How The New Mediation Bill Will Impact Dispute Resolution In India?


Mediation refers to intervention in a dispute. When a third party, usually neutral with no interest in the matter is invited to help solve the debate or discussion. Mediation becomes especially important where businesses are involved and the nature of the dispute is sensitive in nature.

In a country like India where the courts have a long list of pending cases, mediation is a helpful alternative. With this view, the Mediation Bill was introduced in December 2021. What is the bill about, how will it benefit Indians and is it even effective? Let us find out.

What is the Mediation Bill?

In December 2021, the Union Law Minister put together the draft for a Mediation Bill. A first of its kind in India, it is meant to ease up and smoothen the process of mediation leading to the quicker settlement of disputes. There are many different features that there will be if the bill comes into force. For starters, there will be a mediation council with members that will aid in the mediation process. Another aim of the Mediation bill is to make the process of mediating disputes, of any sort, popular without approaching the legal system.

The Mediation Bill 2021 was introduced in the Rajya Sabha in December 2021 but faced opposition. Thereafter, the bill was forwarded to the Committee on Law and Justice. To fully understand the scope of the bill, let us explore each of its features.

Why Was The Mediation Bill Introduced?

The Mediation and Conciliation Project Committee of the Supreme Court stated that mediation is a tried and tested method to settle disputes. Currently, there are no rules for mediation in India making the need for such a bill high. There are, instead, provisions for mediation in different acts. For instance, mediation has been mentioned in the Code of Civil Procedure 1908, Companies Act 2013, Commercial Courts Act 2015, Consumer Protection Act 2019, etc. Another reason, as stated by the committee for the requirement of such a bill is that India is signed onto the Singapore Convention on Mediation. This makes the requirement for a proper bill for international and national dispute settlement through mediation high.

Features of the Mediation Bill

The Mediation bill has several tiny features and details that must be fully explored to understand the bill.

Definition: Under section 2 of the mediation bill, there has been introduced the concept of domestic mediation means both of the parties to the mediation must be residents of India. International mediation where one or both parties reside in a different country can also take place provided the businesses in question have limited liability.

Pre-litigation mediation: Another important but essential part of the mediation bill is the concept of pre-litigation mediation. These are a set of steps that must be taken before the parties approach the courts. Additionally, the pre-litigation mediation steps must be taken even if there is no mediation agreement. During this stage, even if no common ground can be reached, the mediatory party can recommend mediation if a request is made for the same.

Disputes not made for mediation: The mediation bill states that not all disputes can be mediated. It further continues with a list of disputes or arguments that are not fit for mediation. Topics related to minors or where one party is of unsound mind or a dispute related to matters of tax or criminal cases are not eligible for mediation. This is not the final list and the Government can update this list as and when they deem fit.

Application: As already mentioned above, the mediation bill applies to any case where both parties are Indian or if one or both parties live in another country. For the latter, the dispute has to be commercial in nature to be eligible for mediation. Another situation where mediation compulsorily applies is when there is a specific mediation agreement. Presently, only commercial disputes are eligible for mediation. The Government can change this aspect later if they wish to.

Process of mediation: The entire mediation process is done in confidential environments. There will be two sessions initially and parties can withdraw after the first session if they wish to. The bill allows a period of 180 days from the start to the end of disputes. However, both parties can request an extension to this 180-day period with mutual agreement. A mediation that takes place per court order must be carried out per the court-stated guidelines.

Mediators: For any mediation process, there must be mediators appointed. The mediator can be anyone both parties agree to or a mediation service provider. If there is a conflict of interest regarding the mediator chosen, it must be stated. Thereafter, the mediator will be replaced.

Mediation Council of India: One of the central aspects of the mediation bill is the appointment of a mediation council which the central government will put together. The council will have one chairperson, two members in a full-time capacity who have experience in mediation, and three members with a part-time member from an industry. This council will primarily be helping with the registration of the mediators, and recognize and recommend mediation institutes as and when needed.

Community Mediation: In case of disputes that affect the peace of an entire community or the residents of a locale, community mediation is recommended. Mediation in this case will be headed by three people where one is a person respected or has considerable standing in the locality.

Mediation Agreements: Throughout the mediation bill there are mentions of the mediation agreement. The agreement is signed after the mediation is settled and both parties sign it. This is final and binding on both parties. It can, however, be challenged if there is sufficient cause for it such as fraud, corruption, impersonation, or if the dispute was not fit for mediation.

Is the Mediation Bill Effective?

The experts of Lex Solutions, a legal firm in Chandigarh stated that the mediation bill is quite effective in India. The mediation bill is quite revolutionary in what it finally hopes to achieve. Through mediation, hopefully, the massive backlog of court cases can be cleared up. Moreover, studies have shown that disputes that are primarily commercial in nature can be solved through mediation. However, there are many areas where more clarification or work needs to be done. For instance, there is not enough information in the bill regarding the mediation service providers, what their powers would be, and their limitations.

While the mediation bill is for commercial disputes like property disputes in India or business-related matters, the same can be extended to personal disputes as well. Approaching one of the many top law firms in Chandigarh for help regarding mediation in any matter is helpful with or without the mediation bill.

For any legal cases or mediation help, individuals must approach one of the best law firms in Chandigarh, Lexsolutions. With their team of highly educated and experienced lawyers, one can expect the desired outcome.

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