I recently came across an article on the Kluwer Mediation Blog written by Nadja Alexander (Editor) Singapore International Dispute Resolution Academy dated March 11, 2015. This article is titled ‘What’s your country’s mediation-friendly ranking?’
With the possibility of the Mediation law coming into force very soon in India, it felt apt that an analysis be done on India’s mediation-friendly status. Ms Alexander has put forth 10 questions to assess the mediation-friendliness of a country and I propose to deal with those questions and answer them for India.
I have listed the questions below and I will answer them seriatim.
1. To what extent are cross-border and domestic mediation regulated within the same legal framework?
Since there is currently no law on mediation in India, there is no established legal framework for cross-border and domestic mediation. The Arbitration and Conciliation Act of 1996 provides for international arbitration and for conciliation proceedings. It is possible therefore that any cross-border disputes be subject to conciliation proceedings under the 1996 Act. In the judgement of the Supreme Court of India in Afcons Infrastructure & Anr. v. Cherian Varkey Construction Company Pvt. Ltd. & Ors. [2010 (8) SCC 24], it was held that the terms ‘mediation’ and ‘conciliation’ are synonymous to each other.
Under the circumstances, I would say that cross-border and domestic mediation are regulated within the same legal framework to a certain extent as far as the Arbitration & Conciliation Act, 1996 goes. However, the Singapore Convention on Mediation does not apply to those settlement agreements which are enforceable as an arbitral award and since the settlement reached under the Conciliation proceedings under the 1996 Act are enforceable as an arbitral award, the Singapore Convention will not apply to such settlements.
Mediation is provided for under Section 89 of the Code of Civil Procedure, 1908 (CPC) for all kinds of disputes, and under Section 12-A of the Commercial Courts Act, 2015 for commercial disputes. Though these provisions are under different enactments, there is no contradiction and so I would say that they do also fall in the same legal framework.
When the mediation law comes to be passed in India, there shall be a comprehensive and unified legal framework for cross-border and domestic mediation, as is currently provided for in the bill. At the same time, the Singapore Convention does not apply to Settlement agreements - (i) That have been approved by a court or concluded in the course of proceedings before a court; and (ii) That are enforceable as a judgment in the State of that court. As such, Sec. 89 of the CPC and Sec. 12-A Commercial Courts Act, etc. shall not be relevant as far as the Singapore Convention goes.
2. To what extent do mediation laws (soft law and hard law) offer transparency and clarity?
The European Centre for Constitutional and Human Rights states that the term soft law is used to denote agreements, principles and declarations that are not legally binding. Soft law instruments are predominantly found in the international sphere. UN General Assembly resolutions are an example of soft law. Hard law refers generally to legal obligations that are binding on the parties involved and which can be legally enforced before a court.
Mediation is provided for under Section 89 of the Code of Civil Procedure, 1908 (CPC) for all kinds of disputes, and under Section 12-A of the Commercial Courts Act, 2015 for commercial disputes. Though Section 89 of the CPC is discretionary, Section 12-A of the Commercial Courts Act is mandatory.
The Government of India has also enacted the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 and the High Courts have also enacted their respective rules and regulations for the conduct of Mediation under the respective jurisdictions.
It goes without any doubt that all the mediation proceedings conducted in India are confidential in nature, which has also been held in the judgements of the Supreme Court of India.
There is currently no law on mediation as such. However, the above-discussed provisions provide for Mediation to be conducted in India. Having said that, it is as recently as in the month of October 2021, when a matter was heard by the Bombay High Court that it was clarified that Section 12-A of the Commercial Courts Act, 2015 is mandatory in nature. According to me, there was no cause for any other interpretation. However, despite this amendment being made in the year 2018, this clarification came about in the year 2021. It has to be said therefore that it is ‘better late than never’ that this clarification has now been made. There is still quite some confusion regarding the two terms – mediation and conciliation. Even though the Supreme Court of India has held that the two terms are synonymous, in practice, a differentiation is still made and different users use different interpretations of the terms. The new Mediation Bill aims to bring in clarity to these terms and end the confusion regarding their use and scope.
3. To what extent can disputants access mediation information and mediation service? Think socio-economic and geographical/ physical access.
The concept of Mediation, although provided for as discussed in earlier answers, it is not very popular in practice. The major centres for Mediation are the court-annexed Mediation Centres, whether in rural or urban areas; but there are hardly any private mediation centres for institutional mediation and the same goes for private mediation, which is quite rare.
Given the circumstances, there are very few players in the domain of mediation that have an established practice, whether as an institution or as an individual.
There is little awareness about mediation amongst lawyers and thus, a lawyer advising his/her clients to go for mediation is extremely rare. If we consider the general public, hardly anyone knows about mediation and there has been little effort made to increase awareness about the process of mediation and also its benefits.
To summarise, the access to mediation information in mediation services is extremely poor in India in rural as well as urban areas.
4. To what extent are mediation and multi-tiered dispute resolution clauses likely to be enforced?
Although the concept of mediation may not be as popular, multi-tiered dispute resolution clauses are commonly seen in contracts. If there is a provision made for Arbitration in any contract, the jurisdiction of the courts has been excluded, except for certain very specific grounds and fields of law in social welfare. It is seen that the courts ensure that the parties go for arbitration whenever there is an arbitration clause in the agreement.
The courts also take cognizance of the contractual provisions in the contracts and if there is any provision for a multi-tiered dispute resolution mechanism, that provision is directed to be enforced. Contracts do provide for a multi-tiered dispute resolution process with negotiations, to begin with, followed by Mediation and then Arbitration. Some Arbitrators do exercise their powers under the Arbitration & Conciliation Act, 1996 to refer the parties to mediation/conciliation, although such instances are rare. But, if there is a provision made for a multi-tiered dispute resolution process in a contract, then that is followed by the adjudicating authority, whether it is in arbitration or in litigation.
Thus, the enforcement of multi-tiered dispute resolution clauses in India is high.
5. How “good” are the laws on confidentiality? Here “good” might mean, inter alia comprehensive in relation to who is protected and what is protected, and precise in relation to exceptions.
The Mediation Bill No. 43 of 2021, provides a comprehensive framework for the confidentiality of mediation proceedings. However, even currently, mediation proceedings in India are completely confidential.
The confidentiality provisions are not currently set up in a framework. However, the true essence of confidentiality is respected.
In the case of Moti Ram (Dead) Through Lrs. & Anr. V. Ashok Kumar & Anr, (2011) 1 SCC 466, the Supreme Court of India has held in Paragraph No. 2 of the judgement as follows:
(2) … we would like to state that mediation proceedings are totally confidential proceedings. This is unlike proceedings in court which are conducted openly in the public gaze. If the mediation succeeds, then the mediator should send the agreement signed by both the parties to the court without mentioning what transpired during the mediation proceedings. If the mediation is unsuccessful, then the mediator should only write one sentence in his report and send it to the court stating that the “mediation has been unsuccessful”. Beyond that, the mediator should not write anything which was discussed, proposed or done during the mediation proceedings. This is because in mediation, very often, offers, counteroffers and proposals are made by the parties but until and unless the parties reach to an agreement signed by them, it will not amount to any concluded contract. If the happenings in the mediation proceedings are disclosed, it will destroy the confidentiality of the mediation process.
Under the provisions of the Constitution of India, this is the law laid down by the Supreme Court of India and as such is binding on everyone in India, including all the courts.
It is therefore my view that the confidentiality of mediation proceedings is given strong protection by the Supreme Court of India. While this is true, the confidentiality provisions do not have much clarity on who is protected, what is protected and what are the exceptions.
6. To what extent is there a real choice about the legal form of a mediated settlement agreement and effective options for enforceability?
Currently, there is no legal form of a mediated settlement agreement and even the Mediation Bill No. 43 of 2021 does not provide for a particular legal form of a mediated settlement agreement. It can be safely said that the mediated settlement agreement can take any shape or form, so long as it finds itself within the legal framework of India.
With reference to the Arbitration & Conciliation Act, 1996, if conciliation proceedings are adopted by the parties, the settlement agreement reached shall have the same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under section 30 of the 1996 Act. Thereafter, the arbitral award shall be passed as per the provisions of section 31 of the 1996 Act and subject to the appropriate Stamp Duty.
7. To what extent do the courts support mediation in terms of - a clear line of decision-making in cases brought before them; recognition of properly drafted mediation clauses and other contractual documents; recognition of the importance of confidentiality as a central tenet of the mediation process, and so on?
In the current circumstances, with the rarity of cases referred to Mediation and the overall reluctance of the Judiciary in referring cases to Mediation, this area of analysis will need to be explored after the passing of the Mediation law. Further, the absence of trained Mediators is also a big problem to be addressed. Certain High Courts in India, however, where robust systems exist, Courts are liberal in referring matters to Mediation under Section 89 of the CPC.
However, as discussed above, the confidentiality of Mediation proceedings is protected by the Indian courts.
As to the enforceability of mediation clauses, there is still a lack of clarity, as there is no statutory framework for enforcing mediation clauses. Section 12-A of the Commercial Courts Act itself provides loopholes to avoid mediation, such as the need for urgent interim orders and lack of response from the Defendant to a notice inviting him/her for mediation.
8. To what extent are there incentives on legal advisers to recommend mediation?
There are no incentives provided for legal advisers to recommend mediation and there is no such provision made for it in the Mediation Bill of 2021.
9. To what extent does the law efficiently and effectively “suspend” litigation limitation periods when mediation commences in a pre-litigation matter?
The initiation of mediation proceedings completely stops the application of the Limitation Act, 1963. Therefore, the parties can rest assured that the time spent in mediation would not adversely affect their rights in any manner, including the passage of time and its effect on the limitation period.
10. To what extent is mediation more cost-effective than going to court?
India is known for its huge backlog of pending cases which are more than 48 million. Not unlike other countries, litigation is expensive in India. Arbitration too has become expensive and time-consuming in India.
Though mediation is not practised in India as widely as it is in other countries, inferences can be drawn from the experience of other countries, and it can be understood that Mediation can be extremely beneficial to all the disputing parties in saving valuable time and money.
The Indian courts are overburdened and are in desperate need of solutions to reduce the caseload, and at the same time provide justice to all the Indian citizens who now can knock on the doors of the court for redressal of their grievances. Mediation can be the shining light at the end of the dark tunnel providing the much-needed respite to the courts in the administration of justice.
Having considered the different aspects of Mediation in India, although a numbered ranking is difficult to give, it can be safely said that the overall ranking is pretty low and much needs to be done to improve the prevalence of private mediation as well as court-annexed mediation. Awareness of the mediation process and its benefits need to be spread widely amongst the different classes and geographies of India.
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