BRIDGING DISPUTES: The role of Mediation and Conciliation in Modern ADR

Introduction

India is home to 1.5 billion people and in such a vast country, dispute resolution becomes very important. It is very well known that the judicial system which is the most popular means of settling disputes in India is plagued by a huge pendency of cases, affecting its functioning and hampering justice delivery.

Recently, the legislature has taken a significant step by enacting the Mediation Act, 2023, addressing a long-standing need for a structured legal framework for mediation in India. This new legislation provides a comprehensive approach to alternative dispute resolution (ADR), mandating pre-litigation mediation in certain cases to alleviate court burdens and foster quicker, amicable settlements. It establishes clear guidelines for mediators and the mediation process, ensuring confidentiality and impartiality. The Act also recognizes online mediation, adapting to modern technological advancements. By doing so, it promotes mediation as an effective, cost-efficient tool for resolving civil and commercial disputes.

Under the ambit of the Arbitration and conciliation act,1966 Conciliation emerges as a valuable approach in this context. Unlike litigation, which often involves adversarial procedures and lengthy court processes, conciliation focuses on fostering dialogue and mutual understanding between parties. By employing a neutral third party to facilitate discussions and help negotiate a mutually acceptable agreement, conciliation offers a more collaborative and less confrontational alternative. This method can expedite the resolution process and often results in solutions that are more satisfactory and enduring for all involved.

Mediation

As Joseph Grynbaum rightly said, “An ounce of mediation is worth a pound of arbitration and a ton of litigation.”

Mediation is a voluntary, non-binding process in which an impartial and neutral mediator facilitates disputing parties in reaching a settlement. Mediation is defined under section 3(h) of The Mediation act, 2023 as a process whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person referred to as mediator, who does not have the authority to impose a settlement upon the parties to the dispute.

Mediators

A mediator is defined under section 3(i) of the Mediation act, 2023 as a person who is appointed to be a mediator, by the parties or by a mediation service provider, to undertake mediation, and includes a person registered as mediator with the Council. A person of any nationality may be appointed as a mediator according to a process agreeable by the parties. However, the party autonomy is curtailed by the proviso to Section 8(1) which provides that in case of a foreign mediator, he/she shall possess such qualification, experience and accreditation “as may be prescribed.” Failing agreement, the parties may make an application to the Mediation Service Provider for appointment of a mediator from the panel of mediators maintained by it, which must take into consideration the preference of the parties and suitability of the mediator in resolving the dispute.” Further as mentioned in section 5(3), a mediator should be:

1.      registered with the Council; or

2.      empanelled by a court-annexed mediation centre; or

3.      empanelled by an Authority constituted under the Legal Services Authorities Act, 1987; or

4.      empanelled by a mediation service provider recognised under this Act, shall conduct pre-litigation mediation.

Role of a Mediator

Section 16 of The Mediation Act, 2023 lays down a mediator’s role.

1.      The mediator shall attempt to facilitate voluntary resolution of the dispute by the parties and communicate the view of each party to the other to the extent agreed to by them, assist them in identifying issues, advancing better understanding, clarifying priorities, exploring areas of settlement and generating options in an attempt to resolve the dispute expeditiously, emphasising that it is the responsibility of the parties to take decision regarding their claims.

2.      The parties shall be informed expressly by the mediator that he only facilitates in arriving at a decision to resolve a dispute and that he shall not impose any settlement nor give any assurance that the mediation may result in a settlement.

Mediation Proceedings

1. Place of mediation: The mediation shall take place within the territorial jurisdiction of the court or tribunal of competent jurisdiction to decide the subject matter of the dispute, or at any other place by mutual consent of the parties. Parties may also conduct the mediation proceedings (including pre-litigation mediation) online, provided the parties agree to do so by written consent.

2. Process: Mediation is deemed to have commenced from the date a party receives notice invoking mediation under a mediation agreement. In case there is no such agreement, from the date of appointment or consent of the mediator to be appointed, whichever the case may be. The mediator is required to assist the parties in an independent, neutral and impartial manner guided by principles of objectivity and fairness. The mediator may meet the parties separately or jointly, as frequently as required. The mediator shall not be bound by the principles of Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872. This would ensure more flexibility from procedural requirements and party autonomy in arriving at an amicable settlement.

3. Role of the mediator: The mediator’s role is limited to facilitating voluntary resolution of the dispute by assisting the parties in identifying the issue, advance better understanding, clarify priorities, explore areas of settlement, generate options and lay emphasis on the ultimate responsibility of the parties to take a decision regarding their claims - whilst ensuring that the mediator does not impose a settlement on the parties or give an assurance that the mediation may result in a settlement.

4. Time-limit: The mediation proceeding is required to be completed within a period of 120 days from the date fixed for the first appearance of the mediator. This may be extended by a further period mutually agreed upon by the parties, not exceeding 60 days. A corresponding amendment has also been proposed to the Commercial Courts Act 2015 in case of pre-institution mediation which currently requires the process of mediation to be completed within a period of three months from the date of application made by the plaintiff extendable for a further period of two months with the consent of the parties.

5. Confidentiality:  Parties and participants involved in mediation are obligated to keep confidential several aspects, including statements, proposals, documents, and any other communication exchanged during the mediation. Moreover, recording mediation proceedings through audio or video is prohibited to ensure confidentiality. Importantly, the information discussed during mediation cannot be used as evidence in court, arbitration, or any legal proceedings.

   
   

Mediation Settlement Agreement

A mediated settlement agreement includes an agreement in writing between some or all of the parties resulting from mediation, settling some or all of the disputes between such parties, and authenticated by the mediator as is mentioned under section 9(1) of The Mediation Act, 2023: Provided that the terms of the mediated settlement agreement may extend beyond the disputes referred to mediation.

Chapter VI, section 27 deals with the enforcement of mediation settlement agreement. Subject to the provisions of section 28, the mediated settlement agreement shall 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, and may, accordingly, be relied on by any of the parties or persons claiming through them, by way of defence, set off or otherwise in any legal proceeding.

Future of Mediation in India

Chapter VII of the Mediation Act, 2023 establishes the Mediation Council of India (MCI), which regulates and promotes mediation across the country. The MCI oversees the registration of qualified mediators, sets ethical and procedural standards, accredits training institutes, and addresses disputes related to mediator conduct.

The creation of the MCI is expected to significantly benefit India by enhancing the professionalism and credibility of mediation. This institutional framework will ensure consistent and high-quality mediation practices, fostering greater public trust and acceptance. As a result, mediation is likely to expand into new areas such as corporate law and international disputes, improving the efficiency of the legal system and offering a robust alternative to litigation. The MCI's role in standardizing and regulating mediation will likely drive its growth, transforming mediation into a mainstream dispute resolution method in India.

WHAT IS CONCILIATION?

Conciliation is a conflict resolution process where a neutral third party, known as a conciliator,

helps the parties involved reach a mutually acceptable agreement. The conciliator engages with

both sides to identify underlying issues, suggest potential solutions, and facilitate constructive

discussions. The goal is to guide the parties towards a resolution that addresses their concerns

and satisfies their needs, promoting a collaborative and harmonious outcome.

KEY FEATURES OF CONCILIATION

1. Neutrality: The conciliator remains impartial, avoiding favouritism. Their role is to facilitate the process and assist in reaching a resolution, without influencing the outcome or making decisions for the parties.

2. Voluntariness: Participation in conciliation is voluntary, and parties are free to withdraw at any time. This ensures that all participants are genuinely committed to resolving the dispute.

3. Confidentiality: Discussions and information shared during conciliation are kept confidential. This encourages open and honest dialogue, as parties can communicate freely without concern for negative consequences.

4. Active Assistance: The conciliator actively engages in the process by identifying underlying issues, proposing potential solutions, and helping parties navigate their differences constructively.

5. Fairness: The conciliator ensures that all parties are treated with respect and fairness, recognizing each perspective and ensuring everyone has an equal opportunity to contribute.

6. Empowerment: Parties are encouraged to take responsibility for finding and agreeing on solutions. The conciliator supports them by offering guidance and options, but the final agreement is reached through the parties’ own efforts.

BENEFITS OF CONCILIATION

Conciliation offers several significant benefits that make it an appealing option for resolving disputes. It is an evolving form of dispute resolution hence this process provides a supportive and collaborative environment, which can help alleviate the emotional and psychological stress often associated with conflicts. It also proves to be more cost-effective than traditional litigation, avoiding the high expenses and lengthy procedures of court cases. Additionally, conciliation ensures confidentiality, safeguarding the privacy of all parties involved. The collaborative nature of conciliation allows participants greater control over the final resolution, promoting positive relationships and facilitating quicker, more efficient outcomes.

THE CONCILIATION PROCESS

The conciliation is much easier and preferred form of dispute resolution for big organisations as by addressing conflicts in a collaborative and constructive manner, conciliation can improve workplace relationships and overall harmony. Part 3 (section 61-81) of the Arbitration and Conciliation Act 1996 discusses the process of conciliation, which is an alternative method of resolving disputes outside of court. Conciliation is governed by the provisions outlined in the Arbitration and Conciliation Act, 1996

1. Initiating Conciliation: The process begins when one or both parties agree to seek conciliation. This agreement can be voluntary or mandated by a contract or legal requirement. Once both parties agree, they select a conciliator with expertise relevant to the conflict. The conciliator can be 1,2 or 3 as decided by both the parties as mentioned in Section 63 of the Arbitration and Conciliation Act, 1996. There can be even number of conciliators unlike Arbitration.

2. Preparation: Prior to the conciliation session, parties often provide written statements or summaries of their positions. The conciliator may review these documents and prepare an agenda to guide the session. He may request additional information at any stage of conciliation. As per Section 19 of the Arbitration and Conciliation Act of 1996 an arbitral tribunal is not bound by the Code of Civil Procedure (CPC) or the Evidence Act of 1872. This section also allows parties to determine their own procedure.

3. The Session: During the conciliation session, the conciliator facilitates discussion between the parties. This may involve individual meetings with each party to understand their perspectives and then joint sessions to explore potential solutions. The conciliator helps to clarify misunderstandings, identify common ground, and propose possible resolutions. As per Section 75 of A&C,1996 Conciliator and the parties are to keep all the matter relating to conciliation confidential. The parties are restricted from initiating and arbitral or judicial proceeding during the process of conciliation except in the cases were the parties find it vital for preserving their rights. The cost of conciliation is borne equally by both the parties until otherwise decided in the agreement.

4. Agreement: If the parties reach an agreement, the conciliator helps to formalize it. This may involve drafting a written settlement that outlines the terms agreed upon and the steps each party will take to implement the agreement. The conciliator authenticates the settlement agreement and furnishes a copy to each party. Only the agreements authenticated under section 73 of Arbitration &Conciliation Act,1996 can be assigned the status of settlement agreement. The settlement agreement has the same stance as an arbitral award. It does not require a seal of approval of the court for its enforcement when it is made in direct reference by the parties without intervention of the court.

5. Follow-Up: In some cases, the conciliator may schedule follow-up meetings to ensure that the agreement is being implemented as planned and to address any new issues that arise.

Conclusion

Mediation and conciliation stand as pivotal pillars of alternative dispute resolution (ADR) in India, offering a more efficient, collaborative, and cost-effective means to resolve conflicts. The introduction of the Mediation Act, 2023 marks a significant shift towards formalizing mediation within the legal framework, mandating pre-litigation mediation and establishing the Mediation Council of India. This legislative progress, coupled with the established conciliation procedures under the Arbitration and Conciliation Act, 1996, underscores India's commitment to modernizing its dispute resolution mechanisms.

Both mediation and conciliation prioritize confidentiality, voluntary participation, and the involvement of neutral third parties to foster constructive dialogue and mutual understanding. These methods, by focusing on amicable settlements, not only reduce the burden on courts but also offer parties the autonomy to resolve disputes in a manner that best suits their needs. The benefits of these processes—speed, cost efficiency, and flexibility—are particularly appealing in a country where the judicial system struggles with a significant backlog of cases.

The establishment of the Mediation Council of India will further professionalize and standardize mediation practices, enabling it to evolve as a mainstream method for resolving civil, commercial, and even international disputes. As mediation and conciliation continue to grow in prominence, they promise to transform the legal landscape, offering individuals and businesses alike a more amicable, accessible, and efficient path to justice.

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Authors:

Harnoor Grewal, First Year

Bhawna Hooda, First Year