Evaluating The Mediation Bill, 2023

Chitra Narayan

12 Sep 2023 9:00 AM GMT

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  • Evaluating The Mediation Bill, 2023

    Among the Bills passed in the recent session of the Parliament is the Mediation Bill, 2023. This Bill has the potential to reframe how we understand access to justice in India. After more than twenty years of policies enabling and mandating mediation and conciliation, these expressions are no longer unfamiliar to us. These are processes where persons in conflict take the assistance...

    Among the Bills passed in the recent session of the Parliament is the Mediation Bill, 2023. This Bill has the potential to reframe how we understand access to justice in India. After more than twenty years of policies enabling and mandating mediation and conciliation, these expressions are no longer unfamiliar to us. These are processes where persons in conflict take the assistance of another person who works with them in building dialogue and understanding, that paves the way to cooperating to resolve their problems. The process supports them in moving away from anger, mistrust and hostility to an acceptance that they own their conflict, and together they can identify the problems surrounding the conflict and resolve them. The Mediation Bill, 2023 (‘the Bill’) provides a comprehensive policy framework to encourage the use of mediation. If disputes are settled through mediation before, during, and even after decrees in courts, the objective of accessing justice on terms determined to be fair by the parties is well served.

    The discussion here on Mediation Bill, 2023 is done in two parts. This first part discusses the framework of the Bill and the concerns, while the second part will discuss the Singapore Convention and the issues surrounding its exclusion from the Bill.

    PART -1

    Till date, India has a patchwork of policies on mediation. These include policies related to court-annexed mediation, the compulsory use of mediation in certain commercial disputes before filing a case in court, mediation of cases in courts through the Lok Adalats, mediation of disputes relating to recovery of payments to suppliers by micro and small industries, mediation of consumer disputes, etc. It is in this regulatory milieu that the Bill has been proposed.

    A law dedicated to mediation was a felt need, with several objectives in mind. These included standard setting for all the mediation policies that existed - clear articulation of the rights of disputing parties who used mediation, the credentialling of mediators that would inform and enable the mediation users to choose a mediator and rules for the enforcement of the agreement resulting from the mediation. Importantly, this would allow mediation to emerge as a credible, policy backed process for resolving disputes. India is a signatory to the United Nations Convention on International Settlement Agreements Resulting from Mediation (“the Singapore Convention”) since 2019. It was expected that the new law on mediation would implement the Singapore Convention enabling the enforcement of cross border mediated settlement agreements in India.

    The Bill, when introduced in the Rajya Sabha in 2021, was referred to the Standing Committee on Personnel, Public Grievances, Law and Justice, Rajya Sabha Secretariat, Parliament of India for review. The Standing Committee held discussions with lawyers and mediators across India and submitted its report, suggesting revisions to various aspects in the Bill. Some of these recommendations have been incorporated, while others have been excluded. An important recommendation of the Standing Committee was to remove the proposal in the 2021 draft for mandatory mediation across civil and commercial disputes under this law. This has been accepted.

    The Bill addresses mediation in civil and commercial disputes, and the promotion of institutional mediation in India. It enables steps to be taken for building capacities - mediators, mediation service provider organizations, and for standards setting in mediation services. In the context of mediation in India being led by court-annexed mediation services, the promotion of institutional mediation provides an important thrust to the growth of mediation services in addition to the courts. This means the availability of a choice of visible, reliable and credible mediation services to help resolve India’s significant number of current and future disputes. Access to mediation is thus built through capacities for institutional mediation outside of the courts.

    The oversight of institutional mediation will be undertaken by a Mediation Council appointed by the government, which is tasked with making regulations, disciplinary oversight of registered mediators, mediation service providers and mediation training institutions, standards setting, and mediation advocacy.

    The Bill secures the rights of persons in mediation, through provisions that secure confidentiality in mediation, privileging mediation communication, the training and registration of mediators, volition in mediation, code of ethics for mediators, and the right to challenge the settlement agreement on limited grounds. When agreements setting the terms for resolution of disputes are made following mediation, the proposed law strengthens implementation of such agreements. Now settlement agreements from mediation can be enforced like a decree of court.

    The Bill does not impinge on various laws that govern mediation in different sectors, or in court-annexed mediation. Mediations will continue under those laws. The Arbitration and Conciliation Act, 1996, as its name suggests, provides a framework of rules under which disputes can be resolved through conciliation. This law, modelled on the UNCITRAL Conciliation Rules, 1980, allows for all disputes arising from legal relationships to be resolved through conciliation. This law was felt to be over-prescriptive and rigid as to the process to be followed, and deficient in the way it addressed the enforceability of settlement agreements made after conciliation. The Bill repeals this law.

    Importantly, the Bill in 2023, in a shift from its earlier version, states that mediation of government disputes will be governed by this law. This is significant in two respects – in its affirmation that mediation will be utilized in resolving government disputes, and that this will be under the framework of this law. The significance of positioning this at the forefront (s.2) signals credibility to the mediation process. The fact that these are disputes in which the public are interested is acknowledged in provisions for the framing of schemes and guidelines for government disputes, and for oversight mechanisms that will evaluate the proposed settlement terms before these are signed on (s.48, s.49). The use of mediation is for commercial disputes initially, with discretion being reserved for the use of mediation in other categories of government disputes.

    There is a plurality in mediations in India. A member of the family, a well-regarded professional, a friend, customary leaders, industry leaders, etc., are sought to provide mediation services without the nomenclature of mediation. These manifold mediations support dispute resolution, and it is only disputes that have not been resolvable through support systems such as these that may manifest in formal dispute processing in courts. The Bill allows such mediations to continue. Mediation services provided by persons who may not be trained or credentialled under the proposed law are not delegitimized, and this is important.

    This then, is the framework of the law.

    The Bill however, has some disquieting and problematic features. The first relates to the composition of the Mediation Council, proposed as a body to manage mediation and professional mediators, but run by the Government. All the members of the Council are government appointees. Of the seven members of the Council, the majority are persons who do not have a background in mediation and are persons who find themselves in the Council because of their office in government, or in an industrial association. The government also reserves powers to issue directions to the Council ‘on questions of policy’ from time to time (s.47).

    Professional bodies world over, self-regulate their affairs, including standard setting and advocacy. The reasons for this are clear. The professionals are best placed to understand competencies, the minimum standards required, the contexts of mediation, and be nimble and respond to the needs and issues concerning the practice of mediation. Self-regulation is democratic. The regulation of mediators through a government run council is a departure from this accepted norm and diminishes the professional in mediation.

    Related to this is the extent of control over the mediation process. The proposed law brings into the process of mediation, rules on the seat and venue of mediations, mandating the recording of mediated settlement agreements in writing, registration of settlement agreements, maintenance of a repository of settlement agreements, and a general power of the Council to call for records of the mediation service providers. These encumber the autonomy and flexibility that persons may want to employ in the process. For instance, persons who settle their conflicts through mediation may choose not to set the agreement in writing. The policy is unclear on the interplay between the power of the Council to call for records of service providers, and the rights of mediation users to confidentiality.

    Similarly, community mediation now becomes a controlled process (s.43, s.44). Panels of mediators for community mediation will be set up by the District Magistrate or Legal Services Authorities in their jurisdictional areas. If a dispute arises amongst persons in these localities, the mediation will perforce be conducted by these panel mediators if any of the parties to the dispute apply to them. The qualifications for selection to the panel are ‘persons of standing’, persons who have contributed to the society, etc. These qualifications are vague, and raises concerns that this would tend to reflect existing power structures in society, that could impinge on the autonomy of the parties in mediation.

    The next issue is the enforceability of agreements to mediate. The choice of mediation to resolve disputes can be made when the commercial or contractual agreements are made. Dispute resolution clauses provide for resolving the dispute first through mediation, followed by adversarial resolution processes if there is no settlement. Courts in England, after an initial reluctance to enforce such mediation clauses on a principle that this would amount to enforcing an agreement to agree, have begun enforcing them. Courts recognize that agreements to mediate, are not simply an agreement to agree, but a structured process where discernable efforts are made by parties to give effect to such commitments to resolve through mediation. Courts in Singapore have specifically enforced agreements to mediate and have expounded on how mediation exposes the false binaries claimed between self-interest and cooperation in a negotiation. The Bill reverses these positive developments. The Bill acknowledges that parties may agree upfront to mediate when conflicts arise but subjects them to a fresh requirement of mutual consent to mediate when the time comes for their application. Hence such agreements will not be enforceable unless both parties agree, in which event no recourse to a judicial authority will be necessary!

    The Bill sets out grounds on which a settlement agreement can be challenged by a party (s.19, s.28). These are fraud, impersonation or corruption. While these factors are important, the proposed law is unclear on what impersonation or corruption means. Whose corruption, and what manner of corruption permits a challenge to the settlement agreement? Several other important factors are not contemplated in this context. Civil and commercial agreements, it is expected, could involve the interests of a child. Should there not be stringent oversight in such situations? Similarly, will not conditions of duress and coercion impact the legitimacy of a settlement agreement? Settlement agreements resulting from mediations straddle two dimensions – an agreement and a resolution. Assessing the bases for their legitimacy and consequently, the grounds for their challenge is thus a painstaking but important task, which remains to be undertaken. Providing comprehensive grounds of oversight, will give legitimacy to the process, and will eliminate ad hoc judicial expansion of grounds where the policy is found wanting. The period within which a settlement agreement can be challenged is 90 days plus 90 days, which is inadequate. Fraud may be discovered well after this period, but the party will not be able to challenge the settlement.

    The Bill lists categories of disputes that cannot be mediated (s.6, Schedule I). The issue whether private dispute resolution processes can be applied for all dispute categories has been addressed in judgments of the Supreme Court (Booz Allen & Hamilton Inc. v SBI Home Finance Ltd. - 2011 and Vidya Drolia v Durga Trading Corporation - 2021). The courts in India have applied principles such as whether the dispute is one which is a dispute in rem - as distinct from a dispute concerning inter-personal rights, whether the resolution will have an ergo omnes effect or impact third party rights (such as the validity of a claim to an intellectual property), where a centralized public dispute resolution process is mandated by law, the issue to be resolved relates to sovereign and public interest functions of the State, or whether the vulnerabilities of certain persons warrant public and rights based resolution, non-compoundable criminal offences, etc., as bases to determine if a dispute can be resolved through a private process.

    While discussed in the context of arbitration, these principles considered why public dispute resolution through courts and tribunals must decide certain disputes, rather than private dispute processes, and are useful in mediation as well. It is submitted that this latter approach is a better way to analyse and exclude disputes from mediation rather than excluding dispute categories by fiat. For instance, a dispute may have criminal as well as civil remedies that a party can seek. The prohibition of disputes involving criminal offences for mediation, results in proscribing mediation in the civil remediation of the dispute. The absolute terms of prohibition of dispute categories in the Bill, such proceedings before the SEBI, is also at variance with efforts by the government to introduce mediation in dispute categories, such as the SEBI (Alternative Dispute Regulation Mechanism) (Amendment) Regulations, 2023, which has been substantially re-designed in July this year to encourage use of mediation in investor disputes with listed companies and certain intermediaries.

    Finally, there are many drafting inconsistencies that impact the policy. For instance, the Bill defines as a “party”, a person who agrees to and engages in the mediation to resolve their dispute. This is an error. Defining party as the persons in mediation, then overlooks the fact that necessary parties to the dispute who ought to, may not have participated. Such a person will also not be able to challenge the mediation settlement, despite there being available the ground of impersonation, because they are not a party to the mediation. Another example is the definition of place of business. Instead of limiting this to the place of business that is connected with the dispute, the definition accommodates multiple places of business that a party may operate from, resulting in multiple courts claiming jurisdiction.

    In the next part we will discuss the Singapore Convention.


    The Singapore Convention (https://www.singaporeconvention.org/convention), was passed by the General Assembly of the United Nations in December 2018. The Convention provides a framework for implementing and enforcing international mediated settlement agreements. The Convention is similar in purpose to the New York Convention for foreign arbitration awards. Through the adoption of the Convention international settlement agreements can be enforced through courts in India. Where more countries ratify and make the Singapore Convention a part of their law, the enforcement of mediated settlement agreements concerning businesses in those countries becomes easier. The knowledge that mediated settlements will be enforced in case of breach spurs confidence in and the adoption of mediation in resolving international disputes.

    The Convention applies to settlement agreements resulting from mediations that are international – i.e., settlement agreements relating to businesses in different countries, and commercial – i.e., where the purpose of the relationship for all parties is business or commercial. The Convention contemplates enforcement of the mediated settlement agreement in two scenarios. The first is to use the machinery of the courts to get the counter parties to perform their obligations under the mediated settlement agreement. The second is to apply the mediated settlement agreement for the purposes of a defense in a proceeding in another country.

    The Singapore Convention lists a comprehensive set of grounds on which the settlement agreement will be evaluated. These relate to considerations on capacity of parties, illegality in the agreement, public policy considerations, mediator misconduct that is so serious as to vitiate the settlement agreement, uncertainty in the agreement, etc. If, on evaluation by the courts, the agreement qualifies on these grounds, the courts will enforce the agreement against the counter parties situated in their country. The enforcement is done regardless of the place where the mediation was undertaken.

    The Singapore Convention is an important measure for encouraging mediation. Persons involved in in cross-border conflicts will readily use mediation, with the assurance that the agreement that they make will be enforced by the courts of the home country of the counter party. India’s recognition of mediation and the importance of the Singapore Convention can be appreciated from the fact that it was one of the earliest countries to sign the Convention in August 2019.

    The Mediation Bill, 2023, does not include the Singapore Convention.

    The explanation for the non-adoption of the Singapore Convention in the Bill can be found in the submissions made by the government in the Standing Committee meetings. The government informed the Committee that the Convention had only just come into force and that India would prefer to wait for greater acceptance, especially by other major economies, and observe the course its implementation takes.

    Notwithstanding this position, the Bill makes provision for international commercial mediations, mediated settlement agreements and their enforcement in India.

    Why and how does the Bill address international mediation? The answer to the first question is unclear, especially when one considers the answer to the second.

    The Bill defines international mediations (s.3(g)). These are mediations where at least one party to the mediation is a person outside India. For such mediations to be considered under the Bill the mediations must relate to: (i) a commercial dispute, (ii) must be undertaken in India (see s.2) and (iii) must be undertaken under this law. This and other provisions in the Bill relating to international mediation inexplicably work at cross-purposes with the policy under the Singapore Convention.

    As can immediately be seen, international mediations that take place outside India are excluded, and will not have the benefits (limited thought they are) of enforcement under the Mediation Bill.

    The Bill has other misalignments with the Singapore Convention as concerns international mediations. These are discussed below.

    With the coming into force of the Bill, India will have two policies on commercial mediations. The first one is under the Commercial Courts Act, 2015. This law provides for the demarcation of commercial courts and commercial divisions for processing cases relating to commercial disputes. This law also defines commercial disputes, but differently from the Singapore Convention, in that it does not require that all parties to the dispute have a commercial purpose. The law mandates pre-institution mediation. Settlements arrived at through mediation are enforceable as if they were a decree of court.

    The second policy for commercial mediation is that set out in the Bill. The Bill adopts the definition of ‘commercial dispute’ in the Commercial Courts Act (s.3(a)). However, the Bill excludes from its purview commercial mediations covered by the Commercial Courts Act. Presently, the Commercial Courts Act covers all commercial disputes of a value of Rs.3 lakhs and above. It is only the remainder that fall to be considered under the Bill. Mediation of disputes that may be regarded as commercial but fall under the jurisdiction of special tribunals will be governed by the Mediation Bill (s.5(2)).

    Consequently, we now have two policies in relation to international commercial mediations. These are both based on a wider conception of ‘commercial’ that does not align with the Singapore Convention.

    The inconsistencies continue. The Bill and the Commercial Courts Act make settlement agreements resulting from mediation enforceable as if they were a decree of court. Under both policies, the commercial mediations must take place in India (please see section 12A(2) of the Commercial Courts Act as it is proposed to be amended by the Bill), to get the benefit of enforcement in India. This has two consequences. In the case of an international mediation under either of these policies, enforcement of the settlement agreement will be like a decree of court. Countries that ratify and implement the Singapore Convention, will not consider such settlements for enforcement because the Singapore Convention excludes from its purview settlement agreements that have the status of a decree. As to countries that have not implemented the Singapore Convention, the status of decree given to the settlement agreement disrupts enforcement under their domestic laws on mediation that might afford enforceability to mediated settlement agreements.

    The advantages in the New York Convention and the Singapore Convention are the framing of policies that provide a framework of oversight over outcomes in private dispute resolution processes and enforcement of foreign judgements in other countries. More importantly these conventions overcome the difficulties facing enforcement of foreign judgements, by providing a simple framework for enforcement. With the unqualified treatment of mediated settlement agreements as decrees of courts, the very purpose and advantage of the Singapore Convention gets undermined. The Singapore Convention grants a sui generis status to international settlement agreements which can be enforced in any country that ratifies the Convention.

    In the proposed law, there will be a category of international commercial mediations and settlement agreements left rudderless because they have taken place outside India. It is also unclear how this will impact online mediation.

    While awaiting ratification, the Bill could and ought to have adopted the concepts and principles in the Singapore Convention that relate to grounds of challenge, the manner of conferring an enforceable status to the settlement agreement and the definition of international commercial mediation under its scope. The policy dissonances will surely affect adoption of mediation by foreign companies with business interests in India, who are unsure of their enforcement of mediated settlements in the country.

    Businesses arrange their disputing processes and adopt mediation on the basis of policies that secure the validity and enforcement of mediation agreements. The uncertainty surrounding the implementation of the policies in the Bill and the Commercial Courts Act that conflict with the Singapore Convention is bound to impact utilization of mediation in international disputes. Should the government choose to ratify the Singapore Convention, it will first need to dismantle two policies – the law under the proposed Bill and the Commercial Courts Act, 2015, (a law which mandates mediation of commercial disputes both international and domestic – as defined under that law – before filing of a case in court).

    India’s signing of the Convention has been touted as an important source of encouragement to the Singapore Convention, and her leadership in the ratification and implementation of the Convention is a matter of great anticipation in the business and mediation world. As we discuss the Mediation Bill in India, the Convention has notched up 56 signatories (including India), and 11 ratifications. The Convention came into force in September 2020. Singapore has ratified and made a law for the implementation of the Convention in 2020. The United Kingdom has consulted internally on the benefits and utility of the Singapore Convention and has decided to ratify it. In not ratifying and legislating on the Singapore Convention, India has lost an opportunity in providing an assurance that international mediations will be encouraged, and that mediated settlements will be enforced here. This is a chance to bolster efforts for ease in resolution of disputes and enforcement of international contracts in our country.

    The author is an Advocate and Mediator . Views are personal.

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