Source: The Hindu 

Introduction 

In the recent monsoon session of Parliament, both Houses passed the Mediation Bill, 2023, and upon receiving the assent of the President of India on 15th September 2023 to be known as the Mediation Act, 2023 . This law aims to encourage people and businesses to solve their disputes through mediation before going to court. Mediation is a way for disagreeing parties to work out their problems with the help of a neutral person, instead of fighting it out in court. This new law is part of a bigger effort to make solving disputes easier and faster in India. 

What is Mediation? 

• Mediation is a voluntary process where disputing parties try to resolve their conflicts with the help of a neutral third party called a mediator. 
• The mediator doesn't impose solutions but creates a supportive environment for the parties to find their own resolution. 
• It's a flexible process without strict procedural rules, allowing parties to communicate openly and work towards a mutually acceptable agreement. 
• Mediation is part of Alternative Dispute Resolution (ADR) methods, aiming to settle disputes outside of formal court proceedings. 
• In India, mediation has roots in traditional practices like the panchayat system and has been legally recognized through various laws, including the recent Mediation Act 2023. 

Mediation Act 2023 

• Scope and Application: 
  • The Act applies to mediations conducted in India where:  
    • All or both parties reside or are incorporated in India  
    • The mediation agreement specifies resolution under this Act  
    • It is an international mediation 
    • One party is a government entity and it pertains to a commercial dispute 
    • Any other dispute notified by the government 
• Pre-litigation Mediation: 
  • Parties may voluntarily undertake pre-litigation mediation before filing civil or commercial suits 
  • Pre-litigation mediation is mandatory for commercial disputes of specified value 
  • Mediators for pre-litigation mediation must be registered with the Mediation Council or empaneled by court-annexed mediation centers/legal services authorities 
• Mediation Process: 
  • Mediation shall be completed within 120 days, extendable by 60 days with parties' consent 
  • The mediator shall assist parties in an independent, neutral and impartial manner 
  • Mediation proceedings are confidential 
  • No audio/video recording of mediation proceedings is allowed 
• Mediated Settlement Agreement: 
  • A mediated settlement agreement signed by parties and authenticated by the mediator is final and binding 
  • It can be challenged only on grounds of fraud, corruption, impersonation or relating to disputes not fit for mediation 
  • Challenge must be made within 90 days of receiving the agreement 
• Mediation Council of India: 
  • Established as a body corporate to regulate and promote mediation 
  • Functions include laying down guidelines for mediator certification, registration of mediators, recognizing mediation institutes, etc. 
• Online Mediation: 
  • Can be conducted with written consent of parties 
  • Shall ensure confidentiality and integrity of proceedings 
• Community Mediation: 
  • For disputes likely to affect peace and tranquility in a locality 
  • Panel of 3 community mediators to be appointed 
  • Settlement agreement not enforceable as court decree 

What are the Advantages of Mediation Act 2023  ? 

• The Act aims to significantly reduce the burden on Indian courts by encouraging pre-litigation mediation, potentially decreasing the filing of frivolous claims and promoting efficient dispute resolution. 
• It provides a comprehensive legal framework for mediation, including the establishment of the Mediation Council of India, which enhances the credibility and professionalism of mediation services across the country. 
• The Act grants Mediated Settlement Agreements the status of court decrees, ensuring their enforceability under the Code of Civil Procedure, 1908, thus providing a strong incentive for parties to engage in mediation. 
• By recognizing various forms of mediation, including online and community mediation, and ensuring confidentiality of proceedings, the Act promotes flexible, cost-effective, and relationship-preserving dispute resolution methods. 
• The Act aligns India with international practices in alternative dispute resolution, potentially positioning the country as a global hub for commercial dispute resolution. 

How Does the Mediation Act, 2023 Enhance Institutional Mediation and Position India as a Global Hub for Dispute Resolution? 

• The Mediation Act, 2023 emphasizes institutional mediation in India, mirroring the recent amendments to the Arbitration and Conciliation Act that prioritized institutional arbitration for dispute resolution. 
• The Act introduces the concept of "mediation service providers," which are entities authorized to offer not only mediator services but also the necessary facilities, secretarial assistance, and infrastructure for efficient mediation proceedings. 
• These mediation service providers are analogous to arbitration institutions, creating a parallel structure for mediation that aligns with the established framework for institutional arbitration in India. 
• Many existing arbitration institutions in India, which already offer mediation services comparable to global standards, are expected to play a crucial role in advancing India's mediation landscape under the new Act. 
• By strengthening both institutional arbitration and mediation, the Act aims to position India as a comprehensive global hub for commercial dispute resolution, encompassing various alternative dispute resolution mechanisms. 

What are the Important Provisions of Mediation Act, 2023? 

• Mediation Agreement (Section 4):  
  • This section defines what constitutes a mediation agreement, its format, and how it can be recorded. It's important because it establishes the legal basis for mediation proceedings. 
• Pre-litigation Mediation (Section 5):  
• This is a crucial section as it introduces the concept of voluntary pre-litigation mediation. It allows parties to attempt mediation before filing a suit in court for civil or commercial matters.  
  • Voluntary nature of pre-litigation mediation 
  • Special provisions for commercial disputes of Specified Value 
  • Types of mediators who can conduct pre-litigation mediation 
  • Specific provisions for mediation in motor vehicle accident compensation cases 
• Disputes Not Fit for Mediation (Section 6): 
  • This section is important as it outlines what types of disputes cannot be resolved through mediation. It refers to an indicative list in the First Schedule of the Act. 
• Power of Court to Refer Parties to Mediation (Section 7): 
  • This section gives courts and tribunals the authority to refer parties to mediation at any stage of proceedings, even if pre-litigation mediation was unsuccessful. It also allows for interim orders to protect parties' interests during mediation. 
• Appointment of Mediators: (Section 8) 
  • Parties can agree on a mediator of any nationality, though foreign mediators must meet specified qualifications. 
  • Parties are free to agree on the mediator and appointment procedure. 
  • If parties don't agree, the initiating party can apply to a mediation service provider for appointment. 
  • The service provider must appoint a mediator within 7 days, either as agreed by parties or from their panel. 
• Termination of Mediator's Mandate: (Section 11)  
  • A mediation service provider can terminate a mediator's mandate upon:  
    • a) Receiving an application from a party 
    • b) Learning of a conflict of interest  
    • c) The mediator's withdrawal 
  • For conflict of interest, termination occurs after a hearing if there's justifiable doubt about the mediator's impartiality and a party desires replacement. 
• Replacement of Mediator: (Section12)  
  • In non-institutional mediation, parties have 7 days to appoint a new mediator after termination. 
  • For institutional mediation, the service provider must appoint a new mediator from their panel within 7 days of termination. 
• Territorial Jurisdiction (Section 13):  
  • This section establishes where mediation can take place and allows for online mediation or mediation outside the court's jurisdiction with mutual consent of the parties. 
• Commencement of Mediation (Section 14): 
  • Defines when mediation proceedings are deemed to have started, which is crucial for legal timelines. 
• Conduct of Mediation (Section 15):  
  • The mediator's role and the principles guiding the mediation process, emphasizing impartiality and confidentiality. 
• Time-limit for Completion of Mediation (Section 18): 
  • Sets a 120-day limit for mediation, extendable by 60 days, providing a clear timeframe for the process. 
• Mediated Settlement Agreement (Section 19): 
  • Defines what constitutes a valid mediated settlement agreement and how it should be documented. 
• Registration of Mediated Settlement Agreement (Section 20): 
  •  Allows for optional registration of settlement agreements, which can be important for enforcement. 
• Confidentiality (Section 22): 
  • Ensures the confidentiality of the mediation process, which is crucial for open and honest communication between parties. 
• Admissibility and Privilege Against Disclosure (Section 23):  
  • Protects the confidentiality of mediation communications in other legal proceedings, with some exceptions. 
• Termination of Mediation (Section 24):  
  • Specifies the conditions under which mediation proceedings are considered terminated. 
• Cost of Mediation (Section 25):  
  • How the costs of mediation are to be shared between parties. 

Conclusion  

The Mediation Act sends a clear message that courts should not be the first choice for solving business disputes. It puts mediation and arbitration (another way of solving disputes outside court) on equal footing. The law promotes professional mediation services, like arbitration. This change is expected to help solve disputes more quickly and easily, while reducing the workload on Indian courts.