The Supreme Court, in an important judgment delivered on Wednesday (17 August 2022), expressed its concerns regarding dearth of trained and skilled mediators and lack of infrastructure.
The bench comprising Justices KM Joseph and Hrishikesh Roy also emphasized the importance of having a dedicated bar for mediation.
"A trained Mediator can work wonders. Mediation must be perceived as a new mechanism of access to justice..The effective participation of the bar which must be adequately remunerated for its service will assist in mediation evolving", the court added.
The bench made these observations in its judgment holding that Section 12A of the the Commercial Courts Act, 2015 is mandatory and that any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VII Rule 11. Section 12A deals with pre-Institution Mediation and Settlement. It provides that 'a suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.' The issue raised before the Court was whether this provision is mandatory.
One of the criticisms raised was that the mediation is opposed to the fundamental principle of access to justice. In this regard, the bench observed thus:
"Mediation offers a completely new approach to attaining the goal of justice..A win-win situation resulting from assigning a greater role to the parties themselves, with no doubt, a spirit of accommodation represents a better and what is more in the era of docket explosion, the only meaningful choice. The realisation has been growing over a period of time, that formal court rooms, long drawn-out proceedings, procedural wrangles, mounting and crippling costs, delay, which never wanes but only increases with the day that at least, in certain categories of cases, mediation can be the way out. It, undoubtedly, requires a complete change in the mindset. The change in approach, undoubtedly, can be achieved only if the litigants become aware of its benefits in comparison with the great disadvantage in waiting in the serpentine queue for the day of reckoning to arrive in a court of law. The role of the Bar is vital in taking mediation forward. With increase in population and a skewed Judge-population ratio and a huge spiralling of litigation in the courts, it is logical, just and imperative, to attempt and persevere in out of the box thinking. We can no longer afford to remain in the past. A clean break with the past is urgently needed. What was a mere writing on the wall as early as in the last decades of the previous century has become the harsh reality. It is important that the courts also adapt to the changing times. At least when the Parliament has decided to move ahead, it becomes the court's duty not to greet it with undue scepticism. It becomes necessary to fulfil the intention of the Parliament by realising the true role of judiciary."
While concluding, the bench made the following observations :
Mediation can become a potent alternate dispute resolution device. There are, however, a few indispensable requirements. The first requirement is the existence of adequate infrastructural facilities and, what is more important, availability of trained and skilled Mediators. The role of the Mediator, as per Rule (5) of the Rules, is to facilitate the voluntary resolution of a commercial dispute and assist the parties in this regard. How can a Mediator, who is not properly trained, fulfil his responsibility under Rule (5)? Another area of concern is the availability in the number of Mediators in the country, particularly, in the light of lowering of the monetary valuation from Rs. 1 crore to Rs. 3 lakhs. It is all well to pass a law with sublime objects as in this case. However, the goal will not be realised unless the State Governments and all other relevant Authorities bestow their attention in the matter of providing adequate facilities. Knowledge of the laws, which are the subject matter of the suits under the Act, is indispensable for a Mediator to effectively discharge his duties. His role is supreme and it is largely shaped by his own knowledge of the law that governs commercial cases. There must be training by Experts, including at the State Judicial Academies. This must be undertaken on a regular and urgent basis, particularly keeping in mind when there is a dearth of trained mediators. There is a need to have a dedicated bar for mediation. The effective participation of the bar which must be adequately remunerated for its service will assist in mediation evolving. The concerned High Court may also undertake periodic exercise to establish a panel of trained mediators in District and Taluka levels as per need.
Patil Automation Private Limited vs Rakheja Engineers Private Limited | 2022 LiveLaw (SC) 678 | CA | 17 August 2022 | SLP(C) 14697 of 2021 | Justices KM Joseph and Hrishikesh Roy