Analyzing the impact of the Mediation Act, 2023

1. Abstract:

The Mediation Act of 2023 marks a significant milestone in India’s legal landscape, aiming to revolutionize dispute resolution through mediation. This paper meticulously examines the multifaceted impact of the Mediation Act, dissecting its provisions, scope, and potential implications for legal proceedings and societal dynamics. Delving into the Act’s key features, such as the establishment of the Mediation Council of India (MCI) and the recognition of Mediated Settlement Agreements (MSAs) as enforceable judgments, this analysis explores the Act’s efficacy in alleviating judicial burdens, enhancing access to justice, and fostering a culture of collaborative conflict resolution. Moreover, the study scrutinizes potential challenges and criticisms surrounding the Act, including concerns about enforcement misuse and the adequacy of mediator qualifications. By critically evaluating the Act’s provisions and their real-world applications, this paper offers valuable insights into the transformative potential of mediation in India’s legal ecosystem.

Keywords; The Mediation Act of 2023, mediation, dispute resolution, Mediation Council of India, Mediation Settlement Agreements, mediator.

2. Introduction

“An ounce of mediation is worth a pound of arbitration and a ton of litigation”- Joseph Grynbaum[1]

Approximately 4.5 crore cases remain pending in the Supreme Court, with an additional 6 crore cases in various high courts across India[2], underscoring a pressing need for timely justice delivery. The staggering backlog underscores the inadequacy of the current court system in swiftly addressing the growing array of disputes and legal issues arising in society. Recognizing the imperative for alternative dispute resolution mechanisms, the legislature turned its attention to Mediation, a process wherein an impartial mediator facilitates dialogue and negotiation toward a mutually agreeable resolution[3]. The Mediation Bill, 2023, aimed at promoting and streamlining mediation practices, received approval from the Rajya Sabha on August 1, 2023, followed by endorsement from the Lok Sabha on August 7, 2023. Subsequently, on September 14, 2023, the bill secured presidential assent, formally becoming the Mediation Act, of 2023. Encompassing provisions for pre-litigation mediation, online mediation, community mediation, and conciliation, this legislation signifies a pivotal step towards enhancing dispute resolution mechanisms in the country.[4]

3. Features of this act:

3.1. Scope:

The Mediation Act, of 2023, delineates its applicability to civil and commercial disputes within India unless parties opt for mediation outside the country’s jurisdiction. Moreover, it extends to international mediations involving one or more parties residing abroad or with business interests beyond India’s borders.

3.2. Exclusion of Disputes:

Section 6 of the Act, in conjunction with the first schedule, delineates categories of disputes exempted from its purview. Notably, the Act excludes disputes involving minors, intellectually disabled individuals, criminal matters, tax-related disputes, and those affecting third-party interests. However, exceptions exist for matrimonial cases addressing child welfare and disputes concerning land acquisition and compensation.

3.3. Compelling Pre-litigation Mediation:

Section 5(1) of the Mediation Act, of 2023 mandates pre-litigation mediation for parties embroiled in civil and commercial disputes. This provision underscores the Act’s proactive approach to conflict resolution, encouraging mediation as an initial step before resorting to formal court proceedings.[5]

3.4. Mediation Agreement:

In accordance with Section 4 of the Act, parties must formalize their agreement to submit present or prospective disputes to mediation in writing.

3.5. Court’s Authority to Refer to Mediation:

As outlined in Section 7(2) of the legislation, courts or tribunals possess the discretion to refer parties to mediation at any stage of legal proceedings, regardless of the existence of a prior mediation agreement.

3.6. Appointment of Mediators:

Section 8 of the Act outlines the procedure for appointing mediators. While individuals of foreign nationality may serve as mediators provided they meet the requisite qualifications and accreditation, parties retain the right to select their mediator. In the event of disagreement, parties may engage a mediation service provider to appoint a mediator.

3.7. Role of Mediators:

Under Section 16 of the Act, mediators are prohibited from coercing parties into settlements or guaranteeing specific outcomes. Instead, mediators facilitate discussions, aid in issue identification, explore potential areas of agreement, and inform parties of settlement options.

3.8. Time Limit:

Section 18 mandates that mediation proceedings be concluded within 120 days from the mediator’s initial appointment. Extensions beyond this period are permissible, subject to mutual agreement, for a maximum of 60 additional days.

3.9. Place of Mediation:

According to Sections 38(f) and 52(2)(c), mediation sessions must occur within the jurisdiction of the relevant court or tribunal. Additionally, Section 13 permits online mediation provided parties consent in writing.

3.10. Confidentiality:

Section 22 of the Mediation Act mandates confidentiality regarding all communication, statements, and documents exchanged during mediation. Recording of mediation proceedings, whether audio or video, is prohibited, and statements made during mediation are inadmissible as evidence in court proceedings, except in cases involving criminal offenses, domestic violence, child abuse, or threats to public health and safety.

3.11. Mediation Council of India:

Section 31 formalizes the creation of the Mediation Council of India (MCI). Its responsibilities, outlined in Section 38, include the pivotal task of positioning India as a hub for both domestic and international mediation. Furthermore, Section 39 mandates that the council submit an annual report, or as directed by the central government, assessing the implementation of the Act and its effectiveness to the central government.

4. Will the Mediation Act 2023 Bring Significant Change?

Mediation is not a novel concept in India, with gram panchayats often serving as mediation platforms at the village or community level. The legal and industrial sectors view the Mediation Act as progressive due to its flexible mediation mechanisms, which can be tailored to suit the nature of the dispute, facilitating easier settlement for involved parties.

The Act aims to alleviate the judiciary’s workload and enhance the ease of conducting business in India. The establishment of the Mediation Council of India (MCI) is pivotal for creating rules and regulations governing the Act’s implementation and procedures. But before concluding about the nature of impact of this Act it is important to take a look at some of its shortcomings.

4.1. Shortcomings:

While the Act strives to make mediation accessible to all, mandating pre-litigation mediation for every civil and commercial dispute may inadvertently deviate from its intended objective. This could potentially elongate the process as parties may attend mediation as a default step rather than with a genuine intent to resolve disputes.[6]

Customized mediation mechanisms, while intended to cater to diverse needs, could hinder the Act’s objectives if not standardized. Variability in approaches among mediators may lead to disorganization and increase the risk of misuse of powers or bias, undermining the pursuit of justice.[7]

The requirement for the Mediation Council to seek central government approval for issuing regulations contrasts with bodies like the National Medical Commission and the Bar Council of India, which operate without such constraints. This dependence on central government approval may limit the council’s effectiveness in executing key functions, hindering the Act’s implementation.[8]

Mediated Settlement Agreements (MSAs) are accorded the status of court judgments and are enforced as decrees of the court. However, the potential for misuse arises when individuals seek MSAs improperly to expedite enforcement, posing a significant threat to the rights of vulnerable parties. To mitigate this risk, only disputes mediated by MCI-registered mediators should be eligible for enforceability as judgments.

Section 32 of the Act stipulates that only one member of the Mediation Council is required to possess knowledge of mediation law. However, given mediation’s critical role in delivering justice, both mediators and council members should possess profound knowledge, training, experience, and skills in mediation. Without such expertise within the council, mediated outcomes may prove inadequate.[9]

The Act excludes certain groups such as minors, intellectually disabled individuals, and deities from its applicability[10]. Nonetheless, these individuals are already safeguarded by separate statutes and legislation allowing for guardianship assistance when making legally non-binding decisions. Thus, the Act’s exclusionary approach to mediation access could be perceived as discriminatory.

In society, there exists a prevailing reluctance among individuals to engage in mediation processes. This hesitancy often stems from the fear of societal judgment and the associated stigma attached to seeking alternative dispute-resolution methods. Individuals may harbor concerns about being perceived unfavorably by their community if they opt for mediation, fearing that society might view them as conceding or admitting fault by choosing to settle disputes outside of formal court proceedings.[11]

Furthermore, there’s a prevailing apprehension that participation in mediation might signal weakness or vulnerability, especially when compared to the potentially more assertive stance one might take in a court setting. The fear of being seen as lacking resolve or confidence in pursuing legal remedies can dissuade individuals from embracing mediation as a viable means of resolving conflicts.

This societal perception not only affects individuals’ willingness to participate actively in mediation but also influences their readiness to candidly disclose their concerns and interests to the mediator. The apprehension of being judged or misunderstood can create barriers to effective communication and hinder the collaborative problem-solving process inherent in mediation.

Thus, while mediation offers a confidential and less adversarial forum for resolving disputes, societal attitudes and perceptions play a significant role in shaping individuals’ decisions regarding participation. Addressing these concerns and promoting a more positive understanding of mediation within society can help encourage greater acceptance and utilization of alternative dispute resolution mechanisms.

A party can’t dispute the MSA if it’s been more than 120 days since they got it.[12] The law doesn’t think about cases like fraud or misrepresentation that might only come up later. It would make more sense if the time limit starts from when they find out about these issues, like in the Limitation Act.

CONCLUSION:

Given the mounting backlog of cases in courts, achieving swift and cost-effective justice is paramount. The Mediation Act, of 2023 marks a significant leap forward in this endeavor. It covers a wide array of cases, extending beyond domestic disputes, and introduces various avenues such as online mediation and community mediation to facilitate easier access to mediation as an alternative to traditional legal proceedings. The Act aims to formalize and improve mediation processes across the country. However, it falls short of addressing certain inevitable issues between parties. Nevertheless, with proper implementation and clear rules, it has the potential to become one of the most impactful laws in recent memory. The government must iron out the law’s deficiencies before it goes into effect. This progressive legislation boasts extensive reach and requires government promotion akin to Consumer Protection Laws to ensure broader awareness. The Indian mediation community has ample cause for celebration, signifying significant progress for the country.

Reference(s):

[1] admin@webkrafts, ‘An Ounce of Mediation Is Worth a Pound of Arbitration and a Ton of Litigation- Joseph Grynbaum | Chandigarh Today’ (30 July 2021) <https://chandigarhtoday.org/?p=50746> accessed 11 February 2024.

[2] ‘Welcome to NJDG – National Judicial Data Grid’ <https://njdg.ecourts.gov.in/njdgnew/?p=main/pend_dashboard> accessed 11 February 2024.

[3] ‘Brochure – MCPC.Pdf’ <https://main.sci.gov.in/pdf/mediation/Brochure%20-%20MCPC.pdf> accessed 11 February 2024.

[4] ‘The Mediation Act, 2023: Understanding The Key Features – Civil Law – India’ <https://www.mondaq.com/india/civil-law/1401910/the-mediation-act-2023-understanding-the-key-features> accessed 11 February 2024.

[5] ‘Alternative Dispute Resolution- An Analysis Of The Mediation Act, 2023 – Arbitration & Dispute Resolution – India’ <https://www.mondaq.com/india/arbitration–dispute-resolution/1390584/alternative-dispute-resolution–an-analysis-of-the-mediation-act-2023> accessed 13 February 2024.

[6] Samriddhi Mishra, ‘COMPULSORY MEDIATION-SHOULD BE INTRODUCED BUT GRADUALLY’.

[7] Amit Bansal & Shruti Gupta, ‘Will the Mediation Act, 2023 Change the Way Parties Resolve Disputes?’ (BusinessLine, 8 October 2023) <https://www.thehindubusinessline.com/business-laws/will-the-mediation-act-2023-change-the-way-parties-resolve-disputes/article67395541.ece> accessed 13 February 2024.

[8] ‘Mediation Act, 2023: Easing Judiciary Workload’ (Drishti IAS) <https://www.drishtiias.com/daily-updates/daily-news-editorials/mediation-act-2023-easing-judiciary-workload> accessed 13 February 2024.

[9] Prime Legal, ‘Assessing the Mediation Act 2023: A Leap Forward in Dispute Resolution’ (Prime Legal, 18 September 2023) <https://primelegal.in/2023/09/18/assessing-the-mediation-act-2023-a-leap-forward-in-dispute-resolution/> accessed 13 February 2024.

[10] Section 6 of the Mediation Act, 2023.

[11] NEXT IAS Content Team, ‘Exploring the Mediation Bill 2023: Promoting Alternative Dispute Resolution in India’ (27 October 2023) <https://www.nextias.com/blog/mediation-bill/> accessed 13 February 2024.

[12] Section 18 of the Mediation Act, 2023