Introduction
Over 50,000 cases have been settled in India through mediation from April 2021 to March 2022, according to the National Legal Service Authority (NALSA). This number has surged to approximately 110,000 cases between April 2022 and June 2023. This data clearly demonstrates that mediation is emerging as an efficient alternative dispute resolution method, like arbitration and conciliation. Mediation, especially pre-litigation mediation, is the process of settling disputes before a suit or proceeding is filed in a court.
Mediation is an important mechanism to reduce the caseload of the judiciary and if not, prevent the piling up of new cases. It has the power to transform the Indian Judiciary by resolving most of the civil and commercial disputes outside the court. However, mediation in India has a limited scope because it lacks formal recognition, unlike other countries such as the USA, UK, Belgium, and Italy, where mediation is mandatory. To expand the scope of mediation , the Indian government tabled the Mediation Bill 2023 on 15th September 2023 which aims to encourage and facilitate meditation, particularly institutionalised mediation, across the country.
The importance of pre-litigation mediation cannot be overstated in India and is demonstrated by the mandatory pre-litigation mediation provision in the Commercial Courts Act 2015. Keeping the huge pendency and long duration of judicial proceedings in mind, section 12A was brought into the act which sets out to provide mandatory pre-institution mediation unless the suit requires an ‘urgent interim relief’ to be tried in a court. This provision plays an important role in avoiding the piling up of new cases because parties have to mediate prior without the involvement of the courts at the nascent stage. Additionally, the Supreme Court and various High Courts have consistently reiterated the importance of pre-litigation mediation in many cases such as Afcons Infrastructure Ltd v Cherian Varkey Construction Co. (P) Ltd., Patil Automation Private Limited & Ors. v Rakheja Engineers Pvt Ltd, Micro Labs Ltd v A. Santosh, Makwana Mangaldas Tulsidas vs The State Of Gujarat, etc.
The objective of this blog is to analyse the provision of pre-litigation particularly in civil and commercial cases. Rather than solely focusing on the importance of mediation, the emphasis lies on the necessity of the effective implementation of pre-litigation mediation. By addressing the challenges in the effective implementation of mediation and offering unique solutions this blog provides an overall glimpse of pre-litigation mediation and its scope in India.
Tracing the Roots of Pre-Litigation Mediation in India
Understanding the historical roots of pre-litigation mediation in India not only highlights its importance from time immemorial but also its modern efficacy. The best example of the pre-litigation system in India is Panchayat or Panchas. The system of panchas has been used by many tribes in India since before the advent of Britishers. Pancha was the head of the Panchayat of a village who settled tribal disputes and grievances at the local level before going to the public forum. If the pancha failed to mediate, the dispute would go to the public forum. Lastly, the pancha, after considering everything, would again attempt to resolve the dispute.
This process was completely confidential as all the proceedings were oral and no record was made. The prevalent cases dealt with by the panchas were family disputes, land settlement disputes, commercial transactions, disagreements between tribes, etc. This system exists to date in some villages where the head of the town resolves disputes among the locals before they approach the court. However, as soon as the court system began in the 20th century, people started taking all the disputes, ranging from family disputes to murders, before the judiciary which ensued the piling up of cases.
Reasons for the Ineffective Implementation of Pre-Litigation Mediation in India
In India, despite the popular practice of pre-litigation mediation through the Panchayat system and community-based mediation, the legal recognition of mediation has faced significant challenges. The reasons for this unsuccessful implementation are multifold, existing in cultural and systemic factors.
The Litigation Lure: Preference for Litigation over Mediation
The major reason for a preference for litigation over mediation is the absence of legal recognition of mediation in India. This preference is further compounded by the general bias of the common people in India towards an authority, rooted in our hierarchical system, a system that is deeply ingrained in the cultural and historical structure of Indian society, that serves to reinforce the strong preference for litigation and judiciary over mediation, as highlighted by AJ Jawad, India’s leading full-time Mediator. The deep-rooted notion of respect for recognized authority figures within families and society inadvertently hinders India from accepting the common practice of mediation. Therefore, unlike judges with an adjudicating authority, mediators lack a formal recognition.
Judges as Mediators: A Conflicting Role
In India, as mediation gained popularity, judges started incorporating court-annexed mediation centers in the formal court system, to promote mediation in the country. However, as per rule 5 of the Mediation Rules 2015, retired judges began to practice mediation in these centers and settle disputes. While these centers helped in resolving disputes, in India to some extent, it is important that judges acquire more specialised training in mediation to act as effective mediators. .The role of a mediator is distinct from that of a judge; while the former is trained to facilitate dispute, the latter is trained to uphold the law and rules.
The Voluntary vs Mandatory Pre-Litigation Mediation Conundrum
In the author’s opinion, the debate on the voluntary versus mandatory pre-litigation mediation method in India for a long time has been considered a major hurdle to its effective implementation. The advocates of mandatory pre-litigation mediation argue that increasing participation, in the beginning, is necessary given that people are unaware of the process. While the advocates of voluntary pre-litigation mediation argue that mediation is voluntary in its true essence since consent, and self-determination are the basic principles of mediation. This debate creates uncertainty about the correct implementation of mediation in the country, impacting its acceptance as a viable method of alternative dispute resolution.
Implementation of Pre-Litigation Mediation under the Mediation Act 2023
The Mediation Act 2023, has attempted to address all the challenges faced by Mediation in India, for its effective implementation. The bill has a ‘voluntary and consensual’ provision for pre-litigation mediation, thereby ending the debate on voluntary vs mandatory mediation. Additionally, it seeks to provide the autonomy of selecting the mediator to the parties concerned, which ensures that there is no imposition of a mediator, without their willingness. It also specifies the minimum qualifications and accreditations for a mediator, to maintain the quality of mediation. However, despite these strides, the act is still pending, unable to implement it at its full potential.
Voluntary Pre-Litigation Mediation: The Right Call for India?
Section 5 of the act provides that the disputing parties, before filing any civil and commercial suit, may ‘voluntarily and consensually’ attempt to settle the dispute by pre-litigation mediation. This provision holds significant sway as it will affect the number of fresh cases coming to the court after the Mediation Bill 2023. To implement pre-litigation mediation, successfully in India, policymakers may draw inspiration from Turkey and Italy, who initially made the provision of pre-litigation mediation voluntary but later made it mandatory.
Turkey, introduced voluntary mediation for civil disputes in 2013, considering the long duration of proceedings in litigation and the heavy workload on the judiciary. However, the large backlog and long trials, due to the voluntary nature of pre-litigation mediation, forced Turkey to regulate mandatory mediation. The labour disputes were the first to be put for mandatory mediation by an amendment in 2018. The labour disputes have been resolved, and as a result of this successful resolution, commercial disputes were also brought into this category in 2019. Additionally, matters related to intellectual property rights and consumer disputes are also covered under mandatory mediation.
Similarly, Italy had the provision of voluntary facilitative mediation, a voluntary process that facilitates the discussion between parties, for all disputes till 2003 as per Legislative Decree No. 5/2003, but the lawmakers introduced the concept of mandatory mediation in 2011 for a number of disputes. The attempt to make pre-litigation mediation mandatory in Turkey and Italy has proved effective, not only, in bolstering the number of mediation cases, but also, in alleviating the judiciary’s burden of cases.
Embracing Technology: Online Pre-Litigation Mediation
Section 30 of the Mediation Act 2023 contains the provision for online mediation, including pre-litigation mediation. This provision would aid the cause for mandatory pre-litigation meditation by promoting parties who are geographically separated to attempt mediation.
Measures like creating an appropriate technology, specially designed for Online Dispute Resolution mechanisms and the legal industry, with features such as synchronous communication, separate virtual rooms, end-to-end encryption for text-based conversations, provision for e-signatures, and integration of AI for translation of different languages to make the communication effective, should be considered to effectively implement this provision.
Role of the Counsel
This is a less-discussed, yet important point, to be taken into account. Since mediation is a comparatively new concept in India, people generally, are hesitant to adopt it which is where a counsel can be helpful, in encouraging parties to adopt mediation, as per the needs of the case and the client. Counsels in India perceive mediation as a threat to their jobs, which was seen in Italy, when mandatory pre-litigation mediation was first implemented. However, a counsel plays an imperative role in the process of mediation right from the day the party approaches with the case.
Way Forward
In conclusion, pre-litigation mediation emerged as a potent method to alleviate the judiciary’s burden by resolving disputes before they reach the courts and aligning with the vision of the former CJI N.V. Ramana, “Courts must be the last resort”. The Mediation Act 2023, emphasizes its importance in the Indian legal landscape and encourages common people to opt for pre-litigation mediation as a suitable dispute resolution method.
In essence, as litigation has increasingly become protracted and cumbersome, parties are seeking easy solutions, and legal practitioners and judges are becoming increasingly receptive to alternate dispute resolution methods, pre-litigation cases are on the rise and are poised for exponential growth in the foreseeable future.
This blog is written by Gungun Agrawal, 3rd Year BA LLB (5-year course).