30/11/2021
On 5 November 2021, a draft of the Mediation Bill, 2021 ("the Bill") was released for public consultation.
In recent times, the necessity of an exclusive legislation governing mediation has been discussed on multiple fora. Further, since India became a signatory to the Singapore Convention on Mediation, the Bill aim to address gaps in the process of domestic as well as international arbitration.
This article tries to highlight the key features which the Bill proposes to cover.
What is mediation? (Section 4 of the Bill)
The Bill gives a vast definition to mediation and includes any process including pre-litigation mediation, online mediation, conciliation or any similar expression, where parties request a third person(s) referred to as the mediator to assist them in arriving at an amicable settlement of their dispute.
Domestic mediation (Section 2 of the Bill)
The scope of domestic mediation covers mediation conducted in India, and -
1) All or both parties habitually reside in or are incorporated in or have their business in India;
2) The mediation agreement provides that the Mediation Act, 2021 would apply to the mediation; or
3)The mediation is an international mediation (means a mediation which relates to commercial disputes arising out of legal relationships under Indian laws and where at least one of the
parties, is (i) not an Indian or habitually resides in other countries (ii) a body corporate, association with its place of business outside India; or the Government of a foreign country.)
Pre-litigation mediation (Section 6 of the Bill)
The draft Bill proposes pre-litigation mediation with registered Mediators as a compulsory step, subject to other provisions, before approaching courts or tribunals, even if there is no record of a mediation agreement between the two parties.
One of the most important provisions is that if a mediation proves to be successful, the parties may enter into a Mediation Settlement Agreement which becomes binding and be enforceable by law unless the one of following is proved by a party:
a)parties to the Mediation Agreement were under some incapacity, Agreement was null and void;
b)the mediation is incapable of being performed under the law which the parties have subjected it;
c)Agreement is not binding, is not final according to its terms or has been subsequently modified;
d)The obligations in the settlement agreement have been performed or are not clear;
e)Granting relief would be contrary to the terms of the settlement agreement;
f)Serious breach by the mediator of standards applicable without which breach that party would
g)not have entered into the settlement agreement;
Mediation Council of India
The Bill states that the Central Government shall establish the Mediation Council of India which shall consist of members from the judiciary as well as administrative legs.
The Bill proposes amendments to the Indian Contracts Act,1872, to include mediation along with arbitration as a mode of resolving disputes. It also proposes appropriate amendments to the CPC, Arbitration and Conciliation Act.
While the Bill is a forward step in fast tracking the ecosystem around alternative dispute resolution in India, it would be necessary to address the ambiguities in various provisions so as to make it effective
