What is Mediation Act, 2023?

Mediation Act 2023: India has a rich heritage of resolving disputes through mediation, an age-old practice dating back to the Vedic period. Mediation is a voluntary, low-cost, and confidential process where disputing parties mutually find a solution with the help of an impartial third-party mediator. It offers an effective and peaceful way to settle conflicts, especially family matters, without the need for lengthy court battles.

Mediation Act, 2023
Mediation Act, 2023

While the concept of mediation is not new to India, the Alternate Dispute Resolution (ADR) movement has gained significant momentum in recent years. Mediation, along with Arbitration, Conciliation, and Negotiation, forms the cornerstone of ADR methods in the country. Among these, mediation has emerged as the most popular choice for resolving disputes amicably.

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The primary advantage of mediation is its flexible and party-centric approach. Unlike litigation, where parties engage in a blame game and await the court’s decision, mediation empowers the disputants to participate in the resolution process actively. With the guidance of a neutral mediator, they can express their grievances, explore options, and reach a mutually agreeable settlement.

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The Journey of the Mediation Act

The Mediation Bill was first introduced in the Rajya Sabha on December 20, 2021, after which it underwent a thorough review by the Standing Committee. The committee’s 117th Report, released on July 13, 2022, contained specific recommendations regarding the Bill’s provisions, some of which were approved by the Union Cabinet.

Consequently, the revised version of the bill, referred to as the Mediation Bill of 2023, was successfully passed by the Rajya Sabha on August 2, 2023, and later by the Lok Sabha on August 7, 2023. Following Presidential assent, the Bill became an Act on September 15, 2023, and was officially named the Mediation Act of 2023. Some portions of the Act came into force on October 9, 2023.

It’s clear that previous Acts passed by parliament have consistently reflected aspects reminiscent of mediation-oriented laws. Notably, Acts like the Legal Services Authority Act of 1987, Micro Small and Medium Enterprises Development Act of 2006, Companies Act of 2013, and Commercial Courts Act of 2015 all incorporate distinct sections devoted to mediation. This consistent inclusion highlights the acknowledged importance of mediation within our legal framework.

Further, the inception of mediation centres, exemplified by the Salem Bar Association case, marked a crucial step in this direction. Yet, the impact was primarily confined to court-annexed mediation proceedings. A paradigm shift has occurred, manifesting as a faith-infused legal framework for mediation. Parties embroiled in disputes can now seek resolution with a profound sense of confidence and trust, underpinned by this transformative mediation law.

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Two Paths to Mediation: Court-Referred and Private

In India, mediation can be initiated through two primary routes:

  1. Court-Referred Mediation: Under Section 89 of the Code of Civil Procedure, 1908, courts can refer pending cases, particularly matrimonial disputes like divorce, for mediation. This approach is widely adopted to ease the burden on the judicial system and provide a quicker resolution.
  2. Private Mediation: Individuals, businesses, corporations, and even government entities can voluntarily appoint professional mediators to resolve their disputes through private mediation. This process involves a fixed fee and allows parties to choose their preferred mediator.

The Mediation Process in India

The mediation process in India is designed to be user-friendly and flexible. Here’s how it typically unfolds:

  1. Initiation: Parties decide to resolve their legal dispute through mediation by entering into a written agreement and appointing a mediator of their choice, which could be an ADR lawyer or any other qualified professional.
  2. Structured Communication: The mediator facilitates structured communication and negotiation between the parties, ensuring each side presents their issues and proposed solutions.
  3. Confidentiality: One of the primary benefits of mediation in India is its confidentiality. All statements, admissions, and information shared during the process are inadmissible in court proceedings without prior consent from all parties.
  4. Party Control: The mediator does not impose a decision but guides the parties towards an amicable settlement. Parties retain control over the outcome and can withdraw from the process at any stage without providing a reason.
  5. Settlement Agreement: If a settlement is reached, the mediator drafts a clear and binding agreement reflecting the mutually agreed terms.

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Benefits of Mediation in India

Mediation offers numerous advantages over traditional litigation, making it an attractive dispute resolution method in India:

  1. Time and Cost Efficiency: Mediation is typically faster and more cost-effective than protracted court battles, saving valuable time and resources for all parties involved.
  2. Preserving Relationships: By promoting open communication and mutual understanding, mediation helps preserve personal or business relationships that may be strained by conflict.
  3. Confidentiality: The confidential nature of mediation proceedings allows parties to discuss sensitive matters freely without fear of public disclosure.
  4. Flexible and Creative Solutions: Mediation encourages creative problem-solving, enabling parties to craft tailored solutions that may not be possible through court-imposed judgments.
  5. Reduced Burden on Courts: By diverting cases from the judicial system, mediation helps alleviate the burden on courts, contributing to a more efficient administration of justice.

Key Provisions of the Mediation Act

Mediation Act
Mediation Act

Another notable provision is the reduction in the time limit for a mediation to be completed. In the earlier Bill of 2021, the time limit was 180 days which could be further extended up to 60 days but in section 18 of the 2023 Act, it has been reduced to 120 days which can be further extended up to the period of 60 days making it 180 days in total. This reduction in the time limit will further cater to the fast and timely disposal of the dispute.

The Act has also made the whole process more voluntary as under section 24, parties can opt out at any time during the proceedings to terminate the mediation. In the earlier Act of 2021, there was a bar of at least two sessions that had to be attended by the parties in order to terminate the proceedings.

The Act also gives an equal footing to Online Dispute Resolution (ODR) under Section 30, reflecting the Act’s modern approach, allowing for mediated settlements in the digital realm. It can be conducted at any stage of meditation giving more flexibility to the whole mediation process.

One of the most celebrated provisions brought by the Act is the legal status given to mediation settlement agreements (MSAs) which under Section 27 can be enforced like court judgments, enhancing the enforceability of mediated settlements.

This maintains the authenticity of mediation and makes the whole process worthy of opting. Although under section 29 of the Act, there are some grounds on which the MSA can be challenged such as if the agreement is reached through fraud, corruption, impersonation, etc.

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As India continues to embrace alternative dispute resolution mechanisms, mediation is poised to play a pivotal role in fostering a harmonious society. The government, legal professionals, and the public alike recognize the benefits of this time-honoured practice, paving the way for its widespread adoption.

With the right legal framework and increased awareness, mediation in India can become a cornerstone of conflict resolution, empowering parties to take control of their disputes and find mutually satisfactory solutions. By embracing this age-old wisdom, India can chart a course towards a more peaceful and prosperous future.

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