The Bill seeks to enforce agreements providing for mediation and provides for a body for the registration of mediators. One of the main objectives of the Bill is to encourage community mediation and to make online mediation an acceptable and cost-effective process. This article delves into the intricacies of the Mediation Bill, 2021.

What makes the Mediation Bill, 2021 stand out from other ADR-related enactments is the intentional inclusion of “online mediation” under Chapter VII Section 32, thereby paving the way for Online Dispute Resolution (ODR) in the country.

The Bill also gives due importance to the geographical character of ADR mechanisms. Section 17(5) is a significant step towards the inclusivity of parties who prefer the use of their native or regional language. This is a core incentive for those litigants who are unaware or sceptical about trying out ADR to settle their claims. The Bill fosters a trust-building exercise by allowing parties to mediate in the language they feel comfortable enough to communicate in. Consent and comfort of the parties to the mediation remain the hallmark of the Bill.

In India, informal mediations often take place between adversaries to amicably settle claims before taking recourse to litigation. This is often true in cases where family disputes and business disputes involving close relations are at play. The most positive benefit that would arise from the enactment of the Mediation Bill, 2021, is the successful implementation of community mediation^[2], which enables the settlement of any dispute likely to affect peace, harmony and tranquillity amongst the residents or families of any area or locality, with the prior mutual consent of the parties to the dispute. It allows a particular class of persons (as mentioned in sub-section 5 to Section 44) to determine the dispute and this model is very similar to that of gram panchayats. Thus, the Mediation Bill, 2021 retains the characteristics of pre-existing indigenous dispute settlement mechanisms.

Yet, all that glitters is not gold and some things are too good to be true. The Mediation Bill, 2021 falls short in numerous instances. The main reason why the Mediation Bill, 2021 is heralded as a revolutionary legislation is the fact that it would significantly reduce the burden on the courts. Parties would have to mandatorily opt for pre-litigation mediation prior to the institution of a suit under Section 6(1). It is to be noted that the proviso to Section 6 states that pre-litigation mediation in matters of commercial disputes of specified value shall be undertaken in accordance with the provisions of Section 12A of the Commercial Courts Act, 2015^[3], and the rules made thereunder. This would permanently alter the procedural law in Indian jurisprudence.

One might argue that the mandatory nature of pre-litigation mediation in its essence undermines the voluntary nature of ADR and adds yet another step in the already cumbersome and tedious litigation process. Section 9(3) is testimony to this. It states that the parties shall not be under any obligation to come to a settlement in the mediation when referred by the court upon their consent. The exit route available to parties under Section 20(1) in case of failure of the parties to arrive at a settlement after the completion of the two minimum mandated mediation sittings makes the whole exercise a mere formality and puts mediation as an ADR mechanism on the back burner as compared to the other alternatives of arbitration, conciliation and Lok Adalat. The constitutional validity of the same in light of the fundamental right to have access to justice (under Article 21 of the Constitution) might turn out to be a dangling sword.

Moreover, the numerous powers granted to the Central Government under various provisions of the Bill ultimately fail to uphold one of the most significant pillars of ADR mechanisms: consent of the parties.

Section 2 which deals with the applicability of the Act, confines itself to three instances; (i) all or both parties habitually reside in or are incorporated in or have their place of business in India; or (ii) the mediation agreement provides that any dispute shall be resolved in accordance with the provisions of this Act; or (iii) there is an international mediation. It however restricts the application of the Bill to non-commercial disputes where one of the parties involved is the Central Government or a State Government, or agencies, public bodies, corporations and local bodies, including entities controlled or owned by such Government. How fair and just this exclusion is, remains to be determined.

Section 7(2) of the Bill provides the Central Government with the discretion to decide the matters fit for mediation. By vesting such power in the hands of the Government, the Bill enables a breach of the executive into the jurisdiction of the judiciary. The courts have time and again clarified which disputes can be settled through ADR and are fully entitled to determine the issues which are to be heard and settled by it. Various tests have been laid down in landmark cases such as Booz Allen & Hamilton Inc v. SBI Home Finance Ltd. & Ors.^[4],  Vidya Drolia & Ors. v. Durga Trading Corporation^[5], and Sukanya Holdings Private Ltd. v. Jayesh H. Pandya & Anr.^[6] Whether a dispute is to be referred to ADR largely depends on the facts and circumstances of the case at hand and the discretion of the court. Section 7(2) and Schedule 1 disturb the delicate balance and separation of powers which form part of the basic structure doctrine.

Another aspect which needs to be considered is that in case the mediation fails, the parties would be incurring more costs, as they would be paying for the services of the mediator/mediation institution, along with the subsequent cost of initiating a suit. This defeats yet another characteristic of ADR: cost-effective mechanisms for dispute resolution. This would also result in the wastage of precious time and resources of the parties and would elongate the process unnecessarily.

Under Section 33(1), the Central Government is vested with the power to establish the Mediation Council of India (MCI). If Section 34(1) cl. (a) to (g) are perused carefully, it is apparent that the Central Government has the power to determine and heavily influence the composition of the MCI. Whether or not this would adversely affect the outcome of mediations wherein the Government of India is a party remains unanswered. The provision can be in future tested on the anvil of the Constitution.

In conclusion, the Mediation Bill, 2021 represents a significant step towards formalising mediation as an ADR technique in India. While it introduces commendable features such as community mediation and online dispute resolution, there are inherent challenges. The mandatory pre-litigation mediation may undermine the voluntary nature of ADR, and the extensive powers granted to the Central Government raise concerns about the delicate balance of powers.