The persistent backlog of pending cases inventory ranging from the district courts up to the supreme court paved the way for the establishment of Alternative dispute mechanisms in India. In simple words mediation is a way to resolve conflicts between two or more parties with the support of a neutral party to arrive at a compromise in simple words is mediation.

Evolution
The meaning of mediation if applied in the literal sense, India is no new to this system of mediation, with gram panchayats serving as the mediator. There exists another contention that the earlier forms of Mediation, it was historically more ancient than the present-day Anglo-Saxon adversarial system of law.

However, the legal recognition of Mediation began with the Industrial Disputes Act 1947. Section 4 of the act appoints conciliators who are "charged with the duty of mediating in and promoting the settlement of Industrial disputes."[1] An amendment to the Code of Civil Procedure was passed by the Indian Parliament to insert section 89 which provides for the referring of cases pending in courts to the ADR mechanisms including mediation.[2]

This occurred under the recommendations of the Law Commission of India and Malimath Committee Report But legally, the foremost detailed training for mediators occurred in Ahmedabad in 2000, which was conducted by the American Trainers from the Institute for the Study and Development of Legal Systems. 27th July 2002 saw the inauguration of the first lawyer-managed mediation centre, the Ahmedabad Mediation Centre which was formally inaugurated by the then CJI. The Amendment Act was put forth in the year 1999. But the same was brought into effect in 2002.

But this section was put to test in the Salem Bar Association, Tamil Nadu VS Union of India[3], where the main issue was Whether the 1999 and the 2002 Amendments to the Code of Civil Procedure were constitutionally valid. For this very purpose, a Committee headed by a former Judge of the Supreme Court and the Chairman, of the Law Commission of India was formulated to ensure that the amendments become effective and result in a quicker dispensation of justice.

This committee filed a report which was in 3 parts. Report one touches on the grievances relating to the amendments of eh code and the recommendations of the committee. The 2nd report touched on various points in connection with the draft rules for ADR and mediation. It also is comprised of model rules. The 3rd report delves into the conceptual appraisal of case management.

The committee also framed rules explaining the procedure for mediation. In compliance with this judgement, the Law Commission of India drafted a consultation paper on Alternative Dispute Redressal and Mediation Rules 2002 which was later taken by several other high courts to formulate their own rules for mediation.

In 2013, the mechanism of Mediation held a place in section 442 of the Companies Act, 2013 which touches on establishing a Mediation and Conciliation Panel.[4] The support India showed be it intentionally or unintentionally for mediation by becoming a signatory at the UN Convention on International Settlement Agreement is also another step adding to the evolution of recognizing mediation.

The Commercial Courts Act 2015 by way of Amendment in 2018[5], incorporated Chapter III A titled Pre-Institution Mediation and Settlement which necessitates mediation before the institution of a suit for commercial matters. The object of section 12A of this act was to promote speedier justice and improve India's ranking in the Ease of Doing Business report released annually by the World Bank. The question of whether section 12A was mandatory or directory was subjected to judicial interpretation.

The Bombay High Court in Deepka Raheja v. Gango Taro Vazirani held that section 12A is not a directory but rather mandatory[6]. The Calcutta High Court maintained emphasis on the interpretation of the term shall in section 12A to hold that the same is mandatory.[7]

But the Madras High Court in its decision in the Shahi Exports (P) Ltd. v. Gold Star Line Ltd., 2021, took a varied stand to consider section 12A of the Act as not mandatory[8]. The same was justified by the high court in lines that the right to justice is a constitutional right and one can't be deprived of the same on the mere basis of not instating mediation.

Such varied interpretations were settled upon with the judgment from the apex court in Patil Automation Private Limited & Ors. V. Rakheja Engineers Private Limited[9]. In this case, the bench of KM Joseph and Hrishikesh Roy answered this issue to hold that section 12A of the Commercial Courts Act 2015 is mandatory and any suit violating the same, the plaint of the case would be rejected under Order VII Rule 11 of the Code of Civil Procedure. The Court highlighted the same as a compulsory provision by touching on the legislative intent of the Amendment Act. Moreover the language in this section, the term shall be meant to assist the Court to hold the provision mandatory.

The Madras High Court in M/s. Micro Labs Limited V. A Santhosh upheld the decision of the Patil Automation case and dismissed the micro lab's case as the parties didn't undergo mediation and urgent interim relief was not contemplated.[10]

After this case, an interesting question as to whether the plaintiff possesses the exclusive authority to determine the necessity for urgent relief was brought before the Madras High Court. Though the Supreme Court has taken up the matter of section 12A's mandatory nature, there was a contrasting Judgement in the Madras High Court in the case of Junior Kuppanna Kitchens Private Limited v. Kuppanna Foods and others (CS (Comm.Div.)No.200 of 2022) . Thus through a notification dated 15.06.2023, the different views in M/s. Micro Labs Limited V. A Santhosh and Junior Kuppanna Kitchens Private Limited v. Kuppanna Foods and others case, relating to the maintainability of Commercial suits without availing Pre-Litigation under section 12A of the Commercial Courts Act, 2015,

"When the suit is filed with the application for interim relief, (i)Whether it has to be left to the plaintiff that whenever an application is filed, Pre-Litigation Mediation need not be resorted to? (or) (ii)Whether the court has to decide that the interim relief was imminently necessary to entertain the suit without resorting to mediation? [11]

This case is yet to be decided.

Despite such developments, a comprehensive piece of legislation dedicated to mediation arose only after the pandemic. The apex court in its judgment in 2020, [12] directed the government to consider the feasibility of enacting an Indian Mediation Act. Such formalization will help to have a uniform procedure. This later led to the Mediation Bill 2021 which requires individuals to try to settle civil or commercial disputes via mediation before approaching court. The same got tabulated into the Mediation Act which introduces a non-adversarial process driven by impartial mediators which thus provides an efficient and cost-effective alternative to litigation.

The contemporaneous enactment of Mediation Act, 2023 has indeed strengthened the ADR system and has filled the lacuna in the law, as India as a nation did not have any standalone legislation in this arena. The act provides for community mediation, online mediation and has even touched on pre-litigation mediation by mandating the same. It has also focussed on the aspects where mediation is not the permitted mode of dispute resolution.

Conclusion
India as a country has been a strong stakeholder in framing laws in all concerned arenas and mediation or ADR has never been an exception. But with regard to mediation, this is the first statute that India has for a law on Mediation.

End-Notes:

1. Section 4(1) of Industrial Disputes Act
2. Section 89 of Code of Civil Procedure, Amendment Act 1999
3. AIR 2005 S.C. 3353
4. Section 442 of Companies Act 2013
5. The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018 No. 28 OF 2018
6. Deepak Raheja v. Gango Taro Vazirani, 2021 SCC OnLine Bom 312
7. Ganga Taro Vazirani v. Deepak Raheja, 2021 SCC OnLine Bom 195
8. Shahi Exports (P) Ltd. v. Gold Star Line Ltd., 2021 SCC OnLine Mad 16514
9. Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd., 2022 SCC OnLine SC 1028
10. Micro Labs Limited vs. A. Santhosh (14.09.2022 – MADHC) : MANU/TN/7367/2022
11. Notification No.178/2023
12. M.R. Krishna Murthi v. New India Assurance Co. Ltd, (2020) 15 SCC 493, (India)

Written By: Pooja Padmanabhan