Critical Analysis of the Draft Mediation Bill

The Perspective

Well, we hear a lot about Mediation now a days. This is primarily for reasons emanating from the business environment which are in a way forcing the Government to do something real and fast in this space. Hence, the government is out with a Mediation Bill, open for discussion and suggestions. We all need to be active in giving our suggestions to make sure that what we get is a good piece of legislation, which is the need of the hour.

Sense of Urgency in imbibing Mediation

The reasons which likely are putting the added pressure on the government and judiciary now a days in imbibing mediation are two-fold.

• One, Singapore Convention on Mediation (2019) is inviting lot of attention from world over and countries are actively exploring its ratification, Georgia being the 9^th one in the list. India may not want to be late (as we missed the bus earlier wanting to be the hub for the International Arbitration and regret it till date) and in any case would need a law of its own before the convention can be ratified, having been a signatory to the said convention already.
• Second pressing need, which we keep hearing all through by almost everyone linked or connected to the judicial system is the huge backlog we have in respect of pendency of cases in the courts. Well, ask me and I would have always wanted this not to be the reason for the required and desired push to Mediation but then, since we need both push and pull, let this reason be one for the push. The inherent benefits of Mediation are so many and such that, if they are properly explained and understood, the Courts would in any case become the last option/resort (as also wished by our CJI recently in his remarks while the opening of an (ADR) Alternate Dispute Resolution platform).

Mediation has been known to be a collaborative way of resolving disputes. It can be the most flexible and creative tool in terms of finding solutions suiting either side, ideally with the aid of a neutral or a facilitator and it is touted to be a cheaper mode of ADR. What is important is a proper ‘pull’ and a ‘push’. Pull takes time and need to be handled differently. For now, the right push can happen through the Mediation Bill which is being discussed and debated in the corridors across. We need to be sure that the bill puts forth what needs to be told and accordingly understood by various stakeholders, reduces the ambiguity on certain aspects of Mediation, and clarifies the government stand with regards to its own commitment. This would be an Act soon and it would be expected of all of us to choose Mediation as the default option to resolve our disputes, all types, always. Hence, a critical view required on the current document in circulation:

Critical Analysis of the Draft Bill:

A critical analysis of the current Mediation Bill (Draft) is being done with a request to policy makers (as they set out to debate on this bill) to get the basics right as the world is watching us, and we cannot go wrong in ‘pace’ and surely not in the ‘direction’. Some precautions as mentioned below, if taken care at the right stage, might be a good idea.

a) Ad hoc mediation is a taboo, is a word with huge negative connotation. Let this be addressed as non-institutional or private mediation. After all, policy making includes taking care of the psychological factors and avoiding an improper use of nomenclature and terminology. (Would humbly suggest the removal of ‘insolvency in corporate insolvency resolution process’ in IBC on the same lines)

b) Court annexed mediation is not and cannot be equated with private mediation (or the stated ‘pre litigation’ mediation). Mediation is purely a voluntary initiative and anything happening on the direction of the Court cannot be voluntary. A said/unsaid pressure on the parties, having already litigated for a while, cannot be coerced to settle. Having said this, an option to mediate and explore settlement should be and can be given at any stage of the ongoing litigation and even an out of court (private) mediation should be an option.

c) Pre-litigation Mediation should be the buzz word and promoted, endorsed, and pushed across all the time. Though, it cannot be forced or coerced as would go against the grain of the concept. Just that if we can find a better word and avoid the term ‘litigation’ in pre-litigation mediation when we promote Mediation, we would do justice to the cause. CJI recent remarks be repeated that courts should be the last option to be explored to resolve disputes. The takeaway from this statement is that ADR (and Mediation in that being the first option) be tried first to resolve those disputes.

d) Making an Agreement to Mediate in writing as a pre-requisite is both inconsistent with above mentioned Pre litigation Mediation as a default step and goes against the intent of giving the free will to the parties to opt for mediation (whether agreed prior or not). In any case, over the period, the intent would be to have all agreements and contracts contain the mediation clause as the default option.

e) Any kind of timelines being imposed to initiate or complete the Mediation process is contrary to the intent of bringing this law itself when we first put pressure on parties to settle and then to settle within the defined time frame. Let the party autonomy be at play and let them take their own time, after all they are not coming to the Court till the time, they are busy resolving. Yes, in any case any one side can call off mediation and move to the next best alternative.

f) Of course, it would be great to have dedicated courts to handle the settlements through mediation so that unwanted situations can be avoided and a veiled threat of a big brother watching is available. After all, a fresh/different mindset would be required to deal with this concept. This in any case might be required as the last resort, in case of any unintended situation as normally enforcement would seldom be an issue as these settlements would be an outcome of a voluntary initiative. Settlement through mediation carries the weight and force of a decree and that is a good weight behind it.

g) Mediation is to be promoted as a career and a profession and cannot and should not be looked down upon by tagging it as a cheaper resolution option. Let the best of minds be excited and attracted towards this and help the larger cause. The cost efficiency is only to the extent it can be attributed to a quicker resolution which is a possibility under this concept.

h) Registration and the Depository concept be brought in cautiously keeping in mind the very essence of Mediation which is ‘confidentiality’.

i) Setting up of Mediation Council of India as a regulatory body be only required for discipline and a structure and not to stifle the creativity and flexibility which is the hall mark of the Mediation process.

j) Schedule II inserted talks about the exceptions and the types of disputes which are not to be subjected to Mediation. List is surprisingly very long. Ideally only the typical kind of issues like those dealing with fraud, misrepresentations, and ones where adjudication is required need be excluded, else ideally most of them should pass through the prism of Mediation atleast once and parties in dispute be encouraged to solve, resolve, and explore creative settlements. Restricting types of issues to Mediation might also be an outcome of the existing mindset where justice by a third-party is seen superior to the actual solutions expected and desired by the parties in dispute. When last year some statements from the top bosses appeared in the papers suggesting use of Mediation even in Income Tax Disputes, it raised a ray of hope. Let that hope remain. It’s worth the effort.

Mediation in commercial space might be a non-starter if the Government does not lead with the example. Yes, the biggest litigator in Government (authorities and departments) too are welcome to try mediation in all their issues. To make it easy for them to avoid scrutiny later, let there be committees (a three-member team) formed taking joint calls while taking part in the mediation process and come out with creative and flexible solutions and bring down litigation and disputes, alike.

Let India grab this opportunity to be the hub of Mediation, let the world get attracted to this jurisdiction and learn from us and follow us. Let us do the basics right from the very beginning. Yes, the law would evolve like others, but let us not repeat any of the earlier mistakes. Let these (mistakes) be the new ones and let us use mediation to settle new and old disputes alike, using mediation. After all, ease of doing business needs a further boost and so does the World Bank rankings. This would help. Happy drafting and debating.