This article was written by Rahul Ohri, pursuing the Diploma in International Contract Negotiation, Drafting, and Enforcement Course from LawSikho, and edited by Koushik Chittella.

Introduction 

The Indian Legal System has been struggling with long-lasting litigation procedures coupled with the immense number of cases burdening the judiciary. Hence the famous quote: “No man’s life, liberty, or property is safe while the legislature is in session.” by Mark Twain, an American writer. However, the new legislation, the Mediation Act, 2023, is one of the steps towards the dismissal of prolonged cases in court by the choice of the parties. Although mediation has always been there since the introduction of alternate dispute resolution, it has been the only one left out to be formalised into legislation apart from arbitration and conciliation, except for a few honourable mentions here and there in certain legal enactments such as the Motor Vehicle Act, Domestic Violence Act, Commercial Courts Act, etc.

This Act has introduced a formalised dispute resolution in India and promoted mediation as a viable and effective alternative option for the parties apart from traditional court battles and arbitration procedures of around a year.

Mediation

Mediation is a structured process where two or more parties having a dispute over a subject matter come together to negotiate with each other and resolve the issue through a neutral third party, also known as the mediator. This third party, a mediator, helps the parties in disputes to come to an agreement with mutual understanding and settle the dispute within the parties without resorting to any lengthy proceeding before the court. 

Here, the settlement/agreement reached by the parties with the help of the arbitrator is amicable and without any sort of influence, pressure, or coercion. Unlike judges who state the orders and direct the parties to comply with the court decisions, the mediators guide the conversation between the parties and encourage them to open communication and try out creative ways to resolve the matter. This collaboration between the mediator and the parties in dispute leads to a unique solution that fulfils their needs and interests and ultimately resolves the dispute.

The Mediation Act: a legislative framework

Before the Act, mediation existed in a fragmented legal space. Its procedure, enforceability, and implication were often unclear, especially regarding the procedure or grounds to challenge the mediated settlement agreement in case of misrepresentation, creating hesitancy among parties to fully engage in the process and build complete reliability.

But most recently, the Mediation Act of 2023 has been passed by the Parliament. But as we talk about the implementation of the Act, it has yet to. This Act lays down a comprehensive legal framework for mediation in India, which had been missing for so long till date. Till this Act was passed, there was a practice established to be followed for the mediation to take place or settle any dispute through mediation that has to go through the court proceedings first where the court refers the matter to mediation, and thereon, on the basis of that mediation, the resolution or persistence of trial was carried on, except for a few provisions similar to alternate dispute resolution under the Code of Civil Procedure, 1908, Hindu Marriage Act, 1955, Companies Act, 2013, Commercial Courts Act, 2015, etc.

Definition under the Act

Mediation is defined as a voluntary process opted by the parties themselves to resolve their dispute through a neutral third party, i.e., the mediator, and reach an amicable settlement for any sort of dispute, except for disputes mentioned under the first schedule of the Act, that arise between them, which includes pre-litigation mediation, online mediation, community mediation, and conciliation. Yes, you read it right, and it’s true that conciliation is now a part of the Mediation Act 2023. It emphasises the consensual and voluntary nature of mediation and the mediator’s impartial role in facilitating communication and resolving the dispute.

Types of mediation

• Court-annexed mediation: The old-school mediation procedure (an established practice over the years) occurs within the court’s or tribunal’s established mediation centre, often initiated by judges.

• Institutional mediation: This type of mediation is conducted with the consent of the party, where the parties themselves choose to opt for an institution with their own established centre specialising in providing mediation. In this type of mediation, the mediator, the place for mediation, and any other facilitation for the mediation are provided by the mediation institute itself.
• Online mediation: This Act has now formalised and legally defined the online dispute resolution methods via mediation. It utilises technology for the remote participation of all the parties and the participants. It can be utilised by submitting a written application by the parties to the mediation service provider seeking online mediation for dispute resolution.
• Community mediation: This Act has now introduced the concept of community mediation. Where any dispute arises among the different families or residents of a community or area, they may reach out for mediation through a written application by any person of the community or area to an authority designated for the said purpose under the Legal Services Authorities Act, 1987, or the district magistrate or the sub-divisional magistrate of the respective areas where the dispute has arisen. A tribunal comprising three community mediators shall mediate the dispute to an amicable resolution, leveraging the local resources to resolve disputes within communities.
• International Mediation: Any commercial dispute where at least one party to the dispute is not a national or resident of India, whose place of business is outside India, or is a foreign country’s government, then such disputes may be settled through this type of mediation at the choice of the parties.

Key features of the Act

1. Appointment of the mediator

This Act gives complete flexibility to parties while choosing a mediator for the amicable resolution of their dispute. Any person regardless of his/her nationality may be appointed as mediator if the parties choose so, or parties may choose to approach a mediation service provider, which will appoint a mediator of the parties’ choice (with preferred skills or qualifications) on the written application from the parties. 

2. Mediator’s termination or replacement

In case a mediator discloses a potential conflict of interest pertaining to the dispute that is being addressed in such mediation, either before or during the mediation proceedings, and any party objects to the same, then the mediator shall be terminated or replaced. Even without any conflict on either party’s written request to the mediator himself or to a mediation service provider in case of non-institutional mediation to terminate or replace the mediator. The Act also empowered the mediation service provider to remove a mediator from the case if there is a reason to believe that there might be a conflict or if the mediator, himself, withdraws for any reason. However, in case of termination due to any reasonable doubt, then the mediator is entitled to the right of hearing to prove the contrary.

3. Time-bound process

This Act also provides for a time limit to conclude the mediation, i.e., 120 days from the date of first appearance before the mediator. This is supposedly done to avoid the misuse of processes and cases to linger on like in the court, which would ultimately defeat the purpose of this Act. However, this Act also allows the mediator and parties to extend this time limit for another 60 days with the mutual consent of the parties, only if there seems a possibility to resolve the dispute or the mediator feels that the few measures or options could be explored that would likely resolve the dispute.

4. Conduct and role of mediator

The mediator must be an independent, neutral, and impartial person throughout the mediation process and should never take sides with any party or express personal opinions on the merits of the dispute. He must abide by the principles of fairness and objectivity and adhere to professional and ethical standards as specified under regulations to ensure mediators’ high level of professionalism and conduct.

The mediator’s role is to facilitate open communication between the parties so they may freely present their viewpoints, identify key issues, explore possible compromises each could make, and reach an amicable settlement. Such settlement cannot be imposed upon the parties and must foster a pressure-free or coerce-free agreement. They are also supposed to disclose any sort of interest or relationship to the parties and take approval or no objections from the parties to proceed any further with the mediation.

5. Mediated settlement agreement and registration

A mediated settlement agreement is a written and duly signed agreement between some or all parties mutually involved in mediation proceedings who voluntarily came to an agreement to settle a certain or all of the disputes brought to be resolved before the mediator. The said agreement must be verified, along with the authentication of signatures of all parties involved, by the mediator along with his own signature. The Mediated Settlement Agreement is legally binding in nature and enforceable on the parties the same as any court decree, so parties can execute the said agreement under provisions of the Code of Civil Procedure, 1908, like any other court decree. The said agreement is final in terms of the dispute resolved therein, and no further proceedings of any sort would be entertained pertaining to the particular dispute addressed in the Mediated Settlement Agreement. Parties or the mediation service provider can also choose to register the said agreement with an authority constituted under the Legal Services Authorities Act, 1987, or any other body notified by the central government within the time limit of 180 days of receiving the original copy of the agreement. 

Under the Mediation Act, 2023, it is not mandatory to register the Mediated Settlement Agreement. However, it certainly provides an option for it and not only for the sake of it, as the same certain has its advantages, such as:

• It provides additional evidence of the agreement’s authenticity. 
• It becomes part of the public record, making it easily verifiable.
• It can make the process of enforcement way easier.

6. Confidentiality

The mediator, mediation service provider, parties, and all other participants (advocates, counsels, advisors, or experts) are liable to maintain the confidentiality of the matters brought to the mediation and whatsoever discussed, advised, admitted, produced, offered, or stated by anyone during that mediation proceeding. Neither of them is allowed to take or record any audio or video recording of the said proceeding.

However, anything stated in the mediated settlement agreement shall not be considered under the confidentiality provision of the Act but rather the necessary part of the terms and conditions to be stated in the agreement. Furthermore, only when any criminal threat or mens rea to commit a crime under the Indian legislative system seems to exist or any professional misconduct on the part of the mediator, it is not covered under the confidentiality provision under the Act. 

7. Termination of mediation and non-settlement report

As and when the parties to the dispute reach an amicable resolution through mediation and have duly signed a mediated settlement agreement with the authentication of the mediator, the mediation itself is then and thereby deemed to be concluded. 

But where the mediator, after a thorough attempt to resolve the dispute, determines that no further efforts can foster any result, then he can provide a written declaration to the parties or mediation service provider to terminate the mediation, or any of the parties may also provide a written application/communication to the mediator and other parties and choose to withdraw from mediation.

If no agreement is reached within the prescribed time limit, even then the mediation is automatically terminated. However, in these cases, either a mediation service provider or the mediator himself shall provide a copy of the non-settlement report duly signed by all parties.

8. Challenges and limitations to enforcement of mediated settlement agreements 

The Mediation Act, 2023, states provisions where a mediated settlement agreement could also be challenged subject to certain grounds:

• fraudulent means or bribery were involved to reach or obtain the agreement.
• Impersonation of another party during the mediation process.
• Disputes that were not suitable for mediation as defined by Section 6 of the Mediation Act have been settled in the said agreement.

Furthermore, the Mediation Act also imposes a deadline of 90 days for challenging the Mediated Settlement Agreement from the date of receiving the authenticated agreement. The same could be extended in case parties succeed in convincing the court that the delay was not deliberate but rather a genuine delay.

9. Mediation service provider and functions

A Mediation Service Provider could be any organisation or authority recognised by the Mediation Council established under the Act. It encompasses a variety of entities that are duly recognised under the Mediation Act:

• Mediation bodies or organisations: Any organisation, entity, or body established solely for the purpose of conducting mediation as per the provisions, rules, and regulations of the Act.
• Legal services authorities: Any authority empowered solely to provide mediation services and constituted under the Legal Services Authorities Act, 1987.
• Court-annexed mediation centres: Our same old pre-recognised and well-known mediation centres were within the court complexes and operated under the court administration for settling the disputes presented before the court and referred to the said mediation centre.
• Government-approved bodies: Any entity, body, or authority recognised or appointed as a mediation service provider by the Central Government via notification through the Official Gazette of India.

Key functions of mediation service providers:

• To accredit qualified mediators and undergo the necessary training. 
• To maintain a panel of accredited mediators.
• To connect parties with a mediator from the panel and facilitate the mediation process from beginning to end.
• To provide necessary facilities, assistance, and infrastructure, including meeting spaces and administrative support for conducting mediation.
• To promote the professional and ethical conduct of mediators through ethical codes, training, and actions against misconduct.
• To facilitate this registration process and register mediated settlement agreements.

• To raise awareness about mediation and its benefits among the public.
• To conduct research on mediation practices and study their effectiveness.

10. Community focus

Out of many new introductions in this Act, one is “Community Mediation,” wherein the disputes among the locals or the communities within a locality affect the peace and harmony among residents or families within the area/locality/communities and promote a collaborative approach to resolve issues at the grassroots level. It is an entirely voluntary process and emphasises parties’ mutual participation. 

The community mediation could be sought by any aggrieved party and may initiate the process by giving a written application with a designated authority under the Act, which includes the Legal Services Authority, the district magistrate, or the sub-divisional magistrate. For the purpose of community mediation, a panel of three community mediators is appointed in a specific locality to oversee the mediation process. 

Just like any other mediation process, whenever a successful resolution is achieved, a mediated settlement agreement is executed between all parties and authenticated by the mediators, and in case of no settlement, mediators need to submit a non-settlement report to the authority, district magistrate, or sub-district magistrate.

11. Mediation Council of India

The Act establishes a central body, called the Mediation Council of India (MCI), that oversees mediation practices, registers qualified mediators, mediation service providers, and mediation institutions, and further promotes institutionalised mediation services, ensuring quality and consistency in the system.

Duties and Functions of the Mediation Council

• It aims to promote mediation within India, domestically as well as internationally.
• It provides guidelines for the education, assessment, and certification of mediators by mediation institutes.
• It provides the professional and ethical conduct of mediation proceedings.
• It provides a procedure for registration and potential withdrawal or suspension of a mediator.
• It sets standards for the professional and ethical conduct of mediators.
• It conducts training programs and collaborates with various stakeholders to enhance mediation proceedings.
• It recognises and regulates mediation service providers.

Conclusion

The Mediation Act, 2023, plays a vital role in transforming the nation’s alternative dispute resolution (ADR) landscape. It provides a faster, more cost-effective, and amicable settlement alternative coupled with arbitration to resolve disputes without resorting to lengthy litigation. It introduces a sturdy legal framework, lays down the procedures for training and registering mediators, and further boosts the establishment of mediation institutions for parties to address their disputes directly before the mediator rather than the case before the court just to get the matter mediated later on, further addressing many of the uncertainties and gaps that previously existed in the mediation procedure. 

It recognises various types of mediation, from court-annexed to community-based and online, which demonstrates that legislatures had a forward-thinking approach to take care of diverse needs during dispute resolution. It further lays down the principles for effective mediation for dispute resolution and emphasises voluntary participation, confidentiality, and time-bound procedure. The establishment of the Mediation Council of India ensures standardisation and professionalism in the mediation process and practices all over the nation via mediator accreditation and ethical conduct.

However, just like any new legislation, the true test of the Mediation Act will come through its implementation. As this new framework gives more prominence to mediation, it will not only relieve our courts from the overburdening but also boost a more collaborative and harmonious approach towards dispute resolution as a peace-loving society. Legal professionals would also play an immensely crucial role when it comes to the implementation of the Mediation Act, as they would be responsible for utilising and promoting this new framework as a dispute resolution tool and ensuring that clients and society get the most benefit out of it.

References

1. Mediation Act, 2023