Legal Framework for Mediation in India

Mediation Act, 2023

The Act can be accessed by clicking this link.

The Mediation Bill, 2021, subsequent to being passed by both the Houses of the Parliament and receiving Presidential assent on September 15, 2023 was notified in the Gazette of India. The Bill was first introduced in the Parliament on December 20, 2021 and was referred to a Parliamentary Standing Committee ("Standing Committee"), which submitted its report to the Rajya Sabha Chairperson on July 13, 2022.

The Act aims 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," and was much needed to help the overburdened judicial system. The highlights of the Act are as under-

• Mediation Agreement: Every mediation agreement must be in writing with respect to present or future disputes. It may be in the form of a clause within any agreement, or may be executed as a separate agreement. The agreement shall be deemed to be "in writing" if it is contained in or recorded as: (a) a document signed by the parties; (ii) an exchange of communications (including electronic communications for the purposes of the Information Technology Act, 2000); or (iii) any pleadings in a suit or any other proceedings in which existence of mediation agreement is alleged by one party and not denied by the other.

• Pre-Litigation Mediation: Irrespective of the existence of any mediation agreement, the parties before filing any suit or proceedings of civil or commercial nature in any court or Tribunal, may voluntarily and with mutual consent take steps to settle the disputes by Pre-Litigation Mediation ('PLM'). As opposed to this, the Bill, made it mandatory for the parties to attend at least two sessions of mediation. However, the Standing Committee recommended against mandatory mediation, hence the act opts for a optional model. It may be noted that exercise of PLM vis-à-vis cases required to be adjudicated by Tribunals, will depend upon whether the Tribunal has been notified for such purpose by the Central or State Government, as the case may be. Here, it is important to distinguish the PLM under the Mediation Act, 2023 from the PLM envisaged under the provisions of section 12A of the Commercial Courts Act, 2015, and the rules made thereunder. The latter shall be undertaken in accordance with the provisions of section 12A under the Commercial Courts Act, 2015. It may be noted that PLM under the Commercial Courts Act is mandatory unless a part pleads for its waiver in view of plea for the grant of urgent interim relief in the matter.

• What can't be Mediated: First Schedule to the Act contains a list of matters which cannot be mediated upon. Few matter listed in the schedule are criminal offences, proceedings initiated in relation to the misconduct of any registered professional, disputes relating to the levy and collection of any direct or indirect tax or refunds, and so on.

• Appointment of a Mediator: Unless otherwise agreed upon by the parties, a person of any nationality may be appointed as a mediator, provided that mediator of any foreign nationality shall possess such qualification, experience and accreditation as may be specified. The parties shall be free to agree upon the name of mediator and the procedure for their appointment. If the parties do not reach any agreement, then the party seeking initiation of mediation shall make an application to a mediation service provider for the appointment of a mediator. Within a period of seven days from the receipt of the application, the mediation service provider shall either appoint a mediator as agreed by the parties, or appoint a mediator from the panel maintained by it.

• Jurisdiction: Every mediation shall be be undertaken within the territorial jurisdiction of such court or tribunal which is competent to decide the subject matter of dispute. Subject to the agreement between the parties, the mediation may be conducted at any place outside the territorial jurisdiction of the court or tribunal, or even online. However, in such cases, for the purpose of enforcement, challenge and registration of the mediated settlement agreement, the same shall be deemed to have been undertaken within the territorial jurisdiction of the court or tribunal of competent jurisdiction.

• Time Limit: The Act provides for completion of the Mediation proceedings within a period of 120 days from the date of the first appearance before the mediator. The time may be extended for a maximum period of 60 days.

• Mediated Settlement Agreement: Where a mediated settlement agreement is reached between the parties with regard to all or some of the disputes, the same shall be reduced in to writing and signed by the parties and authentication by the mediator. Thereafter the MSA shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a judgment or decree passed by a court. A mediated settlement agreement may be challenged only on the grounds of fraud, corruption, impersonation, and where the mediation was conducted in disputes or matters not fit for mediation under the Act.

The Act does not shed any light on interim reliefs available to the parties mediating a dispute.

OUR ADDRESS

109, First Floor, Prakash Mahal,
Dr. Subhash Bhargava Marg,
Daryaganj, Delhi-110002.
Click here to find on Google Maps

CONTACT US

office@shashankmangalandco.in,
011-40576206 +91-9999031928

WORKING HOURS

Monday - Saturday
10:00 - 20:00

Disclaimer

The Bar Council of India does not permit advertisement or solicitation by advocates in any form or manner. By accessing this website, www.shashankmangalandco.in, you acknowledge and confirm that you are seeking information relating to Shashank Mangal & Co. of your own accord and that there has been no form of solicitation, advertisement or inducement by Shashank Mangal & Co. or its members. The content of this website is for informational purposes only and should not be interpreted as soliciting or advertisement. No material/information provided on this website should be construed as legal advice. Shashank Mangal & Co. shall not be liable for consequences of any action taken by relying on the material/information provided on this website. The contents of this website are the intellectual property of Shashank Mangal & Co.