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The Impact of Mediation in India

by Arjun Pal

March 2019

Originally published on the ipleaders blog

Arjun Pal

Introduction

Mediation is a dynamically structured voluntary dispute resolution process where a neutral third party helps the disputing parties in resolving a conflict between them by using specialized communication and negotiation techniques. These techniques are in turn designed in a manner that facilitates the process of mediation and dispute resolution. The concept of mediation evolved in the latter half of the 20th century, however, the roots of mediation can be traced way back to the ancient Indian legal systems, for example, the systems known as the “Gram Panchayats” and “Nyaya Panchayats” were popular and widely prevalent in ancient rural India.[1]

However, even though these systems are still existing in many parts of rural India, the people of the country, especially the ones that were still relying on these legal systems for justice, have lost their faith in them. This is so because these Panchayats are prone to influence from the influential and powerful people residing in these areas. These influential people often use these systems to mete out justice depending on their own whims and fancies and also exercising their bias/influence in the decisions of the Panchayats. This has played a hugely negative role in the dwindling of the popularity of the Panchayat systems. In the process of addressing these concerns, the Indian government is making incessant efforts to revive these indigenous justice delivery methods by allocating funds and trying to make better rules for their reinvigorated and unbiased functioning.[2]

Mediation through the Years

The Arbitration and Conciliation Act, 1996 was the first statute to introduce the Indian legal system to mediation. Introducing Sub-section (1) of Section 30 of the Arbitration and Conciliation Act, 1996, it encourages the parties involved to explore the option of mediation and conciliation despite arbitral proceedings having started and thereby empowers the arbitral tribunal to use mediation as a means of dispute resolution. Nevertheless, due to a lack of proper enforcement (or even formation) of any specific rules of mediation, this provision promoting mediation has almost been rendered defunct. This, however, was rectified to a certain extent by the introduction of Section 89 of the Code of Civil Procedure, 1908 (introduced first in Section 30 of the Arbitration and Conciliation Act, 1996), which was concerned with exploration of the different methods of dispute resolution. Also, the notion of “judicial mediation” was first introduced by this section”[3].

Relying on this, the Court, where satisfied that the circumstances are such that the parties can try and settle their disputes amicably in ways if tried, the Court may encourage the parties to seek out the methods of mediation, arbitration and other forms of alternate dispute resolution. Despite this, unlike other statutorily-recognized forms of non-binding alternative dispute resolution there is still no concrete statute that addresses the concern of and ensures “confidentiality” in mediations in India.

It was only recently in the year 2011 that the Supreme Court of India declared that mediation proceedings were confidential in nature, and only an executed settlement agreement or alternatively a statement that the mediation proceedings were unsuccessful, should be provided to the court by the mediator[4]. It is expected that in view of this judgment, the popularity of mediation as a method of resolving disputes in India will increase. In fact, it has been noted that during the proceedings of important cases such as the one regarding the demolition of the Babri Masjid, the Chief Justice of India himself has stepped in to facilitate mediation between the warring parties[5].

Following in the same footsteps, the Law Commission of India in its 129th Report recommended that it should be made obligatory for the Court to refer disputes to mediation for settlement[6].This was referred to in the landmark case of Afcons Infra Ltd v. M/S Cherian Varkey Constructions (2010)[7].In this case, the Supreme Court of India further held that all cases relating to trade, commerce and contracts, consumer disputes and even tortious liability could normally be mediated.

Another landmark decision by the Supreme Court was arrived at on 22nd Feb, 2013 in the case of B.S. Krishnamurthy v. B.S. Nagaraj[8], wherein it directed the Family Courts to strive to settle matrimonial disputes via mediation and to also introduce parties to mediation centres with consent of the parties, especially in matters concerning maintenance, child custody, and the lot. In the few years since mediation centres in the cities of Delhi (in the year2005) and Bangalore (in the year 2007) were set up, around 30,969 cases have been through mediation process, and around 60% of these cases have been settled ever since[9]. One of the most famous recent cases where mediation was resorted to was the one (even though conciliation was rejected despite mediation) between Reliance bigwigs Mukesh and Anil Dhirubhai Ambani over the takeover of South African Telecom Major MTN.

Following this, various Supreme Court decisions in the recent past appear to point out that the Courts are gradually developing a favourable attitude towards mediation. Also, mediation seems to have become the most sought after means of dispute resolution with regards to the settlement of patent disputes. Further, it has been noticed that many Indian generic drug manufacturers are more frequently resorting to mediation as a method for dispute settlement involving “patents” including the recent famous cases of patent disputes between Hoffman La Roche and Cipla[10] (even though mediation between the two parties failed in facilitating dispute resolution) and Merck and Glenmark[11].

Usually it is expected that Generic drug companies operate whilst keeping public health concerns at top priority. However, it is also of concern that even though settlements via mediation may be mutually beneficial for the parties involved and would spare them the pain of going through lengthy legal proceedings, it might end up making the drugs manufactured more expensive for consumers in countries like India. This would definitely be disadvantageous for consumers in developing countries such as India. So, at the time of mediation, the mediator may like to address not only the interest of the disputing parties but also the concern of the parties likely to be affected by the outcome of the mediation to avoid prolonged appeals/ petitions in court.

Despite being successful in various countries, mediation has not been able to make much headway in India mainly due to the lack of awareness regarding mediation and its benefits. It does seem to appear that there has been a lack of initiative on the part of the government, including that on part of the legal fraternity to spread awareness about mediation across the country. In India, even though the judges have been quick to identify the increasing usage of mediation as a helpful means for reducing case backlogs and delays, yet, lawyers in India have not been able to respond to mediation fast enough. Also, the current court assisted mediation centers hardly cater to this aspect of reaching out to the people. However, the famous Malimath Committee Report[12]  addressed certain aspects to be kept in mind while making efforts for opening a wide range of different justice delivery mechanisms which will have long term effects in resolving and decreasing the number of disputes involving the common man. Also, the 129th Report of the Law Commission has identified certain new methods which may help facilitate the speedy disposal of cases in urban areas.

These are as follows[13]:

  • Establishing the Nagar Nyayalaya with a professional Judge and two lay Judges in the same manner as the Gram Nyayalaya and having comparable powers, authority, jurisdiction and procedure. However, the Nagar Nyayalaya will resort to mediation first and then initiate proceedings (only if mediation fails);
  • Having cases heard in Rent Courts by a Bench of Judges, minimum two in number, with no appeal but only a revision on questions of law to the district court;
  • Setting up a Neighbourhood Justice Centres involving people in the vicinity of the premises in the resolution of dispute; and
  • Conciliation court system, presently working in Himachal Pradesh.

The efficient implementation of a system like this will most definitely help in addressing the problems related to court delivery system. Such a system would also benefit the common man in a substantial way. However, even in the present day, the lawyers in India still continue to be as traditional and conservative as they have been over many years. They hardly tend to support any new changes and at the same time, hesitate while venturing into exposing their clientele to the unknown risks that may be involved in an ADR or mediation process, about which they are not well aware.

The lawyers always have an apprehension that delving into mediation would probably deprive them of income by encouraging the settlement of cases prematurely and thereby significantly reducing the legal fees that could otherwise be earned during the on-going and prolonged judicial proceedings. On, the other hand the adversarial system (current court system) too cannot be totally dispensed with. The adversarial system (involving litigation proceedings in the courts) is often the most relevant method in a many different variety of situations especially, those needing authoritative interpretation or establishment of rights or which manifest severe negotiating imbalance. It is also required as one of the last resorts of dispute resolution. However, its haphazard and unchanging application across a wide range of conflict ridden situations is a major cause of the several maladies beleaguering the Indian legal system.[14]

It has been noticed that up till now mainly companies and institutions in the field of insurance, banking and trading have relied on mediation and ADR as means of settling disputes. Hence, encouragement is very much needed for making provisions mandatory for ADR especially mediation to be used as the most commonly sort after means of dispute resolution is much needed. Awareness has to be aimed at the common people with countrywide publicity in various media. Thus, there is an urgent need to identify people or community-based initiatives for taking up the cause of spreading awareness about mediation across the country. It now seems that we need new ways of looking at conflict resolution and the legal profession and hope that we discover a new way that will help in bridging bonds between the ethics of practice, the values of the law and the demands of public policy. The process has started, but slowly. Creating awareness in the society of the mediation process and its benefits, and developing capacities for the same will help expedite the shift from adversarial litigation to methods of alternate dispute resolution in a big way. This will also help in reducing the backlog of long pending cases in Indian courts and usher in a new era.

ENDNOTES

[1] Anil Xavier, Mediation: It’s Growth and Origin in India, available at http://www.arbitrationindia.org/pdf/mediation_india.pdf

[2]Madhu S, Mediation in India, available at http://cppradr.blogspot.in/2008/07/mediation-in-india.html

[3] www.indialawjournal.com/volume4/issue_1/article_by_desia_kanuga.html

[4] Held in the case of, “Moti Ram (D) Tr. LRs and Anr. Vs Ashok Kumar and Anr (Civic Appeal No. 1095 of 2008)”

[5] Dr M. Ismail Frauqui And Ors. vs Union Of India (Uoi) And Ors AIR 1995 SC 605

[6]http://practicalacademic.blogspot.in/2012/08/guest-post-mediation-and-conciliation.html.

[7] 2010 (8) SCC 24

[8] S.L.P. Civil) No(s).2896 OF 2010

[9]Forbes India, Mediation in Indian Courts, available at http://www.forbes.com/2010/09/28/forbes-india-judiciary-encouraging-mediation-reduce-baclog.html

[10] F.Hoffman La Roche Ltd. and Anr v. Cipla Ltd. 2015 SCC OnLine Del 13619 : (2015) 225 DLT 391 (DB)

[11] Glenmark Pharmaceuticals Limited v. Merck Sharp and Dohme Corporation and Anr 2015 (6) Supreme Court Cases 807:2015 SCC OnLine SC 493

[12] lawcommissionofindia.nic.in/reports/report238.pdf

[13] lawcommissionofindia.nic.in/101-169/report129.pdf

[14] http://lawcommissionofindia.nic.in/adr_conf/sriram17.pdf

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