Alternative Dispute Resolution (ADR)
ADR is a mechanism of dispute resolution that is non adversarial, i.e. working together co-operatively to reach the best resolution for everyone.
ADR can be instrumental in reducing the burden of litigation on courts, while delivering a well-rounded and satisfying experience for the parties involved.
It provides the opportunity to "expand the pie" through creative, collaborative bargaining, and fulfill the interests driving their demands.
Need for ADR:
The system of dispensing justice in India has come under great stress mainly because of the huge pendency of cases in courts.
In India, the number of cases filed in the courts has shown a tremendous increase in recent years resulting in pendency and delays underlining the need for ADR methods.
Mediation Act, 2023
Mediation Act, 2023
In the recent monsoon session of Parliament, both Houses passed The Mediation Bill, 2023, and upon receiving the assent of the President of India, is referred to as the Mediation Act, 2023 (“the Act”).
The Act has been enacted to especially promote institutional mediation for resolution of disputes, enforce mediated settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as acceptable and cost-effective process.
Key features of the Act
Mediation Agreement:
The Act requires every mediation agreement to be in writing, with the parties to the agreement agreeing to submit any dispute that may arise between them to mediation.
The mediation agreement may be drafted either as a clause within any agreement, or may be executed as a separate agreement.
Pre-Litigation Mediation:
The Act permits parties to a dispute (regardless of whether they have executed a mediation agreement) to voluntarily and mutually refer their dispute to mediation prior to filing a suit or instituting proceedings before any court.
This provision is a departure from the 2021 Bill, which earlier required parties to mandatorily attend at least two mediation sessions, and may be attributed to the Standing Committee's report, which recommended optional pre-litigation mediation instead.
Exceptions:
Matters which cannot be referred to mediation. This includes:
Disputes involving criminal offences.
Proceedings initiated in relation to the misconduct of any registered professional,
Disputes relating to the levy and collection of any direct or indirect tax or refunds.
Appointment of a Mediator:
Unless otherwise agreed upon by the parties, a person of any nationality may be appointed as a mediator, provided that they possess the qualifications, experience and accreditation prescribed.
The parties also have the liberty to select the mediator and the procedure for appointment.
If the parties are unable to select the mediator or the procedure, the claiming party may make an application to a mediation service provider to appoint a mediator.
Within 7 days from the receipt of the application, the mediation service provider shall either appoint a mediator as agreed by the parties, or a mediator from the panel maintained by it.
Jurisdiction:
Every mediation initiated thereunder to be undertaken within the territorial jurisdiction of the court or tribunal competent to adjudicate upon the dispute.
While, if the parties so agree, the mediation may be conducted at any other place or even online.
Time Period:
Mediation proceedings must be completed within a period of 120 days from the date of the first appearance before the mediator, which may be extended for a maximum period of 60 days.
Mediated Settlement Agreement:
Once the mediation has been successfully concluded (with respect to all or some of the disputes referred), the parties shall reduce the terms of settlement to a written agreement signed by the parties and duly authenticated by the mediator.
Once authenticated, an unchallenged Mediated Settlement Agreement may be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a judgment or decree passed by a court.
A mediated settlement agreement may be challenged only on the grounds of fraud, corruption, impersonation, and where the mediation was impermissible under the Act (as provided above).
Benefits
This requirement is expected to reduce the filing of frivolous claims before Indian courts.
Owing to the confidentiality of a mediation, it may also mitigate the risk of deterioration of the parties’ relationship due to a publicly fought dispute.
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