Changes to mediation bill approved by Cabinet ahead of Parliament session - July 2023
Highlights of the Bill
- The Bill requires persons to try to settle civil or commercial disputes through mediation before approaching any court or tribunal. A party may withdraw from mediation after two mediation sessions. The mediation process must be completed within 180 days, which may be extended by another 180 days by the parties.
- The Mediation Council of India will be set up. Its functions include registering mediators, and recognising mediation service providers and mediation institutes (which train and certify mediators).
- The Bill lists disputes that are not fit for mediation (such as those involving criminal prosecution, or affecting the rights of third parties). The central government may amend this list.
- If the parties agree, they may appoint any person as a mediator. If not, they may apply to a mediation service provider to appoint a person from its panel of mediators.
- Agreements resulting from mediation will be binding and enforceable in the same manner as court judgments.
Key Issues and Analysis
- The Bill makes participation in pre-litigation mediation mandatory. Mediation is a voluntary dispute resolution process. The question is whether it is appropriate to mandate parties to attempt pre-litigation mediation. On one hand, this could lead to more out of court settlements and reduce the pendency in courts. On the other hand, mandating mediation goes against its voluntary nature.
- The Mediation Council, established to regulate the profession of mediators, may not have representation of practising mediators with adequate experience. This is unlike other professional regulators such as the Bar Council of India.
- The Mediation Council requires prior approval from the central government before issuing regulations related to its essential functions. It is not clear why such prior approval is required. This may also be questioned since the central government may be a party to mediations.
- The Bill applies to international mediations only if they are conducted in India. It does not provide for enforcement of settlement agreements resulting from international mediation conducted outside India.