Is mediation an efficacious mechanism to Resolve disputes in the current scenario?

What is an alternative dispute resolution system?

An alternative dispute resolution system which is commonly called as ADR, signifies the concept of dispute settlement outside the Court. It is the process in Law which encourages the parties to settle their disputes by mutual consensus or by mediation where an impartial third person intervenes.

The ADR as a whole provides various processes by which the parties without, going through the regular court procedure, get their disputes resolved. The mechanism is applied to majorly civil, commercial, and family disputes.

The ADR is a non-adversarial system in dispute resolution. The working is by the equal cooperation of both parties. Unlike in litigation, once the dispute is resolved in ADR, both parties are benefitted.

ADR plays a prominent role in reducing the burden of the Court. The courts today are overburdened with lakhs and lakhs of pending cases. From the moment ADR came into the picture as a mechanism to resolve disputes in an amicable way, the courts to a reasonable extent have seen a reduction in the overburdening.

The prominent types of the mechanism are;

1. ARBITRATION
2. CONCILIATION
3. MEDIATION
4. NEGOTIATION

All these shall be discussed separately and more importance would be given to the concept of “Mediation”.

Arbitration[1]

Under this type, the dispute is referred to the Court which makes an arbitral award which has a binding effect. This court does not have strict rules of evidence as followed in normal trial courts.

Arbitration takes place only when both parties to the dispute consent to it. In cases of contractual matters, an “arbitration clause” is inserted. In the absence of the clause, an agreement to that effect will ensure a referral.

The parties choose the arbitrator. It also invariably ensures confidentiality. Access to confidential documents and other related aspects of the dispute are kept confidential.

These are a few main benefits and principles of arbitration.

International perspective of arbitration[2]

A Permanent Court of Arbitration, which was composed of a panel of jurists was established at The Hague in 1899.

Twenty cases were arbitrated between 1902 and 1932, but from that year until 1972 only five cases were dealt with because the importance of the Permanent Court of Arbitration was diminished by the establishment of the Permanent Court of Justice and its successor, the International Court of Justice.

Recently, the International Court of Arbitration, which was originally created for the settlement of disputes between states, has offered its services for the arbitration of controversies between states and individuals or corporations. By the beginning of the 21st century, the court had arbitrated more than 10,000 disputes.

International treaties and arbitration provisions

There are numerous multilateral treaties that provide for the settlement of international disputes by arbitration, which includes the Geneva General Act for the Settlement of Disputes of 1928. The act provides for the settlement of various disputes, after unsuccessful efforts at conciliation, by an arbitral tribunal of five members. Other treaties include the General Treaty of Inter-American Arbitration, signed in Washington, D.C., in 1929, and the American Treaty on Pacific Settlement of Disputes, signed in Bogotá, Colom., in 1948.

The Council of Europe adopted the European Convention for the Peaceful Settlement of Disputes (1957). Arbitration is also mentioned as a proper method of settling disputes between countries in the Charter of the United Nations, as it was in the Covenant of the League of Nations.

An award rendered by an arbitral tribunal is customarily complied with by states. In fact, unless a state is prepared to comply with an adverse decision, it generally will not submit the dispute to arbitration.

Few eminent organisations which work towards arbitration

• Indian Council of Arbitration(ICA)
• International Chamber of Commerce(ICC)
• Federation of Indian Chamber of Commerce & Industry (FICCI)
• World Intellectual Property Organisation(WIPO)
• The International Centre for Alternative Dispute Resolution(ICADR)
• London Court of International Arbitration(LCIA)

Law on arbitration in India – Arbitration and Conciliation Act, 1996 

The concept of Arbitration in India works on the principles laid down under Article 39A (justice, legal aid and speedy trial) of the Indian Constitution and Section 89 (settling disputes by way of ADR) of the Code of Civil Procedure, 1908.

Earlier, the law on arbitration was discussed under three acts which eventually became outdated. As a result of which the bodies of trade and industry and experts of arbitration proposed amendments to make the Act at par with the needs of the society and the prevailing situations.

It was felt that the economic reforms in the country can be dealt with only if domestic and international commercial disputes and their settlement are within the ambit of the reforms that will be taken. The United Nations 1985 adopted the Model Law on International Arbitration and Conciliation and asked all the countries to give due importance to it. This resulted in the enforcement of the said Act i.e. Arbitration and Conciliation Act, 1996.

Conciliation[3]

This is a form of arbitration which is less formal in nature than arbitration. In this type too, an impartial third party comes in to assist the parties in dispute in reaching a mutual settlement.

In this type, a point to be noted is, the recommendations given by the conciliator, are not binding. The parties can either accept or reject the recommendations.

But if the parties accept the settlement which is drawn by the conciliator, in that case, the decision shall be final and binding on the parties.

More than the legality, in conciliation, agreeing to a settlement depends upon the frame of mind of the parties and the ability of the conciliator.

International conciliation

International conciliation, the diplomatic mode of dispute settlement in which the third party conciliator or conciliation commission has the most pronounced effect on the process, has been defined by the author Cot as:

“Intervention in the settlement of an international dispute by a body having no political authority of its own, but enjoying the confidence of the parties to the dispute and entrusted with the task of investigating every aspect of the dispute and of proposing a solution which is not binding on the parties”. 

Though the definition was made in the context of international conciliation between states, it can be applied equally to international conciliations involving non-state entities also. Conciliation has been used to resolve disputes on questions of law, the facts, or a combination of both. It can be utilized in the settlement of disputes that involve non-arbitrable or non-justiciable issues and is generally not disturbed by jurisdictional challenges.

In Conciliations involving international business disputes, the parties can avoid the uncertainties involved in designing their own rules by agreeing that the process will be governed by institutional rules such as the rules of the International Chamber of Commerce Conciliation or the rules United Nations Commission on International Trade Law (UNCITRAL) on Conciliation.

In the international economic sphere, conciliation is either structured according to its traditional format or particular aspects of the concept are used.

Mediation[4]

A type wherein a neutral/impartial third person steps in to assist the parties in dispute, to reach a settlement, to which both the parties will agree.

The decision is taken by the parties themselves and not by the mediator. The mediator’s role is to only assist the parties

What is fair and right is not decided by the mediator. He neither blames nor gives any opinion on merits. He takes steps to remove the obstacles that fall in the way of reaching a smooth settlement.

He also maintains confidentiality of the mediation proceedings.

Mediation in international disputes[5]

In order to make mediation a powerful alternative in order to resolve various disputes among the parties the tool of mediation adopted to by various international firms, are:

• The International Chamber of Commerce.
• The Singapore International Arbitration Centre.
• International Mediation Institute.
• Indian Institute of Arbitration and Mediation.

Mediation has played a huge role in resolving various International conflicts throughout the globe and has a rich history in resolving the Disputes of various countries like Britain, Nigeria and Peru. The “Acta De Brasailia” was signed in the year 1998 to resolve the dispute between Ecuador and Peru. Wherein Brazil, Chile, Argentina and the United States played a third part role in order to assist the parties in disputes. The purpose of the said agreement was to create peace or adjacent zones of ecological protection, on both sides of the border in the said region of Cordillera del Condor.

Nigerian Civil War: In the Nigerian Civil War that took place in the year 1967-1970 in which various great leaders like Quakers Adam Curle, John Volkmar and Walter Martin acted as Mediators and help to maintain the situation and reduced the tension amongst the parties in dispute, that worked effectively in order to reach down to an effective solution that helped to end the war.

Negotiation[6]

The most common practice under the ADR is negotiation. The parties who choose this type, try to get their disputes resolved without the interceding of a third party.

The conclusion arrived at, by following this method, is non-binding in nature.

This type is generally resorted to, by parties who have disputes which include business matters, family matters, etc.

History of mediation

The concept of mediation took birth in ancient times. It developed in Ancient Greece (which knew the non-marital mediator as a proxenetas), then in Roman civilization. (Roman law, starting from Justinian’s Digest of 530–533 CE) recognized mediation. The Romans called mediators by a variety of names, including internuncius, medium, intercessor, philantropus, interpolator, conciliator, interlocutor, interpret, and finally mediator.

Following the war against Rome, the Kushites sent mediators to Augustus, who was in Samos, and in the year 21/20 BC, a peace treaty was concluded.

In countries like China, Japan, etc. mediation is a means to resolve interpersonal conflicts. The most known structure of mediation found in the United States is in Labor-Management relations. The 1960s saw the growth of strife, conflict, and discontent on many fronts in America. In order to handle this situation dispute settlement alternatives to the courts were introduced as they were cost-effective means for addressing the demand. Mediation became in specific a widely used means for domestic relations cases.[7]

Now mediation is a form of professional service, and mediators are professionally trained for mediation.

In the UK mediation has seen a rise as a service since the Children and Families Act 2014 made it compulsory for separating couples to go through a Mediation Information and Assessment Meeting (MIAM) before a hearing in the Court.

History of mediation in India

In India, the theory of mediation dates back to the periods of Ramayana and Mahabharata.

In the epic Ramayana, we come across the situation where, Lord Rama sends Hanuman as his messenger to Lanka in order to avoid war between him and Ravana, as the latter had kidnapped the former’s wife. Hanuman tried his best to mediate. There started the concept of mediation.

Similarly in the Mahabharata, When the Kauravas refused to give Pandavas, their share in the property, Lord Krishna went as the latter’s peace messenger to stop the war between the brothers. Here again, Lord Krishna played the role of a mediator. This particular instance has been cited by many esteemed judges in prestigious events which involved mediation topics.

It is always said that a weapon is neither good nor bad. It is impartial. The importance lies in who uses it and for what purpose it is used. The instance that shows this statement is the incident that happened between King Porus and Alexander the Great. Alexander sent a messenger to Porus to mediate and make the latter surrender.

Mediation during the pre-British era

Several years before the British’s arrival in India, mediation was conducted as informal panchayats. The elders of the Village would act as the mediators and resolve the disputes. Panchas or Pancha parameshwars were the neutral third parties who took up the role of mediators.

Mediation during post-British era

After the British had come into the nation, mediation began to be recognized as a formal and legalized ADR mechanism. In the year 1987, Mediation gained more prominence as an ADR mechanism, with the re-introduction of Lok Adalats in the Indian Judicial System. The Legal Services Authority Act gave statutory status to the Lok Adalats in India for the first time. Under this act, the decision of the Lok Adalats has been awarded the same status as that of a civil court.

The development of mediation as an ADR mechanism can also be attributed to section 89 of the Code of Civil Procedure, 1908 which was inserted by the CPC (Amendment) Act, 1999 with prospective effect from 01.07.2002. Another big development of mediation is the decision of the Hon’ble Supreme Court in SALEM ADVOCATE BAR ASSOCIATION VS. UNION OF INDIA[8], in this case, the Court held made it mandatory for the courts to refer cases to alternative forums if they were so pleased. In the Landmark case of AFCONS INFRASTRUCTURE LTD. AND ORS. VS. CHERIAN VARKEY CONSTRUCTION CO. (P) LTD. AND ORS.[9]

While examining Section 89 of the CPC, 1908, the Apex Court held that “having regard to the tenor of the provisions of Rule 1A of Order 10 of the CPC, the civil court should invariably refer cases to the ADR process, except in certain recognised excluded categories of cases“. It went on to state that “where the case is unsuited for reference to any of the ADR processes, the court will have to briefly record the reasons for not resorting to any of the settlement procedures prescribed under Section 89. Consequently, it is mandatory to have a hearing after completion of pleadings to consider recourse to an ADR process under Section 89, but actual reference to an ADR process in all cases is not mandatory“. 

In K. SRINIVAS RAO VS. D.A. DEEPA[10], The Court while examining a divorce matter held that “even criminal courts could refer to mediation cases where a complaint has been filed under Section 498-A of the Indian Penal Code, 1860. The Supreme Court further directed all mediation centres to set up pre-litigation desks or clinics to settle matrimonial disputes at the pre-litigation stage“. According to data from the Bangalore Mediation Centre, between 2011 and 2015, 31441 cases were referred for mediation, which amounted to 4.29% of the cases freshly instituted in the Bangalore High Court (Vidhi Mediation Report 2016, 11).

As per the Mediation and Conciliation Centre of the Delhi High Court, during the same period, 13646 were referred for mediation, which amounted to 2.66% of the total number of cases in the Delhi High Court. Finally, data for Allahabad High Court Mediation and Conciliation Centre reveals that during 2011-2015, 11618 cases were referred for mediation. These constituted 0.85% of the cases freshly instituted in the Allahabad High Court. 

Statutory mediation 

Since mediation is a method of alternate dispute resolution it means that the traditional process of litigation which is usually a long-drawn and costly struggle, need not be taken up by parties and this is the most appealing quality of ADR.

Since courts in India are already burdened by a huge backlog of cases, there are many statutory provisions that make mediation a compulsory prerequisite to filing a suit in court. Some of these statutes are:

• Industrial Disputes Act, 1947 – Section 4 of the Act assigns conciliators the responsibility to mediate and settle industrial disputes and prescribes the procedure to be followed in great detail.
• Code of Civil Procedure, 1908 – The Code was amended in 2002 which provided for the reference of all pending court cases to mediation. The amendment also prescribes mediation for all family and personal matters due to their sensitive nature.
• Companies Act, 2013 – Section 4 provides for the referral of disputes to mediation by the National Company Law Tribunal and the Appellate Tribunal.
• Micro, Small and Medium Enterprises Development Act, 2006 – The Act mandates mediation and conciliation when disputes arise.
• Hindu Marriage Act, 1955 and Special Marriage Act, 1954 – As the courts have stated before, disputes relating to marriage and divorce are more likely to be referred to and settled by mediation so the provisions under these Acts are in consonance with the same.
• Real Estate (Regulation and Development) Act, 2016 – Section 32(g) provides for the amicable settlement of disputes through an established dispute resolution forum.
• Commercial Courts Act, 2015 – The new amendment made to the Act in 2018 provides for mandatory mediation between parties before the filing of a suit. The amendment allows litigation only if the parties meaningfully engage in mediation proceedings and still fail to resolve the matter.
• Consumer Protection Act, 2019 – The new rendition of the Consumer Protection Act dedicates an entire Chapter to the resolution of disputes through mediation first before approaching the consumer forum.

Other acts and amendments

1. Civil Procedure ADR and Mediation Rules 2003 of the Madras High Court
2. Delhi Mediation and Conciliation Rules, 2004
3. Bombay High Court ADR Rules, 2006
4. Amendments to the Companies act, 2013 and Commercial courts act, 2015

The Hon’ble Supreme Court of India also has laid down guidelines for Mediation and has also arranged training for Mediators.

Lawyers, Judges, bureaucrats and other trained people in the field of mediation play the role of mediators in resolving disputes and also act as the human means to promote Mediation.

Benefits of mediation

1. Cost

The mediation procedure generally takes less time than a normal case’ procedure. A regular trial may last for even years which also tells that more money is required. Whereas, in mediation, the resolution can be got even in a few hours. Therefore less time, less money.

2. Confidentiality

A regular trial happens in open court whereas while mediation proceedings happen confidentiality is maintained. Only the mediator and parties to the dispute are present. Strict maintenance of privacy and confidentiality instils confidence in the minds of parties as well as persons who wish to resort to mediation.

3. Control

Unlike in litigation, there would be an increase in the control that the parties have over dispute resolution. In litigation, it would be the Judge/presiding officer who would have the control.

4. Mutuality

Parties when they decide to resort to mediation, get ready to work mutually towards a single resolution. Both the parties to the dispute, go to the grass root level to ascertain the problem & try to come up with a solution which would benefit both parties.

5. Support

Mediators are trained experts. The impartial way of acting and guiding the parties supports the parties not only in a technical way but also in a way which makes the parties go beyond the box to come up with solutions which have a wider ambit.[11]

Mediation in commercial and family matters

Commercial matters 

The Commercial Courts Act, 2015 was enacted with the Goal of achieving speedy adjudication of Commercial Disputes. Moreover, the Commercial Courts (Pre Institution Mediation and Settlement) Rules, 2018 were also framed with the aforesaid act for the purpose of resolving the matters relating to commercial disputes in an efficacious and expeditious manner.

As per the said enactments, all disputes falling within the definition of “Commercial Dispute” under Section 2(1)(c) of the Commercial Courts Act, which are valued at Rupees 3 Lakhs or more, shall not be instituted unless the plaintiff mandatorily exhausts the remedy of Pre-Institution Mediation, to be conducted by the Legal Services Institutions. Accordingly, Legal Services Institutions are conducting Pre Institution Mediation in respect of Commercial Disputes across the country.

Section 12A of the said act talks about Pre-Institution Mediation and Settlement. As per this provision, the plaintiff must exhaust the remedy of pre-institution mediation unless there is an urgent need for interim relief. 

Family disputes

The family mediator assists the parties to the dispute to reach a settlement to which both parties agree, by encouraging communication. The family law system encourages mediation which can be done in various ways like bringing in a family member or friend to help, informal general meeting or using a special mediation process covered under Australian Legislation The Family Law Act, 1975 known as Family Dispute Resolution in which a practitioner helps people resolve their dispute and he is not related directly to any of the parties. 

There are references to mediation/conciliation in family dispute resolution which are present in Family Courts Act, 1984, Civil Procedure Code, Hindu Marriage Act and the Legal Services Authorities Act, 1987 that gives a special status to Lok Adalats as it has been very effective in resolving family disputes.

Relevance of mediation in today’s scenario and the legal backing[12]

In this paper, we extensively analyzed the current scenario wherein the Courts are overburdened with lakhs and lakhs of cases. The cases are more in number than Advocates or Judges. We also understood, what is ADR and its types. We discussed elaborately the concept of Mediation.

Mediation is a process which benefits numerous persons. It helps the parties to reach a smooth settlement. It helps the courts in reducing the burden of cases. More than, everything, when parties in litigation appear before the Court of Law, they neither talk to each other nor is there any way out for a settlement and smooth relationship. Unlike in that, during mediation the parties deliberate and agree to a common settlement which benefits both parties.

Considering the order of the day, it is very much required for the system to adopt Mediation as a mechanism and use it in as many places as possible to reduce the burden of the Courts by resolving disputes outside the Court. We also had an insight into how mediation evolved from its ancient roots and what form has mediation taken today. Statutory mediation, the mediation Bill, the role that mediation plays in commercial and family disputes, etc. Therefore it is understood and felt that mediation is an efficacious mechanism to resolve disputes in the current scenario provided fit support is provided to it thereby making it more accessible to all.

References

[1] https://www.wipo.int/amc/en/arbitration/what-is-arb.html#:~:text=Arbitration%20is%20a%20procedure%20in,instead%20of%20going%20to%20court.

[2] https://www.britannica.com/topic/arbitration/International-arbitration

[3] https://www.dispute-resolution-hamburg.com/information/conciliation

[4] https://www.jamsadr.com/mediation-defined/

[5] https://enhelion.com/blogs/2020/11/22/role-of-mediation-in-resolving-international-disputes/

[6] https://www.investopedia.com/terms/n/negotiation.asp

[7] https://www.ojp.gov/ncjrs/virtual-library/abstracts/mediation-overview-history-and-dimensions-practice

[8] Writ Petition (civil)  496 of 2002

[9] (MANU/SC/0525/2010)

[10] (2013) 5 SCC 226

[11] https://drcourt.org/wp/faqs/why-is-mediation-important/

[12] https://mediationmantras.com/about-mediation/#:~:text=This%20system%20continues%20even%20today,form%20of%20alternate%20dispute%20resolution.

By: S. Sriram, a student at B.M.S. College of Law, Bangalore.