Following India’s economic liberalization, the Parliament passed the Arbitration and Conciliation Act of 1996, which brought the Indian arbitration framework in accordance with the UNCITRAL Model Law. This was undoubtedly the most significant legal reform, and the Indian legal and business communities paid close attention to it. The law aims to create a structure that allows for maximal party sovereignty while minimizing court intervention.
In many jurisdictions, the terms “mediation” and “conciliation” are synonymous.
In India, however, the Conciliator has more authority than a Mediator. The Conciliator can propose a settlement proposal and define the conditions of the agreement. The mediator, on the other hand, merely serves as a conduit for the parties to reach an agreement. Mediation is not governed by any specific statute in India, unlike conciliation, which is governed by the Arbitration and Conciliation Act, 1996.
The 1947 Industrial Disputes Act included a mediation provision.
The Commercial Courts Act of 2015 and the Real Estate (Regulation and Development) Act of 2016 both have mandatory pre-litigation mediation provisions. The Companies Act of 2013 and the Consumer Protection Act of 2019 have both been amended to allow for mediation. Most crucially, Section 89 of Civil Procedure Code (CPC) was resurrected by the Parliament in 1999, allowing courts to recommend parties to mediation. The Indian Supreme Court, on the other hand, was the one who gave life to this section of the Code.
The lack of any norms or rules for the operation of mediation was palpable, and it was one of the reasons why mediation was not used. The Supreme Court of India created a Committee to draft Mediation Rules in response to a constitutional challenge to Section 89 CPC, which were later accepted. The rules were to be framed by all of the High Courts. In India, this resulted in the formation of Court-Annexed Mediation. In the well-known Afcons International decision, the Supreme Court of India resolved some difficulties in the drafting of Section 89 CPC. In its original form, the section put the cart ahead of the horse. The Supreme Court ruled that it is the Court’s responsibility to determine whether ADR is appropriate for resolving a particular dispute and to recommend the parties to it. Furthermore, the Court made such agreements more enforceable by requiring them to be included in the final order.
In the current Indian situation, the “screening” required by Section 89 CPC takes place in the courtroom. Following that, the Court may submit the case to an appropriate ADR process, such as mediation. Even at the Supreme Court of India, such mediation referrals are common, and we have witnessed conflicts that have lasted decades be resolved quickly through the mediation process.
It’s worth noting that the majority of cases brought to court-annexed mediation are related to family or marriage problems. Private mediations, which take place before a lawsuit is filed, are becoming more common in the country. Most business contracts feature a multi-tiered approach to arbitration, with the initial effort to resolve a dispute between parties being through mediation or negotiation.
In addition to improving and clarifying the rules on mediation, the Supreme Court of India has made a concerted administrative effort to improve the mediation scene in India. In 2005, the then-Chief Justice of India established the Supreme Court Mediation and Conciliation Project Committee. Training of Mediators and Referral Judges across the country, as well as the publication of Training Manuals, are two of the Committee’s most essential operations.
A noteworthy development in 2019 is the Singapore Convention on Mediation.
This is a big step forward in terms of creating a framework for cross-border enforcement of international settlement accords. The Convention is critical for establishing trust and confidence in international commercial settlement agreements. In 2019, India was one of the first countries to sign the Singapore Convention.