Introduction
- A well-planned, purposeful discussion goal method that involves an outsider helping the parties resolve their differences through agreement, settlement, specific correspondence, and negotiation techniques is Mediation. These strategies are progressively constructed in a way that greatly streamlines the mediation and conflict resolution processes.
- Although the concept of mediation has changed during the last half of the 20th century, its origins can be traced back to the old Indian legal systems, such as the “Gram Panchayats” and “Nyaya Panchayats” systems, which were widely used in rural ancient India.
- Even though council systems may no longer be as widely recognized as they once were, they are still used in many rural areas of India, and the government of that country is constantly working to bring these traditional methods of delivering justice back to life by providing funding for them to continue operating.
- First, as a means of resolving disputes, mediation has gained legal recognition. As long as they follow the terms they have agreed upon, the mediator can assist them in reaching a decision. Since mediation is a voluntary process, all parties recognize their rights and powers, and they are free to end it at any time without giving a reason.
- It also encourages or motivates the parties to engage in active and direct dispute resolution, where they can freely discuss the details of their disagreement, develop potential solutions, and reach a settlement. One of its main advantages is that mediation in India is an entirely private process for resolving disputes.
Mediation in India: Evolution
- The Industrial Disputes Act of 1947 marked the beginning of mediation’s legal status. The conciliators appointed under Section 4 of the act are “charged with the task of mediating in and encouraging the peaceful resolution of Industrial disputes”.
- Sub-section of Section thirty of the Arbitration and Conciliation Act 1996 encourages the parties concerned to explore the choice of mediation and conciliation despite mediation proceedings having started and thereby empowers the mediation judicature to use mediation as a way of dispute resolution. all the same, because of an absence of correct social control (or even formation) of any specific rules of mediation, this provision promoting mediation has nearly been rendered defunct.[1] The Indian Parliament amended the Code of Civil Procedure to include section 89, which allows cases that are pending in court to be referred to alternative dispute resolution (ADR) processes, such as mediation.
- This took place by the Malimath Committee Report and the Law Commission of India’s recommendations. However, in terms of law, the most comprehensive mediation training took place in Ahmedabad in 2000, and it was directed by American trainers from the Institute for the Study and Development of Legal Systems. The Ahmedabad Mediation Center, the first lawyer-managed mediation center, was formally opened on July 27, 2002, by the then Chief Justice of India. In 1999, the Amendment Act was proposed. However, the identical thing was implemented in 2002.
- Section 442 of the Companies Act, 2013 addressed the establishment of a Mediation and Conciliation Panel and included the mechanism of mediation. Another step toward the recognition of mediation is India’s signing of the UN Convention on International Settlement Agreement, which indicates that the country supports mediation, whether consciously or unconsciously. Chapter III A, Pre-Institution Mediation and Settlement was added to the Business Courts Act 2015 by Amendment in 2018, requiring mediation for business problems before the institution of a suit.
Development Through Judiciary System
- As we all know dispute is the most common part of everyone’s life, there are 3 aspects of every dispute people, processes, and problems. What is most important in a dispute that how the parties can handle the dispute, there can be two modes of retaining a dispute adversarial like litigation, arbitration, and non-adversarial like mediation and conciliation.
- Not as a substitute for another resolution method. It has been noted that the majority of high courts have distinct regulations controlling conciliation and mediation. Except for a few high courts, no such data is available to reveal the status of mediation cases, the success or failure of that matter, and the number of settlements that were reached and successfully implemented.
- The primary goal of the MCPC was to reduce backlog; however, more attention must be paid to the development of national policies with proper legal frameworks. The Mediation and Conciliation Project Committee (MCPC) was set up by the Indian Supreme Court in April 2005 to oversee the effective application of mediation. Court-annexed mediation has grown as a result of the MCPC’s attempt, and it now serves as “another effective note of dispute resolution.”
- Such varied interpretations were settled upon with the judgment from the apex court in Patil Automation Private Limited & Ors. V. Rakheja Engineers Private Limited.[2] In this case, the bench of KM Joseph and Hrishikesh Roy answered this issue to hold that section 12A of the Commercial Courts Act 2015 is mandatory and any suit violating the same, the plaint of the case would be rejected under Order VII Rule 11 of the Code of Civil Procedure. The Court highlighted the same as a compulsory provision by touching on the legislative intent of the Amendment Act. In another case of The Madras High Court in M/s. Micro Labs Limited[3] Santhosh upheld the decision of the Patil Automation case and dismissed the micro lab’s case as the parties didn’t undergo mediation and urgent interim relief was not contemplated.[4]
- Although the Supreme Court has brought up the necessary character of section 12A, the Madras High Court rendered a different decision in the case of Junior Kuppanna Kitchens Private Limited v. Kuppanna Foods and Ors. In the case of M/s. Micro Labs Limited V. A Santhosh and Junior Kuppanna Kitchens Private Limited v. Kuppanna Foods and others, the various perspectives regarding the maintainability of commercial suits without utilizing Pre-Litigation under section 12A of the Commercial Courts Act, 2015, were thus communicated through a notification dated June 15, 2023.
- The paramount code in Krishnamurthi v. New India Association Co. Ltd.[5] made clear how urgently standard mediation laws across India are needed. The honourable court established a community to create laws and devise ways to provide mediation-based dispute resolution legal validity as a step toward this.
- The direct goal of such a law is to require mediation before going to court or before any tribunals. Addressing the issues related to the court delivery system may surely be made easier by the cost-effective adoption of such a system. Also, a system like this would greatly benefit the average person.
- But even in this day and age, Indian lawyers remain as traditional and archaic as they were a few years ago. Still, the military blockade of the Indian system may be mostly due to its random and stagnant deployment across a wide range of conflict-ridden issues. It has been observed that, to until, organizations and establishments mostly in the insurance, banking, and commerce sectors have depended on alternative dispute resolution (ADR) and mediation as means of resolving disputes.
- Despite these advancements, it wasn’t until after the pandemic that a comprehensive piece of legislation devoted to mediation was created. In its 2020 ruling, the Supreme Court ordered the government to examine the viability of passing an Indian Mediation Act. A standardized method will be aided by its formalization. Later on, this resulted in the Mediation Bill 2021, which mandates that before going to court, people must attempt to resolve civil or business issues through mediation.
- The same was incorporated into the Mediation Act, which offers a successful and affordable substitute for litigation by introducing a non-adversarial method overseen by neutral mediators. Since India lacked any independent legislation in this area, the concurrent enactment of the Mediation Act, of 2023 has enhanced the ADR system and closed legal gaps. The act stipulates online and community mediation and it also mentions pre-litigation mediation by requiring it. It has also concentrated on the areas in which mediation is not an approved form of conflict resolution.
The Mediation Act of 2023
- Australia, Singapore, and Italy are just a few of the nations with stand-alone mediation rules. Several groups, including the Supreme Court (2019) and the High-Level Committee to evaluate the institutionalization of the arbitration system in India (2017), had suggested that separate legislation governing mediation in India be enacted.
- In addition, a committee established by the Supreme Court in 2020 made recommendations and created a draft comprehensive law to uphold the integrity of mediation-based conflict resolution. The goal of the Mediation Bill, 2021 was to encourage mediation—especially institutional mediation—and offer a way to make mediated settlement agreements legally binding. The Standing Committee on Personnel, Public Grievances, Law, and Justice had been tasked with reviewing the Bill.
- By streamlining, organizing, and establishing a legal framework, the Act helps mediations in India address civil and business disputes before they turn into litigation that needs to be settled in court. The major aspects of the Act, such as the enforceability of the mediated settlement agreements, their finality and binding effect, their enforceability, and their challenge ability, lend greater legitimacy to the mediation process. The pre-litigation settlement system has the potential to reduce risk, costs, and delays associated with Indian court adjudication, making it an attractive option for international investors looking to do business in India.
Departure of ‘Singapore Convention’ on Mediation
From the act
- The Act’s failure to provide for the execution of mediated settlement agreements from international mediations held outside of India is the most notable and obvious gap. The clauses about temporary reliefs and mediator appointments are among the other characteristics that allow for excessive interpretation, particularly in comparison to the regulations outlined in the Arbitration and Conciliation Act of 1996.
- India was one of the first countries to ratify the Singapore Convention on Mediation, also known as the United Nations Convention on International Settlement Agreements originating from Mediation, in 2019. But when India passed its first piece of independent mediation law in 2023, it decided not to include the Singapore Convention.
- The Singapore Convention essentially allows for the execution of mediated settlement agreements in the counterparty’s own country’s legal system. But as was already said, the Act does not provide for the enforcement of settlement agreements reached through international mediations that take place outside of India.
- The Center explains this divergence by saying that India would prefer to wait for wider adoption because the Singapore Convention has only recently come into effect. Given that the Singapore Convention has only been adopted by 11 (eleven) non-major economies, India would prefer to see how other major economies are implementing it.
Binding of Settlement Agreement
- According to Section 19 of the Act, a Mediated Settlement Agreement is a written settlement that resolves some or all of the parties’ issues, is reached after mediation, is verified by the mediator, and is signed by each party.
- Furthermore, under Section 28 of the Act, a Mediated Settlement Agreement may be enforced in the same way as a court decision or decree under the guidelines of the Code of Civil Procedure 1908.
Justifications for contesting a Mediated Settlement Agreement:
- A Mediated Settlement Agreement (apart from those achieved through court-referred mediation, by Lok Adalat, or Permanent Lok Adalat) may be challenged on four grounds, according to Section 28(2) of the Act. These include:
- fraud;
- corruption;
- impersonation; and
- disputes or problems that, according to Section 6 of the Act, are not appropriate for mediation.
Institutional Mediation in India
- An organized mediation procedure carried out under the direction of an established mediation institution is referred to as institutional mediation. These organizations offer a structure, comprising guidelines and protocols, to direct the process of mediation. As per Section 2(f) of the Mediation Act,2023 defines “institutional mediation” means mediation conducted under the aegis of a mediation service provider. Institutional mediation is one where the parties refer their dispute to an institution of mediators and agree to be bound by the rules of such institution.
- In institutional mediation, contending parties are assisted in reaching a mutually agreeable conclusion by a neutral third party, the mediator. A mediation service provider oversees the procedure, ensuring that the set rules and regulations are followed. Some of the benefits of an Institutional Mediation is that it gives precise rules and a structure, guarantees an impartial arbitrator. It is frequently less expensive and faster than litigation and protects the privacy of the disagreement and its settlement.
I. Mediation Service Provider
- As per Section 40 of the act “Mediation service provider” means: (a) anybody or organization recognized by the Council that conducts mediation in accordance with this Act and its rules and regulations; (b) an Authority established under the Legal Services Authorities Act, 1987 (39 of 1987); (c) a mediation center attached to a court; or (d) any other body as the Central Government may notify. It is understood, however, that the bodies mentioned in clauses (b), (c), and (d) will be considered mediation service providers recognized by the Council. The Council shall recognize the provider of mediation services in a manner as may be established.
II. Mediation Council of India
- The creation of a corporate entity known as the Mediation Council of India (“MCI”), charged with building India into a strong local and global center for mediation, is mentioned in the Mediation Act. In addition, the MCI is expected to establish guidelines for conducting mediation proceedings, identify, approve, terminate, or suspend Mediation Service Providers, keep an electronic record of mediated settlement agreements, and provide the Central Government with an annual report on the application of the Mediation Act’s provisions. In accordance with the Mediation Act’s provisions, the MCI would also be able to create rules and regulations. Notification of the provisions relating to MCI’s creation has recently been notified.
Reinforcement of The Act: Positive and Challenges
- Even as the Mediation Act, of 2023 has its set of problems and space for development, it is largely held in good reinforcement, highly beneficial, and good reinforcement for the judicial system of India. The following are some of the salient features of this reinforcement:
Positive Reinforcement
- Encouragement of Mediation: The Act promotes mediation as the preferred means of resolution of disputes since it may be quick and reduces the burden on the courts.
- Institutional Mediation: Through the provision for institutional mediation, the Act attempts to infuse greater structure and professionalism in the process of mediation.
- 3. Enforceability of Settlement Agreements: Enforceability of a mediated settlement agreement is given the same stature as an order of any court through the provisions of this Act. This feature gives impetus to mediation as an alternative in the hands of the parties and also adds to the legal certainty involved.
- Confidentiality and Voluntarism: The Act reiterates these two basic tenets relating to mediation, which are the very _sine qua non_ for the effectiveness of that procedure.
5. Training and Accreditation: This provision of the Act serves the purpose of ensuring mediators have had basic training and accreditation so that only professionals with the prerequisite qualifications carry out mediations.
Challenges And Opportunities Toward Future Development
- Awareness and Acceptance: Such provisions are like an excellent framework; however, among the general public and the legal fraternity, mediation still requires more awareness and acceptance.
- Infrastructure and Resources: Insufficient infrastructure and resources are essential to implement the program effectively but are still lacking in some pockets.
- Reflection of the Existing Legal Structure: It is a fact that in practice, there is limited success in achieving effective cooperation between the courts and the mediation centers and the effective integration between mediation and the existing legal system.
- Quality and Consistency: Faith must be maintained in the mediation process, which consists of proper quality and consistency of mediation being offered by different institutions and different settings.
AI in Mediation
- In India, the resolution of disputes and mediation of conflicts has traditionally heavily relied on manual and human-centric procedures that highlight human competence and negotiating skills. However, the advancement of artificial intelligence (AI) is opening up new avenues by giving disputing parties more equitable and efficient ways to settle their conflicts. Senior attorneys have voiced certain reservations over artificial intelligence’s use in the legal sector. It is acknowledged, nevertheless, that people need time to get used to new tools.[6]
- AI is used by attorneys in several ways. The following are the current uses of AI in law as a new industry standard: Task management, title examination, rental resumes, legal and case management, digital signatures, automation of expertise, due diligence, contract administration, legal and case management, contract writing and examination, and so on. Aside from insolvency, immigration, and estate, the software now scans legal articles for links, advantages, disadvantages, and trends that can indicate further instances and identify which arguments are more vulnerable. AI is used by lawyers for intake and document preparation in a variety of contexts, such as bankruptcy, immigration, estate planning, taxes, securities, and food and drug laws. It is also used in the handling and evaluation of scientific expert testimony and litigation planning.
- Even if mediators and their teams do not rely on using AI technologies to support them in their work, AI is likely to come up in mediation conversations and result in changes to the environment in which mediation is done. This suggests that regardless of whether they plan to employ AI in their work, mediators need to be aware of it and its potential implications on the mediation’s content and environment.
- This raises the question of what skills and knowledge mediators in AI should learn or gain. It’s clear that not everyone should or is qualified to become a technical expert. All parties involved in mediation who utilize AI or are likely to be impacted by it should have a basic understanding of it. It’s helpful to phrase this in terms of technological literacy as it relates to AI. Indeed, technology literacy is not a brand-new idea. A smart place to start is with “having knowledge and abilities to select and apply appropriate technologies in a given context.” Many definitions of technological and digital literacy place a strong focus on the ability to use a particular technology appropriately.
- Moreover, it is imperative to integrate a critical thinking element, specifically the “critical evaluation of the influence of digital technology on society.” About AI literacy, both of the digital literacy components are applicable.
Conclusion
- The current state of the Alternative Dispute Resolution system is becoming more widely accepted for debate purposes; the Family Court is adopting it in cases involving marital disputes, domestic abuse, and other issues. Area 9 of the Family Court Act 1984 allows the Family Court to accept any form of ADR successfully and beneficially. The goal of the mediation cycle is to serve as an unbiased facilitator who supports both parties during their interactions.
- The arbiter also helps the parties come up with new ideas for potential question arrangements. Simple and complex contract disputes, payment disputes, cases involving miscommunication, matters about product contentment as well as safety issues, matters associated with service fulfilment issues, employment disputes, insurance disputes, debt disputes, disputes associated with personal injury, civil rights, and small claim matters can all be resolved through mediation, which is a safe, informal, and confidential process.
- AI combined with other blockchain technology will expedite dispute resolution, significantly reduce litigation costs, and provide peace of mind to those embroiled in the world’s most challenging and complicated conflicts. ODR will develop in the future, not fully take the place of in-person ADR.
- Thus, it is recommended that attorneys research the latest technology-based ADR tools and implement those they believe have the potential to enhance their current practices. Technology’s impact on various spheres and lifestyles is expanding and diminishing. This idea suggests that we can’t prevent technology from being utilized in legal services. To support legal practitioners and strategically use this progress to further the legal profession, it is therefore best to embrace it to the utmost extent feasible. By using ODR tools as support mechanisms and using them effectively, practitioners can regain control over the integration of technology for lawyers.
References:
- https://www.jlsrjournal.in/evolution-and-current-scenario-of-mediation-in-india-by-garvit-ramchandran-yash-pandey/
- https://indiankanoon.org/doc/164693074/
- https://www.livelaw.in/pdf_upload/micro-labs-v-santhosh-mad-hc-12a-440314.pdf
- https://www.legalserviceindia.com/legal/article-14793-from-evolution-to-legislation-unraveling-the-journey-of-mediation-in-india.html
- https://indiankanoon.org/doc/179274439/
- https://ijcrt.org/papers/IJCRT2402088.pdf
Written by
Aashi Mehrotra
5th Semester/Third Year Student of LL.B (2022-2025), from Lloyd Law College, Greater Noida