PIMPRI LAW REVIEW JOURNAL ISSN: 2583-5947 (Online) VOLUME 2 ISSUE 1 2022

Study of Mediation as a Leading Mechanism for settlement of Disputes and its

Challenges

Dr. Rohini Dashrath Jagtap1

Abstract:

In India, today obtaining of justice from the courts has become very expensive and time
consuming. The Indian Courts are overburdened with tremendous cases. “As of December 31st,
2022, approximately 5 core cases are pending in Indian Courts across different levels of the
Courts.”2 William Edward Gladstone cited a very famous phrase, ‘Justice delayed is Justice
Denied’ it means if justice is not delivered on right time and if it given later, it will not be treated
as true justice. Hence, time is very precious in justice delivery system. Mediation, as an
Alternative Dispute Redressal (ADR) has become leading mechanism to resolve disputes
amicably. Mediation helps the parties to rethink about their rights and mutual interest so that
they can come up with new solution for settlement of disputes. Generally, the courts procedure is
formal in nature whereas the mediation process is more effective, easier, practical, speedier and
economically cheaper. Therefore, in alternative resolution system the mediation has become
most prevalent method among the arbitration, conciliation and negotiation.

Keyword: Justice, Dispute, ADR, Mediation etc.

1
Principal I/c SNBP Law College Pimpri, Pune Maharashtra.
2
https://www.ndtv.com/india-news/nearly-5-crore-pending-cases-in-courts-over-69-000-in-supreme-court-3768720

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Introduction:

In India, the concept of mediation is not new, mediation has acquired phenomenal place from
Vedic period itself, in the Mahabharata the Lord Krishna acted as mediator in domestic disputes
between Kauravas and Pandavas. In Indian society mediation is deeply embedded in Panchayat
system for settling several types of disputes like matrimonial, Property disputes.

Concept of Mediation

In India, mediation is a consensual method where the party in dispute decides to resolve their
disputes with the help of independent third party. For this purpose, parties have to appoint a
mediator and have to enter in to written agreement. In mediation the decision-making authority
lies in hands of the disputing parties, mediator role is just to assist the parties in arriving solution
to problem.

The object of mediation is to facilitate dialogue between the parties in dispute and give them a
chance to resolve their disputes and reach to a settlement.

Hence, the concept of mediation is nothing but the parties with their mutual consent appoints the
neutral mediator or a facilitator of dialogue. Mediator just helps parties to find out solutions to
their problem in order to reach to a compromise. Mediator can be any person even parties can
hire ADR Lawyers.

Definition of Mediation

According to Dictionary of Black's Law Mediation is "a method of non- binding dispute
resolution involving a neutral third party who tries to help the disputing parties to reach a
mutually agreeable solution."3

As per the Dictionary of Cambridge Mediation is “the process of talking to two separate people
or groups involved in a disagreement to try to help them to agree or find a solution to their
problems.”4

3
Black’s Law Dictionary,Eighth Edition, Brayan Garner, South Asian Edition , Thomson Reuters Publication, p.n.
1003

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Main Characteristics of Mediation

Today mediation has become main tool of dispute resolution, it has become very popular due to
various reasons such as it is more affordable, impartial, saves time and money of Parties, it
avoids litigation, it improves communication between parties, and the most important
characteristics it is gives agreeable solutions to the parties. Hence, mediation proved as the best
mechanism of ADR. Some major Characteristics are as follows:

• It is non-binding procedure.
Unlike an arbitrator or a judge, in mediation process, mediator cannot force the parties to accept
outcome. Mediator is not a decision-maker. His role is just to act as a facilitator to the parties in
disputes.

• It is confidential Procedure.
In mediation, the parties in dispute cannot be compelled to disclose any confidential information.
However, if party willingly discloses any confidential information for reaching to settlement,
then the same information cannot produce before court, arbitration and cannot be shared to
anyone.
• An interest-based procedure
In mediation, the parties can apply their interests and accordingly they can talk. In Mediation
often settlement may result in more value.

Types of Mediation

Commonly, mediation is divided into two categories which are as follows:

1. Court referred Mediation:

Section 89 of the Code of Civil Procedure, 1908 has given power to the civil court to state
unresolved cases for mediation. Majorly, the family matters are refereed by the Court for
mediation.

4
See https://dictionary.cambridge.org/dictionary/english/mediation visited on 15/05/2023

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2. Private Mediation:

Anyone from general public to corporate and even government sector can opt for Private
Mediation. In Private Mediation, any qualified personnel can work as mediator on fixed amount
of payment.

Pre-Institution Mediation in Commercial Matters:

This is one more type of mediation developed recently in commercial matters. Any dispute
which falls within the definition of “Commercial Dispute” under Section 2(1) (c) of the
Commercial Courts Act, 2015 which has value of Rupees 3 Lakhs or more, it is mandatory on
plaintiff firstly to seek remedy of Pre-Institution Mediation.

While talking its scope in mediation many types of disputes are suitable for settlement such as
matrimonial disputes, property disputes, child-custody, business disputes relating to contracts,
consumer disputes, employer-employee disputes etc.

Legislative Provisions relating to Mediation.

1. The Industrial Disputes Act, 1947 under Section 4 empowers the Conciliators with the
responsibility to mediate industrial disputes and encourage for its settlement. However,
the majority of cases are still pending for conciliation proceedings.

2. Order XXXIIA of CPC 1908: also recommends mediation for various kinds of disputes,
as it should not be limited only to personal, family, matrimonial, guardianship, custody
and maintenance matters.

3. Section 89 read with Order X Rule 1A of the Code of Civil Procedure, 1908 :

As per Section 89 read with Order X Rule 1A of the CPC, after recording the admission
and denial of documents, the Court shall direct the parties to the suit to opt for any of the
ADR modes of settlement such as arbitration, conciliation, Lok Adalat or mediation.

4. Section 18 of the Micro, Small and Medium Enterprises (MSME) Development Act,
2006 provides conciliation if any disputes regarding the payment of amount to MSMEs.

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5. Section 442 of the Companies Act, 2013, and Companies (Mediation and Conciliation)
Rules, 2016, clearly states the reference of disputes to mediation by National Company
Law Tribunal and Appellate Tribunal.

6. The Hindu Marriage Act, 1955 under Section 14 (2), Section 29(2) of Special Marriage
Act, 1954, Section 9 of the Family Courts Act, 1984: It mandates the Court in the first
instance to try settlement between parties through mediation.

7. The Real Estate (Regulation and Development) Act, 2016, under section 32(g) states
the harmonious settlement of disputes between the promoters and allottees by dispute
settlement forum.

8. Legal Services Authority Act, 1987.

Under the Legal Services Authorities Act, 1987 legal services authorities are established
at the national, State and Taluka level. Its main objective is to provide free legal aid to the
weaker sections of the society. This authority guarantees justice to citizen of India who is
incapable to avail services of the court due to the reason of disability and economy.

9. The Companies (Mediation and Conciliation) Rules, 2016 under Rule 3 provides for a
Board of Mediators or Conciliators. This provision clearly suggests the reference of
disputes to mediation which is pending before the National Company Law Tribunal and
Appellate Tribunal.

10. The Malimath Committee and the Law Commission of India in its 129th Report also
recommended reference of the mediation process to the courts for settlement of disputes.

11. The Commercial Courts Act, 2015. Section 12A added by Amendment Act, 2018.
Under this provision the plaintiff who does not require any urgent interim relief from the
commercial Court, so this Act mandate the parties to seek remedy of pre- institution
mediation procedure.5

5
Article on “Mediation: Current Jurisprudence Path Ahead” cf https://www.mondaq.com/india/arbitration-dispute-
resolution/957898/mediation-current-jurisprudence-and-the-path-ahead

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12. Chapter V, Sections 37-38 of the Consumer Protection Act, 2019

This Act also provides the reference of disputes to the mediation. Under Section 37 (1)
of the Act, 2019 if the District Commission at first hearing of the complaint or at any
stage of hearing think that there is chance of settlement through mediation, then the
commission may direct to the parties to give written consent within five days to refer
matter to the mediation.

Judicial Approach towards Mediation Process

The Supreme Court in “Hussainara Khatoon & Ors v. State Of Bihar6 held that speedy trial is a
fundamental right of every citizen.

But till today many of cases are pending before the Indian Judiciary with hope to get justice at
the earliest. Hence, in order to get speedy justice to parties mediation is proved to be one of the
best methods and moreover this method is also suggested by the many courts through its
judgments.

The Hon'ble Supreme Court in Salem Bar Association v. Union of India7 suggested referring
matter to mediation. The Court observed that it is not necessary that the cases must be decided by
the courts only. It can be solved through various alternative methods. The Supreme Court also
said, the Courts are required to encourage parties to settle their disputes through ADR. The
Hon’ble Court also suggested forming of a Committee to ensure effective and speedy justice to
parties.

In Afcons Infrastructure Ltd v. Cherian Varkey Construction Co. (P) Ltd8 The Hon’ble
Supreme Court suggested disputes resolution through the mediation. There are various disputes
can be settled through mediation such as consumer disputes, trade, commerce and any matter
relating to tort and contracts.

6
1979 SCR (3) 532
7
(2003) 1 SCC 49
8
2010) 8 SCC 24

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MR Krishna Murthi v. New India Assurance Co. Ltd.9 the Hon'ble Supreme Court while
considering a plea seeking reform in the Motor Vehicle Accident Claims system, recommended
to the Government to study the practicability while enacting Indian Mediation Act. The Court
also suggested considering various facets of Mediation.

The Supreme Court monitored mediation in the Ayodhya dispute (M. Siddiq (D) v. Mahant
Suresh Das, Civil Appeal No. 10866-10867 of 2010) vide its Order dated March 8, 2019 some
relevant portion of the case is “we have considered the nature of the dispute arising.
Notwithstanding the lack of consensus between the parties in the matter we are of the view that
an attempt should be made to settle the dispute through mediation.”

Challenges before Mediation

There are various challenges before mediation process some of them are follows:

1. Lawyers generally hesitant to suggest mediation to their clients: Generally, lawyers are
not much interested to suggest mediation to their clients. It may be due to fear chance of
losing fees for per appearance or may be due to they are more familiar with adversarial
system.
2. The Mindset of India People: The Indian People often seen as sign of weakness to
settle dispute through mediation, therefore they rejects try of mediation and
prefers to fight for litigation in court.
3. It may be due to Judges are not actively promoting Mediation: The lowers courts takes
less active role for promoting mediation, only the Supreme Court and High Courts are
taking initiative for it. It may be due to lack of proper structure in courts for mediation
process.
4. Lack of awareness of mediation among public: Although mediation provision has
been formally inserted in some of statutes but there is, still there is very little
awareness about the mediation process in general public.
5. No legislation on mediation: ADR processes in India are governed by the
Arbitration and Conciliation Act. Unfortunately, Mediation is not covered under

9
2019 SCC Online SC 315

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this Act. The Special Mediation Bill, 2021 is still pending before Parliament. This
law is very important for protecting fundamental concepts of confidentiality,
voluntariness and self-determination. It will give enforceability to a mediated
settlement agreement and will also gain the confidence of people.

Conclusion

Mediation is considered as one of the most phenomenal methods of Alternate Dispute

Resolution. Today it is very indispensible to consider mediation primary mode of Dispute
Resolution. If there is proper awareness and encouragement about mediation to people, it will
certainly deliver speedy justice to society as guaranteed under Article 21 of the Constitution of
India. Judiciary including Advocates Bar Association has to take efforts for promotion of
mediation as it is best mechanism for resolving disputes between parties and it will be best
supplement to Indian Judicial System. Today it is need of hour that the government has to take
immediate initiative for passing Mediation Bill, 2021 as suggested by the Hon'ble Supreme
Court of India.