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Pre-litigation Mediation- The Future in India

Updated: Aug 18

Divyansh Bhargava, 3rd year, Nirma University, Ahmedabad


INTRODUCTION

The Indian judiciary is one of the principal organs of the Indian democracy but unfortunately it is infamous for its ineffectiveness in resolving disputes and disposing off matters timely. According to an article by the Associated press, Indian Express, it would take nearly 466 years for the Delhi High Court alone to resolve all the registered matters. Currently as per the National Judicial Data Grid, there are about 3.14 crore pending cases across the country of which more than over 45 lakh have been pending for over 5 years and more. It is at this juncture that there exists a need for a less formal and alternative method to resolve disputes speedily and in a less expensive manner.


Mediation across the globe is one of the most upcoming modes of dispute resolution where a neutral third party (mediator) helps the negotiating parties to arrive at an amicable and mutually agreeable solution. The authors in this article have emphasised upon the need for private mediation or pre-litigation mediation as opposed to government backed mediation. The importance of private mediation has often been highlighted by the apex court for instance, in the case of K. Srinivas Rao vs. D.A. Deepa (2013) 5 SCC 226, Hon’ble Justice Ranjana Prakash placed great significance on the perks of pre litigation mediation and was of the opinion that often there are matters which arise out of trivial reasons and are escalated by pursuing litigation.

CRITICISM OF GOVERNMENT BACKED MEDIATION

There has been a growing need of ADR in India for a variety of reasons. ADR mechanisms provides techniques for the resolution of mostly all suits under the umbrella of civil law. It is often said that justice delayed is justice denied, so considering the number of pending cases it was pertinent to evolve alternative methods for speedy access to justice. This prompted the suggestion to use the mediation mechanism and further found its mention in a few legislations for instance Section 4 of the Industrial Disputes Act and Section 89(1)(d) of the Civil Procedure Code. Mediation at this juncture, when mandated by the court is known as court referred mediation. There are primarily 2 stages when a party can invoke mediation namely:

  1. Pre-Litigation mediation and,

  2. Court referred mediation

In India there has been a lack of the mediation culture which has proved to be a major roadblock in an attitude of out of court peaceful settlements. The development of mediation culture primarily depends on a particular state’s judiciary and its inclination and trust towards this mode of dispute resolution. For instance, only 5 disputes have been recorded to have been resolved at the Tripura Mediation Centre from 2008 to 2015.


Apart from the mediation culture it is significant to note that there lies certain drawbacks and challenges to the provisions empowering mediation. For instance, the Industrial Disputes Act empowers mediation between the parties but they do not have a say in the terms of settlement or in the final outcome. This is very ironic as one of the major reasons the parties to adopt for mediation as a method of dispute resolution is because it ensures greater degree of party control. Ideally, the mechanism is set up in a way that the negotiating parties will have more control over the outcome and an equal say in the process so that an amicably agreeable solution is possible. It is also pertinent to note that the pleadings and arguments submitted by the negotiating parties is drafted by professionals and there is acute or no opportunity for them to explore the underlying issues of the dispute. So, although the Industrial Disputes Act empowers mediation, the proceedings are very far from the very concept of ADR.


In yet another example, Section 442 of the Companies Act, 2013 provides for “mediation between the parties during the pendency of any proceedings before the Central Government or the Tribunal or the Appellate Tribunal”. So, the above mentioned provision provides for “mediation” between the parties and still the panel formed (as empowered by the section) for resolving disputes is known as the Mediation and Conciliation panel, which further accurately reflects on the lack of distinction between the 2 different concepts of ADR i.e. mediation and conciliation. It also reflects upon the flawed structures or legislation regarding mediation. This provision drew criticism from the Jagannadha Rao Committee report too in 2003, post the Salem I judgment.


In continuation of this very example it is needful to mention Rule 17 of the Companies Rules which provides for a similar role to be played by both the mediator and the arbitrator whereas it has been recognised in the Jagannadha Rao Committee report of 2003 that the task that it is expected to be performed by the 2 cannot be the same.


PRIVATE MEDIATION: THE ROAD AHEAD

With the rise in scope and opportunities that mediation provides there has been acknowledgement and subsequent increase in the out-of-court-settlements. The traditional justice system which is usually prone to rounds of litigation, is giving way to private mediation between litigant companies where resolutions and disputes are quicker (average time taken by the Bangalore mediation centre to resolve a dispute is 150 minutes) cost-effective and confidential. It is this lack of government efforts and drawbacks of government backed mediation which has overtime prompted the growth of private mediation.


Private mediation can be referred as a branch of mediation where parties agree mutually to participate in the process and also mutually agree upon the selected mediator. In private mediation, qualified mediators provide their services on fee-for-service basis to the various stakeholders viz., the Court, the governmental sector, members of the public and business houses. There are various private mediation centres which are working in India, which further are a conclusive proof of increasing out-of-court settlements.


In such situations where parties demand confidentiality, private mediation is the most suitable form of dispute resolution. For instance, any information given by a negotiating party to the mediator which is critical to their resolution or dispute at hand cannot be disclosed by the mediator unless specifically permitted by the party. A leading example of the same could be the high-profile dispute between Amarchand Brothers which required confidentiality for a variety of reasons was resolved through mediation itself.


It has also been acknowledged and stressed upon by the apex court in the case of Moti Ram V/s. Ashok Kumar, that the very essence of mediation proceedings, lies in its confidentiality. The court laid down that the final agreement between the parties shall be sent to the court without mentioning the actual details of the procedure. It shall also be noted that the mediator cannot be called as witness to testify in case of a suit and is mandatorily under the obligation to not disclose any information regarding the proceeding.


It is the success of private and self-initiated mediation which prompted the central government to amend the Commercial Courts’ Act, 2015, and make pre-litigation mediation mandatory (Section 12A) before filing for a suit and the Supreme court to direct all family courts to set up and publicise pre-litigation clinics.

ODR: A TECH SAVY BRANCH OF PRIVATE MEDIATION

In the current era of technological advancements and grave uncertainties (for instance the pandemic), the possibilities of private mediation have expanded manifolds. For the first time in 70 years, the Indian judiciary was at a complete standstill. It is at this juncture that private mediation in reference with online dispute resolution finds its relevance. As mentioned by Richard Susskind, OUP 2009, in his book The End of Lawyers? – Re-thinking the nature of legal services, that with the advent of new technologies there would lie an impact on the growth of mediation and the way it will be practiced, ODR has been labelled as “a logical and natural step” as it facilitates expeditious resolution of disputes. Online dispute resolution is the modern and digitalized way of the traditional ADR mechanism with the difference only being the use of machines and networking for communication.


In the times of COVID-19, ODR is gaining more and more popularity in the country. ODR is originally a mechanism where parties can connect via video conferencing and professionals can help them in solving their disputes. Private mediation through ODR is something which will be more and more effective and beneficial in the near future for the stakeholders (for instance in cases where the amount claimed is not so high to justify face to face mediation).


There has been a significant acknowledgement of online mediation with the setting up of platforms like SAMA, Techno Legal Centre Of Excellence For Online Dispute Resolution (ODR) In India (TLCEODRI) etc. Over the period of time, the availability of such online mediation platforms and their recognition has created a new significance and a landmark achievement in the Indian justice system. It would further enable mediations to be less dependent on logistics and the physical presence of the negotiating parties. Therefore, the number of opportunities available in private mediation and also with reference to online mediation cannot be called in question in the present times.


CONCLUSION

With the advent of private mediation and the absence of articulation and inadequacy highlighted time and again in government backed mediation has paved the way for people to settle disputes outside the court at the very initial stage. Mediation should not just be considered an alternative to litigation but it is also an appurtenance to the traditional method. This is why private mediation is not the ‘alternative’ mode of dispute resolution but the ‘appropriate’ mode of dispute resolution. With the developments seen in this field and the opportunities it provides we can be sure that parties to a dispute would be soon heard saying, “I’ll see you out of the court instead of I’ll see you in court.” As we draw inspiration from the words of Mahatma Gandhi wherein, he says “I realized that the true fiction of a lawyer was to unite parties… A large part of my time during the 20 years of my practice as a lawyer was occupied in bringing out private compromise of hundreds of cases. I lost nothing thereby- not even money, certainly not my soul,” the authors believe that there is a need for large scale recognition and adoption of private mediation for development of the Indian justice system.

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