This article has been written by Sai Aravind R, pursuing a Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting from LawSikho.
The common apprehension among all people to step into court is due to the fact that it is a time-consuming process where it takes years to get any relief. But still, one has no other option other than seeking the court’s help in solving the dispute. Apart from these the alternative dispute resolution mechanisms are sought by many people and it is gaining importance day by day. Mediation is one of the alternate dispute resolution mechanisms available outside the court. Compared to courts, mediation saves both time and money for the parties involved. Moreover, other perks in choosing mediation are that they are private, confidential, and maintain goodwill among the parties.
The Commercial Courts Act, 2015 has made the initial step in making mediation compulsory for all commercial suits. In this era where time is more valuable than anything, mediation saves lots of time for both the parties and the courts. So, this compels us to think why such mediations couldn’t be a prerequisite in other civil litigations too. Hence this article will cover the necessity to make mediation a prerequisite in civil litigations.
Mediation in India
In mediation, with proper communication and negotiation, people put their issues and solutions in front of each other with the help of a mediator. A third party is appointed as the mediator who acts unbiasedly in directing the parties to amicably resolve their issues. The person can be anyone the parties have chosen, or any specialised lawyer agreed on by the parties.
Mediation in India is either court-referred mediations or private mediations. The court refers to mediation mostly in personal disputes such as matrimonial disputes where the matter pending in court is referred for mediation under Section 89 of the Code of Civil Procedure, 1908. In private mediation, parties with disputes engage qualified mediators who work on a fixed-fee basis and could design a process of assisted negotiation between parties for solution-focused discussions. Such mediators can be appointed by anyone from courts, to the general public, to corporate as well as the government sector. After a series of negotiations, the parties may either agree and reach a settlement or fail to reach any settlement. In case the parties mutually agree on the terms of settlement and mode of enforcement, such terms of settlement may be recorded in the form of an arbitral award or conciliation settlement which can be enforced like a court decree. In case the parties fail to reach any settlement, the mediation will be terminated confidentially and the parties could approach the court to resolve their disputes.
Mandatory mediation in commercial suits
The Commercial Courts Act, 2015 establishes special types of courts for adjudication of commercial disputes at different levels. One important feature of this legislation is pre-institution mediation and settlement under Section 12A of the Act. According to which the parties before filing the suit under the commercial courts should first try resolving the dispute through mediation unless the matter requires urgent remedies. The Act mandates that the time for such mediation should be three months from the date of application made by the party which can be extended further to two months.
The main purpose of the enactment of this Act is to promote India’s position in the ease of doing business index. This feature of compulsory pre-institution mediation is a contributing factor to such goals. Parties are much more profitable if their dispute gets solved through mediation instead of getting stuck in the legal entanglement of litigation.
129th Law Commission Report and Malimath Committee
The huge arrears of cases always persisted in India. So, the steps to counteract these problems were taken in the late 1980s itself. The 129th Law Commission Report in 1988 and on the recommendations of the Chief Justices Conference, Justice Malimath Committee made a number of recommendations in its report emphasising alternative dispute resolutions in 1990. The 129th Law Commission Report titled “Urban legislation mediation as an alternative to adjudication” encouraged the necessity for the settlement of disputes between parties through alternate dispute resolution methods. It also recommended the constitution of Conciliation Courts to initiate conciliation proceedings especially on issues related to partition, inheritance, and wills. The Malimath Committee went a step further ahead and recommended making it compulsory for the courts to refer the dispute, for settlement by any of the dispute resolution mechanisms after framing of issues provided that when the parties fail to get their disputes settled through such alternate resolution methods then the suit in court could be continued.
The Code of Civil Procedure (Amendment) Act, 1999 is the main outcome of the recommendations from these two reports. By this amendment, conciliation, Lok Adalat, and mediation were also added as alternate disputes resolution mechanisms in Section 89. This Section 89 previously had reference only to arbitration as the out-of-court settlement. This amendment also brought Rule 1A, 1B, and 1C under Order 10 in the Code of Civil Procedure, 1908. By these provisions, the court shall opt for any one or more alternative dispute resolution after recording their admissions and denials. At the option of the parties, the Court shall also fix a date of appearance before such authority.
It has to be understood that these recommendations were made more than three decades ago. Now the circumstances have not changed yet. A load of litigation in our courts remains even more. Hence the onus is on the lawmakers to subside this problem.
Mediation as a prerequisite of judicial precedents
- The Code of Civil Procedure (Amendment) Act, 1999 which amended Section 89 in the Civil Procedure Code was challenged in Salem Advocate Bar Association v. Union of India (2003). The Supreme Court acknowledged the fact that the long-drawn nature of litigation subverts the ends of justice so it is viable for parties to resort to alternate dispute resolution which would indeed curb delays and the limitations of the traditional system, such as a limited number of judges, the voluminous number of cases, etc. The court further suggests a constitution of a committee in identifying cases and solving them through alternate dispute resolutions. The court also said that such a committee will be at liberty to frame rules and regulations to give effect to mediation under Section 89(2)(d).
- The Supreme Court in Afcons infrastructure and Ors. v. Cherian Verkay Construction and Ors 2010, held that Section 89 has to be read with Rule 1A of Order 10. According to it, after the pleadings, admission/denials are complete and before framing the issues, the court will have recourse to Section 89 of the Code. In such recourse the court is required to consider and record the nature of the dispute, inform the parties about the five options available and take note of their preferences and then refer them to one of the alternative dispute resolution processes. The court also classified certain types of cases that are not suitable for alternate dispute resolution such as representative suits, elections to public offices, serious criminal offences, etc. It also stated that it is mandatory after completion of pleadings, to consider recourse to other dispute resolution processes under Section 89 unless the matter falls in the above cases.
- In the case of MR Krishna Murthi v. New India Assurance Co. Ltd. 2019, the Supreme Court even wanted the state to examine the feasibility of setting up the Indian Mediation Act and Motor Accident Mediation Cells by making necessary amendments in the Motor Vehicles Act. This shows us that the attitude of the apex court has always been in favour of alternate dispute resolution mechanisms. They are well aware of the burden of the judiciary more than anyone else and they tried to promote out-of-court settlement whenever they could.
The delay in adjudicating an issue by the court can be due to different factors such as lack of infrastructure in courts or no adequate number of judges or due to our elaborate procedural laws. But this anomaly has to be accepted and it is better to switch to other handy options. The unique aspect in the resolution of a dispute through mediation is that no right or wrong or any legal issue is discussed. The parties with an open mind look to settle their dispute. Whereas litigation is where rule of law is applied and justice is achieved at the cost of time and money.
We are well aware of the fact that in India courts are overburdened. Any non-litigious person would prefer to save time and money. The mandatory pre-institution mediation for commercial suits is a positive development. Followed by which the pre-institution mediation in consumer, property, domestic, minor criminal cases will be the best course of action in the future. The Covid pandemic has worsened the state of pending litigations in our country. So, there is an urgent need for action from the state to find a solution to mitigate this situation. Therefore, making mediation a prerequisite in civil litigation would be a great step in improving the condition.
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