01 August 2019

By Sumedh Yasaswi, Research Associate , Atharva Legal.

The Union Cabinet chaired by the Prime Minister has approved the signing of the United Nations Convention on International Settlement Agreements (UNISA) scheduled to be held in Singapore on 7th August 2019, or at the United Nations Headquarters. The current convention will more or less be the New York Convention on Arbitration equivalent of Mediation and is indeed a huge boost to the field of Alternate Dispute Resolution. The convention is being welcomed all across the world owing to the fact that mediation is increasingly used in international and domestic commercial practice as an effective alternative to litigation. Countries also note that the use of mediation results in significant benefits, such as reducing the instances where a dispute leads to the termination of a commercial relationship, facilitating the administration of international transactions by commercial parties and producing savings in the administration of the states.

The Buzz of Mediation in India

The topic of Mediation has recently gained prominence after the Supreme Court referred to the Ayodhya Dispute for mediation. On 5th March, 2019, a 2-judge bench of the Supreme Court asked the government to examine the feasibility of setting up a Motor Accident Mediation authority in every district so that road accident claims can be settled in a speedy and amicable manner. Until these two instances, mediation, although a term known to everyone, was never given the importance it deserves.

Mediation in India

Mediation finds mention in multiple statutes in the Indian context and can be broadly classified into pre-litigation (or private mediation) and post-litigation mediation. Private mediation, as the name suggests is when parties decide to mediate their dispute and agree to bind themselves to the outcome of the mediation settlement. This found mention in K. Srinivas Rao
v. D.A. Deepa6, a family dispute case where the court observed that chances of a successful resolution are higher when parties opt for mediation at the earliest. Statute based mediation finds mention in various statutes such as section 89 of the Code of Civil Procedure, 1908, The Industrial Disputes Act, 19477 and the Companies Act, 20138 and arguably the Arbitration and Conciliation Act, 1996. However, its nature is more in the nature of conciliation than mediation itself.

The Benefits of Mediation

The main reasons why parties should opt for mediation are as follows:

1. Confidentiality: Confidentiality is the cardinal principle of mediation. The terms of mediation
   are set by the parties themselves and nobody except those privy to the mediation process will
   come to know about the on goings of the activity.
2. Control: The next important benefit involved in a mediation exercise is the control that the
   parties enjoy over the process. Its outcome, terms, procedure are entirely decided by the parties and not any third person like a judge or any other supervisory authority. The mediator is merely a facilitator of discussion and does not in any way influence the outcome of a mediation agreement. Therefore, parties exercise complete control over the outcome of the case.
3. Cost: The cost of mediation is extremely economical as compared to the courts or arbitration
   proceedings. There is significantly lesser filing involved as well.
4. Time: Another important benefit is the time. It is said that on an average, smaller cases take
   only about 2 hours to be mediated and the bigger cases range anywhere to 60 days and
   beyond. This is again dependent on the complexity of the case and the control that the parties
   exercise. Nevertheless, mediation is more timely than active litigation.

Will the benefits of mediation trickle down to every individual?

Ideally, it should. Considering the numerous benefits that mediation offers, parties to a dispute should increasingly opt for mediation. However, Indians have a mind-set that seeks litigation and third-party adjudication. The idea of us settling the dispute ourselves is still alien to us. This resistance to change must be overcome and this is perhaps the greatest obstacle that stands in the way of India embracing mediation as a mode of dispute resolution. There is not just resistance from the public but also the legal profession because the legal profession fails to see mediation as an additional job role. Instead, the legal professionals are apprehensive of mediation because they believe that it would result in dilution of work opportunities. The same was pointed out in the Law Commission Report on Mediation. For mediation to take off in India, cooperation from the legal professionals and awareness of the general public is a must. Mediation, if properly utilized has a huge potential to reduce the pendency of cases that is plaguing the Indian courts. The Centre is also trying to explore possibilities of using mediation to solve individual insolvency cases by bringing in changes to the Insolvency and Bankruptcy Code, 2016. The benefits of mediation are known. It is only a matter of time before we all embrace it and use it to resolve disputes.