Pre- Litigation Mediation (Section 5 )

Section 5 of the Act mandates pre-litigation mediation, irrespective of the existence of a mediation agreement before filing any suit or proceeding of civil or commercial nature in any court. It provides that irrespective of any mediation agreement, the parties may voluntarily, and with mutual consent, refer the dispute for settlement by mediation before filing any case of a civil or commercial nature in any court. This excludes commercial disputes of specified value that are subject to compulsory pre-litigation mediation under the Commercial Courts Act, 2015. Further, any court/tribunal may at any stage of a proceeding, refer the parties to undertake mediation, irrespective of whether there is a mediation agreement or not.

Applicability of the Mediation Act (Section 6)

This Act shall apply where mediation is conducted in India, and—

 (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; or

(iv) wherein one of the parties to the dispute is the Central Government or a State Government or agencies, public bodies, corporations, and local bodies, including entities controlled or owned by such Government and where the matter pertains to a commercial dispute; or

(v) to any other kind of dispute if deemed appropriate and notified by the Central Government or a State Government from time to time, for resolution through mediation under this Act, wherein such Governments, or agencies, public bodies, corporations and local bodies including entities controlled or owned by them, is a party.

Appointment of Mediators(Section 8)

The Act says unless otherwise agreed by the parties, a person of any nationality may be appointed as a mediator. However, the provision in Section 8(1) limits the freedom of choice by stating that a foreign mediator must possess the qualifications, experience, and accreditation as prescribed. In the absence of an agreement, the parties can request the Mediation Service Provider to appoint a mediator from their panel. The selection should consider the preferences of the parties (Section 9) and the mediator’s suitability in resolving the dispute.

Before being appointed, the proposed mediator must disclose any circumstances, whether personal, professional, financial or otherwise, that could create a conflict of interest (Section 10) or raise doubts about their independence or impartiality. This requirement aligns with the disclosure standards outlined in the UNCITRAL Model Laws and the International Bar Association (IBA) Guidelines on Conflict of Interest in International Arbitration. The obligation to disclose continues throughout the proceedings, and the mediator must promptly inform the parties if any such circumstances arise. The parties can choose to waive any conflicts through written agreement.

Furthermore, a mediator who has been appointed cannot act as an arbitrator or represent a party as counsel in any arbitral or judicial proceedings related to the mediation proceedings. They also cannot be presented as a witness in any proceeding.

Role of Mediator( Section 16)

Section 16 of the Act provides for the Role of the Mediator. The mediator’s responsibility is to help the parties involved in a dispute reach a voluntary resolution. This involves assisting them in identifying the problem, improving their understanding of the situation, clarifying what is most important, exploring potential agreements, and emphasizing that the ultimate decision regarding their claims is up to them. Importantly, the mediator must not force a resolution upon the parties or guarantee that mediation will lead to a settlement.

Written by Adv Rohit Yadav D/8639/2019

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