India: Arbitration, Litigation and Conciliation

A BEGINNER'S GUIDE TO MEDIATION IN INDIA

Mediation in India is becoming increasingly popular amongst the disputing parties owing to its less-time consuming and cost effective factor. Mediation is a process where the parties voluntarily sit on a table to negotiate and resolves their disputes under the guidance of a Mediator. With a view to reduce pendency of cases, even the courts in India are highly bent towards the use of mediation by the parties to mutually resolve their disputes. Mediation has often proved to be beneficial for the parties and it is for this reason that mediation in commercial disputes has now become mandatory by way of an amendment to the Commercial Courts, Commercial Division and Commercial Appellate Division of the High Courts Act 2015.Since a long time now, various rules and regulations have been in place pertaining to the conduct and procedure of mediation endorsed by courts in India. Therefore, a party may find it difficult to comprehend and understand that Mediation rules applicable on them.

We have therefore compiled all the information pertaining to Mediation and have attempted to simplify it in the manner below:

When can parties mediate?

The parties to a dispute can opt for mediation at any stage and are under no mandatory obligation to go through the procedure of Mediation. Choosing mediation as a mode to resolve the dispute in question is a voluntary decision and cannot be forced upon under any circumstances. The Commercial disputes, however, have to mandatorily undergo the mediation process owing to a 2018 amendment to the Commercial Courts Act 2015.Section 12A of the Commercial Courts Act, 2015 has made the pre-institution mediation mandatory before institution of a suit. The Commercial Courts (Pre-Institution Mediation and Settlement) Rules 2018 (the PIMS Rules) have been framed by the government. By virtue of these rules, before the trial begins in a suit, the parties have to mandatorily undergo pre-institution mediation. Settlements arrived at in this process are enforceable by law.

How is a Mediator chosen by the parties?

In India, parties are at liberty to mutually decide upon a Mediator to mutually resolve their legal and contractual issues, however, in case of failure of consensus, a mediator is appointed from the panel of mediators registered with the High Court as well as the District Courts, as the case may be.

What are the various types of Mediation? What type of Mediation is normally chosen by the parties?

Mediation as a concept of Alternate Dispute Resolution is prevalent in India in two forms namely Private Mediation and Court Annexed Mediation. Both the forms of mediation have their pros and cons.It cannot be stated for sure which form of mediation is mostly preferred by the parties due to lack of any clear data or record in this regard. However, the inclination seems to be towards Court annexed mediation, for which the respective High Courts have their own set of Rules. For instance, in Delhi, Mediation and Conciliation is governed by Mediation & Conciliation Rules 2004. Furthermore, Mediation in Delhi is conducted through the Mediation Centres established in each of the District Courts as well as at the High Court level.