Parliament Standing Committee recommends changes to Mediation Bill

Context

Parliamentary Standing Committee on Law and Justice, has recommended substantial changes to the Mediation Bill, meant for institutionalisation of mediation and establishment of the Mediation Council of India.

What is Mediation? 

• Alternate dispute resolution (ADR) refers to means by which disputes are settled outside the traditional court system.
• In India, modes of ADR include Arbitration, Negotiation, Mediation, and Lok Adalats.
• Mediation is a voluntary process in which parties try to settle disputes with the assistance of an independent third person (the mediator).
• A mediator does not impose a solution on the parties but creates a conducive environment in which they can resolve their dispute.
• The mediation process depends on the choice of parties, and there are no strict or binding rules of procedure.
• As a mode of ADR, mediation helps reduce the case burden on courts.
  

Key-Features of the Bill

Pre-litigation mediation

• Parties must attempt to settle civil or commercial disputes by mediation before approaching any court or certain tribunals.
• Even if they fail to reach a settlement through pre-litigation mediation, the court or tribunal may at any stage refer the parties to mediation if they request for the same.

Disputes not fit for mediation

• The Bill contains a list of disputes which are not fit for mediation.
• These include disputes: (i) relating to claims against minors or persons of unsound mind, (ii) involving criminal prosecution, and (iii) affecting the rights of third parties. The central government may amend this list.

Applicability

• The Bill will apply to mediations conducted in India: (i) involving only domestic parties, (ii) involving at least one foreign party and relating to a commercial dispute (i.e., international mediation), and (iii) if the mediation agreement states that mediation will be as per this Bill.
• If the central or state government is a party, the Bill will apply to: (a) commercial disputes, and (b) other disputes as notified.

Mediation process

• Mediation proceedings will be confidential, and must be completed within 180 days (may be extended by 180 days by the parties).
• A party may withdraw from mediation after two sessions.
• Court annexed mediation must be conducted as per the rules framed by the Supreme Court or High Courts.

Mediators

• Mediators may be appointed by: (i) the parties by agreement, or (ii) a mediation service provider (an institution administering mediation).
• They must disclose any conflict of interest that may raise doubts on their independence.
• Parties may then choose to replace the mediator.

Mediated settlement agreement

• Agreements resulting from mediation (other than community mediation) will be final, binding, and enforceable in the same manner as court judgments.
• They may be challenged on grounds of: (i) fraud, (ii) corruption, (iii) impersonation, or (iv) relating to disputes not fit for mediation.

Community mediation

• Community mediation may be attempted to resolve disputes likely to affect the peace and harmony amongst residents of a locality.
• It will be conducted by a panel of three mediators (may include persons of standing in the community, and representatives of resident welfare associations).

Objectives of the Bill

• To promote, encourage and facilitate mediation especially institutional mediation for resolution of disputes commercial and otherwise.
• To enforce domestic and international mediation settlement agreements. 
• To provide for a body for the registration of mediators, to encourage community mediation. 
• To make online mediation as an acceptable and cost-effective process and for matters connected therewith or incidental thereto has been prepared.