Alternate Dispute Resolution (ADR) refers to modes by which disputes may be resolved without taking recourse to the court system. Mediation, among other ADR options, offers voluntary participation, flexibility, confidentiality, speedy and cost-effective solution-finding with the assistance of the mediator, a third party with no stake in the outcome. Litigation prolongs disputes, relationships between parties break down due to the protracted nature of the process and the outcome is determined in favour of only one party. ADR developed as a mode to counteract the less than desirable effects of litigation.

Mediation is useful in matters that “do not involve complex questions of law or evidence (though mediation is being resorted to in complex financial and other disputes of late) and which are not dependent on lengthy procedures for final determination”.¹

Mediation as a method of dispute resolution may be applied to a wide range of civil matters and its potential with respect to criminal cases is beginning to be explored. Mediation can help parties resolve disputes within preferred timelines because parties work together to achieve tailored solutions and the compliance with the agreements is voluntary.² There are presently five ways in which mediation as a dispute resolution process may be initiated:

1. It may be provided for in dispute resolution clauses in contracts between parties
2. Reference by the court as given under Section 89 of the Code of Civil Procedure, 1908
3. Other legislation that provides for mediation as a mode of facilitating resolution³
4. Mandatory pre-litigation mediation as provided under Section 12A of the Commercial Courts Act, 2015⁴
5. By mutual consent of parties once the dispute has arisen

Mediation is not yet a mandatory or even widely preferred mode of dispute resolution in the country. One of the many reasons suggested is the possible lack of clarity surrounding the enforceability of mediation settlements.

India is a signatory (on August 7, 2019) to the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Mediation Convention), 2018⁵ which provides for “a harmonized legal framework for the right to invoke mediation settlement agreements.” The Convention provides for the agreements to have binding force worldwide bringing mediation on par with regimes of litigation and arbitration. Though the provisions need to be incorporated within the domestic legal framework in order to gain force, this is a step in the right direction.

While there is no legislation which provides for mediation settlement agreements to be automatically binding, the Supreme Court in M.R. Krishna Murthi v. The New India Assurance Co. Ltd. and Ors⁶ asked the Government to consider enacting a statute to remedy the position.

Where settlements are reached in court-annexed mediations, the court passes an order or decree in terms of the settlement agreed upon⁷. The preconceptions around weak compliance in private mediation also discourage parties from resorting to mediation.

In the Afcons Infrastructure Ltd. and Ors. v. Cherian Varkey Construction Co. (P) Ltd. and Ors⁸ the Supreme Court examined drafting oversights in Section 89 which included semantic confusion around the definitions of “mediation” and “judicial settlement” and the details of the procedure to be followed when referring matters to mediation under Section 89. Despite the 238^thLaw Commission Report providing recommendations to seal the lacunae in understanding, there has been no effective implementation.⁹

The Mediation Bill, 2021 seeks to provide clarity and codification to mediation as a practicable mode of dispute resolution. It stipulates the professionalisation of mediation as a practice, the binding nature of mediation agreements, the set-up of regulatory bodies for the registration, recognition and laying down of standards of professional conduct for mediators and the establishment of institutes to train and certify potential mediation service providers.¹⁰ It aims to institutionalise mediation, to set up the Mediation Council of India and popularise community mediation among other provisions.

Even though court-annexed mediation has emerged as a solution due to judgements like Salem Bar Association v. Union of India¹¹, staff and services have been regularised at these centres and institutional mediation is also seen as a viable option¹², reports suggest that lower court judges are not incentivised or trained to refer matters under section 89, Code of Civil Procedure. As a consequence of prolonged exposure to the adversarial system, they lack the required objectivity and acumen to determine the possibility of settlement between parties.

The public is believed to be unaware of the existence of ADR processes. Experts and qualified mediators could be encouraged to make more attempts to reach out to litigants and the general public through seminars, webinars, conferences and outreach programmes that inform and educate the larger community about the benefits of mediation which is more party-centric, party-driven and focused on practical outcomes, unlike litigation.

Common myths perpetuated by the legal community include the idea that opting for mediation demonstrates weakness of character and the possibility of failure at trial. It is also believed that it is a “lesser form of justice and second to litigation”, where the risks are higher but the rewards are greater for the same reason .¹³

It has been acknowledged, by the authorities that be, that despite the overwhelming number of disputes that may be referred to mediation, the present number of empanelled mediators is woefully inadequate. The quality of the training and the lack of domain or subject-specific knowledge encumbers the mediators from resolving commercial and other disputes effectively.