The Mediation Act 2023 | #Must Know

The article titled 'The Mediation Act of 2023' delves into the purpose and applicability of the Act, providing an extensive overview of mediation proceedings. This new legislation actively promotes the adoption of community mediation and embraces the use of online mediation methods, which are particularly economical for related matters.

It seeks to encourage and streamline the practice of mediation, especially within institutional settings, as a means of effectively resolving both commercial and non-commercial disputes. Additionally, the act places a strong emphasis on enforcing agreements reached through the mediation process.

Introduction

Mediation is a voluntary approach in which parties try to settle disputes with the assistance of a neutral third person called the mediator. It is a pre-litigation process introduced to reduce the burden of a Court or National Company Law Tribunal. The Mediation Bill was introduced in Rajya Sabha in 2021 and received the consent of the President of India on 15th of September, 2023. The terms “mediation'' and ''conciliation'' were considered synonymous until the Arbitration and Conciliation Act of 1996 passed, and these underwent significant equivalent distinction. Unlike the conciliator, these terms cannot be interchanged through the mediator process.

Purpose

Mediation will be more readily available and more widely accessible. With its free or low-cost services, court-annexed mediation remains a crucial component. It aims to promote, encourage, and facilitate mediation to resolve civil or commercial disagreements before approaching the court and the creation of the Mediation Council of India, mediated settlement agreements.

Applicability

Mediations should occur in India, not outside India. The Act would apply to:

The place where the parties habitually reside or incorporated in or have their place of business

• The mediation agreement provides that any dispute shall be resolved in accordance with the provisions of this Act.
• In case of a commercial dispute, an international mediation takes place. International mediation means one party is Indian or habitually resides in another country but not in India. It can also be a corporation/association/group of individuals having business outside India.
• One of the parties is the Central/State government or any government department controlled or owned by such government; the Mediation Act will be applicable in case of a commercial dispute or any other dispute as notified.

Mediation Agreement

The mediation agreement can be used to settle conflicts. The agreement should be in writing and shall contain a mediation clause. The written agreements between the parties can take place through emails or the filings in a lawsuit. Any party to an agreement, prior or after, may lodge a disagreement. Commercial dispute resolution agreements are known as international mediation agreements.

Pre-Litigation Mediation

The provisions of this Act state that with or without a mediation agreement, the parties may voluntarily and with mutual consent take actions to resolve their disputes through pre-litigation mediation, following the provisions of this Act before filing any suit of a civil or commercial nature in any court.

Who can be a Mediator?

Any member of the Mediation Council can be selected by the parties or a mediation services provider. There is no restriction on any specific nationality for choosing a mediator.

A mediator with a foreign nationality must meet the qualifications, experience, and authorization that may be required. Mediation service provider states the process of selecting a mediator from its panel or as agreed upon by the parties.

Mediation Proceedings

Territorial Jurisdiction (Section 13): The Mediation will take place within the territorial jurisdiction of the Court or Tribunal of competent jurisdiction to decide the subject matter of dispute For enforcement, contest, and settlement agreement, the mediation is bound to occur within the territorial of the competent jurisdiction, or any site if the parties agree to hold the mediation in any location outside the territorial jurisdiction.

Commencement of the Mediation (Section 14): The mediation commences from the date a party receives a notice calling for a mediation under the mediation agreement. In case of no such agreement, from the date of appointment or consent of the mediator to be appointed, whichever the case may be. The mediator may be the parties separately or jointly, as frequently as required.

Period for Completion of Mediation (Section 18): The proposed 120-day time restriction from the date set for the first appearance before the mediator, is extendable by an additional 60-day period, within which the mediation should conclude.

A Mediated settlement agreement (Section 19): A formal contract signed by the parties after mediation to resolve their differences and gets attested by the mediator. It might go beyond the mentioned disputes. The parties must put the agreement in writing and sign it. The agreement must be presented to the mediator in institutional mediation, who will authenticate it and send it on to the mediation service provider.

Registration of Mediated Settlement Agreement: The Legal Services Authorities Act 1987 permits parties to register mediation settlement agreements with an authority or other entity if written in a particular jurisdiction. Registration shall be done within 180 days of receiving an authenticated contract copy. The Act doesn't specify provisions in case of non-registration of the same.

A non-settlement report (Section 21): The mediator must produce a written non-settlement report to the mediation service provider or give a signed copy to each party in case the parties don't settle within the allotted time, or the mediator thinks no settlement is possible.

Confidentiality (Section 22): All information about mediation procedures, including acknowledgements, views, proposals, acceptance, documents, and communications, must be kept confidential by mediators, service providers, parties, and participants. It is not permitted to record the proceedings on audio or video. Parties cannot rely on or introduce information or communication in judicial processes, including arbitration. However, if it doesn't identify parties or individual conflicts, mediators can assemble or reveal generic information regarding mediation matters for research, reporting, or training purposes. This disclaimer does not apply to mediated settlement agreements for registration, enforcement, or dispute purposes.

Termination of Mediation:

The Mediation Proceedings under this Act shall be deemed to end on the following dates (Section 24):

• When the mediated settlement agreement is signed and authenticated;
• When the mediator, after consulting with the parties or otherwise, writes that further efforts at mediation are no longer justified or
• When a party or parties sends the mediator and the other parties a written communication.
• on the expiry of the time limit.

Cost of the Mediation (Section 25)

i. Mediation costs, excluding those for community mediation, shall be as may be agreed.

ii. Unless the parties expressly agree otherwise, the parties shall split equally the mediation costs, including the mediator's fees and the cost of the mediation service provider.

Challenge to Mediated Settlement Agreement: The Party may apply to a court or tribunal to contest a negotiated settlement agreement. Fraud, corruption, impersonation, and other issues unsuitable for mediation are also subject to challenges. Applications must be submitted within 90 days of receiving the agreement, though the court may accept them for another 90 days if there is good reason for the delay.

Limitation Stated: No matter what is said in the Limitation Act of 1963 or any other law currently in effect, the time from the date that mediation began under Section 14 and up until:

i. the submission of a non-settlement report or

ii. the termination of mediation shall be excluded in determining the period of limitation for any proceedings that have undergone relating to disputes for which mediation under this Act.

Online Mediation (Section 30): The Act permits parties to challenge a mediated settlement agreement in court or before a tribunal. After receiving the agreement, you have 90 days to submit your application. Pre-litigation mediation can be undertaken online at any point with the written consent of both parties using computer networks or electronic forms. Integrity and secrecy must be paid attention throughout the process, with mediators taking the necessary precautions to safeguard privacy. Online mediation communications must maintain mediation confidentially, subject to other Act requirements.

Establishment and Incorporation of Mediation Council (Section 31)

The Central Government will establish the Mediation Council of India to fulfill the Act's requirements. The Council will have the authority to buy, possess, and sell property, make contracts, and bring or receive legal action. It will also have perpetual succession and a common seal. With collaboration with the Central Government, it will decide whether to have its head office in Delhi or somewhere else.

Composition of Council: Four people make up the Council,

• the Chairperson,
• a person with experience in law, mediation, alternative dispute resolution, public affairs, or administration,
• a renowned individual with research or teaching experience, secretary to the Government of India in the departments of Legal Affairs and Expenditure, the Chief Executive Officer, and
• a part-time representative from a recognised business organisation.
• Members can be appointed again after serving for four years. Salary, benefits, and other terms and circumstances for members are regulated.

Mediation Service Provider and its Functions (Section 40):

A court-annexed mediation centre, an organisation recognised by the Council, an Authority under the Legal Services Authorities Act, 1987, or any other body informed by the Central Government are all considered mediation service providers. They carry out tasks like registering mediated settlement agreements, facilitating their registration, accrediting mediators, providing services, facilities, secretarial assistance, infrastructure, monitoring, and reporting.

Conclusion

Mediation is a voluntary approach that attempts to settle disputes with the assistance of an independent third person called the mediator. The Mediation Act of 2023 mentions that parties can voluntarily and with mutual consent take actions to resolve their disputes through pre-litigation mediation following this Act's provisions before filing any civil or commercial suit or proceedings in any court. A mediator may be registered with the Mediation Council or chosen by the parties or a provider of mediation services.

The Act also includes registering mediated settlement agreements and creating the Mediation Council of India. Maintaining confidentiality in all information about mediation procedures and the proceedings are deemed to end on specific dates. The Act allows parties to contest mediated settlement agreements involving fraud, corruption, and impersonation. Submission of application must be done within 90 days of receiving the agreement, with the court accepting delays for good reason.

The Act also allows for online mediation, with pre-litigation proceedings conducted with written consent. The Central Government will establish the Mediation Council of India to fulfill its requirements, with the Council having the authority to buy, possess, and sell property, make contracts, and bring or receive legal action.

Mediation Service providers, such as court-annexed mediation centres, organizations recognized by the Council, or other bodies informed by the Central Government, carry out tasks such as registering mediated settlement agreements, facilitating their registration, accrediting mediators, providing services, facilities, secretarial assistance, infrastructure, monitoring, and reporting.

References

[1] The Mediation Act, 2023

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