This presentation discusses the question as to whether a statute on mediation is required to be enacted in India. It argues that an ADR code has to be enacted so that dispute and its resolution are seen holistically.

1. Mediation in India:
Need for a Legislation?
BADRINATH SRINIVASAN
MANAGER (LEGAL), BHARAT PETROLEUM CORP. LTD., NORTH

2. Why is this Question Relevant?
SCI Order dt. 05.03.2019 in M.R. Krishna Murthi v. The New India Assurance Co. Ltd., Civil Appeal
No. 2476-2477 of 2019:
“We recommend to the Government to examine the feasibility of setting up MAMA by making
necessary amendments in the Motor Vehicles Act itself. In fact, the way mediation movement is
catching up in this country, there is a dire need to enact Indian Mediation Act as well.” (Para 27)
“We impress upon the Government to also consider the feasibility of enacting Indian Mediation
Act to take care of various aspects of mediation in general.” [Para 39(a)]
High Level Committee to Review Institutionalisation of Arbitration Mechanism in India (2017):
“The Government may consider the feasibility of having a standalone legislation for mediation
after debate and discussions with the relevant stakeholders.” (p. 85)

3. Legal Framework for Mediation
 Section 89 Code of Civil Procedure (as explained by Afcons Infrastructure)
 Afcons Infrastructure ironed out problems with S. 89
 Effecting compromise by court is not mediation
 Construed S. 89(2) such that “mediation” is replaced by “judicial settlement” in S. 89(2)(c) and “judicial
settlement” is replaced by “mediation” in S. 89(2)(d)
 Held, contra to text of S. 89, and rightly, that terms of settlement cannot be fixed in the preliminary
hearing but are more of an outcome of an ADR process
 Disputes suitable and non-suitable for ADR
 Once pleadings are exchanged & before framing issues, parties are to be explained the choice of five
ADR and sought their views on which one they wish to choose.
 Legal Services Authority Act, 1987 and Court Fee Laws providing for refund of court fee

4. Other Legislations
Hindu Marriage Act 1955, the Special Marriages Act 1954 and the Family Courts Act 1984
Section 442 of the Companies Act 2013/the Companies (Mediation and Conciliation) Rules, 2016
Chapter IIIA (Section 12A) of the Commercial Courts, Commercial Division and Commercial
Appellate Division of High Courts Act, 2015 and the Commercial Courts (Pre-institution
Mediation and Settlement) Rules, 2018.
Most Important: Section 12A(5): “The settlement arrived at under this section shall have the
same status and effect as if it is an arbitral award on agreed terms under sub-section (4)
of section 30 of the Arbitration and Conciliation Act, 1996…”
Section 32(g) of the Real Estate (Regulation and Development) Act, 2016

5. Why Mediation Framework is
Problematic?
 Different frameworks for different types of mediation
 Compulsory mediation in certain cases (commercial disputes and family disputes) while in
other cases there is none (motor vehicles, property).
 Each operating in its own field
 Training: Specialised training depending on the kind of dispute to be handled? Family
mediations and commercial mediations might entail different skill-sets.
 No privacy in court annexed mediation in family cases- Too many people

6. Thinking Aloud: Wish list
1. Dispute Resolution Code- Holistic Dispute Resolution
2. Trained Professionals in different fields
3. Appropriateness
4. Negative incentives in litigation for rejection of settlement offers and ADR
offers
5. Government/ PSU litigation and ADR
6. Research and Standards Institution

7. 1: Dispute Resolution Code
 Alternative Dispute Resolution Code?
 CPC on the one hand & Arbitration, Mediation & Conciliation on the Other
 Central Authority for laying down best practices and standards, and conduct
research
 Specialised institutions all over the country providing various dispute
resolution services.
 Experts in different fields and from different professions
Dispute to be handled holistically.

8. 2: Professional Training
Government sponsored training institutions providing training at nominal cost/ free
 Well-trained professionals: Dispute Resolution Professionals, Counsellors, &
Managers
 Training in mediation & other ADR as a necessary requirement for, becoming advocate
Government counsels, Legal officers in PSUs, designation as senior counsel, etc.
Open not only for lawyers but professionals from different fields
 Tax incentives for mediators, advocates, mediation institutions and training institutes
 Tapping hitherto untapped sources: Corporate counsel, junior advocates, and
homemakers
 Holistic and specialized training to handle different kinds of disputes

9. 3: Appropriateness
 Certain ADR processes are more appropriate in certain cases than others
 Family disputes: Mediation
 Motor Vehicles & Insurance Disputes: Conciliation/ Ombudsman/ AI Based
 Commercial Disputes: Mediation/ Conciliation
 Cases involving serious fraud: Litigation
 List of types of disputes and appropriateness of dispute resolution process
 Is such an exercise possible?

10. 4: Negative incentives for rejection of settlement
offers and ADR offers
Settlement- in the interest of justice
 Advantages of settlement for parties & legal system is well known
 Rejection of settlement offer during litigation/ arbitration should be for right
reasons
If party rejects settlement offer but loses, costs should be awarded accordingly
See, for instance, English Law, Civil Procedure Rules: Part 36 Offers

11. 5: Government/ PSU litigation and ADR
 Government largest appellant
 Reductionist approach
How can Government settle litigations?
 Banks have OTS
 What about PSUs and others?
 Need for Government bodies to evolve settlement policies and mechanisms
 Clear guidelines balancing transparency, eliminating corruption, and enabling
amicable settlement of disputes.

12. 6: Research and Standards Institution
 Institution/ Centre of excellence focusing on research on dispute resolution
 Practical aspects
 Empirical
 Regular publications of Guidelines, Best Practices, Model Rules, Codes of
practice, Standard fee schedules, etc.
 Lay down standards (minimum or expected)
 Collection of statistics from dispute resolution bodies & institutions (legal
framework is required)
 Dispute resolution institutions should necessarily publish statistics pertaining
to disputes handled by it subject to confidentiality.

13. Mediation Related Issues
Boundaries of confidentiality & privilege: Whether applicable for:
 Prevention of physical or psychological injury?
 Prevention or revelation of commission or concealment of crime?
 Threat to a party?
 when proceedings against the mediator are filed for negligence or misconduct in mediation?
 Mediator independence, conflict of interest, and immunity
 Regulating ADR Professionals> ACI> ADRCI?

14. Mediation Related Issues- II
Private Mediation and Limitation Periods-
 bona fide efforts at settlement and amendments to the Limitation law
 Multi-tier Dispute Resolution clauses & commencement of arbitration
 Define commencement & termination
Private Mediation and Status of Settlement Agreements?
Exemption for Settlement Agreements from stamp duty
Form, content, and validity of Mediation Agreements

15. Sum Up: Whether Legislation is Required?
 Yes and no
 Dispute resolution processes are operating in islands
 Dispute is required to be seen holistically
 Concerted action to address disputes
 Need for a dispute resolution code/ ADR Code
 Mediation, Conciliation, Arbitration, Lok Adalat, and their variants
 Necessary for clarifying issues relating to mediation such as confidentiality, etc.
 Promotion of institutional Mediation
 Institutions to publish institutional statistics & statistics of ADR professionals
 Model Agreements

16. Institutions fail not because of their rules but because
people making those institutions fail those rules
Thank You