Understanding The Procedure Of Mediation Under Mediation Act, 2023

In India, access to timely justice has become a mere theoretical fantasy due to the massive backlog of cases and procedural complexities within the judicial system. The growing burden on the Indian courts has resulted in the shift to alternative dispute resolution mechanisms like arbitration, conciliation, negotiation and mediation. Both arbitration and conciliation have long been legally recognised and governed under the Arbitration and Conciliation Act, 1996[1]. However, prior to the enactment of the Mediation Act, 2023[2], mediation, though recognised in practice and through judicial initiatives, lacked a uniform statutory framework, resulting in a fragmented regulatory regime.Recognising the growing importance of mediation as an effective means of resolving disputes and the need for a comprehensive framework to govern it, the Indian legislature enacted the Mediation Act, 2023.Legal Framework Prior to the Mediation Act 2023:Prior to the enactment of the Mediation Act, 2023, mediation in India did not have a comprehensive and uniform framework governing it. The major statutory provision governed mediation was Section 89 of Civil Procedure Code, 1908[3], under which the Court may formulate the terms of a possible settlement and refer the same for alternative dispute resolution, including mediation. Section 89 was highly criticised for its drafting ambiguity on the grounds of vague and unstructured procedure. The constitutional validity of Section 89 was challenged in Salem Advocate Bar Association v. Union of India[4], where the petitioner contended that it violated Articles 14 and 21 of the Constitution of India[5]. However, the Supreme Court upheld its constitutional validity and held that, though Section 89 has imperfections, it does not violate the Constitution but instead requires judicial interpretation to ensure effective implementation of ADR mechanisms prescribed under the provision.Mediation in India was shaped significantly by judicial initiatives. One such case is Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. Ltd.[6], which further strengthened the role of mediation in dispute resolution, where the Supreme Court laid down detailed guidelines for the types of disputes suitable and unsuitable for ADR, including mediation. Further, in M.R. Krishna Murthi v. New India Assurance Co. Ltd.[7], the Supreme Court strongly advocated for the institutionalisation of mediation in India and recommended the enactment of a standalone legislation to govern mediation comprehensively.Thus, prior to 2023, mediation was governed by a scattered and evolving legal framework, which primarily lacked uniformity, clarity, and institutionalisation. This underscored the need for dedicated legislation, which ultimately led to the enactment of the Mediation Act, 2023.The Mediation Act, 2023:The Mediation Bill, 2021 (Bill No. XLIII of 2021), as amended and passed by both Houses of Parliament in August 2023 and subsequently received Presidential assent on 14 September 2023, thereby coming into force on 9 October 2023 as the Mediation Act, 2023. The Act consists of 11 Chapters, 65 Sections, and 10 Schedules.Applicability of the Act: Section 2 states that the Act is applicable in a mediation conducted in India Where all or both the parties reside in India, or are incorporated in or have their place of business in India, orthrough a mediation agreement, orthere is an international mediation, orwhen one party is the Central Government, State Government, or any government agency, public body, corporation, or local authority (including entities controlled or owned by them), and the dispute is commercial in nature, orany other type of dispute that the Central or State Government may specifically notify for mediation, provided that the Government or its entities are one of the parties.What is a mediation agreement?Section 4 speaks about mediation agreement, it states that any written agreement by the parties made to resolve conflicts through mediation. There can be a separate mediation agreement or a single mediation clause in any agreement. This also includes any written e-communication by the parties.Non-Mediable Disputes:Section 6 states that matters specified under Schedule I of the act cannot be resolved through mediation. They are:disputes prohibited by law matters involving minors, persons of unsound mind, or rights in rem criminal offences professional misconduct proceedings disputes affecting third-party rights (except certain matrimonial matters where the interest of a child is involved) environmental matters under the National Green Tribunal tax-related disputes competition law and telecom regulatory matters electricity and petroleum regulatory disputes securities market matters (SEBI) land acquisition and compensation matters and any other disputes notified by the GovernmentProcedure of Mediation under the Mediation Act, 2023:Who is a mediator?Mediator is the one who facilitates communication between...

Understanding The Procedure Of Mediation Under Mediation Act, 2023

Kurzith Imran H

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