DAWN OF “PRE LITIGATION” MEDIATION

inbatv Articles, India, Legal

After having established roots as an alternate method of dispute resolution in Indian Jurisprudence, the country awaits codification of a method of mediation, which would aim to build a structure through which the parties can mediate away their conflicts even before they decide to tread the path of litigation.

This non adversarial method of dispute resolution allows the parties to take a swing at an approach which is solution- oriented, and not conflict based.

Mediation as a practice is flexible in India and can be initiated either before the institution of a suit or during the pendency of one. However, such flexibility and discretion is also a result of the ambiguities present in the legal system as mediation laws are not codified. While there exist special legislations that encapsulate specific provisions of mediation, for other legislations that do not contain the same, mediation is like making rules of a game on a playing field with no boundaries. The sky’s the limit. That is why it is the need of the hour that the legislature drafts laws on mediation to make this seamless field, a level playing one. While flexibility in deciding terms of a mediation isn’t a problem, flexibility to choose litigation over mediation has created a burden on the courts which can be greatly reduced if codified laws make mediation mandatory for parties before they institute a suit.

At this juncture it is important to look at the process of mediation followed in India through the lens of:

  • Codified and Uncodified practices of Mediation
  • Court- annexed mediation and Pre- Litigation mediationC

For instance, Arbitration and Conciliation Act, 1996, Hindu Marriage Act, 1955 and Commercial Courts Act, 2015 contain a mediation clause. In codified mediation provisions, some clauses refer to pre litigation mediation, while some to court annexed mediation.

Although the Arbitration and Conciliation Act, 1996 specifically focuses on the dispute resolution method of arbitration and conciliation, it refers to mediation in Section 30 as a resort for settlement between parties if they consent to the same, on encouragement by the arbitral tribunal. Any settlement reached in such mediation can also be recorded as an arbitral award under the terms agreed to as per Section 73 of the Act. This is also known as the “Arb- Med- Arb” method of dispute resolution where although the resolution starts with Arbitration, the parties can switch to Mediation in between to try to settle the dispute. If that doesn’t work out, the parties are free to go back to Arbitration.

Under the Hindu Marriage Act, 1955, Section 23 empowers the court to encourage “reconciliation” between parties before granting any relief under the Act.

This is an example of court annexed mediation as opposed to private mediation where the court refers the parties to mediation before a mediation centre, which is part and parcel of the judicial system.

While the above mentioned are meditation provisions in special laws, Section 89 of the Code of Civil Procedure, 1908 lays down power for court referred mediation in all civil cases. The appropriate stage for considering reference to ADR processes in civil suits is after the completion of pleadings and before framing the issues.[1] However this does not mean that mediation cannot be referred to at a later stage in the proceedings much after issues have been framed.

While these provisions give statutory recognition to mediation as an alternate method of dispute resolution, there still is a need to bring mediation into the mainstream by redefining it as a primary method to resolve disputes. And this shall be achieved when the legislature successfully drafts laws for Pre Litigation Mediation.

Pre Litigation Mediation is one where mediation is given priority over litigation and so it is preferred before filing a suit or sending a notice. Although this method of mediation can be followed through mutual agreement between contesting parties by adding a clause to this extent in the contract- as the edifice of mediation is consent- this method is not codified, which is why the judiciary is now encouraging the legislature to codify the same.

Only codification of this mutation of conventional mediation practice is found in Commercial Courts Act, 2015, under Section 12A of which states that a suit cannot be filed under this Act until the plaintiff has exhausted the remedy of pre institution mediation- unless such suit is for interim relief. It furthermore safeguards the plaintiff from the provisions of the Limitation Act by stating that the period of such mediation shall not be included for computation of the limitation period for institution of such suit.

Recently, the Youth Bar Association[2] filed a writ petition before the Supreme Court to direct all High Courts of India to provide rules for mandatory Pre Litigation Mediation, or to formulate Standard Operating Procedure (SoP) for the same. This request was based on the 2013 decision of this court where the High Courts of the country had to set up Pre Litigation Mediation Centres, however this was only followed by the Karnataka, Bombay and the Punjab and Haryana High Courts.

This Petition has also opened doors for inclusion of all other corollaries branching out from Pre Litigation Mediation. For example,  an Intervention application by Bridge Mediation was also admitted by the Supreme Court which sought for creation of an expert committee which would shed more light on the practicality of Pre Litigation Mediation as covered by Section 12A of the Commercial Courts Act.

Furthermore, the court also sought for response by the Union Government regarding its intention to draft a general legislation on mediation.

In conclusion, for mediation that is not codified, it is entirely dependent on the discretion of the parties if they want to take this route before institution of a suit or not. Codification of Pre Litigation Mediation, however, will take away this discretion to compulsorily direct the parties to try to settle their differences through mediation before the case is filed. This is beneficial for both, the court as well as the parties as where it’ll reduce the burden on the courts, it’ll also save parties from unnecessary expenses, court dates and conflict.

Although Pre Litigation or Pre Arbitration mediation is encouraged, it is an uncommon practice, and will remain so without well-established laws in place for the same.

Vibhana Kanwar

Student Reporter, INBA

[1] ‘Mediation Training Manual of India’ by Mediation and Conciliation Project Committee, Supreme Court of India

[2] WP(C) No. 849/2020