Towards India’s new mediation age

Mediation needs an omnibus law that provides legitimacy to mediated settlement agreements

By Author Ishana Tripathi   |   Published: 18th Jul 2021   11:57 pm Updated: 19th Jul 2021   12:17 am

Development of mediation infrastructure, mediation use and effective implementation models have been discussed and revisited on various occasions since the inception of mediation rules and mediation centres post 2002.

A few underlying issues that have been repeatedly highlighted are the binding nature of the process (enforceability), powers of the mediator, legislative sanction to the process and mediation awareness. It has also been concluded that judicial support is key to mediation legitimacy, ie, ‘making mediation mainstream’, which was also the theme of the India-Singapore Mediation Summit 2021 held on July 17.

In the keynote speeches by Chief Justice of India NV Ramana and Chief Justice of Singapore Sundaresh Menon, a few common themes emerged as being roadblocks to implement mediation in India and Singapore. Focus on cross-border cases (India-Singapore) and the need to implement mediation as a case resolution method was discussed. Thus, a topic-wise country response needs to be prepared for the commencement of India’s ‘new’ mediation age.

Enforceability and Legislation

A barrier to mediation use and implementation has been enforcement of mediation outcomes – mediated settlement agreements, which are essentially contracts. Justice Menon highlighted this with statistics from Singapore. To address the question of enforceability of mediation outcomes locally in Singapore, the Mediation Act, 2017, was passed, where mediation outcomes are valid and recognised as an order of a court. It was emphasised that in Singapore, mediation has taken its place as a complementary tool to arbitration and litigation, particularly for business and commercial cases.

As identified by the CJI, in India, referrals to mediation are primarily based on the referral judge and the mindset of “Do you have any evidence?” which need to change. Certain laws such as the Commercial Courts Act, 2015, and Real Estate Development Authority Act, 2016, where mandatory (pretrial) mediation is prescribed, have been a motivator to use mediation.

For mediations that are conducted out of court, the conciliator award enforcement was used as the method to provide a legal enforcement outcome under the Arbitration and Conciliation Act, 1996. Justice Ramana specified a distinction between the two processes by the powers of a mediator and conciliator, where the mediator is only a facilitator, and emphasised the need for an omnibus law to address the questions of legitimacy and enforcement, as in Singapore.

Pendency and Infrastructure

For both jurisdictions, pendency in courts has been a key motivator in adopting alternative dispute resolution (ADR) processes. Justice Ramana made a telling observation on the need to have an effective definition of what pendency means and separate cases in arrears (in duration). Both Singapore and India have implemented mediation in stages, though with Singapore, the formal introduction took place in 1994, and for India, it was 2005 (when the first court-annexed centre was functional) to address the question of growing caseloads.

In terms of trajectory, a vital observation to be made in distinguishing the two implementation models is that mediation as a profession moved from voluntary to full-time. Pro-mediation capacity building through executive and governmental support has been a driver in implementing mediation.

Further capacity building also provides for judicious utilisation of ADR in a hybrid manner, where cases that do not conclude and move to litigate could be customised. Justice AK Sikri, International Judge, Singapore International Commercial Court, provided a mediation example of using hybrid ADR process in a case where 80% settled at mediation and 20% at arbitration.

For India, the next step solution is to develop state-of-the-art ADR centres to support the process and robust mediation infrastructure, mediator capacity and expertise through multiple simulator training programmes like that of a commercial airline pilot, as illustrated by the CJI. This would enable using mediation cohesively. Moreover, field specialisations have been a skillset that has enabled the entrenchment of mediation in Singapore, which is a capacity that needs building in India.

Mediator and Advocacy

Two key stakeholders to a dispute resolution process are the mediator and the lawyer – the role of the former needs to be clarified and the latter needs incentivisation:

a. Mediator Powers and Ethics: The role of a mediator requires a clear definition as a facilitator. As the CJI observed, the diverse social fabric of India needs to be taken into consideration in resolution and a mediator’s role of equalising the bargaining power needs serious deliberation. The cultural diversity that has been implemented at the Singapore International Mediation Centre with 70 mediators from 17 jurisdictions could be considered.

b. Mediation Advocacy: Lawyers in support of mediation is crucial for a process to succeed. As suggested by Sriram Panchu, Senior Advocate and Mediator, a mediation fee for lawyers as a response to mediation lawyering could be considered and mediation practice for law firms to provide effective client dispute resolution services is the future of legal practice.

Cross-Border Implementation

The Singapore Convention on Mediation 2019 that was signed by 54 countries, including India, is a step to enable effective cross-border dispute resolution and mediation in commercial and investment cases, including cases of investor-state disputes.

An example of an Indo-Japan international commercial dispute resolved through mediation and in principle settlement in 2 days is an example of how international commercial mediation can be a game changer in international dispute resolution.

Covid-19 Response

The pandemic has led to a resurgence in using non-adjudicative means and initiatives to use mediation. Taking mediation online has also been a policy question for India. While settlement bodies such as Lok Adalats have adapted and provided the necessary support for India, today, for online mediation, a robust setup is yet to be in place. Locally, the Singapore United Mediation Initiative allowed referral of cases to mediation, free of cost, to manage court backlog with a high success rate.

Mediation needs to take its “real value as efficient, effective and enforceable resolution place”. For India, a mediation law which addresses these takeaways is necessary. It is also clear that internationally, mediated settlement agreements need legitimacy, and the ratification of the Singapore Convention could be a step forward.

(The author is Assistant Professor at Jindal Global Law School)