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 THE MEDIATION ACT 2023: AN OVERVIEW

 By- Meemansa Rawat

Student, X Semester, BB.A.LL.B (Hons.), Department of Law, Prestige Institute of Management and Research, Indore

 

Mediation can be defined as a process in which parties to the dispute appoint a third person or mediator who assists the parties in negotiating jointly acceptable resolution of the conflict. It is most significantly used in family court while dealing matters related to divorce, custody and also in disputes between employees etc. In the year 2021, The Mediation Bill was introduced in Rajya Sabha for the first time and subsequently, the parliamentary standing committee which submitted its report to Rajya Sabha in July 2022. The bill was then introduced in both the houses i.e., Rajya Sabha and Lok Sabha which was passed by both on 1^st August 2023 and 7^th August 2023 respectively. It then got assent of the President of India on 15^th September 2023 and was published in the official Gazette of India on the same date.

The Mediation Act, 2023 lines up with Section 89 of Civil Procedure Code, 1908 which allows courts to refer parties to several dispute resolution methods that includes arbitration and conciliation, mediation and judicial settlements when the possibility of friendly settlement exists. The primary object of the act is to “promote and facilitate mediation, especially institutional mediation, for resolution of disputes, commercial or otherwise, enforce mediated settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as acceptable and cost-effective process and for matters connected therewith or incidental thereto.”

KEY HIGHLIGHTS OF THE ACT

Applicability of the act is in situation where mediation occurs in India, including cases where both or either of the parties habitually reside, are incorporated, or have a place of business in India and also applies when mediation agreement specifies application of this act or where there is involvement of international mediations or government entities or commercial disputes.

Mediator’s Appointment shall be done by parties:

a.       By reaching an agreement; or

b.      By a making an application to mediation service provider. Mediator’s Qualification is prescribed as registered as mediator under Mediation Council of India or enrolled with 

                                                         i.            a court annexed mediation center;

                                                       ii.            an authority constituted under the Legal Services Authorities Act, 1987; or

 

A mediation service provider and who is to undertake mediation:

(a)    By parties,

(b)   By mediation service provider. 

Mediator’s termination may be done by mediation service provider upon:

(a)    receipt of an application from either party;

(b)   receipt of information about the mediator’s conflict of interest; or

(c)    the mediator’s withdrawal from the proceedings.

If and when terminated, the mediator may be replaced in the manner set out under the Act. Privilege against disclosure is provided as no mediator, parties, experts or advisers is permitted, at any point of time, to disclose, or be compelled to disclose to any court, adjudicatory proceedings or tribunal any information, content, communication or condition which they have acquired during the time of mediation.

Pre-litigation Mediation i.e., a process of commencing mediation for dispute settlement prior to the filing of a suit or proceedings that is of civil nature before a court or notified tribunal is mentioned as below:

(a)    Parties may voluntarily and with mutual consent take steps to settle the disputes by pre-litigation mediation in accordance with the Act.

(b)   Jurisdiction: Unless agreed otherwise, mediation must be undertaken within the territorial jurisdiction of the court or tribunal of competent jurisdiction to decide the subject matter of dispute.

(c)    Timeline: The mediation process is required to be completed within 180 (one hundred eighty) days from the date fixed for first appearance before the mediator, with a further 180 (one hundred eighty) days period extendable by the consent of parties.

(d)    Withdrawal or non-appearance: A party may withdraw from the mediation after the first 2 (two) sessions. In case the party fails to attend even the first 2 (two) mediation sessions, costs may be imposed at the time of the subsequent litigation on the same subject matter.

(e)    Even if the parties 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.

(f)     Costs: Unless otherwise agreed by the parties, all costs of mediation, including the fees of the mediator and the charges of the mediation service provider will be borne equally by the parties.

(g)    Confidentiality: A mediator, mediation service provider, the parties and participants in the mediation will keep confidential matters relating to the mediation proceedings (list of these matters are set out under Section 22(1). No party can rely on or introduce as evidence any information or communication.

Mediation settlement agreement and its enforcement are done as follows:

(a)    An agreement between some or all of the parties, settling some or all of the disputes between such parties as a result of the mediation. The terms of a mediated settlement agreement can extend beyond the terms of reference.

(b)   Form: The agreement must be in writing, signed by the parties and authenticated by the mediator.

(c)    The mediated settlement agreement will be final and binding upon the parties.

(d)    Registration: The mediated settlement agreement must be registered with an authority constituted under the Legal Services Authorities Act, 1987 within 180 (one hundred eighty) days of the authenticated copy from the mediator.

(e)    Enforcement: It will be enforceable in accordance with the provisions of Code of Civil Procedure, 1908 as if it was a decree passed by a court.

Non settlement Report has to be submitted to the parties or mediation service provider which is to be prepared by the mediator in case of no settlement between the parties under mediation proceedings.

Interim relief orders by courts pending pre-litigation mediation to protect the interest of the parties if deemed appropriate shall be done upon directions of the court or tribunal.

Challenge to a mediated settlement agreement can be done by either party before court or tribunal of a competent jurisdiction by filling an application within 90 days on the grounds of

(a)    fraud

(a)    corruption

(b)   impersonation; and

(c)    Dispute not fit for mediation.

Statutory exclusion of certain period under limitation shall be period of time from commencement of the mediation till, either

(a)    submission of non-settlement report, or

(b)   termination of mediation while initiating proceedings relating to the same dispute.

Corresponding amendments to other legislations that the Act incorporates in this field, includes the Indian Contract Act, 1872, the Code of Civil Procedure, 1908, the Legal Services Authorities Act, 1987, the Arbitration and Conciliation Act, 1996, the Micro, Small and Medium Enterprises Development Act, 2006, the Companies Act, 2013, the Commercial Courts Act 2015 and the Consumer Protection Act, 2019 (since the Act now applies to all civil and commercial disputes in India, naturally).