Alternative Dispute Resolution in India
Context:
- The term Alternative Dispute Resolution (ADR) describes a variety of procedures that allow disputing parties to settle their disagreements outside of court by using an amicable approach. It is impossible to overstate the importance of alternative dispute resolution (ADR) in India, given the backlog in Indian court cases and rising litigation expenses.
About:
- The Mediation Bill, 2023 was passed by both Houses of Parliament during the most recent monsoon session. The Act, as it will be known after the President of India has ratified it, is The Mediation Act, 2023.
- If there were terms of settlement that the parties might agree to, the Indian legal system already encourages courts to send the opposing parties to alternative dispute resolution (ADR) processes, such as mediation.
- With the Act, this encouragement will be furthered. It will require every party to attempt pre-litigation mediation as a means of resolving their conflict before bringing legal action in India, regardless of any previous mediation agreements.
- The Act will also mandate that courts and other pertinent institutions keep a panel of mediators on hand to help with this process.
Many advantages:
- It is anticipated that this rule will decrease the number of baseless lawsuits filed in Indian courts.
- Because mediations are secret, there is less chance that the parties’ relationship may suffer as a result of a publically fought disagreement.
- However, questions are also raised regarding the viability of a mediation carried out out of duty rather than a genuine desire to reach a mutually agreeable conclusion.
- In the latter case, this could provide a stubborn defendant the ability to postpone a legitimate claim.
- They also have to finish the mediation within 180 days of the parties’ initial appearance, unless they agree to an extension.
- However, the Act won’t completely eliminate Indian courts’ haven.
- Before a mediation begins or continues, a party may, under extraordinary circumstances, ask the court for urgent interim relief.
- These clauses guarantee that the requirement of pre-litigation mediation is not weaponized while placing an emphasis on efficiency and expertise.
- The goal is to provide a fair framework that motivates the parties to concentrate less on their disagreements and more on their business activities.
The element of arbitration and mediation:
- In India, the Act will essentially place mediation in the same league as commercial arbitration. There is no denying the similarities between the supporting legislation for any of them.
- These laws set strict deadlines for the conduct of court cases, require confidentiality, require Indian courts to refer parties to mediation or arbitration, offer a default method for selecting mediators or arbitrators, and specify how their mandates can be terminated.
- Similarly, both guarantee the enforcement of an arbitral ruling and a mediated settlement agreement, respectively.
- The proposal to establish an Arbitration Council of India in 2019 is mirrored in equal measure by the creation of a Mediation Council of India.
- The message from Parliament to the Indian sector is very clear: courts should no longer be the first choice for resolving disputes involving commerce.
- It is expected of the parties to settle their disagreement peacefully through business arbitration or mediation.
- Although Indian courts are available upon request, admission to them should be considered a last resort.
Path ahead:
- The Act prioritises institutional mediation in India, much like the recent revisions to the A&C Act did with regard to institutional arbitration of disputes.
- It envisions “mediation service providers” to offer all the infrastructure, secretarial support, and facilities needed for an effective mediation process, in addition to the mediation services itself.
- There are already seasoned arbitration organisations in India, some of which offer mediation services comparable to international best practises.
- Only then would India emerge as a worldwide centre for all facets of business conflict resolution, including arbitration.
