The Impact of Mediation in India

ARJUN PAL

BA.LLB (2014 – 2019)

JINDAL GLOBAL LAW SCHOOL (SONIPAT, HARYANA)

O.P.JINDAL GLOBAL UNIVERSITY

Mediation is a dynamically structured voluntary dispute resolution process where a neutral

third party helps the disputing parties in resolving a conflict between them by using
specialized communication and negotiation techniques. These techniques are in turn designed
in a manner that facilitates the process of mediation and dispute resolution. The concept of
mediation has evolved in the latter half of the 20th century, however, the roots of mediation
can be traced way back to the ancient Indian legal systems for example the systems known as
the “Gram Panchayats” and “Nyaya Panchayats” and, that were popular widely prevalent in
ancient rural India.1 Presently, even though the popularity of the Panchayat systems may have
dwindled, this system still exists in various parts of rural India and the Indian government is
making incessant efforts to revive these indigenous justice delivery methods by allocating
funds for their reinvigorated functioning.2

The Arbitration and Conciliation Act, 1996 was the first statute to introduce the Indian legal
system was to mediation by. Sub-section (1) of Section 30 of the Arbitration and Conciliation
Act 1996 encourages the parties involved to explore the option of mediation and conciliation
despite arbitral proceedings having started and thereby empowers the arbitral tribunal to use
mediation as a means of dispute resolution. Nevertheless, due to a lack of proper enforcement
(or even formation) of any specific rules of mediation, this provision promoting mediation
has almost been rendered defunct. This however, was rectified to a certain extent by the
introduction of Section 89 of the Code of Civil Procedure, 1908, which was concerned with

1
Anil Xavier, Mediation: It’s Growth and Origin in India, available at
http://www.arbitrationindia.org/pdf/mediation_india.pdf
2
Madhu S, Mediation in India, available at http://cppradr.blogspot.in/2008/07/mediation-in-india.html

Electronic copy available at: https://ssrn.com/abstract=3494060

exploration of the different methods of dispute resolution. Also, the notion of “judicial
mediation” was first introduced by this section”3. Relying on this, the Court, where satisfied
that the circumstances are such that the parties can try and settle their disputes amicably in
ways if tried, the Court may encourage the parties to seek out the methods of mediation,
arbitration and other forms of alternate dispute resolution. Despite this, unlike other
statutorily-recognized forms of non-binding alternative dispute resolution there is still no
concrete statute that addresses the concern of and ensures “confidentiality” in mediations in
India.

It was only recently in the year 2011 that the Supreme Court of India declared that mediation
proceedings were confidential in nature, and only an executed settlement agreement or
alternatively a statement that the mediation proceedings were unsuccessful, should be
provided to the court by the mediator4. It is expected that via this judgment, the popularity of
mediation as a method of resolving disputes in India will increase. Following in the same
footsteps, the Law Commission of India in its 129th Report recommended that it should be
made obligatory for the Court to refer disputes to mediation for settlement5.This was referred
to in the landmark case of Afcons Infra Ltd v. M/S Cherian Varkey Constructions (2010)6.
Another landmark decision by the Supreme Court was arrived at on 22nd Feb, 2013 in the
case of B.S. Krishnamurthy v. B.S. Nagaraj7, wherein it directed the Family Courts to strive
to settle matrimonial disputes via mediation and to also introduce parties to mediation centres
with consent of the parties, especially in matters concerning maintenance, child custody and
the lot. In the few years since mediation centres in the cities of Delhi (in the year2005) and
Bangalore (in the year 2007) have been set up, around 30,969 cases have been through
mediation process, and around 60% of these cases have been settled ever since8. One of the
most famous recent cases where mediation was resorted to was the one where conciliation
has been rejected by the Reliance bigwigs Mukesh and Anil Dhirubhai Ambani over the
takeover of South African Telecom Major MTN.

3
www.indialawjournal.com/volume4/issue_1/article_by_desia_kanuga.html
4
Held in the case of, “Moti Ram (D) Tr. LRs and Anr. Vs Ashok Kumar and Anr (Civic Appeal No. 1095 of
2008)”
5
http://practicalacademic.blogspot.in/2012/08/guest-post-mediation-and-conciliation.html.
6
2010 (8) SCC 24
7
S.L.P. Civil) No(s).2896 OF 2010
8
Forbes India, Mediation in Indian Courts, available at http://www.forbes.com/2010/09/28/forbes-india-
judiciary-encouraging-mediation-reduce-baclog.html

Electronic copy available at: https://ssrn.com/abstract=3494060

Following this, various Supreme Court decisions in the recent past appear to point out that the
Courts are gradually developing a favourable attitude towards mediation. Also, mediation
seems to have specifically caught on with regard to the settlement of patent disputes. Further,
it has been noticed that Indian generic drug manufacturers are more frequently resorting to
mediation as a method for dispute settlement involving “patents” including the recent famous
cases of patent disputes between Hoffman La Roche and Cipla9 and Merck and
Glenmark10. Usually it is expected that Generic drug companies operate whilst keeping
public health concerns at top priority. However, it is also of concern that even though
settlements via mediation may be mutually beneficial for the parties involved and would
spare them the pain of going through lengthy legal proceedings, it might end up making the
drugs manufactured more expensive for consumers in countries like India. This would
definitely be disadvantageous for consumers in developing countries such as India.

Despite being successful in various countries, mediation has not been able to do so in India
mainly due to the lack of awareness regarding mediation and its benefits. There does seem to
appear that there has been a lack of initiative on the part of the government, including that on
part of the legal fraternity to spread awareness about mediation across the country. In India,
even though the judges have been quick to identify the increasing usage of mediation as a
helpful means for reducing case backlogs and delays, yet, Indian lawyers have not been able
to respond to mediation fast enough. Also, the current court assisted mediation centres hardly
cater to this aspect of reaching out to the people. However, the famous Malimath
Committee Report11 addressed certain aspects to be kept in mind while making efforts for
opening a wide range of different justice delivery mechanisms which will have long term
effects in resolving and decreasing the number of disputes involving the common man. Also,
the 129th Report of the Law Commission has identified certain new methods which may
help facilitate the speedy disposal of cases in urban areas. They are as follows12:

 Establishing the Nagar Nyayalaya with a professional Judge and two lay Judges in the
same manner as the Gram Nyayalaya and having comparable powers, authority,
jurisdiction and procedure;

9
F.Hoffman La Roche Ltd. and Anr v. Cipla Ltd. 2015 SCC OnLine Del 13619 : (2015) 225 DLT 391 (DB)
10
Glenmark Pharmaceuticals Limited v. Merck Sharp and Dohme Corporation and Anr 2015 (6) Supreme Court
Cases 807:2015 SCC OnLine SC 493
11
lawcommissionofindia.nic.in/reports/report238.pdf
12
lawcommissionofindia.nic.in/101-169/report129.pdf

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  Having cases heard in Rent Courts by a Bench of Judges, minimum two in number,
with no appeal but only a revision on questions of law to the district court;
 Setting up a Neighbourhood Justice Centres involving people in the vicinity of the
premises in the resolution of dispute; and
 Conciliation court system, presently working in Himachal Pradesh.

The efficient implementation of a system like this will most definitely help in addressing the
problems related to court delivery system. Such a system would also benefit the common
man in a substantial way. However, even in the present day, Indian lawyers still continue to
be as traditional and conservative as they have been over many years. They hardly tend to
support any new changes and hesitate while venturing into while at the same time, exposing
their clientele to the unknown risks that may be involved in an ADR or mediation process,
about which they are not well aware. Also, Indian lawyers always have a fear that delving
into mediation would potentially deprive them of income by encouraging the settlement of
cases prematurely and thereby significantly reducing the legal fees that could otherwise be
earned during the on-going and prolonged judicial proceedings. On, the other hand the
adversarial system (current court system) too cannot be totally dispensed with. The
adversarial system (involving litigation proceedings in the courts) is often the most relevant
method in a many different variety of situations especially, those needing authoritative
interpretation or establishment of rights or which manifest severe negotiating imbalance. It is
also required as one of the last resorts of dispute resolution. However, its haphazard and
unchanging application across a wide range of conflict ridden situations is a major cause of
the several maladies beleaguering the Indian legal system.13

It has been noticed that up till now mainly companies and institutions in the field of
insurance, banking and trading have relied on mediation and ADR as means of settling
disputes. Hence, encouragement for making mandatory provisions for making ADR
especially mediation to be used as commonly sorted after means of dispute resolution is much
needed. Awareness has to be aimed at the common people with wide publicity in various
media. Thus, there is an urgent need to identify people or community based initiatives that
already exist in the community for taking up the cause of spreading awareness about
mediation across the country. It now seems that we need new ways of looking at conflict
resolution and the legal profession and hope that we discover a new way that will help in

13
http://lawcommissionofindia.nic.in/adr_conf/sriram17.pdf

Electronic copy available at: https://ssrn.com/abstract=3494060

bridging bonds between the ethics of practice, the values of the law and the demands of
public policy. Helping the shift from adversarial litigation to methods of alternate dispute
resolution such as mediation, creating awareness in society of the benefits of the mediation
process, developing capacities are very critical elements indeed in the success of the process.

Electronic copy available at: https://ssrn.com/abstract=3494060