties have to be agreeable to a settlement through mediation. And by which mediator can become a friend philosopher and diet help them reach a conclusion

Cons

• Court cases are much better than mediation generally people don’t know what mediation is, but people are better informed about Court proceedings.
• All parties must agree to the resolution and results are not guaranteed withholding information can make mediation difficult.
• An unskilled mediator can lead to an unprotected resolution and
• Uncooperative parties can render mediation a waste of time.

Conclusion

It is undisputed that many civil or commercial disputes are given the color of a Criminal Offence and reported to the police so that they get resolved under the fear of arrest. Many criminal offenses.

A result of the fact that civil or commercial disputes cannot be resolved amicably and in time.

The police sometimes take up the minor cases slightly or reduce the seriousness of the crime by converting the offence into a non-cognizable one.

Some of these cases may become aggravated with time.

Therefore, the proposed Bill not only prevents the breakdown of law and order in the form of Community intervention but also helps the inability to smoothen the route to the compounding of a few criminal offences and this may largely relieve some of the pressure on the police and on judicial also.

Edited By: Advocate Komal Sharma, Publisher, Law Insider

References

Bill Introduced in Rajya Sabha

1. The Mediation Bill, 2021 (Bill No. XLIII of 2021), Sec 22
2. The Mediation Bill, 2021 (Bill No. XLIII of 2021), Sec 7
3. The Mediation Bill, 2021 (Bill No. XLIII of 2021), Sec 2
4. The Mediation Bill, 2021 (Bill No. XLIII of 2021), Sec 6  
5. The Mediation Bill, 2021 (Bill No. XLIII of 2021), Sec 7
6. The Mediation Bill, 2021 (Bill No. XLIII of 2021), Sec 10
7. The Mediation Bill, 2021 (Bill No. XLIII of 2021), Sec 22
8. The Mediation Bill, 2021 (Bill No. XLIII of 2021), Chapter VIII  
9. The Mediation Bill, 2021 (Bill No. XLIII of 2021), Sec 44

10. By Amit Anand Choudhary, The Times of India “Make Mediation First Step to Settle Disputes: CJI N V Ramana”

11. Express News Service, Indian Express “Courts Should be last Resort for Dispute Resolution: CJI N V Ramana”