Authors - Natasha Mittal and Gautam Taneja
(Authors are BA.LL.B( Hons.) 1st Year students from Rajiv Gandhi National University of Law, Patiala.)
Keywords: Singapore Convention, Cross-border Mediation, Accreditation of mediators
Abstract
The analysis of the Mediation Act, 2023 examines its impact on Indian disputes juxtaposed with the international mediation standards. While the Act brings about a lot of reforms, but it faces various challenges in keeping up with international standards, particularly when it comes to cross-border enforcement, diversion from Arbitration & Conciliation Act, 1996 and the absence of extensive mediator accreditation requirements. The recommendations centre on the cross-jurisdictional enforcement of settlements, the establishment of uniform mediator accreditation, need for clarification through guidelines and amendments to the act that is inline with the Arbitration and Conciliation Act and the harmonization with international standards, to fully realize the Act and its potential for effective dispute resolution.
I. Introduction
The Indian judiciary faces a substantial backlog, with millions of cases pending across various courts, which makes it increasingly difficult to deliver justice in a timely manner. A successful conflict resolution process not only improves the economy and ease of doing business, but it also aids in expanding access to justice. Mediation via a neutral third party (mediator), aids parties in reaching compromises, fostering common ground and resolving disputes efficiently. In a more recent case of M.R. Krishna Murthi v. New India Assurance Co. Ltd., SC recognized the increasing significance of the mediation process and observed that “there is a dire need to enact an Indian Mediation Act”. Moreover, India was one of the first few nations to sign but not ratify the Singapore Convention on Mediation; and the Mediation Act, 2023 was finally passed by the Indian government on September 15, 2023, with the stated goal of "promoting and facilitating mediation."
II. Deciphering the Key Provisions of the Mediation Act, 2023
The Mediation Act, 2023 (“The Act”) has rendered a comprehensive and elaborate legislative framework for an efficient and streamlined implementation of mediation in India. It has now introduced many features which were bereft of in the previous mediation frameworks, which are as follows:
With the introduction of institutional mediation for resolution of disputes, for commercial or otherwise, would consequently offer essential administrative facilities and support for the mediation process. Its primary function would be to accredit mediators and to regulate mediation.
The Act has expanded the statutory scope to recognize voluntary pre-litigation and online mediation. Section 5(1) of the Mediation Act stipulates that regardless of any mediation agreement, the involved parties have the option to voluntarily and by mutual consent, resolve the dispute through mediation before initiating any civil or commercial lawsuit in any court.
Moreover, with the enforcement of domestic mediated settlement agreements (“MSAs”) and time bound procedures, it would make the mediation process final and binding in nature. It can only be challenged on grounds of fraud, corruption, impersonation, or pertaining to disputes not fit for mediation.
Moreover, the provisions of this act would have an overriding effect for enforcing mediation irrespective of any inconsistent provisions present in extant laws or legally binding instruments. In Yashpal Chaudhrani & Ors. v State, the court endorsed that the provisions of the Mediation Act can take precedence over conflicting provisions in other laws, particularly regarding compoundable criminal cases. Hence, the settlement shall be deemed enforceable and approved according to the stipulations outlined in the Civil Procedure Code of 1908, like a judicially issued judgment or decree
III. Assessing the Alignment of Mediation Legislation vis-à-vis International Standards: A Comprehensive Overview
The government has also partially embodied The United Nations Convention on International Settlement Agreements (“The Singapore Convention or The Convention”) in section 27 of the Act, as it established a concordant international legal structure for the advancement of mediation.
The convention primarily promulgates universal and uniform mediation settlement agreements between parties from any part of the world. In the European Union, a Directive was promulgated to assist member states in formulating legislative frameworks pertaining to mediation. The objective of the Mediation Directive is to institute standardized and comprehensive guidelines for regulating the practice of mediation, thereby facilitating the establishment of an institutional framework governing mediation practices uniformly across EU member states.
The Singapore Convention resulting from Mediation bolsters the worldwide infrastructure for mediation. Emphasized in Article 2 and Article 33 of the United Nations Charter, nations are encouraged to resolve their conflicts using peaceful methods. Furthermore, international arbitral bodies like the International Criminal Court (ICC), International Centre for Dispute Resolution (ICDR) offer mediation services as an initial step toward dispute resolution.
Additionally, mediators and training providers have now enlisted independent bodies to review and authenticate their practices, for example- International Mediation Institute (IMI) and the Singapore International Mediation Institute (SIMI). These institutes universally advocate for mediator’s duty of neutrality and importance of confidentiality of mediation information.
But it can be drawn that the act is in contravention with the convention in several aspects and several lacunas can be drawn when the former is juxtaposed with the international standards of mediation.
IV. Lacunas: Bridging Gaps with International Practices
Non-Enforceability of Cross-Border Mediation
One of the common rationales among the international parties or stakeholders for not opting for mediation is its non-enforceability and international mediation’s non-binding nature. Hence, the convention recognized the indispensable value of a statutory and binding international legal framework and permits the direct enforcement of international mediation agreements in domestic courts of nations that are parties to the convention. But this can only be exercised when the parties have not only signed, but ratified the convention.
Firstly, as projected in Article 1 of the convention, to the contrary, the act doesn’t permit cross-border mediation and its enforcement of settlement agreements. Settlement agreements stemming from mediation conducted outside India fall outside the scope of the act. Moreover, the act also lays down that settlement agreements in India would be considered and treated equivalent to a court judgement and decree and in accordance with provisions of Code of Civil Procedure. This is also in contravention to the international standards and would deem Article 7 of the Singapore Convention, which expressly excludes such settlement agreements within its scope, to be invalid.
The Diversion with the Arbitration & Conciliation Act, 1996 (“A&C”)
In contrast to the A&C Act, the new statute does not provide precise guidelines for interim orders. Another major oversight is the lack of distinction between mediation and conciliation. Part I of the A&C Act deals with mediation, while Part III deals with conciliation. However, the new act deviates from this and attempts to fit both mechanism within the Singapore Convention's framework, which defines both ADR mechanisms very loosely or maybe the Act has tried to give some regards to previous judgement of the SC such as Perry Kansagra vs. Smriti Madan Kansagra and Amardeep Singh vs. Harveen Kaur wherein the court itself used both the terms interchangeably.
Section 27 of the new Mediation Act governs the enforcement of mediated settlement agreements. This section affirms that all the procedural steps for implementing mediated settlement agreements over the long run, as delineated in CPC Order 21, are restored under the new legislation. This undermines the primary objective of seeking faster and more cost-effective results and would have an inherent tendency to delay the process of executing a settlement agreement.
The Need for Comprehensive Accreditation in Indian Mediation
The Act also established the Mediation Council of India ("Council"), which is responsible for regulating the mediator registration process and recognizing mediation institutions and mediators throughout India. While the Act briefly discusses mediator qualification criteria, it does not provide exhaustive criteria, for example the new act doesn't mandate mediators to engage in continuing education. International practices have heavily emphasized stringent standards for mediation accreditation as well as the importance of continuous mediator training.
The Mediation Council has also discounted the need for an adequate representation of experienced practitioners on the panel of accredited mediators. These mediators may struggle to accurately assess underlying legal issues and the parties' interests. Furthermore, before enacting regulations related to its essential duties, the Council must obtain prior approval from the Central government. This can lead to a conflict of interest when the government is one of the parties concerned.
V. Recommendations and Way Forward
Uniform Accreditation and Independent Regulation
Non- uniform accreditations of mediators and lack of adequate representation of experienced mediators would lead to inefficient mediators. This problem could be addressed by framing of a regulation based on the uniform and comprehensive accreditation of mediators as emphasized in M.R. Krishna Murthi v. New India Assurance Co. Ltd.. Additionally, the government can also collaborate with independent or private groups based on the aforementioned criteria.
Independent regulation of the Mediation Council is required to safeguard the autonomy of the Mediation Council of India. To ensure fairness and professionalism, mediators should be appointed using transparent and meritocratic principles. In cases where the government is a party, independent judicial or legislative committees should be tasked with approving the council's decisions.
Enhancing Clarity: Amendments and Guidelines for Mediation and Interim Orders
Clarifications and a succinct distinction between arbitration and conciliation should be made, through amendments to the act that is in line with the A&C Act. In order to provide parties and practitioners a clear understanding of the procedure and expectations during interim stages of dispute resolution, the legislature must also resolve a number of concerns about interim orders. The second Salem Advocates Bar Association case upheld the importance of adhering to the 28 Rules of the Civil Procedure Mediation Rules of 2003 when it comes to enforcing mediated settlement agreements. Prioritizing these rules over the previously mentioned CPC Order 21 will help ensure that mediated settlement agreements are enforced as soon as possible. As a result, the legislature should issue new regulations accordingly.
Voluntary Settlement Agreements and Harmonising Legal Frameworks for Cross-Border Mediation Enforcement
The fundamental area of concern in the Act i.e. the enforcement of a cross-border mediated agreement can be done either through mixed-mode dispute resolution processes or via indirect means. In the former process, mediation can be voluntarily initiated by the involved parties, who can select a neutral third party as the mediator to facilitate the process. The resulting voluntary settlement agreement can contain enforcement measures to ensure compliance in case one of the parties fails to uphold their end of the bargain. These enforcement mechanisms would typically be applicable across both jurisdictions.
In the latter method, enforcement can be sought through indirect modes, which is contingent upon the existence of an enforcement legislation in the enforcing jurisdiction. In countries where specific legislation regarding settlement agreements is absent, such agreements are typically regarded as private contracts and are governed by the contractual laws of that particular jurisdiction. For example, in India, according to sections 30(4), 73, and 74 of the Indian Arbitration and Conciliation Act of 1996, a settlement agreement between two international parties can be enforced summarily voluntarily, which would be akin to an arbitral award for both parties.
But it is imperative that the Act should be harmonised with the provisions of Singapore convention which is recognised universally for enforcement of cross-border mediation agreements.
VI. Conclusion
In essence, the Mediation Act, 2023 is a significant and progressive leap forward in the Indian legal landscape towards promoting efficient dispute resolution through mediation. While the act provides for a structured law on mediation, the success would depend on its accessibility, acceptability and adaptability in the Indian context. The other key shortcoming is that it falls short to be brought in consonance with the practices of international jurisdictions- which otherwise would have helped to integrate mediation seamlessly with global transactions.
The Act introduces institutional mediation, expands the scope to include voluntary pre-litigation and online mediation, and enforces domestic mediated settlement agreements. Yet, critical gaps remain, particularly in the areas of lack of comprehensive accreditation criteria for mediators, alignment with the Arbitration and Conciliation Act, and enforceability of cross-border mediation agreements.
To address these shortcomings, firstly, the act should facilitate the ability of parties to effectively enforce settlement agreements across various jurisdictions, simultaneously retaining the right to necessary checks and balances. Secondly, there's a need for uniform accreditation and independent regulation of mediators, incorporating international best practices and ensuring transparency and professionalism. Finally, amendments should be made to enhance clarity, particularly in distinguishing mediation from conciliation and providing guidelines for interim orders.
Through these comprehensive reforms, the Mediation Act can utilise the paradigm-shifting potential of meditation in resolving disputes, both domestically and on the international stage, thereby fostering a more efficient and equitable justice system.
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