Mediation Bill: Key Changes Recommended By Parliamentary Committee
A parliamentary standing committee advises against making pre-litigation mediation mandatory.
A parliamentary committee examining the proposed draft law on mediation in India has recommended against making pre-litigation mediation mandatory in the country.
The inclusion of mandatory provision might serve as a tool in the hands of those who wish to delay the disposal of cases, the parliamentary standing committee on law and justice said in its report on The Mediation Bill, 2021.
Last year, the central government had proposed a draft mediation bill seeking to institutionalise the mediation process in India. The bill was referred to the standing committee seeking its comments on the draft.
The committee this week submitted its report. The key changes in its recommendations include:
Do Not Make Pre-Litigation Mediation Mandatory
The Mediation Bill, 2021 proposed to make pre-litigation mediation mandatory before the parties come to court. The mandatory mediation process was proposed for civil or commercial disputes with some exclusions enumerated in the first schedule of the bill.
The provision of pre-litigation mediation would be applicable even when parties did not agree to mediation and blocked their access to courts until they participate in at least two sessions of mediation.
The bill also proposed a possibility of costs being imposed on parties that failed to attend two mediation sessions without reasonable cause.
Making pre-litigation mediation mandatory may actually result in delaying of cases and may prove to be an additional tool in the hands of litigants to delay the disposal of cases, the committee said in the report.
Against this background, the committee recommends that the compulsory provision of pre-litigation mediation should be reconsidered.Parliamentary Standing Committee On Law And Justice
Need To Minimise Disputes Excluded From The Bill
The first schedule of the bill lists out disputes that would not be included in the ambit of the proposed law. These include:
Disputes involving allegations of serious and specific fraud, fabrication of documents, forgery, impersonation, coercion.
Disputes relating to claims against minors, deities; persons with intellectual disabilities, and person with disability having high support needs.
Disputes involving prosecution for criminal offences.
Disputes relating to levy of any direct or indirect tax or refunds.
Proceedings before regulatory bodies such as SEBI, CCI and APTEL.
The committee, however, said the list of exclusions needs to be revised and pruned. The reason for this, it said, is to ensure that maximum disputes go through the process of mediation.
The committee also recommended against outright excluding disputes involving people with intellectual disabilities from the bill. Instead, the report said, courts should be empowered to refer suitable disputes to mediation involving this category of individuals.
The provision also allows the government to amend the first schedule relating to exclusions through executive order and the committee has expressed its disagreement with the move.
The committee feels that although this provision is not against the spirit of law-making process but certainly falls under the category of excessive delegation in terms of subordinate legislation. Hence, the committee recommends that this type of provisions should have been avoided specially when the schedule indicates exhaustive list of exclusions.Parliamentary Standing Committee On Law And Justice
Recommends Against Excluding Government Disputes
Another key recommendation from the standing committee relates to exclusion of most disputes involving the central or state government from the purview of the bill.
The bill proposes to by and large keep non-commercial disputes involving the government as one party out of the ambit of the bill.
Experts who spoke with BQ Prime earlier also batted for a change in this provision on grounds that the government is the largest litigant in courts and any move aimed to reduce pendency should include government disputes.
The committee has also said that more government disputes should be covered in the ambit of the bill.
The committee is confident that such a move will inspire confidence in the stakeholders that mediation is a viable option, which even the government is ready to adopt for disputes where it is one of the parties.Parliamentary Standing Committee On Law And Justice
Provision Relating To Interim Relief Needs Clarity
While the bill proposes pre-litigation mediation before parties approach court, there is an exception to come to court seeking urgent interim orders in exceptional circumstances.
The standing committee, however, said the term ‘’exceptional circumstances’’ has not been defined and can lead to a wide interpretation.
It has emerged from the experience of implementation of pre-litigation mediation under the Commercial Courts Act, 2015, that the provisions of interim relief was being used by the parties to delay pre-litigation mediation, wherein the party files an application for interim relief, which does not get decided for a long period of time.Parliamentary Standing Committee On Law And Justice
The committee has proposed that interim relief should be granted by courts after examining whether a prima facie case, possibility of irreparable loss and balance of convenience is examined by courts to conclude the existence of exceptional circumstances.
The report also recommended a specific time limit for courts to decide the application for interim relief and a specific period within which mediation should begin after a court has passed orders on interim relief.
Wider Grounds Of Challenge To Final Settlement
The draft mediation bill allows for a mediated settlement signed and authenticated by parties to be challenged on only four grounds. These include:
Fraud
Corruption
Gross impropriety
Impersonation
The standing committee has sided with experts who said the grounds for challenge needed to be wider. In its recommendation, the committee has suggested rewording the provision to allow challenge on grounds which may be specified by the central government from time to time.
The government should also consider incorporating a provision allowing a court to act if it finds a challenge to be frivolous or without merit.
The committee that examined the provisions of the bill was headed by Bharatiya Janata Party MP Sushil Kumar Modi and consisted of 31 other members across party lines.
The consultation process by the committee included presentations from the Department of Legal Affairs, lawyers, mediation experts, central and state bar councils as well as serving and retired high court judges.