The Mediation Act, 2023

The Mediation Act, 2023

News: The Mediation Act 2023 has been notified in the gazette of India after receiving the assent of the President of India on September 15 2023.

Context:
• Supreme Court Judge Justice Hima Kohli recently said 'The Mediation Act, 2023' was a watershed moment in the Indian legal history and the legislation is a testament to the collective yearning for a more efficient, harmonious and less adversarial method of dispute resolution.

What is Mediation?
• Mediation is a voluntary process whereby disputing parties try to settle their disputes with the assistance of a 3rd person (mediator). The mediator does not impose solution on the parties but tries to create an amicable, conducive environment wherein the parties can try to resolve their dispute.

What are the key features of The Mediation Act, 2023?

Settlement of Disputes through Mediation
• The act requires persons to try to settle civil or commercial disputes through mediation before approaching any court or tribunal.

Pre-Litigation Mediation
• The Act permits parties to a dispute (regardless of whether they have executed a mediation agreement) to voluntarily and mutually refer their dispute to mediation prior to filing a suit or instituting proceedings before any court.

Time Period for completion of Mediation
• Mediation proceedings under the Act must be completed within a period of 120 days from the date of the first appearance before the mediator, which may be extended for a maximum period of 60 days.

Setting up of Mediation Council of India
• The act provides for the setting up of The Mediation Council of India. Its functions will include registering mediators, recognizing mediation service providers and mediation institutes.

Forms of Mediation
• The act aims to govern two forms of mediation- voluntary and mandatory.

Areas excluded from Mediation
• The areas excluded from mediation include serious allegations of fraud, criminal offenses, environmental matters reserved for the National Green Tribunal, and matters relating to competition, telecom, securities and electricity law and land acquisition.

Court’s Role during Mediation
• The act will not prevent any court from referring any dispute to mediation relating to compoundable or matrimonial offenses connected with or arising out of civil proceedings between the parties.

Introduction of Concept of Community Mediation
• Disputes likely to affect peace, harmony and tranquility amongst the residents or families of any area or locality can be mediated and settled by a panel of mediators appointed by the concerned Authority.

What is the significance of Mediation Act, 2023?
• As the act encourages pre-litigation mediation it is likely to reduce huge pendency of court cases. Supreme court – nearly 70,000 cases are pending while in High court over 60 lakh cases are pending.
• The act gives recognition and strengthens the alternate dispute resolution (ADR) mechanism.
• It will promote India’s emergence as a Centre of mediation in the world. Singapore’s robust mediation mechanism has paved for greater foreign investments. Thus, India will benefit both in terms of attracting Foreign investments and ease of doing business.
• Mediation is a cost effective method of dispute resolution. It will not only save cost but also help save time, energy and promote cordial relations between disputing parties.
• India is a signatory to the Singapore Convention on Mediation (United Nations Convention on International Settlement). Implementation of the act fulfills are obligation towards Singapore convention.

Challenges:
• Composition of the Mediation Council of India - There are concerns about the composition of the Mediation Council of India.
• Enforcement of Mediated Settlement Agreements - A mediated settlement agreement can be challenged by either party before the court or tribunal of competent jurisdiction by filing an application within 90 days on the grounds of fraud, corruption, impersonation, and dispute not being fit for mediation.
• Scope of Application - The Act only applies to mediations conducted in India, and where all, or both, parties reside / are incorporated / have their place of business in India.
• Exclusion of Certain Disputes - The Act does not apply to disputes involving criminal prosecutions, land acquisitions or pertaining to minors, deities and persons with intellectual disabilities. Even disputes involving persons who are not parties to the mediation are not covered by the Act. Disputes in regulated subjects like competition, telecom, electricity, securities, environment, and taxation are also excluded.

Way Forward
• ADR mechanism has been successful in disposing off several cases as seen in Lok Adalat (50 lakh cases disposed on an average in past 3 years). Similarly, the Mediation Act, 2023 can prove to be handy if implemented in letter and spirit.