By – Shreya Maheshwari

Abstract 

The Indian Mediation Act, 2023, was a legislative step by the government for transforming Indian dispute resolution mechanisms. While it is a progressive reform for reducing the backlog of overburdened Indian judiciary, having nearly 50 million pending cases, along with promoting collaborative and cost-effective justice in the country, compared to traditional litigation. However, a closer analysis reveals significant gaps, highlighting its shortcomings, including its narrow scope and voluntary pre-litigation mediation. This article aims to critically evaluate these provisions to assess mediation as an effective dispute resolution mechanism in India.

Introduction

The Indian judiciary is one of the most overburdened judiciaries, having a shortage of judges with only 15 judges per million population. This highlights the need for an alternative dispute resolution mechanism outside the courts for the timely disposal of cases. 

 Further, traditional litigation in the country is often lengthy and expensive, thereby forcing citizens and other organisations to choose quicker and cheaper methods of resolving disputes and accessing justice. With over 50,000 cases being settled in India through mediation from April 2021 to March 2022 depict the increasing importance of mediation as an efficient mechanism of resolving conflicts. Recognizing the significant demand for mediation, the said act was passed to reduce the judicial backlog, institutionalizing mediation, thereby making it a mainstream dispute resolution mechanism. Additionally, India is also a signatory to the Singapore Convention on Mediation, which has standardised and unified rules for mediation in international commercial disputes; however, its ratification is still pending. 

The act lays down a progressive framework including provisions like online mediation, time-bound mediation procedure, and enforceability of Mediated Settlement Agreements. However, despite this, the legislation includes several shortcomings that undermine the act’s effectiveness. Its narrow scope related to mediation procedure, excluding too many disputes, the voluntary nature of pre-litigation mediation in several areas raises questions about whether the act can achieve its objectives. The article aims to critically analyse these provisions to understand the act’s effectiveness in governing dispute resolution mechanisms in India. 

A Step Forward: The Promises of the Mediation Act

The mediation act aims to transform Indian justice mechanisms by making dispute resolution timely and accessible. Section 30 of the Mediation Act 2023 provides a provision for online mediation, thereby offering an option of virtual mediation to the concerned parties. This provision widens access to justice, especially for individuals who cannot afford regular court visits. Additionally, it reduces delays as the parties do not have to physically present for the proceedings. However, the success of this initiative also depends on how the challenges related to the digital divide are addressed to make these provisions inclusive. Further, mediators must be trained to conduct online mediation to ensure that its benefits are not undermined because of technological hurdles. 

 Further, Section 18 of the Mediation Act 2023 provides that the mediation should be completed within 120 days, with an extension of 60 days. Having a fixed time frame ensures following a proper timeline to reach a settlement or move towards litigation (as the case may be). It further makes it an affordable procedure as parties are less likely to incur an ongoing cost due to a fixed timeline, as compared to traditional litigation procedures that lack certainty. 

Along with this, the act makes mediation under chapter 6 of the act allow enforcement of mediated settlement as if it were a judgment or decree passed by a court. This increases people’s trust in the procedure, along with strengthening alternative dispute resolution mechanisms in law. These provisions make mediation a trusted forum for resolving disputes, along with providing a faster and fair path of justice to the citizens. 

Mediation Act, 2023: Analysing the gaps

Despite these progressive steps, a closer analysis of the act highlights its notable limitations that require careful examination. 

One of the major shortcomings of the bill includes a provision for voluntary and consensual pre-litigation mediation under section 5 of the Mediation Act 2023.  The mediation bill for 2021 incorporated a mandatory mediation provision for civil cases. However, owing to its criticism on the grounds of violating party consent and autonomy, this provision was omitted from the Mediation Act 2023. The omission of this provision raises serious concerns, as following a voluntary mediation approach might lead people to resort to litigation owing to low public awareness regarding mediation in India. Hence, this provision will not allow the act to achieve its goal of reducing judicial backlog by settling disputes outside the court. 

Additionally, one of the major critiques of having a mandatory pre-litigation procedure is the violation of party autonomy and consent. However, here it is important to understand that having a mandatory pre-litigation process does not compel the parties to settle disputes only via mediation. The provision only makes it mandatory to attempt mediation settlement, and allows the parties to resort to litigation in case the mediation fails. Hence, this does not go against party autonomy. Thus, removing mandatory pre-litigation will not make mediation an effective dispute resolution mechanism. Further, an act’s successful implementation depends on its scope. The Indian mediation act has a limited scope due to the exclusion of provisions, including cross-border enforcement of settlement agreements, limiting international mediation to only commercial mediation. The mediation act does not provide for cross-border enforcement of settlement agreements as provided in the Singapore Convention on mediation. Hence, settlement agreements outside the country are not incorporated in the Mediation Bill 2023. Additionally, section 27 (2) of the mediation act provides that the settlement arrangements reached in the country will be given a similar treatment as a court decree. However, this provision is excluded under Article 7 of the Singapore Convention on mediation. Thus, the Indian Mediation Act 2023 lacks international enforceability. Failing to align these provisions with global practices, the act depicts a missed opportunity for India to become an international mediation hub.

The inadequacy is further depicted through clause 3(g) of the Mediation Act 2023. This clause restricts international mediation to only commercial mediation, thereby not taking into consideration that mediation is most used for civil matters, including custody cases, etc. Thus restricting the act’s scope. 

Similarly, Annexure 1 of the Mediation Act 2023 excludes many disputes, including tax, and property, from the list of disputes that can be settled through mediation. Removing a wide range of disputes from the act raises questions about the bill’s effectiveness in making dispute resolution an adequate mechanism. It is because around 66% of all civil cases in India are related to land/property disputes, thus forming a major part of the backlog of the Indian judiciary. Hence, excluding such provisions from the act goes against the objective of reducing judicial backlogs, as people will still resort to litigation due to a lack of scope and mandatory provision for pre-litigation mediation.

Conclusion 

Drawing from the above analysis, the Mediation Act, 2023, exposes India’s paradoxical approach towards institutionalizing mediation as an alternative to traditional litigation for reducing the burden on Indian courts.  The act aims to reform the justice mechanism in the country; however, the provisions to ensure this appear half-cooked. The act focuses on ensuring greater access to justice by incorporating the provision of online mediation and time-bound completion of the procedure. However, by excluding too many categories of disputes from the act and removing mandatory pre-litigation procedure, the act goes against the objective of reducing pressure on the judiciary and promoting dispute resolution by enhancing the process and making it more efficient. This highlights that the new bill is more symbolic than structural, as it focuses on introducing mediation but without introducing proper mechanisms to shift the justice mechanism from courts to mediation. Thus, it is important to address these gaps to ensure that the act serves its intended purpose. 

Author’s bio

This post has been authored by Shreya Maheshwari, a second-year law student at JGLS.

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