Introduction         

In today’s scenario, there are more than 40 lakh unresolved civil cases in India, out of which 87.33% cases have been pending for over a year in the High Courts.^[1] Even though the Indian legal system has introduced and promoted the use of alternate dispute resolution, there has been limited success^[2] in actual practice, which is evident from the huge disparity^[3] between the rate at which cases are disposed-off to the number of cases pending. Therefore, there exists a dire need for dispute resolution mechanisms to be properly implemented to decrease the burden of the Indian judiciary. One such solution is mandatory pre-litigation mediation. The former Chief Justice of India S.A. Bobde, while addressing the 3^rd International Conference on Arbitration, emphasised that compulsory pre-litigation mediation would ensure the efficiency of the judiciary.^[4] However, such a method is currently not being implemented effectively.

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”.^[5] Section-12A of the Commercial Courts Act, 2015^[6] and the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018^[7] made pre-litigation mediation compulsory in India, unless the parties prefer an “urgent” interim relief. This is a step forward but there are several hiccups that need to be dealt with. This article aims to explain how India may efficaciously implement a mandatory pre-litigation mediation model. This article will address the reasons for the failure of mediation in India. It will also analyse the pre-litigation model of various other countries to provide an international perspective and examine their efficacy. Finally, the article will explore the takeaways from these models that can be effectively implemented in the Indian legal system.

Failure of Mediation in India

There are multiple flaws in the current Indian mediation model, which has led to its failure. In Afcons case,^[8] while examining Section 89 of the Code of Civil Procedure (CPC), 1908, which gives power to the court to refer matters to Alternate Dispute Resolution (hereinafter, “ADR”),^[9] the Supreme Court held that all civil cases, with some exceptions, must be referred to an ADR process. There is limited to no data on the impact of this judgment over referrals to ADR mechanisms,^[10] which is a sign of how unwelcoming the Indian legal system has been to ADR mechanisms. By studying the number of cases that are being referred to ADR procedures and by analysing their success rate, we might be able to estimate how well the ADR procedures fare under the Indian judicial system. Section 89 of CPC has the potential to promote ADR procedures, however, it has not been used efficiently. Judges and lawyers are sceptical about the application of mediation to resolve legal disputes in India, and there are deep apprehensions when it comes to the relationship between the judicial process and mediation.^[11]

Additionally, mediation in India does not have an umbrella legislation, however, there are different sets of laws that refer to mediation such as Section 89 of CPC, Section 12A of Commercial Courts Act, 2015, Section 37 of Consumer Protection Act, 2019, and Section 442 of the Companies Act, 2013, Companies Mediation Rules, 2016, Pre-Institution Mediation Rules under The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018. Lack of enforceability of a unified law within India has led to a decrease in the effectiveness and seriousness accorded to mediation, which poses a challenge. No specific law ensuring the enforceability of a mediation decision sparks uncertainty and anxiety, amongst participants, in the process. The only possible option to enforce a settlement is the contract method, that is, enforcing the settlement agreement as a contract via litigation, which would defeat the purpose of mediation.

Inadequate laws and unsatisfactory training of judges/lawyers/mediators^[12] has also adversely affected the success of mediation in India. Moreover, due to the predominance of litigation and lack of awareness, lawyers and clients approach mediation sceptically, as there is a myth that the party suggesting or initiating mediation has a weaker case.^[13] Another belief is that successful mediation results in a compromised form of justice^[14] and, therefore, it is less fruitful than a successful litigation. The lack of faith in lawyers^[15] can make them deliberately sabotage a mediation proceeding.

India lacks in quality and quantity of mediators; additionally, the judges/lawyers are not being incentivised to reap the benefits of mediation.^[16] In Daramic Battery,^[17] the petitioner approached the Delhi High Court because the National Legal Services Authority was unable to find an eligible commercial mediator from their list of mediators. Such shortcomings undermine laws such as Section-12A of Commercial Courts Act, 2015,^[18] for when the quality and quantity of mediators is not up to the mark, the system of pre-litigation mediation, as a whole, fails. Section-12A^[19] requires State and District Legal Services Authorities (hereinafter, “LSA”) to conduct pre-litigation mediation. However, LSAs have little to no experience/training^[20] in mediation and are rather accustomed to an adjudicatory/adversarial process.^[21]

Additionally, India requires capacity building and state-of-the-art infrastructure. The profession of mediation needs to be promoted and made more lucrative, which would attract more people towards the profession, thereby solving the issue of dearth of mediators. Furthermore, laws should be introduced that bar parties from frivolously challenging mediation agreements. 

India must resolve the above-mentioned flaws if it wants to establish a good mediation model. It might find some inspiration from the mediation models of other nations, which we will discuss below.

Analysis of Mandatory Mediation Models of Other Nations            

Different nations have inculcated different mediation models within their jurisdictions. This part brings to light the mediation models of four such countries which have been able to successfully adopt mediation as an alternate form of dispute resolution. The countries are namely, Turkey, Italy, USA, and Canada.

In 2017, the Mediation Code of Turkey was amended by Law Number 7036,^[22] which mandated pre-litigation mediation for labour disputes.^[23] It also mandated that before filing a suit for monetary relief, parties had to present a statutory declaration attesting to an attempted mediation, failing which, their suit could be rejected on procedural grounds.^[24] Moreover, the mediation proceedings had to be concluded within three weeks, and an extension of one week was given in exceptional cases.^[25] In the first year, after the said model was established, the Turkish Ministry of Justice declared that 67% of the cases that had gone for mediation reached a settlement.^[26] Statistics provided by the Turkish Bar Association in 2019 show that more than 10% of all of Turkey’s lawyers were registered mediators.^[27] In 2018, the Mediation Code was amended to bring “commercial” disputes under the pre-litigation mediation scheme.^[28]

The Turkish Parliament has implemented laws that mandate the Ministry of Justice to maintain a registry of persons, who are qualified to mediate over private disputes. The laws have also established a proper criterion that must be fulfilled for one to qualify as a mediator.^[29] Such proactive institutionalism^[30] has helped raise awareness with respect to mediation. Furthermore, parties who refuse to attend the mediation proceedings are penalised.^[31]

A similar model is also being successfully practiced in Italy. In 2013, Italy implemented the “opt-out” form of mandatory mediation which became its most successful endeavour in forming a system of mediation. In 2013, the Italian Parliament passed a law^[32] making it mandatory to try to mediate certain cases. According to this law, the parties must meet the mediator in the first meeting, which would bear a nominal cost, however, skipping it would entail a penalty. The parties can then make a decision whether to continue with the mediation, wherein the government would provide a tax credit for the first €500 of the fees, or to opt-out of it. Data, collected over time, points towards the success of the “opt-out” model in increasing mandatory and voluntary mediations.^[33] Moreover, lawyers must inform their clients about mediation in writing, a failure in doing so would result in them being precluded from representing their clients.^[34]This helps raise awareness, support, and willingness to mediate the disputes. The result of such awareness can be seen in the American and Canadian models of mediation.

The USA does not have a country-wide law/policy on mediation; however, its public policy strongly supports ADR.^[35] Mandatory mediation is gaining popularity and is currently the most popular^[36] of all ADR procedures. Statistics show that mediation enjoys a success rate of around 70%, as of 2020.^[37] This has been made possible mainly due to the strong support^[38] of USA’s courts, and the legal fraternity. As a result, mediation has been implemented in multiple aspects of civil law throughout the country, especially family disputes’ settlements.^[39]

Canada also has an inspirational mediation model. The Ontario Superior Court of Justice in Canada has set up a mandatory mediation program^[40] for certain civil cases by introducing Rule 24.1^[41] for Toronto, Ottawa, and Windsor. This rule made it mandatory for all the parties to attend the mediation session early in the litigation process. However, if the same does not work, the parties could go through with the trial. Similar to the US courts, the Canadian courts also support and actively refer cases to mediation.^[42] Moreover, like the Turkish model, if a party refuses to participate in a mediation unreasonably, then the court can penalise by reducing the award of costs to the party.^[43] It has been found that this has not only helped in significantly decreasing the time-taken to dispose-off the cases but also, the lawyers and litigants have shown considerable satisfaction with this program due to proper education given regarding mediation.^[44] Around 90% of litigated matters come to a form of settlement before the trial itself, with mediation playing a large role in it.^[45]

Recommendations for an Improved Mediation Model in India    

India needs laws similar to the laws in Turkey, which can establish a quality control system for mediators. Like the Turkish and Canadian model, India could also introduce laws that penalise parties who unnecessarily refuse to attend mandatory mediation sessions, and/or India must allow cases that have not gone through mediation proceedings to be rejected on procedural grounds. This would incentivise parties to go through the mediation proceedings diligently. A three week time-limit on the mediation proceedings, like Turkey, might greatly help Indians who fear that mediation will inadvertently waste their time. 

India does have several provisions concerning mediation, however, discrepancies among the same impede the success of mediation as a whole.^[46] From Italy’s, Canada’s, and Turkey’s models, it is clear that uniform legislation would help create legal sanctity and overall prosperity of mediation in India. It is also important that Indian courts actively support and encourage the use of mediation, similar to USA and Canada. The Indian Supreme Court has, acknowledging the issue of lack of uniform legislation, set up a panel to draft legislation^[47] for mediation (“an Indian Mediation Act”) to be sent to the government, which is a very promising proposal. Through such initiative, the Court has shown support to mediation which will encourage lower courts to follow through.      

However, even if there has been a slight change in the way courts and/or judges view mediation in India, Indian lawyers do not actively encourage the use of mediation even if they are familiarised with mediation via programmes.^[48] To encourage them to do so, India can implement Italy’s model wherein it will be compulsory for them to inform clients regarding mediation otherwise they may be precluded from representing them. The introduction of mediation as a compulsory course,^[49] to be taught in law schools by the Bar Council of India (BCI), is a welcomed initiative to tackle such an issue since it will not only educate but also incentivise future lawyers towards the use of mediation as a dispute resolving method. 

A Family Court Mediation Drive, conducted in 21 Family Courts in Delhi, proved to be successful with a disposal rate of 75.27%, which shows that proper and effective implementation of mandatory mediation and its promotion can help decrease the judiciary’s workload.^[50] Moreover, even though physical/face-to-face mediation is preferable, however, in current times, as a global pandemic rages, online mediation or other forms of ODR (online dispute resolution) could prove to be strong allies.

Conclusion  

This article has shed light on a possible mandatory pre-litigation mediation model for India. The Indian legal system could benefit greatly if such a mediation model is implemented in India. As justice delayed is justice denied, Indian governmental organs must work together to improve the efficiency of the Indian legal system.

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 References

[1]    NATIONAL JUDICIAL DATA GRID, High Courts of India, https://njdg.ecourts.gov.in/hcnjdgnew/?p=main/pend_dashboard (Dec. 15, 2021).

[2]    Prof. K. N. Chandrasekharan Pillai Et Al., ADR: Status / Effectiveness Study, (2014), https://ghconline.gov.in/library/document/conference2728072018/II1ADR%20Status_Effectiveness%20Study.pdf.

[3]    Supra note 1. 

[4]    Arun Sharma, Mediation vis a vis Litigation: Is the time ripe to takeover or there is a need of balance of one on other, 17 PJAEE 7 (2020), https://archives.palarch.nl/index.php/jae/article/view/4286/4190.

[5]    Mediation, cambridge dictionary, (Nov. 23, 2021), https://dictionary.cambridge.org/dictionary/english/mediation.

[6]    The Commercial Courts Act, 2015 § 12A, No. 4 of 2016, Acts of Parliament, 2015 (India).

[7]    The Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 §  pt. II sec. 3 (i), Acts of Parliament, 2018 (India).

[8]    Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (p) Ltd., (2010) 8 SCC 24.

[9]    Code of Civil Procedure, 1908 § 89, No. 5 of 1908, Acts of Parliament, 1908 (India).

[10]    Deepika Kinhal & Apoorva, Mandatory Mediation in India – Resolving to Resolve, 2 IPPR 49, 49-69 (2020), https://vidhilegalpolicy.in/wp-content/uploads/2021/03/Mandatory-Mediation-in-India-Resolving-to-Resolve.pdf.

[11]    Hiram E. Chodosh, Mediating Mediation in India, law commission of india, (Oct. 25, 2017), https://lawcommissionofindia.nic.in/adr_conf/chodosh4.pdf.

[12]    alok prasanna kumar et al., strengthening mediation in india: a report on court-connected mediations (2016), https://doj.gov.in/sites/default/files/Final%20Report%20of%20Vidhi%20Centre%20for%20%20Legal%20Policy.pdf.

[13]    Kinhal & Apoorva, supra note 10.

[14]    Juhi Gupta, Bridge over Troubled Water: The Case for Private Commercial Mediation in India, 11 AJM 59 (2018).

[15]    Kinhal & Apoorva, supra note 10.

[16]    Kumar et al., supra note 12.

[17]    Daramic Battery Separator India Pvt. Ltd. v. Union of India, W.P.(C) 7857/2018.

[18]    Supra note 6.

[19]    Supra note 6.

[20]    Juhi Gupta, Mandatory Pre-Institution Commercial Mediation In India: Premature Step In The Right Direction?, kluwer mediation blog (Sept. 1, 2018), http://mediationblog.kluwerarbitration.com/2018/09/01/mandatory-pre-institution-commercial-mediation-india-premature-step-right-direction/.

[21]    Deepika Kinhal et al., ODR: The Future of Dispute Resolution in India (July, 2020), https://vidhilegalpolicy.in/wp-content/uploads/2020/07/200727_ODR-The-future-of-dispute-resolution-in-India.pdf.

[22]    Labor Courts Act, 2017, No. 7036, Acts of Parliament, 2017 (Turkey).

[23]    Mandatory Mediation in Labor Disputes in Turkey, hg.org legal resources, https://www.hg.org/legal-articles/mandatory-mediation-in-labor-disputes-in-turkey-44070.

[24]    Hasan Kadir Yilmaztekin, Turkey introduces mandatory civil mediation for commercial cases including IP rights, 14 JIPLP 6, 432 (2019), https://doi.org/10.1093/jiplp/jpz053.

[25]    Abhijeet Shrivastava, Mandatory Pre-Litigation ‘Commercial’ Mediation: Turkey’s Lessons for India, 1 NUJS JODR 2 (2021), https://jodr.org/wp-content/uploads/2021/08/1.-Mandatory-Pre-Litigation-Mediation-Abhijeet-Shrivastava.pdf.

[26]    Tuba Bilecik, Turkish Mandatory Mediation Expands into Commercial Disputes, kluwer mediation blog (Jan. 30, 2019), http://mediationblog.kluwerarbitration.com/2019/01/30/turkish-mandatory-mediation-expands-into-commercial-disputes/.

[27]    Gizem Halis Kasap, Silver Bullet of Mediation? Turkey Implements Mandatory Pre-Litigation Mediation in Commercial Disputes, turkish law blog (Jan. 11, 2019), https://turkishlawblog.com/read/article/50/%22#_ftn1%22.

[28]    Abonelik Sözleşmesinden Kaynaklanan Para Alacaklarina İlişkin Takibin Başlatilmasi Usulü Hakkinda Kanun, No. 7155, Acts of Parliament, 2018 (Turkey).

[29]    Shrivastava, supra note 25.

[30]    Shrivastava, supra note 25.

[31]    Kasap, supra note 24.

[32]    Concilia LLC, Mediation in Italy, lexology (Sept. 9, 2019), https://www.lexology.com/library/detail.aspx?g=d0faf894-e442-46f9-9fee-dfb1f78ddd4a.

[33]    François Staechelé, Mediation and judicial in Italy 2019, gemme (Oct. 22, 2019), https://www.gemme-mediation.eu/2019/10/22/mediation-and-judiciary-in-italy-2019/.

[34]    Kendall D. Isaac, Pre-Litigation Compulsory Mediation: A Concept worth Negotiating, 32 La Verne Law Review (2011), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1988384.

[35]    Commercial mediation in the U.S., linklaters (April. 1, 2020), https://www.linklaters.com/en/insights/publications/commercial-mediation-a-global-review/commercial-mediation-a-global-review/us.

[36]    Kinhal and Apoorva, supra note 10.

[37]    U.S. Equal Employment Opportunity Commission, EEOC Mediation Statistics FY 1999 through FY 2020, https://www.eeoc.gov/eeoc-mediation-statistics-fy-1999-through-fy-2020.

[38]    Isaac, supra note 34.

[39]    Isaac, supra note 34.

[40]    fact sheet: mandatory mediation, Ministry of Attorney General, (Jan. 1, 2020), https://www.attorneygeneral.jus.gov.on.ca/english/courts/civil/fact_sheet_mandatory_mediation.html.

[41]    Courts of Justice Act, R.S.O. 1990, c. C.43, 2021, § 24.1 (Canada).

[42]    Brett Harrison & Gordana Ivanovic, When is Mediation Mandatory? – A Comparative Analysis of Mandatory Mediation Across Canada, lexolgy, (Oct. 30, 2020), https://www.lexology.com/library/detail.aspx?g=b081e8aa-96ef-45ca-8623-2e1b5c8b0f1a.

[43]    Kathryn Mun, The Cost of Refusing to Mediate, adr institute of canada, https://adric.ca/the-cost-of-refusing-to-mediate/.

[44]    “Mandatory” Mediation, LC Paper No. CB (2)1574/01-02(01), https://www.legco.gov.hk/yr01-02/english/panels/ajls/papers/aj0422-1574-1e-scan.pdf.

[45]    Id.

[46]    Shrivastava, supra note 25.

[47]    M. R. Krishna Murthi v. The New India Assurance Co. Ltd., 2019 SCC OnLine SC 315.

[48]    Anil Xavier, Mediation: Its Origin & Growth in India, 27 HJPLP, https://www.arbitrationindia.com/pdf/mediation_india.pdf.

[49]    Bar Council of India, scc online blog (Aug. 13, 2020), https://www.scconline.com/blog/wp-content/uploads/2020/08/Mediation_Mandatory_Bar_Council_Course.pdf.

[50]    Aditi, Delhi HC celebrates the success of Family Courts Mediation Drive, reports disposal rate of 75.27%, bar and bench (Dec. 11, 2019, 12:50 PM), https://www.barandbench.com/news/delhi-hc-celebrates-the-success-of-family-courts-mediation-drive-reports-disposal-rate-of-75-27.