Harmonious Dispute Resolution: Unveiling India’s Mediation Bill 2023

[Esha Rathi is a final year B.B.A. LL.B. (Hons.) student at Jindal Global Law School.]

In a significant leap towards modernizing the legal framework and expediting the resolution of civil and commercial disputes, the Rajya Sabha recently passed the Mediation Bill 2023. This pioneering legislation marks a crucial shift, elevating mediation as the primary avenue for dispute resolution, prior to resorting to the often costly and protracted traditional court processes.

As we delve into the provisions, implications, and challenges presented by the Mediation Bill 2023, it is imperative to explore its predecessor, the Mediation Bill 2021, and the evolving landscape of dispute resolution in India.

Mediation Bill 2021: Paving the Path

The introduction of the Mediation Bill 2021 in the Rajya Sabha aimed to institutionalize a dispute resolution mechanism founded on collaborative problem-solving and the preservation of relationships. This approach was poised to propel India towards a more harmonious and efficient dispute resolution process, ensuring timely justice delivery and amicable settlements. Central to the Bill was the mandate that all civil and commercial disputes must undergo mediation before entering the court arena. Parties were obligated to participate in a minimum of two mediation sessions, underscoring the significance of exhausting alternative remedies before resorting to litigation. A time-bound approach dictated the completion of the mediation process within 180 days from the initial mediator meeting, with a provision for extension of another 180 days through mutual agreement. Finally, the creation of the Mediation Council of India was a pivotal proposal of the Bill, which was tasked with accrediting mediators and establishing a mediator pool, and overseeing the quality and training of mediators.

The Bill traversed the corridors of the Indian legislative framework, ultimately reaching the scrutiny of the Standing Committee. Comprising experts armed with technical expertise, the Committee meticulously examined the Bill’s provisions and raised pertinent concerns. A focal point of contention centred on the coercive nature of mandatory pre-litigation mediation. While promoting out-of-court settlements, the element of compulsion raised questions regarding the principles of free consent, the voluntary nature of mediation, and the potential burden of failed mediation attempts on the judicial system.

Enter Mediation Bill 2023: An Evolved Paradigm?

The emergence of the Mediation Bill 2023 builds upon the foundation established by its precursor, presenting substantial changes that address nuanced aspects of mediation. Court-annexed mediation remains a pivotal component, offering services either free of charge or at minimal cost. Moreover, the Bill ushers in the prospect of a robust private mediation sector through institutional mediation, wherein service providers extend mediation via their designated panel of mediators. Parties gain the autonomy to select a mediator best aligned with their case, in exchange for professional fees.

The core tenets of mediation, i.e., confidentiality, self-determination, and voluntariness, are safeguarded within the Bill. The Bill affords protection against admissibility and privilege against disclosure, confidentiality of mediation communication, and non-disclosure of the cause of non-settlement in reports by the mediator. The definition of mediation requires that a mediated settlement is the outcome of self-determination; pre-litigation mediation is now voluntary and any party can, at any point in the mediation, also opt out of the process.  

Adapting to the digital age, mediation proceedings have been extended to the online realm, amplifying participation convenience and expanding the process’s accessibility. This change also aligns seamlessly with the overarching goal of enhancing cost-effectiveness within the sphere of justice. In a marked departure from its predecessor, the Bill revises the time limit for completing mediation to 120 days, with an additional 60-day extension, effectively curtailing the overall mediation duration from 360 to 180 days.

Navigating Future Horizons

While the Mediation Bill 2023 presents transformative potential, some of the critical considerations that warrant attention are as follows. The competence of the Mediation Council emerges as a pivotal factor. While a mandatory member with expertise in mediation law remains fundamental, comprehensive proficiency is indispensable to uphold the core principles of mediation. Owing to the lack of a regularized process of admitting individuals in the Mediation Council and the Government’s involvement in approving the panel, the potential influence of the Government over the Mediation Council, especially in cases where the Government is a party itself, must be addressed to ensure autonomy and skill-based leadership.

The Bill introduces dual categories of mediators, i.e., registered and unregistered, expanding the mediator pool. However, caution is warranted as the Bill also provides for enforcement of a mediated settlement agreement (MSA) in a manner as if it were a judgment or decree passed by a court. Allowing mediated settlement agreements to be enforced as court judgments may lead to misuse, particularly for weaker parties facing power imbalances. To mitigate this risk, confining enforcement to MSAs mediated by registered practitioners could serve as a prudent safeguard.

Significantly, the Bill lacks provisions for sanctions in the event of confidentiality breaches. This lacuna jeopardizes the provision of maintaining the confidentiality of mediation proceedings. Until provisions are enshrined that provide certainty regarding the consequences of breaching confidentiality, parties should consider entering into confidentiality agreements at the start of mediation. This would help instil confidence in parties involved in disputes concerning sensitive data, as it would offer protection against potential breaches through injunctive relief and damages to compensate for any losses caused by such breaches.

Concluding Thoughts

So far, India has not had a dedicated standalone legislation pertaining to mediation and various statutes have incorporated provisions related to mediation. The Mediation Bill 2023 will thus significantly contribute to the formalization and advancement of mediation procedures within the country.

The Bill, by elevating MSAs to a binding and enforceable status upon endorsement by the parties and mediator, holds the potential to unclog courts, ameliorating the influx of fresh disputes and addressing extant ones. The incorporation of voluntary pre-litigation mediation underscores a pragmatic approach, rooted in the consent-driven essence of mediation that does not force parties to go through the rigmarole of mandatory mediation with unwillingness or lack of faith in the process. Although the voluntary application of provisions of the Bill does not appear to serve the legislative intent of the Bill with which it was sought to be enacted, the mandatory provision rests in dormancy, poised for activation as mediator capacity escalates and favourable mediation experience serves as the most compelling enticement for litigants to embrace this alternative dispute resolution mechanism, allowing for a paradigm shift in its due time and natural course. As India journeys toward a more harmonious dispute resolution era, the Bill stands as a beacon, illuminating a path towards efficacious and equitable resolution.

Esha Rathi

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