MEDIATION

By
Kavita Singh
Associate Professor
NLIU
• “An ounce of mediation is worth a pound of arbitration and a ton of litigation”.

• Abraham Lincoln - "Discourage litigation. Persuade your neighbors to

compromise whenever you can. As a peacemaker the lawyer has superior
opportunity of being a good man. There will still be business enough."
• According to Cambridge Dictionary mediation is defined as "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."

• Black's Law Dictionary has defined Mediation as "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”. (Black's Law Dictionary Eighth Edition, First South Asian
Edition 2015)
Rule 4 of the Civil Procedure - Alternate Dispute Resolution Rules, 2003 (ADR Rules) defines mediation as
-Settlement by ‘Mediation’ means the process by which a mediator appointed by parties or by the Court, as the
case may be, mediates the dispute between the parties to the suit by the application of the provisions of the
Mediation Rules, 2003 in Part II, and in particular, by facilitating discussion between parties directly or by
communicating with each other through the mediator, by assisting parties in identifying issues, reducing
misunderstandings, clarifying priorities, exploring areas of compromise, generating options in an attempt to
solve the dispute and emphasising that it is the parties own responsibility for making decisions which affect
them.
'Mediation' and 'Conciliation' are both regarded as the same. Both mediation and
conciliation involve a neutral third person seeking the parties to communicate, evaluate and
understand each other's viewpoint, and agree to a settlement.
Mediation Conciliation

the mediator controls The conciliator on the

the process through other hand, may not
follow a structured
different and specific
process. The conciliator
stages: introduction, may carry out the process
joint session, caucus of conciliation as a
and agreement, while traditional negotiation,
the parties control the which may take different
outcome. forms.

The differences between mediation and conciliation are essentially of degree rather than

of kind. In practice, conciliation shades into mediation.

 Judicial Pronouncements on Mediation –

 Salem Bar Association v. Union of India (2003) 1 SCC 49

 Afcons Infrastructure v. Cherian Varkey Construction Co. Ltd. (2010) 8 SCC 24

 MR Krishna Murthi v. New India Assurance Co. Ltd. 2019 SCC Online SC 315

 Ayodhya Dispute (M. Siddiq (D) v. Mahant Suresh Das, Civil Appeal No. 10866-10867 of
2010) vide its Order dated March 8, 2019
• Regarding S.89(2) (d) - in Dayawati v. Yogesh Kumar Gosain 2017 SCC online Del. 11032 -

The Court observed – “ The question is whether the terms of compromise are to be finalised by or
before the mediator or by or before the court. It is evident that all other four alternatives , namely
arbitration, conciliation, judicial settlement including settlement through Lok Adalat and Mediation
are meant to be the action of persons or institutions outside the court and not before the court. The
court is not involved in actual mediation or conciliation. S. 89(2)(d) only means that when mediation
succeeds and parties agree to the terms of settlement, the mediator will report to the court, and the
court after giving notice and hearing to the parties ‘effect’ the compromise and pass a decree in
accordance with the terms of settlement accepted by the parties. The court is not debarred from
hearing the matter where settlement is not arrieved at. The judge who makes the reference only
considers the limited question as to whether there are reasonable grounds to expect that there will be
a settlement”.
• Settlement to be filed in the court before passing of the decree for the purpose of maintaining a
public record of the settlement

• Upon settlement – the court first records the settlement and pass a decree in terms accordingly.

• If parties do not want to record the settlement with the court, they must inform the court that
the suit must be dismissed as their dispute has been settled outside the court.
 Some Important points w.r.t. S.89 CPC– were reiterated by the SC in Afcons Infrastructure
v. Cherian Varkey Construction Co. Ltd. (2010) 8 SCC 24 -

1. Court must acquaint itself with facts and issues of the case and the nature of dispute.

2. Before framing issues, court to fix preliminary hearing of the parties.

3. Court must first consider whether the case is fit to be referred to ADR or not. If the case is not
fit for ADR, the court should record a brief order stating the reasons for the same. If the case is fit
for ADR, the court must then frame the issues.

4. Where the case is fit for ADR, the court should explain the choice of five ADR process to the
parties to enable them to exercise their options.
5. Court should formulate the terms of settlement under S. 89 (1) means that the court has to
briefly refer to the nature of dispute and decide upon the appropriate ADR process. In Salem Bar
Association case, the court equated the expression ‘terms of settlement’ with ‘summary of
disputes’ i.e. The court is only required to formulate a summary of disputes and not the terms of
settlement.

6. If reference is for arbitration or conciliation, then the court has to record that the reference is by
mutual consent of the parties.

7. If the reference is to mediation or :ok Adalat etc. then the court must record that having regard
to the nature of dispute, keeping in view the options and preferences of the parties, it is referred
to mediation or Lok Adalat etc.
 8. If the judge in charge of the case assists the parties and if settlement negotiation fails, he
should not deal with the adjudication of the matter, to avoid apprehensions of bias and prejudices.
Then the case must be referred to another judge.

9. If parties are agreeable to arbitration, then court must inform the parties about the procedure of
arbitration.

10. If parties are not agreeable for arbitration, then the court should ascertain if the parties are
agreeable for conciliation. In either case, the ACA,1996 will govern.

11. If parties do not agree for arbitration or conciliation, then having regard to the nature of
dispute, the matter may be referred to other ADR procedures.
 12. If the reference to ADR fails , on receipt of the report of the ADR forum, the court shall
proceed with the hearing of the suit.. But if there was a settlement, the court shall examine the
settlement and pass a decree in terms of it.

 Criticism of S.89 –

1. Court has no power to refer the disputes to ADR if parties are unwilling. In USA, the courts
have the power to compel the parties to opt for ADR. There are countries where penalties can
be imposed on unwilling parties on their refusal to go for ADR.

Such provisions are lacking under S.89 of CPC.

2. If the reference is to be made to arbitration, the terms of settlement formulated by the court
will be of no use, as what is referred to arbitration is the dispute and not the terms of settlement –
and the arbitrator will then adjudicate upon the dispute and pass the award. If the reference is
made to conciliation/mediation or Lok Adalat , then the job of drawing up of terms of settlement
is that of mediator/conciliator or the Lok Adalat after going through the entire process of
mediation or conciliation. This unnecessarily burdens the court with such redundant task.

3. It will not be possible for the courts to formulate the terms of settlement unless the judge
discusses the matter in detail with both the parties. The court formulating the terms of settlement
merely on the basis of pleadings is not possible. This requirement creates a great hinderance in
implementing s.89
 Cases Suitable for Mediation -
1. All cases relating to trade, commerce and contracts, including- Disputes arising out of
contracts (including all money claims); Disputes relating to specific performance; Disputes
between suppliers and customers; Disputes between bankers and customers; Disputes between
developers/builders and customers; Disputes between landlords and tenants/licensor and
licensees; Disputes between insurer and insured.

2. All cases arising from strained or soured relationships, including- Disputes relating to
matrimonial causes, maintenance, custody of children; Disputes relating to partition/division
among family members/co-parceners/co-owners; Disputes relating to partnership among
partners.
3. All cases where there is a need for continuation of the pre-existing relationship in spite of
the disputes, including- Disputes between neighbours (relating to encroachments, nuisance etc.);
Disputes between employers and employees; Disputes among members of
societies/associations/Apartment owners Associations.

4. All cases relating to tortious liability including claims for compensation in motor
accidents/other accidents.

5. All consumer disputes including Disputes where a trader/supplier/manufacturer/service

provider is keen to maintain his business/professional reputation and credibility or `product
popularity.
 Types of Mediation –

1. Statutory/Mandatory

Statutes themselves provide for the mediation process, such as disputes in labour and family law.
In India, r. 5(f)(iii) of the Civil Procedure- Mediation Rules, 2003 provide for mandatory
mediation, though recourse to it is rare.

2. Court Ordered

Some sort of alternative dispute resolution is required by most jurisdictions in India before
resolution through the judicial process. As soon as a case is filed, the parties are provided with a
number of ADR options out of which they must select and pursue one unless exempted by the
court.
3. Court-Annexed

• Mediation services are provided by the court as part of the judicial system.

• The court maintains a list of skilled and experienced mediators who are available to the parties. The
Court appoints a mediator and sets a date by when the mediation must be completed. The results of the
mediation are confidential, and any agreement reached is enforceable as a judgement of the court.

• Since the case is referred to a court-annexed mediation service, the overall supervision of court is kept on
the process . In court-annexed mediation the judges, lawyers and litigants become participants therein,
thereby giving them a feeling that negotiated settlement is achieved by all the three actors in the justice
delivery system.

• The same lawyers who appeared in the case represent their clients before a mediator and the litigants are
also allowed to participate. The popular acceptance for mediation also improves as it is the integral and
impartial court-system which is seen as extending an additional service.
4. Court-Referred
• Under Court-Referred Mediation, the court merely refers the matter to a mediator.

• Referral Order –

• A referral order issued by the referral judge initiates the process of mediation and is the foundation of a
court-referred mediation. An ideal referral order contains details like name of the referral judge, case
number, name of the parties, date and year of institution of the case, stage of trial, nature of the dispute,
the statutory provision under which the reference is made, next date of hearing before the referral court,
whether the parties have consented for mediation, name of the institution/mediator to whom the case is
referred for mediation, the date and time for the parties to report before the institution/ mediator, the time
limit for completing the mediation, quantum of fee/remuneration if payable and contact address and
telephone numbers of the parties and their advocates.
 LEGAL RECOGNITION OF MEDIATION IN INDIA

• The concept of mediation received legislative recognition in India for the first time in the Industrial
Disputes Act, 1947.

• In 1999, the Indian Parliament passed the CPC Amendment Act of 1999 inserting Sec.89 in the
CPC 1908, providing for reference of cases pending in the Courts to ADR which included mediation.

• With an idea of making mediation a critical tool to solve problem of arrears of cases in the civil
courts in 1995-96 the SC of India under the leadership of the then Chief Justice, Mr. A. M. Ahmadi,
undertook an Indo-U.S. joint study for finding solutions to the problem of delays in the Indian Civil
Justice System and every High Court was asked to appoint a study team which worked with the
delegates of The Institute for Study and Development of Legal Systems [ISDLS], a San Francisco
based institution.
• This was followed by a number of training workshops of mediators throughout the country.

• The Mediation and Conciliation Project Committee (MCPC) was constituted by the then CJ of
India Hon'ble Mr. Justice R.C. Lahoti in 2005. Hon'ble Mr. Justice N. Santosh Hegde was its
first Chairman. It consisted of other judges of the Supreme Court and High Court, Senior
Advocates and Member Secretary of NALSA.

• The Committee in 2005 decided to initiate a pilot project of judicial mediation in Tis Hazari
Courts whose success led to the setting up of a mediation centre at Karkardooma in 2006, and
another in Rohini in 2009.

• MCPC has taken the lead in evolving policy matters relating to the mediation. The committee
has decided that 40 hours training and 10 actual mediation was essential for a mediator.
 ADVANTAGES OF MEDIATION

1. The parties have control over the mediation in terms of 1) its scope (i.e., the terms of reference
or issues can be limited or expanded during the course of the proceedings) and 2) its outcome
( i.e., the right to decide whether to settle or not and the terms of settlement.)

2. Mediation is participative. Parties get an opportunity to present their case in their own words
and to directly participate in the negotiation.

3. The process is voluntary and any party can opt out of it at any stage if he feels that it is not
helping him. The self-determining nature of mediation ensures compliance with the settlement
reached.

4. The process is speedy, efficient, economical, simple and flexible. It can be modified to suit
the demands of each case. It is confidential also.
5. The process is conducted in an informal, cordial and conducive environment.

6. Mediation is a fair process. The mediator is impartial, neutral and independent. The mediator
ensures that pre-existing unequal relationships, if any, between the parties, do not affect the
negotiation.

7. The process facilitates better and effective communication between the parties which

is crucial for a creative and meaningful negotiation.

8. Mediation helps to maintain/ improve/ restore relationships between the parties.

9. In mediation the focus is on resolving the dispute in a mutually beneficial settlement.

10. A mediation settlement often leads to the settling of related or connected cases between the
parties.
11. Mediation always takes into account the long term underlying interests of the parties at
each stage of the dispute resolution process – in examining alternatives, in generating and
evaluating options and finally, in settling the dispute with focus on the present and the future and
not on the past. This provides an opportunity to the parties to comprehensively resolve all their
differences.

12. Mediation allows creativity in dispute resolution. Parties can accept creative and non
conventional remedies which satisfy their underlying and long term interests, even ignoring their
legal entitlements or liabilities.

13. When the parties themselves sign the terms of settlement, satisfying their underlying needs

and interests, there will be compliance. It promotes finality i.e. it puts the dispute to rest finally.
THANK - YOU