Chapter 1: Introduction to Mediation and Conciliation
Introduction to Mediation and Conciliation
Mediation and conciliation are recognized as separate forms of ‘alternative dispute resolution’ (ADR) and are in contrast to the adversarial approach used in court and arbitration proceedings. Even during the course of arbitral proceedings, the arbitral tribunal is empowered to encourage settlement and may use mediation, conciliation, or other procedures to encourage settlement.
Difference between Conciliation and Mediation
In India, although the terms “mediation” and “conciliation” are sometimes used interchangeably, there is a recognized difference between the two. For example, the Code of Civil Procedure (CPC) provides that where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court may formulate possible terms of settlement and/or refer the dispute to arbitration, conciliation, or judicial settlement.
Legal Framework
Conciliation: Governed by Part III of the Arbitration and Conciliation Act, 1996. It provides for the appointment of conciliators, their role and functions, the conduct of conciliation proceedings, and the effect and enforcement of settlement agreements.
Mediation: No specific statute, but often conducted under the rules of various High Courts or private institutions. The Supreme Court has also issued guidelines for court-annexed mediation in Salem Advocate Bar Association v. Union of India1.
Role of Conciliator and Mediator
The role of a conciliator is to assist the disputing parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute. The conciliator may make proposals for a settlement, but has no authority to impose any terms on the parties.
On the other hand, a mediator facilitates negotiation between the parties to help them arrive at a mutually acceptable solution. The mediator does not offer any suggestions or solutions, but rather enables the parties to communicate effectively and explore their own interests and options.
Statutory Mediation under Commercial Courts Act
The Commercial Courts Act, 2015 was amended in 2018 to introduce a mandatory pre-institution mediation for commercial disputes under Section 12A. This provision requires parties to exhaust the remedy of pre-institution mediation before filing a suit in a commercial court, unless they seek any urgent interim relief. The pre-institution mediation is conducted by authorities constituted under the Legal Services Authorities Act, 1987 or any other authority as notified by the central government. The mediation process must be completed within three months from the date of application by the parties, which may be extended by another two months with their consent. If a settlement is reached through mediation, it shall have the same status and effect as an arbitral award under Section 30 of the Arbitration and Conciliation Act, 1996.
The objective of this provision is to promote and facilitate mediation as an effective and efficient mode of dispute resolution, especially for commercial disputes. It also aims to reduce the burden on courts and expedite the disposal of cases.
Relevant Provisions: Commercial Courts Act, 2015 – Sections 12A, 30
