A clear message to industry on dispute resolution
Current Affairs for 23rd September, 2023
A clear message to industry on dispute resolution
Alternative Dispute Resolution refers to a bouquet of mechanisms that enables disputing parties to resolve their differences amicably, without the intervention of courts.
Until recently, discussions around ADR largely focused on arbitration or conciliation of disputes under the Arbitration and Conciliation Act, 1996. However, now mediation of disputes is being understood in all its vastness.
In the recent monsoon session of Parliament, both houses successfully passed the Mediation Bill, 2023 (now an act).
The Indian legal framework already encourages courts to refer the disputing parties to ADR procedures. The act will take this a step forward. Irrespective of a prior mediation agreement, it will obligate each party to take steps to settle their dispute through pre-litigation mediation before approaching an Indian Court. To facilitate this process, court and relevant institutions would have to maintain a panel of mediators.
The move is excepted to reduce the filing of frivolous claims before Indian courts. Because of confidentiality, it will also mitigate the risk of deterioration of parties' relationship over the dispute. The Act will also require the mediation to ordinarily be conducted by an empanelled and neutral mediator.
Subject to an extension by the parties, they must also complete the mediation within 180 days from the parties' first appearance.
Yet, in exceptional circumstances, a party may seek urgent interim reliefs from a court before the commencement or during mediation.
These provisions will prioritize expertise and efficiency, while ensuring that obligation of pre-litigation is also not weaponised. It also does not remove the refuge of Indian courts.
The aim is to create a balanced framework which encourages the parties to focus more on their commercial dealings and less on their disputes.