The Mediation Act, 2023 (“the Act”) was passed by the Rajya Sabha on 01.08 2023, the Lok Sabha on 07.08.2023 and given assent by the President on 14.09.2023. The Bill was introduced with the intention to provide quick and affordable justice to the population of the country. The objective of the Act is to promote, encourage and facilitate mediation especially institutional mediation for resolution of civil and commercial disputes, enforce mediated settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as an acceptable and cost-effective process and for matters connected therewith or incidental thereto.
Applicability - The Mediation Act, 2023 will apply where mediation is conducted
in India and under this law, provision for international Mediation has been
provided for in cases where one party is other than that of Indian nationality.
Moreover, disputes other than commercial disputes, in which Central Government
and State Government or its agency, entity etc. are a party, cannot be mediated
unless the nature of disputes which can be referred to mediation are notified.
The Mediation Act
only applies to international mediation where the mediation is conducted in
India but not applicable to mediation which are conducted outside India.
Definition of
Mediation – Section 4 of the Act has defined mediation
as a process, whether referred to by the expression mediation, pre-litigation
mediation, online mediation, community mediation, conciliation whereby party or
parties, request a third person referred to as mediator or mediation service
provider to assist them in their attempt to reach an amicable settlement of a
dispute.
Hence, the
Mediation Act recognises online mediation and community mediation which have
been a part of our ancient culture by way of Panchayats which was later
replaced by British rule which introduced system of jurisprudence and
adversarial litigation conducted in the Courts.
Mediation
Agreement - A mediation agreement as defined in
Section 5 of the Act shall be in writing, in the form of a mediation clause in
a contract or in the form of a separate agreement.
Disputes or
matters not fit for mediation – Such disputes have
been mentioned in an indicative list provided in First Schedule of the Act. Few
of such disputes are disputes which by virtue of any law for the time being in
force may not be submitted for mediation, disputes involving allegations of
serious and specific fraud/fabrication of
documents/forgery/impersonation/coercion, disputes involving prosecution for
criminal offences, disputes which have the effect on rights of a third party
who are not a party to the mediation proceedings, etc.
Interim
relief by court or tribunal – Parties to mediation
can under Section 8 of the Act before the commencement of, or during the
continuation of, mediation proceedings under this Act, file suit or appropriate
proceedings before a court or tribunal having competent jurisdiction for seeking
urgent interim relief.
Mediators – As specified in Section 10, person of any nationality can be a
mediator provided they possess the requisite qualifications. In case parties
fail to reach an agreement on the name of a mediator, the party initiating the
mediation can make an application to the Mediation Service Provider for
appointment of a mediator from the panel of mediators maintained by it, which
must take into consideration the preference of the parties and suitability of
the mediator in resolving the dispute.
Territorial
jurisdiction to undertake mediation – As mentioned
in Section 15 of the Act, mediation shall take place within the
territorial jurisdiction of the court or tribunal of competent jurisdiction to
decide the subject matter of dispute or online or any other place with the
mutual consent of the parties.
Withdrawal
from mediation - As mentioned in Section 20 of the
Act, a party may withdraw from mediation at any time after the first two
mediation sessions. Cost may be imposed for absence in first two sessions.
Enforceability - Mediated Settlement Agreement in Section 22 of the Act, shall be
final and binding on the parties and persons claiming under them respectively
and enforceable 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, 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.
Time - Period – As per Section 21 of the Act,
Mediation shall be completed within a period of one
hundred and eighty days from the date fixed for the first appearance before the
mediator which may be extended for a further period as agreed by the parties,
but not exceeding one hundred and eighty days.
Challenging
mediated settlement agreement – As per Section
22 of the Act, a mediated settlement agreement may be challenged may file an
application before the court or tribunal of competent jurisdiction, only on all
or any of the grounds of fraud, corruption, impersonation and where the
mediation was conducted in disputes or matters not fit for mediation under
section 7. An application for challenging the mediated settlement agreement
shall 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.
Community
Mediation – Chapter X of the Act recognises
Community Mediation and states that any dispute likely to affect peace, harmony
and tranquillity amongst the residents or families of any area or locality may
be settled through community mediation with prior mutual consent of the parties
to the dispute.
Mediation Council of India: Chapter VIII of the Act
specifies establishment of the Mediation Council of India (MCI) to be headed by
a chairperson to be appointed by the Central Government. Duties and functions of the Mediation Council of India have been
laid down, inter alia, for promoting institutional mediation, registration of
mediators, grading of mediation service providers etc.
Hence, the
Mediation Act institutionalizes the mediation which aims to provide an
effective alternative dispute resolution mechanism which reduces the dependency
on the Court. It has been stated in the Act that pre-litigation mediation in
matters of commercial disputes will continue to be governed according to
Section 12(A) of the Commercial Courts Act, 2015. One of the drawbacks of the Act
is that the Act does not provide for enforcement
of settlement agreements resulting from international mediation conducted
outside India. The Act also uses the word conciliation interchangeably with
mediation. With this Act coming into effect and the Rules that will be
formulated later, the role mediation in amicable dispute resolution can grow
and settlement can be reached efficiently and effectively.
This Article has been Compiled by Ayushi Misra (Senior Associate) and Arun Gupta (Managing Partner).
You can direct your queries or comments to the author at info@factumlegal.com
Disclaimer-
The contents of this article should not be construed as legal opinion. This article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. We expressly disclaim any financial or other responsibility arising due to any action taken by any person on the basis of this article.
