MEDIATION ACT – 2023
Mediation Act – 2023 is implemented to promote and facilitate, especially institutional mediation, for resolution of disputes, commercial or otherwise, enforce mediated settlement agreements, provide for a statutory body for registration of mediators, to encourage mediation and to make online mediation as acceptable and also cost-effective process and for matters connected therewith or incidental thereto.
The main purpose of the Mediation Act 2023 is to expand the scope of mediation and also to legally recognize the mediation process, like pre-litigation mediation, online mediation, and community mediation. The stated practices are now included under the definition of ‘mediation’. This change is in compliance of international standards in the terms ‘mediation’ and ‘conciliation’ which are commonly used and were previously acknowledged by the Supreme Court of India also.
1. Application of Mediation Act
This Act shall apply where mediation is conducted in India, and —
a. all or both parties habitually reside in or are incorporated in or have their place of business in India; or
b. the mediation agreement provides that any dispute shall be resolved in accordance with the provisions of this Act; or
c. there is an international mediation; or
d. wherein one of the parties to the dispute is the Central Government or a State Government or agencies, public bodies, corporations and local bodies, including entities controlled or owned by such Government and where the matter pertains to a commercial dispute; or
e. to any other kind of dispute if deemed appropriate and notified by the Central Government or a State Government from time to time, for resolution through mediation under this Act, wherein such Governments, or agencies, public bodies, corporations and local bodies including entities controlled or owned by them, is a party.
2. Disputes Subject for Mediation
Section 6 of the Act provides that:
“A mediation under this Act shall not be conducted for resolution of any dispute or matter as contained in the list under the First Schedule:
Provided that nothing contained herein shall prevent any court, if deemed appropriate, from referring any dispute relating to compoundable offences including the matrimonial offences which are compoundable and pending between the parties, to mediation”.
The First Schedule of the Act provides a comprehensive list of disputes that are not suitable for mediation like disputes involving minors or people with intellectual disabilities, criminal prosecutions, tax-related issues, matters before regulatory bodies such as the Telecom Regulatory Authority of India and the Telecom Disputes Settlement and Appellate Tribunal, and cases under the Competition Act, 2002.
The Act also extends its applicability to non-civil and non-commercial disputes, including compoundable offenses and matrimonial disputes. This provision offers clarity in identifying disputes that can be resolved through mediation.
3. Meditation Agreement
Section-4 stipulate that a mediation agreement can be included as a clause in a written agreement or as a separate written agreement. A person of any nationality can be appointed as mediator. Parties will be free to choose their mediator and in procedure for their appointment. The person appointed by the parties will have to communicate his willingness within 7 days. During the mediation, the mediator will have to disclose to the parties in writing any conflict of interest that has newly arisen or has come to his knowledge. The Mediator should not act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial proceeding in respect of a dispute that is the subject matter of the mediation proceedings. Additionally, if one party alleges the existence of a mediation agreement in any pleadings or other proceedings and the other party does not deny it, that would also be considered a valid written agreement. Furthermore, parties can choose to submit a dispute to mediation even after the dispute has already arisen between them.
4. Pre-Litigation Mediation
Section 5 of the Act mandates pre-litigation mediation, irrespective of the existence of a mediation agreement before filing any suit or proceeding of civil or commercial nature in any court. It provides that irrespective of any mediation agreement, the parties may voluntarily, and with mutual consent, refer the dispute for settlement by mediation before filing any case of civil or commercial nature in any court excluding commercial disputes of specified value of pre-litigation mediation under the Commercial Courts Act, 2015. Further, any court/tribunal at any stage of a proceeding, may refer the parties to undergo mediation, even if there is any mediation agreement or not.
5. Appointment of Mediators:
Section-8 of the Act says that unless otherwise agreed by the parties, a person of any nationality may be appointed as a mediator.
Section 8 (1), however, conditioned that a foreign mediator must possess the prescribed qualifications, experience, approvals and authorisations. In the absence of an agreement, the parties can request the Mediation Service Provider to appoint a mediator from their panel.
Section-9 prescribed that the selection should be considered in the light of the preferences of the parties and the mediator’s suitability in resolving the dispute.
Section 10 laid down that before being appointed, the proposed mediator must disclose any circumstances, whether personal, professional, financial or otherwise, that could create a conflict of interest or raise doubts about their independence or impartiality. Obligation to disclose continues throughout the proceedings, and the mediator must inform the parties if any such circumstances arise. The parties can choose to waive any conflicts through written agreement.
Furthermore, a mediator who has been appointed cannot act as an arbitrator or represent a party as counsel in any arbitral or judicial proceedings related to the mediation proceedings. They also cannot be presented as a witness in any proceeding.
6. Role of Mediator
Section 16 of the Act provides for Role of Mediator. The mediator’s responsibility is to help the parties to resolve the dispute and to reach an amicable resolution. Mediator has to assist parties in identifying the issue, to discuss in harmonious atmosphere so as to reach to an amicable agreement resolving the issue but mediator should not force a resolution upon the parties or guarantee that mediation will lead to a settlement.
7. Time-limit
According to Section 18 the Act, the mediation proceeding must be completed within 120 days from the date of the mediator’s first appearance. This deadline can be extended by a maximum of 60 days if both parties agree.
8. Registration and Enforcement of Mediation Agreement
Section 19 and 20 of the Act deals with registration of mediation Agreement. Mediation agreement as arrived at between the parties, other than those arrived in a court or tribunal referred mediation or award of Lok Adalat or final award of the Permanent Lok Adalat under section 21 or section 22E of the Legal Services Authorities Act, 1987, may, at the option of parties, be registered with an Authority constituted under the said Act, or any other body as may be notified by the Central Government, in such manner as may be specified and such Authority or body shall issue a unique registration number to such settlement agreements.
This registration can be done within 180 days (with a possible extension) of receiving the authenticated copy of the agreement. Registration is not mandatory, and the implications is provided under Explanation which says- For the removal of doubts, it is clarified that nothing contained in this sub-section shall affect the rights of parties to enforce the mediated settlement agreement under section 27 or challenge the same under section 28.
9. Enforcement
A mediated settlement agreement resulting from a mediation signed by the parties and authenticated by the mediator shall be final and binding on the parties and persons claiming under them respectively and enforceable as per the provisions of Act.
Mediation agreement shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a judgement or decree passed by a court, and may, accordingly, be relied on by any of the parties or persons claiming through them, by way of defence, set off or otherwise in any legal proceeding.
10. Grounds of Challenging Mediation Agreement
Section – 28 of the Act stipulate that a mediation agreement can be challenged on the following grounds: —
a). fraud;
b). corruption;
c). impersonation;
d). where the mediation was conducted in disputes or matters not fit for mediation under section 6.
An application for challenging the mediated settlement agreement shall not be made after ninety days have elapsed from the date on which the party making that application has received the copy of mediated settlement agreement.
Provided that if the court or tribunal, as the case may be, is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of ninety days, it may entertain the application within a further period of ninety days.
11. ONLINE MEDIATION
Section-30 provides for online mediation including pre-litigation mediation may be conducted at any stage of mediation under this Act, with the written consent of the parties including by the use of electronic form or computer networks but not limited to an encrypted electronic mail service, secure chat rooms or conferencing by video or audio mode or both. The process of online mediation shall be in such manner as may be specified. The conduct of online mediation shall be in the circumstances, which ensure that the essential elements of integrity of proceedings and confidentiality are maintained at all times and the mediator may take such appropriate steps in this regard as he deems fit.
12. MEDIATION COUNCIL OF INDIA (Chapter VIII)
The Mediation Act establishes the Mediation Council of India (MCI) as a corporate body responsible for various duties, including the development of India as a strong centre for domestic and international mediation. The head office of the Council shall be at Delhi. The Mediation Council of India (MCI) shall oversee the conduct of mediation proceedings, handle the recognition, renewal, cancellation, or suspension of Mediation Service Providers, maintain an electronic depository for mediated settlement agreements, and submit an annual report on the implementation of the Mediation Act to the Central Government. Additionally, the Mediation Council of India (MCI) shall have authority to create rules and regulations.
The Council shall consist of the following members, namely: —
(a) a person of ability, integrity and standing having adequate knowledge and professional experience or shown capacity in dealing with problems relating to law, alternative dispute resolution preferably mediation, public affairs or administration to be appointed by the Central Government—Chairperson;
(b) a person having knowledge and experience in law related to mediation or alternative dispute resolution mechanisms, to be appointed by the Central Government—Member;
(c) an eminent person having experience in research or teaching in the field of mediation and alternative dispute resolution laws, to be appointed by the Central Government—Member;
(d) Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and Justice or his representative not below the rank of Joint Secretary— Member, ex officio;
(e) Secretary to the Government of India in the Department of Expenditure, Ministry of Finance or his representative not below the rank of Joint Secretary— Member, ex officio;
(f) Chief Executive Officer—Member-Secretary, ex officio; and
(g) one representative of a recognised body of commerce and industry, chosen by the Central Government—Part-Time Member.
13. Mediation Service Providers
Section 40 provides that mediation proceedings may be conducted by a Mediation Service Provider which includes a body or an organization, or
b) an authority constituted under the Legal Services Act, 1987,
c) a court annexed mediation Centre, or
d) any other body as notified, provided any of these are recognized by the Mediation Council of India (MCI) for conducting mediation proceedings under the Mediation Act.
The Mediation Service Providers are duty bound to provide all facilities such as infrastructure to conduct of mediation proceedings, facilitate registration of mediated settlement agreements.
Siddharth-Srivastava Advocate Mobile-9811776422
