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MEDIATION AND CONCILIATION

The document summarizes mediation and conciliation procedures for corporate disputes in India according to the Companies Act 2013 and Companies (Mediation and Conciliation) Rules 2016. It outlines eligibility criteria for mediators and conciliators, matters that cannot be referred for ADR, time limits, fees, procedures, and how to withdraw from the mediation panel. Key points are that mediation and conciliation must be completed within 3 months and can be extended up to 6 months, fees are set by the Regional Director or Tribunal, and settlements must be submitted in writing.

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Introduction Eligibility Not to Refer Time Limit Procedure Disqualification Apply for Empanelment How to Apply Fees Withdrawal/ Deletion of name
Alternative Dispute Resolution methods are fast becoming the preferred and most economical way to resolve contractual disputes. This is particularly the case in relation to issues involving technically complex subject matter. Alternative Dispute Resolution (ADR) is the procedure for settling disputes without litigation, such as arbitration, mediation, or negotiation. ADR procedures are usually less costly and more expeditious Section 442 of the Companies Act, 2013 , provides for Mediation and Conciliation Panel. Ministry of Corporate Affairs vide its notification dated 9th September, 2016 has notified Companies(Mediation and Conciliation) Rules, 2016. Central Government shall maintain a panel of experts to be called as Mediation and Conciliation Panel for mediation between the parties during the pendency of any proceeding before Central Government (herein referred as Regional Director) or the NCLT(National Company Law Tribunal) or NCLAT(National Company Law Appellate Tribunal.
Has been an officer in the Indian Corporate Law Services or Indian Legal Services with 15 years Experience Has been a Judge of Supreme Court of India Is an expert in mediation or conciliation who has successfully undergone training in mediation or conciliation Is a qualified legal practitioner for not less than 10 years Has been a member or registrar of a tribunal constituted at the National level Has been a District and Sessions Judge Has been a Judge of High Court Has been a member or president of any state consumer forum Is or has been a professional for atleast 15 years of continuous practice as a Chartered Accountant or Cost Accountant or Company Secretary or or or or or
WHO IS DISQUALIFIED ? Is an undischarged insolvent or has applied to be adjudicated as an insolvent and his application is pending, or Has been convicted for any offence which in the opinion of the Central Government involves moral turpitude, or Has been removed or dismissed from the service of the Government or the Corporation owned or controlled by the Government, or Has been punished in any disciplinary proceeding by the appropriate disciplinary authority, or Has in opinion of Central government, such financial or other interest in the subject matter of dispute or is related to any parties, as is likely to affect prejudicially the discharge by him of his functions as a mediator or conciliator
HOW TO APPLY FOR EMPANELMENT IN THE PANEL ?
WHAT MATTERS CANNOT BE REFERRED FOR MEDIATION AND CONCILIATION? Matters related to proceeding for inspection or investigation under Chapter XIV of Companies Act, 2013 or matters related to defaults or offences for which application is for compounding is made by either of the party. Cases involving serious and special allegations of fraud, fabrication of documents, forgery, impersonation, coercion etc Case involving prosecution for criminal or non-compounding offences Case involving public interest or interest of numerous persons who are not parties before Regional director, NCLT or NCLAT, as the case may be
WHAT IS THE TIME LIMIT TO COMPLETE MEDIATION AND CONCILIATION? Extension can be granted (Only in case of mediation or conciliation in relation to any proceedings pending before NCLT or NCLAT) Of Maximum 3 months (Total 6 Months, if granted) By NCLT or NCLAT If not completed within 3 months on application by Party or mediator or Conciliator TO BE COMPLETED WITHIN 3 months from date of appointment of expert
HOW TO APPLY FOR MEDIATION AND CONCILIATION? Parties may agree on the name of sole mediator or Conciliator or where parties are unable to agree on sole mediator or Conciliator, the Regional Director or NCLT or NCLAT may ask each party to nominate the mediator or conciliator or Regional Director or NCLT or NCLAT may appoint the mediator or conciliator, as may be deemed necessary Any party to the proceeding may, during the proceeding before Regional Director or NCLT or NCLAT apply in Form MDC-2 along with a fee of Rs. 1000 for referring the matter to mediation and conciliation panel and then Regional Director or NCLT or NCLAT shall appoint one or more expert from the panel. Regional Director or NCLT or NCLAT may suo moto also refer the matter to such number of experts from the and conciliation panel as they deem fit. Further it may be noted that parties shall not initiate any arbitral or judicial proceeding during mediation and conciliation except when such proceedings are necessary for protection his right
WHAT IS THE FEES FOR MEDIATION AND CONCILIATION? At the time of referring the matter the Regional Director or NCLT or NCLAT may fix the fee for mediator and conciliator, generally a consolidated fee rather than fee for each session. Expense of the mediation and conciliation shall be borne equally by parties or as may be otherwise directed by the Regional Director or NCLT or NCLAT, as the case may be. The mediation or conciliation shall commence only on deposit of amount as directed by mediator and conciliator before commencement of proceedings/sessions. If not deposited the mediation or conciliation shall stand terminated. If any party make default in payment, the Regional Director or NCLT or NCLAT, as the case may be shall issue appropriate directions to the concerned party.
WHAT IS THE PROCEDURE FOR MEDIATION AND CONCILIATION? Step 1: Fixing date and time of each mediation and conciliation session, in consultation with parties Step 2: Conduct of joint or separate session at place decided by Regional Director or NCLT or NCLAT, as the case may be, or some other place as agreed between parties and mediation and conciliation jointly. Step 3: If there are more than 1 mediator and conciliator, they shall first concur with the parties which nominated them and then interact with other mediator and conciliator to resolve the dispute. Step 4: Each party shall atleast 10 days before session, provide a brief memo of issues, his position in such issue, and other important information to mediation and conciliation. Also copy of such memo shall be given to other party also. Period given above may be reduced with discretion of mediation and conciliation. *Note : Parties shall ordinarily be present personally, however parties may be present through an authorised attorney at the session with the permission of mediation and conciliation Cont.
Step 5: If party fails to appears in session deliberately or wilfully for 2 consecutive sessions, the mediation and conciliation process shall deemed to have failed and the same shall be reported to Regional Director or NCLT or NCLAT, as the case may be. Step 6: the mediator or conciliator in order to facilitate the proceedings, may arrange for administrative assistance by a suitable institution or person with the consent of the parties. Step 7: All the sessions shall be conducted in privacy. Step 8: Any party may during proceeding “with or without prejudice” offer a settlement to the other party with a notice to the mediator or conciliator. Step 9 : where any settlement is reached between the parties in regard to all or some of the issues, the same shall be recorded in writing and signed by parties. The settlement agreement shall then be submitted to mediator and conciliator who shall forward the same to Regional Director or NCLT or NCLAT, as the case may be. Cont.
Step 9: if no settlement is reached within the time of 3 months (plus 3 months extension if granted), or where settlement is not possible then the same shall be communicated to Regional Director or NCLT or NCLAT, as the case may be. Step 10: the Regional Director or NCLT or NCLAT, shall generally within 14 days of receipt of communication from mediator and conciliator regarding settlement shall fix a date of hearing and pass the order. Step 11: If settlement disposed only certain matters of the proceeding, order shall be passed for such settled matters, the Regional Director or NCLT or NCLAT, as the case may be shall proceed to decide further matters.
HOW TO WITHDRAW NAME AND DELETION FROM PANEL? • any person intending to withdraw his name from the panel can make application to RD along with reason of withdrawal. RD after taking decision on such withdrawal (within 15 days of receipt of application) update the panel. Withdraw • Regional Director may by recording reasons in writing and after giving an opportunity of being heard, remove any person from the Panel.Deletion
IMPORTANT NOTES: The mediator or Conciliator shall not be bound by the Indian Evidence Act, 1872 or the Code of Civil procedure, 1908 Duty of mediator or Conciliator appointed, to disclose the facts which may give rise to reasonable doubts to his independence and impartiality. No mediator and conciliator shall be held liable for anything which is done or omitted to be done by him in god faith during the proceeding nor shall be summoned by any party. mediator or Conciliator shall act as per the duties, ethics and responsibility granted to them under the Companies (mediation and conciliation) rules,2016.
MEDIATION AND CONCILIATION