Future of Mediation Services in India

This is authored by Ashwin Singh of Symbiosis Law School, Pune

Introduction

As of late, mediation has been looked upon as the method of alternative dispute resolution (“ADR”) which is the fastest-growing one. Even the current Chief Justice of India, Justice Ramana, supported mediation and stated how people should go for mediation instead of turning towards litigation, due to litigation being a tedious, costly, and time-consuming process.

On the other hand, mediation is much more interactive, focusing on the mutual interests of the parties, along with finding innovative solutions, and then facilitating the process. It is also worthwhile to note that mediation, as a process, whilst being a negotiation through proper communication techniques does not form a binding instrument on the parties and has its basis in voluntary acceptance. The mediators themselves play a role of suggesting the parties instead of compelling them to attend the mediation, or go for litigation if the parties are not comfortable. Thus, mediation as a concept has not been limited to any specific statute in India.

As of late, parties have been preferring the process of mediation over others, primarily due to costs. Furthermore, in the modern world, several issues are being faced, which can be see via the large number of litigations and other legal matters pending in various courts between parties, which has seen a specific rise in the covid period. Therefore, in such a situation, the goal becomes to work out the issues and to come to an amicable solution without harming the existing relationship between the organizations, wherein mediation could play a crucial role.

Whilst it is important to note that the processs of mediation is one which is extremely useful in a situation of backlog of cases, both on the national & international level, it also faces certain limitations. The prime issue is the non binding nature of the mechanism, under which the process of litigation could be started again. Thus, the only solution visible in this of this would be to work towards the creation of a compulsory mediation process.

Why Mediation & It's Relevance in Indian Society

In India, under Section 89 of the Code of Civil Procedure, 1908 (“CPC”), a power is granted to the courts for referring any parties’ dispute to meditation. In Bhavana Ramaprasad v. Yadunandan Parthasarathy, the Karnataka High Court stated that there is no need for consent of parties to be taken by courts for referring the dispute to mediation. This raises the importance and need of mediation in the Indian scenario. Furthermore, in case any of the parties are absent, then the cost of the mediation is to be imposed on the absentee party itself.

Mediation forms an important part of the ADR mechanisms and, in particular, has been known to the Indian land from time immemorial. Furthermore, it would be correct to state that mediation is the most useful form of ADR mechanisms as mediation creates a “no-win situation”. Both the parties profit from the mediation process in several ways, whilst simultaneously both lose some ground also. Meditation being a non-adversarial process, guided by the mediator, helps both the parties arrive at a settlement. Along with this the process of mediation is faster, cost-efficient, and keeps the relationship of the parties intact. It is also worthwhile to shift our attention to the fact that during COVID-19, the scheme of ADR and in particular online mediation has taken up speed which was not seen before.

In Indian law, the prime legislation concerning ADR mechanisms is found within the Arbitration and Conciliation Act, 1996. This act primarily governs and focuses on the arbitration and conciliation system in India. After its enactment, the CPC was amended in 1999 to grant legislative authority to the courts to refer the issues to ADR. However, it is important to note that even before the amendment and the Arbitration and Conciliation Act, 1996, the courts have had the power to refer the parties to ADR. Furthermore, in Afcons Infrastructure v. Cherian Varkey Construction Co. Ltd. ((2010) 8 SCC 24), the Supreme Court laid down specific guidelines to be followed in cases of referring pending disputes to ADR. The guidelines held that consent of the parties whilst referring to pending disputes in arbitration & conciliation should be present. The court stated that in case the parties do not consent to arbitration and conciliation, then the parties could be referred to mediation irrespective of the consent to the same, and if the parties do not appear during mediation then the same party would be responsible for the cost of the mediation process.

In conclusion, it must also be noted that arbitration sometimes results in excess economic loss to the parties as the arbitrator appointed may show a lack of interest in resolving the dispute and a prior interest in getting more and more money, which the arbitrator is paid for in each sitting. However on the other side of the coin, it is also important to take note that the arbitraters and the process of arbitration has many other issues as well. The similarity to litigation in examination of evidence and witnesses, combined with the specific issues of international arbitration centers also result in further increase in costs for the parties. Furthermore, if the common law principle of “loser pays”, is allowed then one of the parties could also suffer from an economic disaster.

Stakeholders in Mediation: An Indian Perspective

To fully be aware of the prospect of mediation in India, it is important to be aware of the stakeholders present in the Indian society concerning mediation. On the face of it, it would be correct to state and emphasize that the government and the judiciary, especially the apex court, have been staunch supporters of the same. The Arbitration and Conciliation Act, 1996, was implemented to reduce the burden on the courts and for fast disposal of the issue, however, still the judiciary has preferred much faster modes of dispute resolution such as that of Lok Adalats.

The prime question therefore which presents itself to us is whether the ongoing period is appropriate to make mediation the first mandatory step for resolution of any dispute in India. The prime issue in this regard is whether the creation of a mandatory mediation mechanism would result in coercion for the settlement of disputes, more specifically as to what extent would the autonomy of the parties would be affected. One other issue would be whether the parties in India would accept and understand the idea of compulsory mediation. Lastly, it is pertinent to note the appeal process in mandatory mediation and understanding whether the presence of such would result in a repeat of litigation or not.

Whilst ADR presents itself as a remarkable alternative to the court-based process of dispute resolution, the quantum of cases referred to mediation is minuscule. To elaborate upon the same, from January 2020 to June 2021 only around 15% of pre-litigation mediation applications in commercial matters were referred to mediation. Furthermore, for the same duration only around 1.2% of the lower courts referred cases to mediation. In light of this reluctance, mandatory mediation would result in much more participation. In case the parties are not able to settle, then they retain their autonomy to call off the process.

Implementation of Mediation in Indian Society?

Mediation carries special importance in the Indian society. The prime factor for this is the huge pile of pending cases at all levels of the judiciary. The various methods for the implementation of mediation in the Indian legal system could be plausible via the following methods:

Mandatory Mediation

The prime method of implementation of mediation in Indian society could be done via the method of mandatory mediation. Mandatory mediation, as a term, is often misunderstood as people think that mandatory mediation would mean that the parties would have to settle their whole dispute via the method of mediation. However, that is simply not the case, instead, mandatory mediation means that the parties have a mandate upon them to refer the dispute and to attempt the process of mediation. Furthermore, the enactment of mandatory mediation has several benefits also, namely:

1. By mandating mediation, neither of the parties appears weak to each other.

2. The myth of secondary justice being given by mediation is also resolved when the mandate is present.

3. Mandatory mediation helps the client economically.

4. The legal system’s burden is also alleviated by imposing mandatory mediation.

5. Furthermore, if the lawyers themselves understand the process of mediation then the lawyers firstly suggest the process of mediation themselves to their clients, and secondly work in developing the mediation system themselves.

6. Lastly, mediation also helps in the creation of new employment opportunities for the nation.

Via Legislation

The Supreme Court, in January 2020, proposed a panel for the drafting of legislation to provide legal sanctity to dispute settlement via the method of mediation. This panel was created to provide a code of conduct for the mediators primarily focused on the aspects of confidentiality, voluntary nature of the proceedings, neutrality, enforceability of the settlement, etc. Furthermore, several governmental and non-governmental institutions and agencies set up in India including the Centre for Advanced Mediation Practice [CAMP] Bangalore, Foundation for Comprehensive Dispute Resolution [FCDR]-Chennai, Maadhyam Delhi, retired judges, senior partners of law firms, and academicians from leading national and international universities are free to submit their recommendations to the Ministry of Law and Justice.

If this legislation were to come into existence, this could also be regarded as a basis for the implementation of mediation in India. It would be correct to state that one can expect the government of India to implement a mediation legislation soon, which would also contain a detailed framework.

Taking Expertise from Abroad

Another method of implementation of mediation in India could be done via taking expertise from abroad from nations wherein the process of mediation and other ADR methods has been successful. This could include both governmental and state-sponsored ADR programs, along with non-governmental and other programs.

One example of this could be the Singapore International Mediation Centre (“SIMC”), which was launched by the Chief Justice of Singapore. In India, the SIMC works along with its allies, i.e., CAMP Arbitration and Mediation Practice, and Mediation Mantras. SIMC is a not-for-profit organization that offers specific tailored dispute resolution services. A panel of around 70 international independent mediators is maintained by the organization. In the short span of its existence and the limited number of cases and areas which SIMC has dealt with, the success rate has been high. Thus, dispute resolution done via amicable methods saves the relationship of the parties, whilst saving time and costs for all the parties involved in any issue.

Future of Mediation & Recommendations

On a comparative analysis, the process of mediation could be rightly regarded as one which is better than the litigation method at all the concerned stages of the process.

After understanding the various issues and facets surrounding mediation, the following recommendations could be implemented in the Indian legal framework for a better mediation working mechanism:

1. Making the result of mediation compulsory and mandatory on the parties in specific civil cases, such as that of a tort, family dispute, etc.

2. Adding incentives for the parties to prefer mediation mechanisms such as very low or nil application costs.

3. Creation of time limits within which the dispute resolution is to be completed.

4. Implementation of compulsory ADR education in all the law colleges of the nation.

5. Implementation of proper legislation which focuses on all methods of mediation and is not just limited to arbitration and conciliation.

6. Creation of a national wide mediation council similar to the lines of ICAI, ICSI, etc.

Conclusion

India is going to have the biggest population in the world within the next 10 years and seeing the current trajectory of the pile of cases in court, it would be correct to state that 10 years down the line, this pile of cases would only increase. At the same time, the rise in new areas of law such as energy, intellectual property, commercial arbitration, environmental, EV, etc., would come with a prerequisite of the knowledge of the same for proper adjudication, which the Indian judiciary might not be able to comfortably accommodate. The increasing privatization in India and the rise of corporations also plays a important role. Coupling that with the issues being faced by the Indian judiciary such as lack of infrastructure, trained manpower, and high burden of current cases, any methods of ADR would be beneficial for the public interest at large. Mediation in particular stands out as it focuses on the need and wishes of both parties.