Introduction
The problems plaguing the Indian legal system are manifold but the most glaring amongst those is the incessant backlog of cases in courts. As of 15th August, 2021, the total number of pending cases stands at 3,92,12,242, including civil and criminal. Among original cases, 68.27% account for civil suits. The Ease of Doing Business rankings of the World Bank in 2020 ranked India at a dismal 163 out of 190 in terms of the enforcement of contracts, primarily a judicial function. A plausible solution may be to address the systemic processes that induce such an outcome, requiring several structural changes. However, not only does such reform necessitate legislative action but also fails to act as a preventative measure. It is at this juncture that it becomes crucial to appreciate the potential of alternative methods of dispute resolution. Primarily, those methods that are non-adversarial in form and are unencumbered by intermediaries with an interest in prolonging the judicial process to accrue income. Mediation is possible through dispute resolution clauses in contracts, by way of reference of the court under Section 89 of the Code of Civil Procedure, 1908 (hereinafter, ‘CPC’) or under special legislations such as Section 37 of Consumer Protection Act, 2019. However, it is only under Section 12A of the Commercial Courts Act, 2015 (hereinafter, ‘CCA 2015’) that mediation has been mandated.
This possibility of accessing a more cost-effective, swift and efficient mode of dispute resolution through mediation has been sparsely utilized under the current regime. As of June 2021, the total cases pending in the Karnataka High Court stands at 1810538 whereas only 770 were referred for mediation at the pre-litigation stage between 2014-2021. This is not an isolated statistic. The Mediation and Conciliation Centre of the Delhi High Court recorded 30,166 referrals for mediation between May, 2006 - March 2020 where the total cases pending before the Delhi High Court are at 1055624, the former barely accounting for close to 3% of the total cases. This disparity in numbers elicits an appreciation of the possible reasons.
This article shall first attempt to articulate the flaws that afflict the mediation regime in India presently and reflect upon the causes for its lack of popularity. The second section shall elaborate on what such an imposition of mandatory mediation may look like and the benefits associated with such a regulation. It shall also seek to address specific concerns one may harbour. Finally, it shall conclude with a consideration of factors that may ensure an effective implementation of such a measure, if adopted.
I. Problems Governing the Existing Mediation Regime
The first is a matter of habit – judges, albeit under an obligation to make objective assessments, are predisposed to select the usual adjudicatory process as the primary mode of resolution. This may lead them to embrace misconceptions due to a lack of training on the benefits of mediation. [1] This has led to an infrequent utilization of Section 89 of the CPC and has percolated to the minds of most individuals, now harbouring a similar perception in side-lining mediation as a secondary measure of last resort. It is rooted in a lack of awareness about the availability of such a mechanism or the processes associated with it, with an understanding that a mediator is expected to ‘decide’ the case and may not be as qualified as a judge to do so – an understanding that is inherently false.
The ‘first to blink syndrome’ further adds to the melange. Resorting to mediation is often considered a sign of weakness and hesitation during trial, with one party always waiting for the other to make the first move. [2] The lack of clarity in statutes on mediation, reflected through the discussion on the definitions of ‘mediation’ and ‘dispute settlement’ in Afcons Infrastructure Ltd., [3] coupled with the ambiguity in terms of the procedure for referring matters to mediation under Section 89 is also a factor because judicial support is essential in ensuring that mediation is on an equal pedestal as litigation. It is of further significance that there exist no discernible guidelines regarding the enforceability of the outcome of mediation. It was only in Afcons Infrastructure that the court clarified the governance of court-referred mediation by Section 21 of the Legal Services Authorities Act, 1987 and even so, the outcome is not automatically enforceable. The only choice available for those opting for pre-litigation or ad hoc mediation is a contractual obligation, a failure of which inadvertently results in a resort to litigation, thereby defeating the purpose of mediation in the first place.
II. Mandatory Mediation and its Implications
Mandatory mediation does not intend to coerce parties to settle their dispute but imposes a mandate to engage in the process instead. Instituted prior to or during proceedings in court, it may be of three types. [4] The first provides for a compulsory referral of specific subject matters to mediation and are usually statutorily mandated before instituting a suit. Section 12A of the CCA 2015 is an apt example. The second, as witnessed in Section 89 of the CPC, is a power granted to courts where judges have the discretion to refer parties to mediation, on a case-to-case basis. The third, albeit not made mandatory, imposes costs when parties approach the court without undergoing mediation. This acts as a deterrent and compels individuals to comply. Reflecting upon the unpopularity of mediation practice within the Indian regime so far coupled with an immediate need to address the pendency of suits in courts and the high costs of litigation, mandating mediation may be explored as a conceivable solution.
Beyond an alleviation of the burden of courts with regard to their case load, mandatory mediation has several benefits. It eliminates the necessity for one party to take initiative, thereby tackling the myth of ‘first to blink’ and prevents the possibility of deterrence by appearing to have a weak case. By statutorily according the process legitimacy, it takes us a step further in a common acknowledgment of the benefits of mediation since more individuals will now be compelled to engage in dialogue about the processes, functions and subject matter associated with it. In the long run, one could also surmise that it may be a possible stepping stone toward a voluntary adoption even in matters that are beyond the scope of the mandate imposed, creating a legal culture of amicably settling disputes. In the interests of preserving the relationship between both parties, neither does mandating mediation accord any discretion to lawyers to prolong judicial processes in their own interest or to fulfil their client’s objective of putting the opposite party through a long and arduous legal battle. Further, it shall lead to the creation of demand for qualified mediators, generating large-scale employment in several fields if infrastructurally supported. [5]
Some argue that mandating mediation undermines the core value it is rooted in – voluntariness. However, it is fallacious to fixate on the only part of the process that is made mandatory, that is, an attempt or initiation to mediate. Parties are not compelled to settle and neither are they coerced to continue the process. It is also said that not all disputes have the potential for mediation. This may be a fair argument since several subject matters require a consideration of factors that derive from constitutional principles, human welfare or criminal cases that are deemed to be acts against the State, requiring profound legal inquiry. It is advisable to impose such a mandate broadly on cases involving tortuous liability instead but a comprehensive research study would be helpful in determining exceptions and feasibility. However, it is of definite concern that even if mediation is mandated, India does not have the infrastructure to support it. For example, in Daramic Battery Separator India Pvt. Ltd. v. Union of India, [6] the petitioner was compelled to approach the Delhi High Court after the National Legal Services Authority proved unable to provide a suitable mediator. Despite this, it would not be incorrect to presume that once sufficient demand has been created for mediators, market forces would warrant the creation of supply – more individuals would undergo training to be mediators after a subsequent State-wide infrastructural push to support such learning in universities. [7] The evolution of ODR mechanisms shall also prove beneficial, as is seen from its success in various jurisdictions.
After Section 12A of the CCA was added in 2018 and the process for availing pre-institutional mediation through the Legal Services Authorities was notified in the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018, similar concerns have been raised. In the summary suit Ganga Taro Vazirani vs. Deepak Raheja on 21st February 2021, the Bombay High Court declared that pre-institution mediation was not mandatory under Section 12A, holding it to be a procedural requirement with which substantial compliance was enough. The court stated that the purpose of 12A is to provide speedy justice, an objective that would be contradicted if the parties were driven to mechanically undergo mediation. Mediator Chitra Narayan has argued that the mediation process is the very antithesis of a mechanical exercise. He says that by bringing parties together and facilitating a conversation, the mediator assists them in reaching a collaborative solution that accounts for all interests, beyond a linear proposal and rejection. The Bombay High Court had chiefly relied on the strength of the plaintiff’s case in recovering money lent. However, this demonstrates another drawback impacting litigation – it is the segregation between winners and losers in each case, indicating a naïve absence of nuance in considering human actions.
The Way Forward
Even if adopted, a hasty and poorly contemplated framework of implementing mandatory mediation may have the potential of unravelling progress that has already been made in grappling with the structural deficiencies that encumber the legal system. Some possible parameters to be deliberated upon in devising such a framework could be opt-in/opt-out models with mandatory information sessions, sunset clauses calling for a periodic review in implementation, segregation of subject matter in extending such a mandate and freedom to choose mediators among other factors. Above all, the most crucial step in the process would be to learn from similar provisions in other countries that have implemented it like Greece, USA, Turkey, UK, Romania, Norway, Italy, etc. A starting point would be collection of data on the impact of Section 12A of the CCA in India and comparing it with these other jurisdictions. Mandatory mediation, if adopted, would be a re-ordering of the legal system and entail a paradigm shift in elevating mediation to the mechanism primarily resorted to. However, acknowledging that it would tremendously ease the burden of courts does not imply that it is the only solution to be looked for. It would merely be one of the many crutches essential for revitalizing the Indian judicial system in its totality.
Views expressed above are solely of the author's.
Sources
[1] Gina Viola Brown, ‘A Community of Court ADR Programs: How Court-Based ADR Programs Help Each Other Survive and Thrive’ (2005) 26(3): 327-341 The Justice System Journal http://www.jstor.org/stable/27977258 accessed 26 June 2021
[2] Juhi Gupta, ‘Bridge over Troubled Water: The Case for Private Commercial Mediation in India’ (2018) 11:59-88 American Journal of Mediation, as referenced in https://ippr.in/index.php/ippr/issue/download/5/5 accessed 27 June 2021
[3] Afcons Infrastructure Ltd. and Anr. v. Cherian Varkey Construction Co. (P) Ltd, (2010) 8 SCC 24 at ¶ 8
[4] Deepika Kinhal, ‘Mandatory Mediation in India- Resolving to Resolve’ (2021) 2: 49-70 Indian Public Policy Review https://ippr.in/index.php/ippr/issue/download/5/5
[5] Campbell C. Hutchinson, ‘The Case for Mandatory Mediation’ (1996) 42(1): 85-96 Loyola Law Review, as referenced in https://ippr.in/index.php/ippr/issue/download/5/5 accessed 27 June 2021
[6] W.P.(C) 7857/2018
[7] Ibid, at v.
