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The Centre for Alternative Dispute Resolution (CADR), Himachal Pradesh National Law University, Shimla is ecstatic with excitement to welcome you all to the most awaited event 2nd National Mediation Competition – 2022, wherein teams representing the top universities participate from all around the country.

In the domains of law, justice, and governance, we want to encourage the progress of education, research, and practice and instil in the pupils a special mix of theoretical knowledge with practical learning and skill development. Even during the pandemic, our abilities, excitement, spirit, and desire for mediation remain unbounded. And by offering a captivating and comfortable experience, we at the Himachal Pradesh National Law University, Shimla want to achieve the objective of fostering the amazing talent involved.

About the Centre for ADR & Professional Skills

The Centre for Alternative Dispute Resolution [ADR] and Professional Skills primarily aim to promote research in the field of dispute resolution mechanisms in India. The Centre aims to provide a platform for interaction between professionals in the field and students. In pursuance of its goal of conditioning the law students to efficiently resolve disputes and after witnessing tremendous success in the first edition, the Centre is intending to continue it as a flagship event of HPNLU, Shimla. We firmly believe that such events and competitions not only inculcate a sense of professionalism but also take participants a step closer to the dynamic thinking requiring them to act in real-time.

2nd National Mediation Competiton, 2022

Second National Mediation Competition is the second edition of the flagship event. After witnessing a great response and appreciation from the participants across 32 premier law colleges and assessors across the globe, this event is yet another step taken by the Centre for ADR and Professional Skills, HPNLU, Shimla towards acting as facilitator in increasing the Mediation among aspiring students. The competition seeks to provide a prodigious experience that will amplify the interests of young minds in this niche practice of law. The competition will help students brainstorm probable solutions for a near to real challenges while providing them with the comfort of choosing their roles as per their preferences. This competition will also provide an opportunity for the participants to develop the requisite lawyering and communication skills through various training sessions conducted by industry professionals. The participants are expected to take a multi-dimensional approach to reach a settlement, showcasing the variety of skills that can be useful in effective mediation.

About IDRC

IDRC (Indian Dispute Resolution Centre) is an initiative of ‘Indian Dispute Resolution Council’ is duly empanelled with the Ministry of Law & Justice, Government of India for providing Alternative Dispute Resolution services through Arbitration, Mediation and Conciliation online to Government Ministries, Departments, Organisations and Public Sector Undertakings. IDRC is dedicated to provide a highly professional, efficient and state-of-the-art institutional environment for both online and offline resolution of all kinds of disputes in a time bound and cost effective manner. This initiative is backed up by our proven track record in the legal field for the provision of world-class institutional support as a neutral and independent venue for the conduct of Domestic and International Arbitration and other Alternative Dispute Resolution (ADR) proceedings.

About PACT

The Peacekeeping and Conflict Resolution Team (PACT) is a team of like-minded professionals who share the vision of promoting the use of consensual dispute resolution (CDR). As a collective, the PACT aims to catalyze the development of CDR in India and abroad through its innovative initiatives. Conceptualized by law and psychology graduates, The PACT grew up along the shores of Goa, is currently headquartered in New Delhi, and has begun working on projects beyond India. The mission is to cross geographical boundaries and stereotypes, and take Consensual Dispute Resolution to every corner of this globe.

DAY 1 : INAUGURAL CEREMONY

11:05 AM The ceremony started with a welcome address by Mr. Santosh Kumar Sharma, Director, CADR and Ms. Saloni Paliwal & Ms Pakhi Jain, the Convenors of the Centre for Alternative Dispute Resolution & Professional Skills, virtually inaugurated the 2nd National Mediation Competiton, 2022.

11:13 AM  Our Special Invitee, Mr. Santanu Mukherjee, Founder, Ex Ledge Chamber and Former Partner, Luthra & Luthra Law Offices started his speech by appreciating the constitution of an ADR Centre in the HPNLU, Shimla. Also, He appreciated Professional Skills Training along with CADR in the university. He taught about the lessons of Mediation and its importance in today’s real world.

11:23 AM  Another Special Invitee, Ms. Sumedha Rathi, Senior Partner, Lexidem & Rathi thanked HPNLU, Shimla for having her for this Inaugural session. Afterwards, Ma’am discussed the importance of Mediation by emphasizing the Mediation process categorizing it to be a peaceful process as compared to other processes. Further, she emphasized the need for a codified law in Mediation and Mediation Bill 2021 which ensures promoting institutional mediation and encourages community and online mediation. She wished all the best to all the participants and the organizing committee of CADR.

11:35 AM  Now coming forward with the inaugural ceremony, our Guest of Honour, Ms. Anupama Ahluwalia, an attorney with over 16 years of experience in international & domestic legal matters. She has worked with top-tier law firms-Shearman & Sterling, Singapore; O’ Melveny & Myers, NY and Paul Hastings, NY and her clients have ranged from MNCs, Financial Firms, and Global NGOs to International institutions. Over the years, she has worked in U.S., Singapore and India and is admitted to practice law in New York and Delhi, India.

11:46 AM  With this, Our Chief Guest Mr. Tejas Karia, Partner, Shardul Amarchand Mangladas & Co. thanked the Organizing Committee of CADR, HPNLU, Shimla for inviting him as the Chief Guest. Sir started his words by telling us about hybrid models are successful in settling disputes whereas, Mediation plays an important role in narrow disputes. Also, Sir taught about the appreciated confidentiality in mediation, legislations that provide for mediation, and Organisations – CAMP, PACT, IDRC (working closely on training and capacity building through institutional mediation). He gave recommendations before the parliamentary discussion – we would see a mediation act – the impetus to commercial mediation. At last, our esteemed guest wished all the best to all participants and the university for organizing this competition.

12:06 PM  With this a Vote of Thanks is presented by our Director of CADR, HPNLU, Shimla to all the esteemed guests and invited them in near future to visit the campus in Shimla. Now, The participants are now ready to go into tomorrow’s Preliminary Rounds.

Signing off for today! We will be back with full enthusiasm to join the Preliminary Rounds.

 DAY 2: PRELIMINARY ROUNDS 1

Room number 01 | Team Code 212 v. Team Code 228

10:16 AM Greetings to one and all! The judges and participants have arrived! They exchange pleasantries and introduce themselves to each other and the round commences. Instructions are read out by the host. The mediator greets the judge and other participants. Client Stanley Hudson and their counsel introduce them. Energy Webb private limited clients and counsel have introduced them. Mediators is instructing both parties about the mediation proceedings. The mediator briefed both parties about the rules of the mediation round.

10:28 AM Stanley Hudson, requesting party talks about himself and highlights of the contract. Counsel thanks mediators for initiating proceedings and hope to find a solution through these mediation proceedings. Counsel for Stanley Hudson highlights the main point of discussion and points out how her client has been impacted by a breach of contract. The mediator takes over the proceedings and asks the responding party to start with their opening statement.

10:37 AM CEO of Energy Whipped Private Limited introduces her company to the mediators and counsel. Responding Party states that Stanley Hudson has been an asset to the company and hopes to have the contract in future as well. Counsel for the responding party to take over the proceeding. Counsel highlights the contract between the requesting party and the responding party. Counsel highlights the three main points of the mediation. The mediator takes over and draws out the disagreement between the parties. The Mediator highlights the keenness of the responding party to continue with the contract with the requesting party.

10:47 AM Requesting party continues to explain his situation after consuming the responding party’s product. Judge asks counsel to directly come upon the issue. The mediator asks the requesting party to take over and put some light on future contracts and compensation needed by the requesting party. Counsel of the requesting party brings to notice the mediator the need to retain the contract and apology needed from the responding party. TC 228 Client put forward what the company has faced due to the act of requesting a party, further she mentions the interest of the company.

10:55 AM Judge tells both the parties that this mediation is going nowhere and directs them to put some light on the issue and mediation process directly. The mediator asks the responding party to establish the grounds to prove that because their product Stanley Hudson is not injured. Counsel continues to explain their side and asks for a caucus to take place. Judge due to some time constraints asks both the parties to conclude

Requesting party proposes a solution. The requesting party asks the responding party for a public survey to happen and issue a public apology. The responding party assures requesting party of the best marketing terms and a public survey to happen.

11:03 AM Mediator directs both the parties on what needs to be discussed in the next session which mainly includes the grounds of compensation. Counsel of the responding party tells the mediator that they are ready to pay half of the total amount asked by the requesting party as compensation. The mediator tells both parties to go on with their closing statements.

11:06 AM: The mediator asks the Judge if any question is to be asked. The judge in response asks a question both the parties if they have given their best BATNA. The responding party answers the question by highlighting the importance of the caucus. Requesting party answers the same.

Host thanked all the participants and the judge for giving their valuable time and initiation.

Room number 04 | Team Code 204 v Team Code 219

10:49 AM  Greetings everyone, The Judge and the participants representing both parties have arrived. The host is greeting everyone and explains the rules to all the participants. Both parties introduced themselves and exchanged pleasantries. The mediator has begun the session by greeting both parties and explaining the procedure of the mediation.

10: 56 AM On the request of mediator 1, mediator 2 clarifies all the rules of the mediation and how this session shall proceed. The Mediator asked the requesting party to begin their speech. The requesting party’s client talks about his background and how he faced various challenges he had faced during his early life. The Counsel of the requesting party talks about how he and Stanley know each other. He explains all the issues related to the present case. The counsel assures them that they will take all the healthy measures to resolve their dispute.

11:07 AM The client of Energy Whipped Pvt. Ltd, thanks to Stanley for calling them and asking to resolve their dispute by mediation. The client explains their other issue which is related to the losses they suffered. The client tells him that they want to clear out the past mistakes and asks for the backup report from Stanley which provides the information related to the reports that state that he suffered health issues due to consuming Veber.

11:13 AM  The council of the responding party, raises the issue that due to the allegations of Stanley they had suffered various losses. They want to keep that contract intact and the form of that contract shall be discussed in this mediation.

11:16 AM  The mediator pointed out the following agendas on which both parties want to have their negotiation. These agendas were related to the Explanation and clarification of the statement made by Mr. Stanley, Secondly on the injury which is suffered by Stanley after the consumption of that product. And thirdly related to the continuation of their original contract and their future relationship. 

11: 20 AM  The counsel of Mr. Stanley raises the question of why their product was launched some days before the day of launching it and whether all the qualitative measures were taken by the responding party to check the quality of their product. The counsel for the requesting party stated that Other players might not have suffered anything that might because Stanley had more rigorous training in comparison to the other players.

11: 27 AM The client of the responding party explains that all the essential measures were taken to check the quality of VeBar. The client ensures that they have taken proper checks and tells them no other customer has reported any problems that are caused to them after consuming their product. The client also tells them other players are also using their product and there are no health problems they are facing due to rebar. The counsel of the responding party also tells them that their products are checked again and again to check the quality of their product.

11:34 AM The host asks the parties if they want to have a caucus session right now. The counsel assures that they are not facing any problems and there is no need for a caucus session. The session continues. The mediator asks the timekeeper to pause the time for a minute as the counsel, Stanley is facing some technical issues and is unable to join.

11:37 AM Stanley joins and the session continues. The mediator summarizes and tells that both parties have agreed to have a third-party internal check. The counsel tells them that they will not be able to share their medical report and instead they will send them a certificate that a milk-based product was found in their bar. The counsel of the responding party wants clarification that Vebar and Stanley will have a future relationship and that the contractual part will be discussed after this mediation. Mediator 226 asks them if they can move to their second agenda related to the contractual part.

11:42 AM Client tells that their relationship had benefited both of them. He tells them he hopes to buy some shares of energy whip PVT ltd so that they can also contribute to them and assure their trust in them. The mediator tells them there is less time left with them and if they can discuss the other issue.

11:47 AM They will be willing to give them a certain share of their company but it will be contingent on their previous contract and they are willing to have this solution. They have agreed to have a third-party investigation. They welcome their interest in purchasing shares of their company. But they tell them that they should have another mediation so that they can discuss the terms related to their new contract. The mediator tells that both parties have done a good job of reaching a solution. The mediators wish luck to both parties. All the participants appreciate each other’s work. He round wraps and both the parties promise each other to meet again as soon as possible.

11:54 AM The judge gave positive remarks on the performance of all the participants. He appreciated the skills of both parties. The judge gave his critiques on the point that both parties were facing network issues and due to this, there was a waste of time. At last, he ended the session by praising both parties and ended the session on a positive note.

Room number 08 | Team Code 208 v. Team Code 217

10:03 AM The session started with the host giving a welcome note to the judge and the participants. We are honored to have Adv Dinesh Bishnoi among us as a judge. He is a bachelor of law in international law and labor. He has conducted various judicial trials as presiding officer, defending officer, and also as judge advocate at various courts.

10:09 AM The session was continued by the host by elaborating on the rules of the competition. The mediator begins with an opening and introduction of the mediation. The parties have agreed to choose this online mediation table with certified meditators. The session then proceeded with the introduction of the parties. Counsel for the requesting party agreed to be referred to as Stanley Hudson. Our mediators then briefed everyone on the nuances of the mediation process, along with the element of confidentiality and caucus (a private mediation session).

10:16 AM The parties introduced themselves. The client for the requesting party introduces himself as a basketball player who has been asked to be the brand ambassador of V bar due to which his health deteriorated. The client for the responding party thanked Mr. Stanley and introduced his international energy drinks brand, which has been sustaining and thriving for over 25 years. The company made a 5-year contract with Mr. Stanley leading to an increase in the popularity of V bar.

10:22 AM The co-mediator proceeds with the session and lists down the agendas:- trust, losses suffered, and accountability of MNC. The responding party was also concerned with the breach of contract, primary reason for abdominal pain, and statements of Mr. Hudson.

10:29 AM Both parties negotiated on Agenda 1, i.e., trust. The responding party contented that Mr. Stanley should have talked instead of making a comment due to which they lost faith in customers.

10:36 AM Mediators facilitated the session well. A caucus was called by the requesting party. They discussed the issue of staying in the contract. The party made clear that they want to stay in contract for the next 5 years. It was concluded in the open session that both parties wish to continue the contract.

10:41 AM Then, the responding party called for a caucus. They accepted that they have not met the standards and the product was released before the actual release date due to customer demand. They asked for the compensation of defamatory loss and monetary compensation, if possible.

10:46 AM The session was concluded. Both parties wish to renegotiate the terms of the contract. Mediators gave a general recap of the session. By the end, Judge remarked about the session. He highlighted that body language is important as soon as you are on camera. Mediators should allot more time to parties than to themselves. The session should lead to some results with time being an important element. Don’t get bogged down so much in procedural aspects that you miss the crux of the session. Moreover, the hand movement should remain below your shoulders because it is not political speech. The session ended with a thank note from the host.     

10:53 AM The session was continued by the host by elaborating on the rules of the competition. The mediator begins with an opening and introduction of the mediation. The parties have agreed to choose this online mediation table with certified meditators. The session then proceeded with the introduction of the parties. Counsel for the requesting party agreed to be referred to as Stanley Hudson. Our mediators then briefed everyone on the nuances of the mediation process, along with the element of confidentiality and caucus (a private mediation session).

10:59 AM The parties introduced themselves. The client for the requesting party introduces himself as a basketball player who has been asked to be the brand ambassador of V bar due to which his health deteriorated. The client for the responding party thanked Mr. Stanley and introduced his international energy drinks brand, which has been sustaining and thriving for over 25 years. The company made a 5-year contract with Mr. Stanley leading to an increase in the popularity of V bar.

11:06 AM The co-mediator proceeds with the session and lists down the agendas:- trust, losses suffered, and accountability of MNC. The responding party was also concerned with the breach of contract, primary reason for abdominal pain, and statements of Mr. Hudson.

11:09 AM Both parties negotiated on Agenda 1, i.e., trust. The responding party contented that Mr. Stanley should have talked instead of making a comment due to which they lost faith in customers. Mediators facilitated the session well. A caucus was called by the requesting party. They discussed the issue of staying in the contract. The party made clear that they want to stay in contract for the next 5 years. It was concluded in the open session that both parties wish to continue the contract. Then, the responding party called for a caucus. They accepted that they have not met the standards and the product was released before the actual release date due to customer demand. They asked for the compensation of defamatory loss and monetary compensation, if possible.

11:16 AM The session was concluded. Both parties wish to renegotiate the terms of the contract. Mediators gave a general recap of the session. By the end, Judge remarked about the session. He highlighted that body language is important as soon as you are on camera. Mediators should allot more time to parties than to themselves. The session should lead to some results with time being an important element. Don’t get bogged down so much in procedural aspects that you miss the crux of the session. Moreover, the hand movement should remain below your shoulders because it is not political speech. The session ended with a thank note from the host.

Room 15 | Team Code 215 v. Team Code 224 

10:23 AM The Judge and the participants have arrived. They exchange pleasantries and introduce themselves to each other and the round commences. The judge, Ms Apoorva Dixit, has completed her education at HIdayatullah National Law University, Raipur and is currently an assistant professor at Jagran Lakecity University. The host introduces the judge and then lays down the rules of the Second National Mediation Competition, HPNLU. 

10:30 AM The mediator lays down the ground rules for the session and explains the mediation process to the requesting party. He lays emphasises, listening to the other party and respecting each other. The requesting party starts by speaking about the relationship they have with the responding party, he says that the damages that occurred to him are more than just material loss and are more emotional.  The responding party says that they have faith in the mediation process. He talks about rebuilding the relationship and having it back to its full glory. 

10:43 AM The Counsels of both the party lay down the problem of both parties and propose to set the legal issues aside, and have a spirit of good faith partnership for the promising and mutually profitable relationship that it is.  They set the agendas of today’s session and want to preserve the relationship and this is just a roadblock in their relationship.  The Conference session starts. The questioning starts and the responding party starts answering them.  

10:58 AM The discussion goes on. The council requests the mediators to summarise the discussion after he stops speaking for a smoother mediation. The mediator points out that there is a communication gap between the party and he requests for moving on to the Caucas. The responding party asks the requesting party to respond to his questions and sets the atmosphere for the continuance of their relationship in future. 

11:08 AM The responding party’s counsel asks for the medical report not just for the sake of examination but for the concerns of his health. There is a reiteration for having a healthy relationship going ahead. The caucus starts. The mediator suggests that the responding party comes for the caucus first. The responding party gently rejects the caucus due to the paucity of time and for transparency. The requesting party again asks for the caucus and is given 4 minutes of time for the same.

11:19 AM The Caucus ends and the other party joins back. The caucus is being summarised by the mediators and the main conclusion which comes out is that the privacy of both the parties is maintained by both the parties and the mediation should be focused more on future aspects. Both parties agree to the proposal. The responding party proposes the continuation of the contract and to show strength to have promotional gatherings together. A favour of paying 25 per cent amount if the negotiation goes well and the rest would be paid in next 2 years. The proposition of making the Client the brand ambassador of the remaining party. 

11:27 AM The compensation amount is to be discussed and agreed upon later on due to the paucity of time today. The company is ready to pay the hospitalisation charges for a week A proposal of drafting the client as the brand ambassador of other products and drafting a contract similar to that of the NBA Pro League player. 

11:31 AM Conclusion by the parties. The mediators sum up all the ideas discussed in the last 2 minutes of the negotiation. It was a fruitful session and the judge starts speaking. The judge gives her insight into the sessions. Appreciating the mediators for being good team handlers and the suggestions of the same were shared by her. The session concludes with both parties looking forward to the next session. 

Room no. 16 | Team Code 216  v. Team Code 220

10:07 AM The session for Preliminary Rounds-1 starts, the judge, Mr. Harsh Dave is introduced, pleasantries are exchanged and everyone, parties, counsels, and mediators introduce themselves.

10:13 AM A brief overview of the session is given by the mediators and the process is explained to the parties, consent of the parties regarding the commencement of the mediation process is asked and surety of confidentiality is given.

10:24 AM Client, Mr. Stanley who is an NBA player addresses his issues with the respondent company, Energy Whipped Pvt. Ltd. Mr. Stanley explains how he lost his career to the unfortunate incident. The counsel of Mr. Stanley Hudson summarizes the issues of his client. Three main issues were identified – reputational loss to Mr. Stanley due to his non-selection of him in NBA; financial loss faced; health issues that Mr. Stanley had to suffer.

10:32 AM The CEO of Energy Whipped Pvt. Ltd explains the background of its company and the grounds for its issues. The counsel for the company also summarizes the issues regarding the contract which were financial loss due to Mr. Stanley backing out of the contract; loss in brand value and also funding from investors; criticism faced by the company

10:39 AM Discussion by the mediators over the agendas that were key to the dispute arose in the present case, which is- relationship loss, reputational loss, and financial losses faced by both parties.

10:41 AM Mr. Stanley states how he values the relationship between both parties and believes that there is potential to save the relationship and thus, introduces the idea of a new contract that both parties can enter into after making certain adjustments.

10:44 AM Issue over a relationship is somewhat resolved by establishing that both parties wish to remain in the contract either by entering into a new contract or renewing the present contract with medical coverage (expenses) and testing (lists of tests conducted by the company) and also the withdrawal of the batches in the market for time being.

10:52 AM Certain apprehensions are raised by Mr. Stanley regarding the product but the same are resolved and the parties have decided to stay in the contract upon renewed terms.

10:58 AM The issue of reputational loss is being discussed which was faced by both parties. Both parties have decided to settle this matter by issuing a joint public declaration of their willingness to continue in the contract and establishing a manifestation of the bond. Mr. Stanley will again stand as the face of the brand to garner public trust over the brand.

11:0 AM Session for Preliminary Round-1 ends after resolving two out of three key issues at hand and the third issue is left for discussion for the next session.

11:10 AM The Judge, Mr. Harsh Dave gives his comments regarding how the process of mediation is rushed for the purpose of settlement in such competitions which is not the case in real life. All in all, appreciates the conduct of their clients and their ability to fulfil the roles assigned to them. Also appreciated the ability of mediators in explaining the process of mediation and explained how confidentiality is a two-way street and has to be fulfilled by clients as well as the mediators and goes on to say that voluntariness and neutrality are a one-way street.

11:14 AM The session comes to an end.      

     

DAY 2: Preliminary Round 2

Room number 01 | Team Code 209 vs Team Code 225

02:04 PM Greetings to everyone. The mediators outlined the roadmap that will be followed throughout this mediation session in order to make it as advantageous as possible for both parties concerned.

02:08 PM The session continues with the host elaborating on the rules. After this the mediator begins with an opening statement where both the mediators introduce themselves and provide some information about the mediation process. The requesting and responding parties provide an introduction about themselves and have agreed to choose this online mediation table with their certified mediators and have also agreed to be addressed by their respective names. The importance of mediation is addressed briefly after which the mediator asks if parties have ever opted for the same, and reassure the parties they will help them reach an amicable agreement.

02:21 PM Requesting party starts with the opening statement by thanking respondents and mediators for joining the process where they express their intention to reach a mutually agreeable solution. The requesting party highlights why they wanted to acquire their land, where they approached respondents with the utmost respect and on a very positive note, where the requesting party also highlights how their reputation has been tarnished due to defamation charges by the respondents. The respondents make it clear that they want to deliberate on vital issues arising out of these unfavourable circumstances. Further, two items of the agenda for the session are highlighted I.e, to see the instances leading to defamation suits and the second agenda is to discuss future business collaboration.

02:34 PM  Opening session for Agenda 1 starts with the responding party stating that a defamation suit seemed as the best option due to Constant interruptions by requesting party despite clear signals, further causing mental trauma, plus they brought into light the sentimental value of their land holds for them as it’s their ancestral property. The respondents claimed that the Requesting party only focused on the monetary value. Their Claim was further substantiated by the counsel, Where the intention of not selling property was reiterated again. They proposed another idea of Not selling but willing to lease it for 99 years, Where the solution can mutually benefit both parties.

02:45 PM Respondents highlight what their intention was before filing suit. No bad intention was intended in the first place. Their neighbours were Also being bothered. Further, the intention to issue a Common public statement was appreciated. Also, Another proposal was made to organise a Private meeting with investors to confirm collaboration, as wanted by requesting party. Finally, the Solution was that a Joint public statement is to be issued.

02:51 PM Parties move on to the second agenda. Before that, responding parts Requests for a caucus. The responding party highlights their apprehension about not being given suitable reasons for use of land by the respondent. They Want surety that the right profit is being given to them considering the high profitability the land holds. The responding party Agrees to negotiation when it comes to the amount. However, Clarification about profit was sought by the mediator. The respondents highlighted that they are willing to continue with selling, given that market value is the fair and reasonable profit of the entire project received by all families (neighbours).

03:05 PM Move ahead to the 2nd Agenda where requesting party highlights that they are willing to deliberate on the proposal. Review offers are considered after deliberation. Requesting party Offers 70 per cent property at market value and Offers 30 per cent as a secure creditor in township project where the respondents can retain the entire floor. Additional benefits like Free usage of common areas like pool play areas are proposed with respect to collaboration. The mediator highlights the proposals of the requesting party and they Agree on proposals made by the requesting party. Amount stated agreed to, secure credit also appreciated. Hence, the Proposal is agreed to by the respondent. Negotiations happen. Another proposal was made by the respondent on which requesting party is silent. The parties Still have not agreed to the profit part, resulting in Friction between them related to the issue. Caucus is then requested. Due to the paucity of time, it doesn’t take place. The profit part is to be discussed later.

03:09 PM Today’s session concluded although consensus couldn’t be formed on the other agenda. But the 2 agendas were discussed. Closing statements made by requesting party first, grateful about the fact that they could agree on at least 1 agenda. Both parties agreed on some issues. All of them concluded that it was a Fruitful discussion. Meditators were thanked For their flexible approach.

03:21 PM Our esteemed guest is invited to give feedback to participants where he Highlighted the importance of reality-testing by mediators. He also advised Dividing the opening statements equally by mediators. Certain mistakes were highlighted and he advised both the parties to be extremely careful while making offers and statements.

03:22 PM– Closing statement by the host. The Session was concluded.

Room number 02 | Team Code 210 vs Team Code 227

02:12 PM  Greetings to one and all. The session begins with the mediators deliberating as to what will be the roadmap undertaken throughout the course of this Mediation session for it to be most beneficial for both parties involved.

02:18 PM The parties and the judge enter the room. The host provides a brief introduction of our esteemed judge for the session Mrs. Sonal Kharbanda. The pleasantries are exchanged and introductions of the parties begin with smiles across all faces. The mediators highlight the importance of their role in facilitating the conversation that would lead the parties to an amicable resolution of the dispute. Now, we are all set to begin with what we are hoping would be a productive round of mediation.

02:23 PM  The Mediators open the floor for mediation. The mediator starts with the session and the agenda is about the Construction of a company. Now questions are as follows:-

-In regards to the nature of actions taken to obtain land rights and what can be done in the same.

-In regards to the damages claimed due to losses, both reputation and finances suffered by all parties.

-Future disputes redressal mechanisms of choice.

02:50 PM Now call for a caucus. The counsel for energy whipped elaborates on the same for the satisfaction of the requesting party.

02:58 PM – The parties enter a caucus session and are informed about the caucus’s confidential aspect.The parties put forth their sides without any hesitation and fear of the information being disclosed to the other party.

03:06 PM – The joint session begins in regard to the market value.

03:10 PM – The mediators wrap up the session by congratulating the parties for such a fruitful session. With the hopes of meeting again for another session to further discuss the remaining issues with the same enthusiasm, the mediation round comes to an end.

03:14 PM – Our respected judge is giving the feedback to the mediators first, on how to efficiently direct the parties to reach an amicable settlement. The parties are congratulated for being tactful at handling the surprises being thrown at them by the opposite side. I am sure everyone gained a lot by hearing the feedback from our esteemed judge.

Room Number 03 | Team Code 211 v Team Code 231

02:23 PM Greetings! All the participants representing different parties have arrived. The host greets the judge and all the participants and provides them with the rules and regulations of the competition.

02: 25 PM Mediators are introducing themselves to the room. The mediators now ask the parties to introduce themselves. Bob Construction Pvt. Ltd. and the Vivek Oberoi with their respective counsels introduce themselves to each other.

02: 28 PM The mediator 227 explains the healthy benefits of the mediation over the long heft process of litigation and he further explains how this session of mediation will proceed. The mediator again emphasizes the benefits of mediation and explains what will be the roles of the mediators in this session of mediation.

02: 34 PM The mediators ask the requesting party that is Bob Construction Pvt. Ltd. to introduce themselves and start with the session. Bob Construction Pvt. Ltd. and its counsel introduces themselves and begins with the background of the current problem they are facing for which they are coming for this session of mediation. They also explain how their following project is very important and how damage to their reputation affected investments, finances, and so on. Furthermore, they want to work it out with the other party and continue with the contract process.

02: 43 PM The mediator summarises the requesting party and asks Vivek Oberoi and his counsel to introduce themselves and start with the session. Vivek Oberoi and his counsel introduce themselves and begin to talk about their side of the story of the problem and explain their agendas.

02: 47 PM The counsel of the respondent party explains their agenda. The mediator summarises the whole talk and sets the agenda for the party that is regarding reputational loss, land problems, and finances.

02: 49 PM The requesting party now starts with their point and explains how they want to continue with the contract. The responding party explains how the land is their ancestral property and they agree to find a solution for it and they agree to work with the contract but only on some concrete assurance.

02:53 PM The requesting party explains to the other party how they want to compensate them for the land on the basis of the market value.

02:54 PM Vivek Oberoi agrees with the statement of the other party and asks them about what are they willing to offer. The mediator summarises the whole argument of both parties.

02: 56 PM The requesting party explains how they want a joint agreement and joint statement in the media and an agreement where the other party is willing to work together and there was no problem with the land issue. Further, Vivek apologies for the actions of her sister, and he further explains how other people are cutting ties with them

02:59 PM  Bob Construction Pvt. Ltd. asks for a caucus session and everyone agrees to it and the caucus session begins. The mediators explained the rules of the caucus session to both parties separately. Bob Construction Pvt. Ltd. explains the fact that they lack finances due to damage to their reputation and they were willing to provide the Oberois accordingly. Then, the responding party comes and explains the monetary value they want for the sale of their land.

03:15 PM – The caucus session gets over and the discussion begins. The mediators put out the point about the sale o the land. Bob Construction Pvt. Ltd. places the offer that they are willing to give the opposite party fifty per cent of the land value with a flat for the Oberois and also give a priority to them for the investment in their construction project and accommodate that for the same. The condition is that the opposite party will take back their work of defamation publicly and back the other neighbours for the positive side of the project.

03: 21 PM– Vivek Oberoi agrees on the point of going for a joint statement and the word of the requesting party. The requesting party further agrees to it. The financial agreement has been left for another session.

03:23 PM– The mediators summarize the whole session regarding the public joint statement and both parties agree on the sales of the land for the construction. At last, today’s session for mediation ends on a positive note.

Room number 04 | Team Code 205 v Team Code 226

02:05 PM Hello and Good afternoon! The parties have introduced themselves and exchanged pleasantries. The host introduces the judge, Mr Digant Mishra, a graduate of MNLU Mumbai and currently a legal associate. The mediators have discussed a strategy for reaching an amicable solution.

02:11 PM Mediator lays down the ground rules for the mediation session to resolve the conflict amicably.CEO of the construction company, requesting party, begins with the opening remarks. The Client provides brief information about the construction company. The Client wishes to sell the land at a fair market price. In addition, he says that the actions of the responding party hampered the company’s goodwill and resulted in the threat of the investors. The responding party further describes how the requesting party defamed the company and falsely accused the employee. The legal Counsel advises dealing with the issue with mediation. 

02:18 PM Counsel for the requesting party begins to propose possible solutions and describes the monetary losses the company has suffered. Discussion of the agendas begins with the requesting party wanting ten crores as compensation for defamation and renegotiating the sale deed in future.

02:26 PM The responding party decides to sell the land based on negotiation terms. The requesting party states that the land is the core definition of life and holds sentimental value. Additionally, she contends that repeatedly rejected proposals for land purchase are the crux and the bone of contention. The company’s employer knocking on every day became harassment for the responding party. Disputes arise when the Client(responding party) refuses to purchase the land at a fair price. Meanwhile, The Mediator suggests going into the caucus session and reaching a positive solution.

02:36 PM Mediator discusses the three Agendas 1. Defamation suit 2. Mutual intention regarding the property 3. Compensation for harassment.CEO of the construction company clears his intentions. Counsel for the company answers the question of the responding party.

02:43 PM The responding party decides to move into the caucus. However, requesting party chooses to delay. The parties are going in circles. Until now, Nobody has proposed a solution.

02:52 PM With the end of the caucus, the requesting party reveals the confidential information round.   The responding party agrees to the condition to take back their words and quash the defamation suit. The parties set their agendas for the next session. The requesting party would like to discuss the sale deed and contract in future sessions. 

03:00 PM At the end of the session, The honourable judge gives feedback to the participants. The judge praises the parties for handling the issue tactfully. Further, he directs them to maintain politeness, keep their language positive, and refrain from using negative words while talking to the parties. He wishes all the best to the parties for their future agendas and congratulates them for participating.

Room 16 | Team Code 201 v. Team Code 230

02:00 PM  The round begins with the arrival of the judge and the participants. They exchange pleasantries and introduce themselves to each other. The mediator makes both parties comfortable by making them aware of the rules of the mediation session and ensuring them that they all are going to be heard no matter what.

02:03 PM Mr. Alex, MD of bob construction is the client and James is the counsel and TC230 Vivek is the client and Sarais the counsel. Mediator made the parties aware of the rules and made the participants comfortable.

02:10 PM Mr. Alex gave his opening statement. Bob construction company is a very reputed engineering company. According to him there is some misunderstanding between the party, and now stakeholders are threatening them and their reputation has also declined in the market due to this. TC 201 wants to settle down the land dispute and is looking forward to a solution, counsel is providing the statements, personal stakes are high in the issue, and Bob construction wants a smooth settlement.

02:20 PM Bob construction majorly wants a settlement on these issues, they want to settle the land dispute and false and unreasonable harassment claim against them and want to come to a resolution. The mediator is portraying the issues clearly among the parties. The issue is that there is some land dispute between parties and parties want an amicable settlement. There is a loss of goodwill of the parties because of the claims of both parties’ compensation for the defamation suit. 

02:23 PM  The other party Mr. Vivek the head of the Oberoi family and doesn’t want to sell their land. And his counsel gave facts and presented his side of the dispute.  The council is providing technical viewpoints on the issue. They want to resolve the issue and the party is ready to compromise and will sell the land if paid more and will withdraw the defamation suit and will give a joint statement regarding the issue.

02:34 PM TC 201 provides the new terms of providing the new residential place.

02:38 PM TC230 is ready to sell the land but only at a higher price, and this condition would be kept private. They don’t want the new property and will not change the name of the property. The mediator is clarifying the terms.

02:48 PM TC230 asked for the private caucus. TC230 is discussing its terms with the mediator. They are ready to sell the property but at a higher price, as they are going through financial difficulties.

02:54 PM TC201 is ready to dismiss the defamation suit, and just wants a joint statement for dispute settlement. Bob construction is not ready to give the higher price.

03:01 PM Both parties are fixed on their terms. They want to pass the land dispute to the next session. TC230  is ready to give the joint statement.

03:05 PM Judge is providing the judgment, mediators were advised to not stretch the session. Judge questioned mediators why the mediators rejected the demand of the caucus at first. Mediators are clarifying. Mediators are provided with feedback by the judge. Parties are provided with positive feedback by the judge. Judge is providing her views on the entire mediation round. 

03:10 PM The host expressed a vote of thanks to the judge, the mediators and the parties involved in the mediation

Room 15| Team Code 202 v. Team Code 2

02:05 PM The round beings with the arrival of judge Ms. AISHWARYA DOBHAL and negotiators. Pleasantries and introductions are exchanged and the host expressed a vote of thanks to the judges and made them aware of the following instructions to the negotiators for the mediation competition.

02:09 PM Mediators and council start a talk about their dispute between BOB CONSTRUCTION V/S VIVEK OBEROI.

02:14 PM All parties opening their statements firstly, TC 2O2 -bob construction in which the client s. Elizabeth stated that in their construction business they are facing certain restrictions in that then, the counsel Mr Rockefeller stated two points the first one to make a deal to buy their ancestral land and the second one, how can we help each other in making their loss to regain

02:23 PM The other party named TC 228  – Vivek Oberoi’s client and council gave their thoughts to the other party. The client – Vivek argues on their deal  for their land acquisition by bob construction while he refers to his counsel christ  hence, she clears the client’s thoughts and asks mediators to look into the matter

02:29 PM TC -228 ask for the caucus to talk to mediators in which the client Vivek Oberoi opens up about how they are in crisis due to their land acquisition and how his sister backstabbed her and then counsel asks for some certain steps to help them in these problems.

02: 35 PM Oberoi’s wants a joint development agreement  with bob’s construction regarding their land

02:40 PM TC -202 tells how they are using their land and what benefits they will provide to the other party like – they will make a  complex for the persons from whom they have agreed to take their land and asks them to be a part of this good deal. As the complexes are at the centre of the city.

02:45 PM In favour of the offer made by TC 202 the other parties reply that they are not ok with their proposal and want some other sought-off profit. They want 3 of 6 complexes which will be made by them as they mentioned. If you sell any property then they get  60% of the profit.

02:48 PM TC -202 ask for the caucus to talk to mediators about their problems regarding the statement made by the other parties.

02:58 PM TC 202 raised a question about whether they are protecting their financial interest.

03:00 PM Bob construction made one more deal with Oberoi’s that they will give them a complex and with the complex, they will give some revenue which they are getting from their other successful works. Hence, the other parties don’t accept the favour given by them.

03:05 PM The negotiators and mediators sum up their mediation session with a fruitful meaning and wish to talk about it sooner in the future.

03:08 PM The judge gives their feedback. She included that the mediation session is one of the good ones heard till now. She tells them about their mistakes and corrects them. She adds that after the caucus of one party the mediators have to instantly call up one more session with the other party. And the main point which is defamation the parties and mediators don’t talk about it. They have to do it as it’s the main point of the mediation session.

03:15 PM The host gives the vote of thanks to the participants and to the judges and the session ends on a good note.

DAY 2: QUARTER-FINALS

Room number 1 | Team Code 204 v. Team Code 228

06:18 PM Greetings! All the participants representing different parties have arrived. The host greets the judge and all the participants and provides them with the rules and regulations of the competition.

06: 20 PM The mediators begin by introducing themselves and ask both the parties Verstappen Pvt. Ltd. and Leclerc Inc. with their representatives to introduce themselves and greet each other and they do so.

06: 23 PM The mediators explain the healthy benefits of mediation and how it is better than the long and hefty litigation process. The mediators also explain the rules and regulations and how the following session will proceed. They also describe their roles in this session of mediation and tell both parties to be respectful to each other.

06:30 PM The mediators ask Verstappen Pvt. Ltd. to start the discussion by explaining their problems. Verstappen Pvt. Ltd. and its counsel explain the background of the problem, regarding using the opposite party’s stamp, for which they have come up with a resolution. They also explain how they want to mutually benefit the other party and find a solution to the problem and further they want to have strong future relations with each other.

06:37 PM The mediators ask Leclerc Inc. to start the discussion by explaining their problem. Leclerc Inc. and its counsel explain the background of the problem, regarding charging for stamps used by the other party and the finances related to the movie, for which they have come up with a resolution. They also explain how there was trademark infringement and they want damages through the other party. There also explains that they want to continue with the contract and have strong future relations.

06:42 PM Mediator 2 summarises the discussion and the problems put up by both parties. The main concern is regarding the unauthorized use of stamps and both parties need a solution for it. Mediator 1 briefs the agenda and tells about taking corrective measure regarding certificates, and trademark infringement and agree with the terms of the current agreement.

06:55 PM The mediators mentions the problem of trademark infringement and gave a point of discussion to the session. Leclerc Inc. tells that they want sixty lacs as damages. The counsel for Verstappen Pvt. Ltd. tells and explains how it was a mutual agreement and they agree that they were wrong on their part. Further, he explains the finances and where such finances were used. Counsel for Leclerc Inc. tells the other party how the said finances by the other party are not normal. The counsel for Verstappen Pvt. Ltd. agrees with the other party and offers fifteen lacs as compensation.

07:05 PM Leclerc Inc. explains the fact that it was their film and the other party just
modified it. The other party explains the fact that both the parties have gained through
the money and further explains that they themselves promoted the movie.

07:07 PM Mediator 2 summarizes the whole discussion by both parties. Verstappen Pvt. Ltd. offers thirty lacs and five lacs more regarding module distribution. The counsel for Leclerc Inc. explains the fact that they have received financial losses and need sixty lacs.

The other party agrees to it and asks Verstappen Pvt. Ltd. for having contracts that are in relation to the movies that Verstappen Pvt. Ltd. is making. Leclerc Inc.’s counsel further explains how they have financial limits since they are an upcoming new startup. They further propose module and education videos that will help the other party with their problem of international relations and ads will run in those videos through which fifty per cent profit distribution and further explained the exchange of finances to their proposition. The mediators summarize the discussion regarding finances and the offer provided by both parties.

07:18 PM Leclerc Inc. explains their point that how the other party has international assets and the other party wants all their movies and this would affect their international ties and disagrees with the proposal. Verstappen Pvt. Ltd. clarifies the fact that they just want movies related to the Netherlands. Leclerc Inc.’s counsel explains that the compensation is regarding the present problem and not regarding future deals and they want sixty lacs as damages. The counsel for Verstappen Pvt. Ltd. explains that they want to pay sixty lacs and they want strong relations in the future. He also explains how they want engagement to the terms of the agreement with regard to other proposals in addition to sixty lacs.

07:30 PM Mediator 2 comes in between and tells both the parties that the discussion is going round the circles and they must come to the point of mentioned agenda. Mediator 1 asks both parties to sum up their discussion due to lack of time. Both parties agree on the fact that the solution to the problem is to be discussed in the next mediation session due to lack of time.

07:32 PM The mediators summarize and conclude today’s session of mediation. They also explain the problem to be discussed in the next session of mediation. The mediators conclude the session and end it on a positive note.

07:36 PM The judge gave his positive remarks for the following session. He also gave his critiques to both parties about where they were wrong and what is the right decorum of a mediation session. Questions and answers between judges and the participants took place. At last, he praised the participants for their roles and their action in the following session and further blessed them for future progress. Later, personal feedback was also given by the judge to the participants.

Room number 2 | Team Code 226 v. Team Code 230

06:21 PM Welcome everyone! Judges have arrived and have taken their seats. The host started the meeting with a brief introduction of the judges and also a briefing on the rules of the competition and commenced the mediation session.

06:23 PM The parties TC 225, and TC 232 Mediators introduced themselves and shared a few words with the parties.

06:25 PM The responding and the requesting party introduced themselves and gave the agendas on which they will be negotiating in the mediation process.

06:26 PM Mediators TC 232 and TC 225 gave a small brief about the mediation process what it is really about, how it works, the advantages of the mediation and negotiation process, and how it helps us in resolving issues. And the basic ethics and practices to be used during the whole mediation process.

06:35 PM The parties TC 226 started discussing the agenda by going back on how the whole matter was started and what lead the parties to come to a single table for resolving the issue. Verstappen started by apologizing for the grave mistake they made because of which Leclerc had to suffer the international backlash from the partners they are allied with and the damage it did to their reputation internationally. And further clarified that all the certificates issued cannot be taken back keeping in mind that the certificate will be redesigned and a special clip of 10 sec will be played prior to giving the certificate. The first agenda put up was to continue the contract and discuss the further prospects and working of both the companies together.

06:41 PM TC 230 Started by thanking them for the success of the movie worldwide and accepts the apology by Verstappen. The Counsel again reinstates the issue of the use of the logo by the party without their permission as their international collaboration makes the matter worse as it bars them from entering into contracts. The TC 230 demanded a public formal apology and let the international organizations know that the allegation against them are not that solid and was a misconception. As the international organization demands a public apology and any kind of informal apology will not be accepted.

06:45 PM TC 226 Told that both the parties are on the same board as of now and the mediation is about easing the problem. The mediator asked for summoning the agendas about a formal apology, and compensation and asked to mutually agree about notification in which the clerical staff bears the
whole liability about its mistake and put it out in public.

06:50 PM TC 230 asked for a caucus session and the mediators agree and move further with the caucus session TC 226 leaves the meeting on demand of secrecy.

06:51 PM TC 230 told the mediator that they agree to issue a joint notification addressing the international organization by using soft words so that the purpose of a public apology can be accomplished without damaging their own reputation and the reputation of the other party. Something close to an apology that may satisfy the international organization and the media.

06:55 PM The parties joint the session again after the discussion made in the caucus.

06:57 PM TC 226 counsel offered to give some compensation as per the demand of the other party
and make the proposal of going with the notification request. The mediators asked the other parties to take the caucus and shared the information that
was discussed in the caucus with (TC 226) to (TC 230).

06:59 PM TC 226 Decides not to give a straightforward public apology as it will affect their image as the media may make the matter worse and lead to a dip in their future contractual

07:02 PM The private caucus is closed and the respective parties join the mediation session again the mediator explains how both the parties came to a joint notification as it will be close to a formal apology and the terms that have to be included in the notification.

07:05 PM TC 226 Decides to take responsibility and came to a consensus for the joint notification on the date of 1 Oct on which the notification is proposed to be released in the public domain and further asked about the amount of compensation to be paid. As both parties are fine with the notification they further discussed the future of their partnership. Both parties are fine with the notification as a gesture of kindness.

07:10 PM TC 226 Further the contract is not broken and they will continue to work together. They also discussed the release of their upcoming 5 movies.

07:15 PM The initial contract is up for the future and the future movies will be shown on the same platform as it was before and the certificate will be distributed without the logo of the other company.

07:17 PM They further explain the licensing capacity and the way they are going to work together.

07:20 PM The proposal for licensing the 5 upcoming movies will be sent soon.

07:21 PM TC 232 mediator appreciated the way both the parties came to a mutual understanding when asked for any further questions both the parties denied and they further moved to conclude the session.

07:23 PM The parties have come to a consensus that they have come to agreeable terms on the points that they had delineated in the agenda and expressed their pleasure at getting the fruits out of the negotiation session.

07:30 PM The session was concluded and the judges gave their review of what they found positive and negative in the mediation process both the parties shared warm appreciation towards each other and appreciated the efforts made by them the judges gave some tips to the team of the responding and requesting and concluded the mediation on a warm note.

Room number 3 | Team Code 208 v. Team Code 214

06:00 PM The participants are joining in and waiting for the judges to arrive.

06:13 PM The judges are joining the session, and the host has requested a few extra minutes for the remaining participants to join in.

06:18 PM The session is now in full swing, with the host giving gratitude to the respected judges and the participants and giving the guidelines for the mediation competition.

06:20 PM The mediator explains the pillar of mediation, asks the participants to introduce themselves, makes them feel comfortable, and makes them aware of the rules and process of mediation. They talk about the caucus and the unbiasedness of the session, and the mediator asks for ground rules for the session from the participants, and one of them says that one ground rule should be that there should be no overspeaking.

06:28 PM The requesting team starts heating the session by stating their facts and concerns. The client begins by saying his issues and willingness to come to a conclusion benefitting both sides. The council then takes over, and further states his client’s point. The requesting party is a multinational company. The first issue displayed is the dissolution of the contract’s cobranding and license agreement term. The second issue is bout getting access to the upcoming movies of the responding team.

06:30 PM the mediator then starts to state the facts that have been derived from the statement given by the requesting team

06:38 PM the responding team then begins to give their response, and they thank the requesting team for requesting mediation and not asking for litigation, as it would’ve been more trouble. Further, they start to state their views and respond to the requesting team’s issues.

06:48 PM The mediators again state the facts and issues and write down the main agendas for the
session:
– Nature of the agreement and damages
– Future relations

06:53 PM the responding section says the damages are caused due to the cobranding, and no credit is given. And they ask for compensation, i.e. one crore rupees, to settle the injuries they have suffered, and they shall keep the contract

06:58 PM The mediator summarizes the argument and brings out the points given by the team.

07:00 PM The requesting unit said that due negligence was there from the other party and was not entirely their mistake. and how their company goodwill is also lost, not just the other party

07:04 PM The responding team says this is not a blame game and wants compensation only for the damages that have occurred.

07:06 PM  A caucus is called. The responding team says that the second agenda is what they’re focusing on more. They accept the mistake that has been done on their part. They are looking for a settlement and they want to balance the compensation. They feel there is a creative compensation instead of the one crore. They will allow more film projects to the requesting team.

07:10 PM The mediator takes in all the information and asks if she can disclose the information given by the party and the responding party says that they only want to tell their decision to the other party if they agree to a common understanding.

07:14 PM The responding team’s caucus time is ending and the requesting team’s caucus is starting, and they disclose that they are open to lowering the compensation amount to 80 lakhs, and are open to collaborating on new projects and that they want to cooperate.

07:16 PM The mediator asks if the responding team wants any other than monetary compensation, but they reject that offer, saying that they have to pay the international clients w. The latter is at a loss due to the issues.

07:20 PM The caucus for both teams has ended. mediator starts clarifying that both the party wants to continue to cooperate and wants the teams to work it t. The mediator discloses the requests and ideas given by the teams

07:22 PM The responding team has concluded, ready to give in to the new project collaboration offer, and the licencing fees will go higher.

07:25 PM The requesting team wants to be collaborative and find a middle solution and is open to the idea of paying higher licencing fees. The requesting unit says they cannot give a final answer on the compensation as the decision is o only thanks to the company directors.

07:30 PM The responding team says that they are ready for this quasi-agreement but want a date when they shall tell them correctly when the compensation will be given. The requesting unit says they will let the actual amount be known in the next session because many board directors have to be asked.

07:35 PM The time is up, and both sides have brought in the talk about another session because they want to continue the partnership. The mediator concludes the session by bringing in the information that they have collected from the session. The mediator asks for feedback. The responding team thanks the party and the mediator. The mediation ended on a very wholesome note with both teams appreciating each other.

07:37 PM The host asks for feedback from our judge. The judge gives advice and points out how the session could’ve been better, what should’ve been asked, and how the mediators should’ve operated. The second judge gives her ideas and opinions, advice, and general points to the teams. And says that she will provide her with per provider participants who have more queries

07:50 PM The host concludes the session on a cordial note by thanking all the participants and judges for taking out some of their valuable time and being a part of the competition.

Room number 4 | Team code 232 v. Team code 219

06:15 PM The session host gave the guidelines as to how the mediation session is to be conducted.

06:17 PM The mediators commenced the session by laying the ground rules.

06:18 PM The session moved further with the mediator giving the opening statement wherein he introduced himself. The parties then introduced themselves. The mediator then asked the parties subject to mediation as to their capability/ authority to be a party to any agreement reached through the process of mediation.

06:20 PM The presiding mediator then described the nuances of mediation proceedings. He also described the various stages of the mediation process. He then emphasized the importance of privacy regarding details of the mediation proceedings and requested both parties not to engage in any sort of communication during the mediation proceedings.

06:26 PM The requesting and responding parties then gave their introduction and opening statements. The requesting party happened to be a startup multinational education institute. After the client of the requesting party gave the basic details of the issue into consideration, the requesting party’s counsel laid some ground rules for the opposing party’s counsel and then proceeded with the legal issue.

06:34 PM The requesting party’s counsel stated the agendas of the mediation session. In a nutshell, the main two agendas were as follows:
1. In regards to the nature of cobranding and licensing and what can be done in the same.
2. In regards to damages claimed due to losses both of reputation and finances suffered by all parties.
3. Potential for future collaborative projects.

06:36 PM The responding party started to give their introduction. In the meanwhile, the mediator paused the session due to internet issues faced by the co-mediator. Then the client of the responding party stated her side of the incident.

06:43 PM The counsel of the responding party then introduced himself and called to the attention of the mediators the fact that this was his client’s first mediation proceedings. He reiterated the fact that the opposing party cannot use their logo without his client’s express permission as it was a registered trademark. He then stated his party’s agenda for the session. Their agenda was in consonance with that of the requesting party.

06:53 PM The mediator paused the time of the proceedings because of internet issues faced by the co-mediator.

06:55 PM The requesting party rebutted some statements made by the opposing party previously. They also stated that a part of the issue was the fact that the responding party kept the contract secretive in nature and did not attract investments from private parties. The responding party gave a rebuttal for the previous statement and brought to the attention that this was not a part of the issue. They then stated that the issue was regarding co-branding rather than investments.

06:59 PM The co-mediator interjected and restated the ground rules for the session. She restricted the parties from using unparliamentary language and acts.

07:02 PM The requesting party’s counsel stated the legal technicalities of the issue. They stated that the compensation of INR 60 lakh rupees from the responding party was fair.

07:07 PM The client of the responding party clarified some issues with the counsel of the requesting party. She also provided rebuttals to some statements made by the counsel of the opposing party.

07:10 PM The mediator paused the session due to technical issues faced by the requesting party’s client.

07:12 PM The requesting party’s client rejoined the session and then went on to provide supporting statements to answer the questions raised by the client of the responding party.

07:14 PM The counsel took responsibility for his decision of printing logos which posed an issue for the opposing party.

07:16 PM The responding party’s counsel along with the mediator stated that the session would be more beneficial if the parties could work towards a solution.

07:24 PM The responding party felt that they had a creative solution in mind and went on to state the same. The requesting party had some issues regarding this solution and tried to make some changes so as to come to an amicable solution.

07:26 PM The requesting party stated that they will take down the logos of the opposing party from the further batches with the ongoing contract continuing as it is right now. Also, they were willing to make good some losses suffered by the opposing party.

07:28 PM The client of the responding party reiterated that they wanted some part of the amount right then and the rest could be worked upon later on. Both parties tried to reach a common solution upon which both could agree.

07:32 PM The requesting party stated that they were willing to compensate the opposing party to an amount which was below INR 40 lakhs cap and in return, they were willing to invest in the future endeavours of the company.

07:33 PM The co-mediator interjected and requested both parties to summarize their statements and provide their closing statements.

07:35 PM Both parties provided their closing statements. The requesting party’s counsel stated that they were nearing a possible solution and hoped that they would be able to do so in future sessions.

07:40 PM The co-mediator then went on to summarize the session and points out the fact that the
session had gone in a very convenient and amicable manner.

07:44 PM The presiding judge then went on to provide his valuable insights on the session. He congratulated the teams for their positive response to mediation and applauded the fact that the parties had set the agenda for the next session.

07:55 PM The session host then concluded the session on a positive note.

DAY 3 | SEMI-FINALS

Room number 01 | Team Code 204 v. Team Code 214

10:05 AM The much anticipated day is finally here! Beginning with the Semi-Finals and with the Finals scheduled for later today, today it promises to be jam-packed with a captivating mediation session

10:15 AM The air is brimming with nervous excitement and the participants are on edge as the semi-final rounds have begun.

10:17 AM Greetings! All the participants representing different parties have arrived. The host is greeting all the participants and briefed them about the rules of the competition. 

10:19 AM  The parties and the judge enter the room. The host welcomed the parties. The host provides a brief introduction of our esteemed judges Mr. Jasbir Bajaj who is the director at BE N BY IAS, Meena Waghray who is the founder, and mediator out of court.in and Sravan Unnam who is head of HAC. for the session. The pleasantries are exchanged and introductions of the parties begin with smiles across all faces. The mediators highlight the importance of their role in facilitating the conversion that would lead the parties to an amicable resolution of the dispute. And the host here explains the rules and regulations to both parties. Now, we are all set to begin with what we are hoping would be a productive round of mediation. Here we go!

10:23 AM TC 220 Mediator explaining the issue and process of mediation. The Mediator explains that the mediator explains about facilitating the parties and about their confidentiality and neutrality towards both parties. TC 220 mediator introduces himself and explains the basic rules of mediation and the process that is going to be followed in the session.

10:30 AM The Client for requesting party gives its opening statement and explains about their company, functioning, manufacturing and marketing of the company. The counsel(204) gives a brief about their issue. The counsel thanked both the parties for coming to an amicable solution and mediators. He explains that the counsel is here only for legal assistance. And proposed three agendas from requesting party, 1st is dealing with the dispute in leasing properties and lending spaces to cc’s competitors. 2nd about global proposals to help cc realise its global potential. 3rd is to alternate to dilution of equity.

10:40 AM TC 214 gives their opening statements the client from the responding party thanked both the parties and mediators for providing assistance in resolving the issue and facilitating the party to reach an amicable solution. Then client 214 explains the issues that are faced by their company in the covid situation and put their concerns to the other party. The counsel for the responding party thanks to mediators as well as requesting party for coming to reach to amicable solution despite having poor health. Then addresses the agendas of the requesting party. 

10:53 AM Both the mediator explains the agendas to both parties in simple language. 

10:55 AM The counsel explains about financial crunches that their client faced during the covid time. 

11:00 AM Counsel 204 gives some clarifications on the proposals that are proposed by the responding party and also clarifies the losses their client faced during the pandemic and gives some proposals. The client for the 204 takes the issue for further clarification and gives some proposals.

11:08 AM The mediator 227 explains and summarises what the responding party has proposed. 

11:12 AM The responding party gives some clarifications on the issues of equity liquidation that are mentioned earlier. 

11:13 AM  the requesting party comes to negotiate with the responding party on the issues of interest rate and equity liquidation. The responding party explains the past and present valuation of the company. And proposed some offers to the requesting party. 

11:15 AM Mediator 220 explains the offers that were proposed by the responding party.

11:17 AM The counsel from requesting party mentions considering the proposals of the responding for further session. 

11.18 AM Both Mediators summarise the problems and proposals that are given by both parties and lead the session to further issues. 

11:20 AM The responding party explains the terms and technicalities that were there in the contract and demands damages that the responding party suffered during the pandemic, and also some structural changes. 

11.23 AM  Mediator explains the technicalities and terms proposed by the response about damages and some structural adjustments.

11:25 AM The requesting party proposes some other offer instead of giving damages, and to take charges of the company and proposes for switching of ownership. 

11.32 AM  The mediator explains what issues both the parties have raised and briefed them about suggestions and proposals made by both parties. 

11:35 AM  The requesting party finally comes to the closing statement and explains and proposed some offers that are beneficial to both parties, that is to be discussed in future sessions also mentions making progress in further sessions also to bring some innovative ideas. The responding party comes to the closing statement and mentions the expectations for future sessions and thanks both the mediators and the other party for coming to an amicable solution. 

11.40 AM  Both the mediators summarised what were the agendas and the offers proposed by both parties. And thanks to both the parties for respecting the settlement gives wishes for the future session.

11.44 AM The judges are asked for their feedback and acknowledged and give appreciation to all of the participants. And mentions that the mediator’s role is to facilitate but the mediators intervene intake the matter further, also judges mentioned the role of mediators and explain the caucus session where parties can put their concerns privately. At last, the judges said that the participants were great at their session. 

Room 2 | Team Code 226 v. Team Code  219

10:28 AM Greetings to one and all! The session started with the host giving a welcome note to the judges and the participants. We are honoured to have Ms Prachi Mehta who is a founder and Managing Partner at TAG-The ADR Group, Ms Ekta Bahl, an accredited mediator at SIMI and finally  Mr. Mohd. Humdhan is an accredited arbitrator with an LLM qualification in Construction law, Arbitration and Adjudication. 

10:34 AM The session continues with the host elaborating on the rules. After this, the mediator begins with an opening statement wherein  Mediator 209 introduces himself and provides some information about the process of mediation and requests the parties to introduce themselves as well. The session further continues with the Responding and Requesting parties doing the same where they agree to facilitate this process by certified mediators. The basics of the mediation process are covered along with its features. Mediator 209 assures parties of confidentiality.  It is also clarified that the decisions shall be non-binding unless specified otherwise. The role of mediators is explained succinctly. 

10:41 AM Mediator 232 starts by appreciating both parties for choosing mediation over the conventional dispute redressal process.  Further, the parties are encouraged to be open-minded, comfortable, and accepting and to articulate their part of the story in the most lucid manner,  after which the items of the agenda shall be set, with the consensus of all parties.  The Structure of the mediation process is set. Few ground rules are clarified by mediator 209. 

10:46 AM Requesting party begins the discussion with an opening statement, where she thanks the mediators for their illustrative explanation.  Furthermore, they give a brief about their company, Label Food Inc and highlight the deal signed between Label Food and Coffee Culture.  The technicalities of the contractual terms are highlighted, where an exclusivity contract with CC was signed. Problems faced by the requesting party is brought into light where they felt alienated in tier 3 cities. They sense a breach of trust and disloyalty by CC. The agenda for the day is set-  Agenda 1- The current situation and the events leading to unfavourable circumstances. Agenda 2 – Future relationship and opportunities.  

10:54 AM Responding parts start with an opening statement. Gives brief about the company when it started business in 2016 and is growing steadily. Admires the work of label company and would want to follow their footsteps. 21 per cent liquidity diluted by them,  and are under a  debt of 2 crores. Expanded business in tier 3 cities. Some outlets shut down in some cities due to covid pandemic. Force Majeure clause invoked by CC. No intention to explicitly not lease land from the label company.  They claimed that they Had to maintain profits in tier 3 cities despite the difficulties and further Explained their side of the story. They clarified that they had no intention to exclude or make them feel alienated. Simple interest compound interest differences are highlighted here. No breach of an exclusivity contract. But the principle breach made here as relation not respected. Wants to clear the air. And express their desire to enhance and continue this relationship further. 

11:04 AM The responding party explains his role and clarifies that he is strictly in an advisory capacity. Points out details and agenda that he would like to discuss. Further, Highlights the intention to extend the partnership internationally also. Agenda 1 and 2 were made. The responding party further asks open-ended questions. Wants to know the necessity for a joint public statement and wants to know how many countries requesting party operates. 

11:11 AM Questions addressed by requesting party. Want to understand their state of mind and current financial status to continue relations further.  They want to know what business direction the responding party is headed towards. They also want to know the agenda from the responding party for purchasing land in tier 3 cities. Due to paucity of time. The mediator interrupts and asks both parties to streamline the process. 

11:17 AM Floor for negotiations open. Parties are asked to adhere to the items of the agenda. The responding party takes up the question asked by requesting party about Why the property was sold off in tier 3 cities, and if it was due to a cash crunch. Question of alienation answered by requesting party. Further, the requesting party claimed that they expected allegiance from the respondents. Saw a clear deviation from the responding party’s end.  Also, their reputation in the market is misrepresented.  Clear channels of communication are encouraged by the requesting party, where they Want small ventures to remain intact. Further, they would want a public statement of enhancement/improvement of the relationship. 

11:39 AM The responding party further discusses the best course of action, on how they’re a small business and how the other party helped with their resources in expediting their growth. Moreover, they ask if the requesting party is willing to renegotiate the lease deal.  Parties further agree to public clarification and are Ready for joint notification about the mediation process.  The requesting party is Ready to offer debt at 18 per cent interest as compounding interest. Notification of healthy relationship to be set out by the requesting party.

11:42 AM The respondents want the requesting party to hear the entire offer which can be taken forward in the next session.  Hence,  the 1st agenda is cleared. The responding party clarifies that they are not aiming at taking up any more debt and make a proposal of an offer of giving 10 per cent for 3 crores. Further, they express their desire of going international as they are doing well in tier 1 and tier  2 cities with door-to-door delivery and  That is why the question asked about supply chains was asked in the beginning. Further, the respondents want to renegotiate the current deal. The mediators are then thanked for the parties having a fruitful discussion. 

11:47 AM Concluding statements made by the requesting party. 

11:48 AM  Closing statements by both the mediators are given. Solutions recapitulated by Mediator 2 i.e Firstly, a public clarification ( to be explanatory in nature) on how the other party has helped. Secondly, a Review of offers tabulated (regarding finances) and finally the potential and commitment to rebuilding trust are appreciated. With this, they also appreciate the breakthrough of clearing the air in the most amicable manner. 

11: 52 AM Judges join another room for discussion while participants wait. Results announcement- The Coffee Culture team was heavily in sync with the client and counsel.  Their team Seemed very natural when it came to cross-checking, and agendas were well drafted. Teams played a very active role, although time management could be an area for improvement.  Certain flaws were pointed out by Mr Mohd Humdhan. Feedback remarks were given by Miss. Ekta Bahl where told the participants that Language in mediation should be softer, and reframing and summarising could have been done more effectively by mediators. Parties could have used the mediators more effectively. 

11:58 AM Mediator  232 and The responding party i.e TC 219 were declared as winners. Closing remarks by the host were given. Question asked by the winning team on how mediators can be used effectively. Addressed by Ms Ekta Bahl and Mr Mohd. Humdhan. TC 219 also asked about career prospects in mediation which was answered by Ms Prachi Mehta by giving her background history. Ms. Ekta Bahl also gave an account of her mediation journey.  Mr Mohd Humdhan appreciated the idea of looking at different perfectives as a mediator also. Session Concluded.

 DAY 3 | FINALS

 

02:05 PM Greetings to the judges. The session started with a welcoming note by Ms. Prachi Thakur, Co-convener, ADR Society, who also expressed gratitude to the judges Mr. Amit Sanduja, Mr. William Patrick McPhilamy, Ms. Anupama Ahluwalia, Mr. Jaydeep Mehta, and Ms. Radhika Arora.

02:10 PM A brief of the concept of mediation was given by the mediators. The process was defined as collaborative, where parties come together to solve problems that have arisen between them, and they do so with the mutual assistance of the mediators. They based mediation on four pillars: party autonomy and the option of self-decision, party centralism, confidentiality, and voluntary neutrality.

02:15 PM The Ground rules for the session were set by the Mediators. They gave analogies so as to depict the role of mediation and mediators in resolving disputes.  It was explained that the mediators are not judges, and anything that the parties say cannot be used for or against them at any point in time. They also explained the lack of information exchange as a root cause of disputes, and hence promoted the parties to divulge more information.

02:20 PM The requesting party explained the situation of their company and thanked the other party for their acceptance of a mediation session. They also explained their reasons to negotiate, mainly not harming their existing relationship and clarifying any existing bad air between the two parties.

02:30 PM The counsel for requesting party appreciated the analogies used by the mediators in explaining to them the concept of mediation, and expressed their gratitude to the other party for opting for mediation and not the conventional litigation which would have made the parties antagonistic and cost them a lot of money, which was supposed to be used for the good of the people.

02:35 PM The Client for the responding party explained the grounds for their disputes and envisioned the alignment of agendas of both parties. They explained they had no hurtful intentions whatsoever behind their actions and the dispute arose because of differences and not poor intentions. They hoped for the session to result in something substantial and for the parties to be in a better position by clearing out the foul air.

02:45 PM The Counsel for the responding party expressed their hopes of taking away something fruitful from the session. They believed mediation to be laidback and opted for proceeding cautiously and not jumping or rushing into a decision which can make situations very confusing. They also commended the analogies used which set a very positive tone for the entire mediation.

02:52 PM It was agreed that an apologetic attitude on behalf of the responding party would help in a better resolution. Thereby, similarity in agendas set up by the parties would result in reaching an amicable solution.

02:54 PM The counsel for the responding party suggested setting the grounds and expectations after clearing any foul air between the parties, which would require restructuring agendas and expectations.

03:00 PM The requesting party justified their actions as being made under the careful supervision of their risk assessment team and not merely a personal decision taken in heat of the moment or rashly, but due to the urgency of the situation and paucity of time taken immediately.

03:12 PM The mediators suggested that allegations should not be made which would result in the spreading of rumours, and the agenda set with respect to the mending of the situation, the responding party demanded clarification to be issued in public so that the market forces recognize it wasn’t a hostile takeover and the share price is not affected anymore.

03:19 PM The requesting party clarified that the decision alleged to be a hasty decision was not taken without supervision, and was in fact taken with the assistance of experts, but was taken promptly as an immediate and fast decision was necessary to be taken by the team.

03:22 PM While the responding party agreed that the requesting party was performing to the best of their ability, business results matter more than the intention itself, which was not given by them. Summarize. The mediators proposed that in the best interests of the parties, the teams should move to the structuring part and if in future that does not seem plausible, then a caucus should be called.

03:25 PM Caucus was called by the responding party who demanded compensation for the losses arising out of the breach of contract, and also stated that they believed a deadlock was reached as the interests of both the parties were going in opposite directions. It was also stated by the party that the requesting party was not setting out clear interests and expectations which made it difficult for them to negotiate.

03:37 PM Caucus was then called by the requesting party who expressed their anger over the fact that the responding party did not turn up in the mediation session or in the funeral.  They also expressed their desire to dilute their shares in the opposite company and vice versa as well. They further demanded compensation for the breach of their contract.

03:44 PM The mediators and the parties concluded the session on the note that both parties were open to collaborating with each other professionally with regard to the subsidiary issue and the publishment of a joint statement. They were further ready to propose their offers again in another session if deem fit by both parties.

03:55 PM The Honourable judges appreciated the participating teams for their performance in the final rounds and highlighted the grey areas where more precision could have been useful. They further wished the students the best of luck in their future endeavours and the organizing committee for their efficient conduction of the entire competition.

 

 

Delhi High Court
Case BriefsHigh Courts

Delhi High Court: In a suit filed by Nikhil Chawla (‘plaintiff’) for its brand COOK STUDIO in the nature of threat application seeking declaration of non-infringement of the registered trademark COKE STUDIO by Coca Cola Company (‘defendant’), Prathiba M Singh, J. recorded the settlement terms arrived at between the parties through mediation and decreed the suit.

The Plaintiff is the proprietor of the firm trading as “The Chawla Group” and is stated to be running a very popular online platform called ‘COOK STUDIO’ engaged in the activity of blogging, production of video films, training, etc., particularly relating to cooking.

The Plaintiff has received notices from the Defendant who is the owner of the registered trademark named ‘COKE STUDIO’ calling upon him to desist from using the mark COOK STUDIO for his culinary related blog.

The summons was issued in the suit to the Defendant and the parties were referred to mediation before the Delhi High Court Mediation and Conciliation Centre for an amicable resolution, wherein they arrived at settlement.

A joint memo dated 12-09-2022 recorded the terms agreed between the parties as under:

“1. Plaintiff shall adopt the mark “Cook Pro 6” instead of the mark “Cook Studio” for the channels and platforms where the latter mark has been under use and shall completely transition to the mark “Cook Pro 6” and abandon the use of “Cook Studio” by 30th November, 2022.

2. Defendant shall not object to, nor otherwise interfere in any manner with the Plaintiff’s use of the mark and iterations of “Cook Pro 6” and shall also not object to or interfere with any application made by the Plaintiff for the registration of the mark “Cook Pro 6” whether in India or elsewhere.

3. The Plaintiff shall withdraw all trademark registration applications relating to “Cook Studio” and consequently withdraw the captioned suit.

4. The Defendant agrees that these terms shall only be limited to those channels/pages operated by the Plaintiff under the mark “Cook Studio” and shall not prejudice/affect the right of the Plaintiff in respect of any other product, service and/or channel or past/prior acts.

5. These terms shall have prospective effect from the date ascribed herein below.”

The Court noted the settlement terms arrived at between the parties and were found to be lawful.

Placing reliance on Nutan Batra v. Buniyaad Associates, 2018 SCC OnLine Del 12916, the Court further directed the complete Court fee to be refunded to the Plaintiff.

[Nikhil Chawla v. The Coca Cola Company, 2022 SCC OnLine Del 2861, decided on 12-09-2022]


Advocates who appeared in this case :

Mr. Adarsh Ramanujan, Mr. Lzafeer Ahmad and Ms. Skanda Shekhar, Advocates, for the Plaintiff;

Mr. Naval Kartia and Mr. Akshay Bhardwaj, Advocates, for the Defendant.


*Arunima Bose, Editorial Assistant has put this report together.

Delhi High Court
Case BriefsHigh Courts

Delhi High Court: In a suit filed by Sunshine Tea House Pvt Ltd. (‘plaintiff’) for its brand CHAAYOS was seeking permanent injunction restraining infringement of trademark and unauthorized use of trade name etc. relating to the phonetic and ocular similarity between trademarks ‘CHAAYOS’ and ‘CHAIOPS’, Prathiba M Singh J. appointed Mr. Sidharth Chopra (Counsel present in Court) as the Mediator to attempt amicable resolution of disputes between the parties, on finding that there is a possibility of amicable resolution.

The Plaintiff’s brand ‘CHAAYOS’ was established and started operations in the year 2012 and it claims to be the leading chain of Chai Cafes in India operating in various States across the country offering customized Chai in several variants having 200 outlets across the country.

The Defendant adopted the mark ‘CHAIOPS’ for selling tea products through a cafe under the name and style of ‘CHAIOPS’. The case of the Plaintiff is that the Defendant adopted the mark ‘CHAIOPS’ for products and services identical to the Plaintiff’s services and products which is a violation of the Plaintiff’s registered trademark ‘CHAAYOS’.

The parties admitted before the Court that there is no similarity in the device and logo of the parties. The only issue between the parties is regarding the phonetic/ ocular similarity of ‘CHAAYOS’ & ‘CHAIOPS’ marks.

Thus, the Court, realizing a scope of amicable resolution of disputes appointed Counsel Mr. Sidharth Chopra as the mediator. The Court directed the parties to appear before the mediator either virtually or physically.

[Sunshine Teahouse Pvt Ltd. v. MTRM Global Pvt Ltd., 2022 SCC OnLine Del 2831, decided on 06-09-2022]


Advocates who appeared in this case :

Mr. Jayant Mehta, Mr. Ankit Miglani, Ms. Jyoti Nambiar and Ms. Kaveri Rawal, Advocates, for the Plaintiff;

Ms. Swathi Sukumar, Mr. Abhishek Jain, Ms. Sutapa Jana, Ms. Anjali Bisht, Ms. Himangi Kapoor and Mr. Ritik Raguwanshi, Advocates, for the Defendant.


*Arunima Bose, Editorial Assistant has reported this brief.

Case BriefsSupreme Court

Supreme Court: In a case relating to pre-litigation mediation in commercial disputes, the bench of KM Joseph* and Hrishikesh Roy, JJ has stressed on making mediation a potent alternate dispute resolution device.

The Court listed down the following indispensable requirements that are necessary to achieve this goal:

  1. Existence of adequate infrastructural facilities and, what is more important, availability of trained and skilled Mediators. The role of the Mediator, as per Rule (5) of the Commercial Courts Act, 2015 (Pre-Institution Mediation and Settlement) Rules, 2018, is to facilitate the voluntary resolution of a commercial dispute and assist the parties in this regard.
  2. Availability in the number of Mediators in the country, particularly, in the light of lowering of the monetary valuation from Rs. 1 crore to Rs. 3 lakhs. It is all well to pass a law with sublime objects as in this case. However, the goal will not be realised unless the State Governments and all other relevant Authorities bestow their attention in the matter of providing adequate facilities.
  3. Knowledge of the laws, which are the subject matter of the suits under the Act, is indispensable for a Mediator to effectively discharge his duties. His role is supreme and it is largely shaped by his own knowledge of the law that governs commercial cases. There must be training by Experts, including at the State Judicial Academies. This must be undertaken on a regular and urgent basis, particularly keeping in mind when there is a dearth of trained mediators.
  4. There is a need to have a dedicated bar for mediation. The effective participation of the bar which must be adequately remunerated for its service will assist in mediation evolving. The concerned High Court may also undertake periodic exercise to establish a panel of trained mediators in District and Taluka levels as per need.

In the case at hand, the Court has held that the statutory pre-litigation mediation under Section 12A of the Commercial Courts Act, 2015 is mandatory and any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VII Rule 11 of the Civil Procedure Code, 1908.

Pre-litigation mediation under Section 12A of the Commercial Courts Act, 2015 mandatory; any violation would lead to rejection of plaint: SC

[PATIL AUTOMATION PRIVATE LIMITED v. RAKHEJA ENGINEERS PRIVATE LIMITED, 2022 SCC OnLine SC 1028, decided on 17.08.2022]


*Judgment by: Justice KM Joseph


For petitioner(s): AORs Ayush Negi, Santosh Krishnan, Arup Banerjee,

Advocates Chitanya Nikte, Vishakha Upadhyaya, Himanshu Tyagi,. Varnita Ojha, Sonam Anand

For Respondent(s): AORs Hetu Arora Sethi, Nikhil Swami

Advocates Saket Sikri, Ekta Kalra Sikri, Ajay Pal Singh Kullar, Vikalp Mudgal, Prabha Swami, Divya Swami

For Appellant: Senior Advocate Sanjeev Anand

Case BriefsSupreme Court

Supreme Court: The bench of KM Joseph and Hrishikesh Roy, JJ has held that the statutory pre-litigation mediation under Section 12A of the Commercial Courts Act, 2015 is mandatory and any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VII Rule 11 of the Civil Procedure Code, 1908. This power can be exercised even suo moto by the court.

While this declaration has been directed to be effective from 20.08.2022 so that concerned stakeholders become sufficiently informed, the Court made clear that,

  • in case plaints have been already rejected and no steps have been taken within the period of limitation, the matter cannot be reopened on the basis of this declaration.
  • if the order of rejection of the plaint has been acted upon by filing a fresh suit, the declaration of prospective effect will not avail the plaintiff.
  • if the plaint is filed violating Section 12A after the jurisdictional High Court has declared Section 12A mandatory also, the plaintiff will not be entitled to the relief.

Going into the legislative intent, the Court highlighted that Section 12A of the 2015 Act was inserted to the Act by amendment in the year 2018 as a compulsory provision. The object of the Act and the Amending Act of 2018, unerringly point to at least partly foisting compulsory mediation on a plaintiff who does not contemplate urgent interim relief. The provision has been contemplated only with reference to plaintiffs who do not contemplate urgent interim relief. The Legislature has taken care to expressly exclude the period undergone during mediation for reckoning limitation under the Limitation Act, 1963.

Further, the language used in Section 12A of the 2015 Act, which includes the word ‘shall’, certainly, go a long way to assist the Court to hold that the provision is mandatory. The entire procedure for carrying out the mediation, has been spelt out in the Rules. The parties are free to engage Counsel during mediation. The expenses, as far as the fee payable to the Mediator, is concerned, is limited to a one-time fee, which appears to be reasonable, particularly, having regard to the fact that it is to be shared equally.

Noticing that the statute which has generated the controversy is the Amending Act of year 2018, the Court observed that,

“The Amending Act containing certain Section 12A is a toddler. The law necessarily would have teething problems at the nascent stage.”

The Court, further, observed that is an undeniable reality that Courts in India are reeling under an extraordinary docket explosion. Mediation, as an Alternative Dispute Mechanism, has been identified as a workable solution in commercial matters.

The Court observed that it is an undeniable reality that Courts in India are reeling under an extraordinary docket explosion. Mediation, as an Alternative Dispute Mechanism, has been identified as a workable solution in commercial matters.

“A trained Mediator can work wonders. Mediation must be perceived as a new mechanism of access to justice.”

Hence, any reluctance on the part of the Court to give Section 12A, a mandatory interpretation, would result in defeating the object and intention of the Parliament. The fact that the mediation can become a non-starter, cannot be a reason to hold the provision not mandatory.

[PATIL AUTOMATION PRIVATE LIMITED v. RAKHEJA ENGINEERS PRIVATE LIMITED, 2022 SCC OnLine SC 1028, decided on 17.08.2022]


*Judgment by: Justice KM Joseph


For petitioner(s): AORs Ayush Negi, Santosh Krishnan, Arup Banerjee,

Advocates Chitanya Nikte, Vishakha Upadhyaya, Himanshu Tyagi,. Varnita Ojha, Sonam Anand

For Respondent(s): AORs Hetu Arora Sethi, Nikhil Swami

Advocates Saket Sikri, Ekta Kalra Sikri, Ajay Pal Singh Kullar, Vikalp Mudgal, Prabha Swami, Divya Swami

For Appellant: Senior Advocate Sanjeev Anand

Law School NewsOthers

The NLUO Mediation Cell at the National Law University Odisha was successfully inaugurated by Hon’ble Dr. Justice S. Muralidhar, Chancellor, NLUO & Chief Justice, High Court of Orissa on 15th August 2022 in the presence of Prof. Ved Kumari, Vice Chancellor, NLUO and Prof. (Dr.) Yogesh Pratap Singh, Registrar, NLUO. The event witnessed huge participation by the local masses including some CMC Corporators of the nearby wards amongst others. Justice Muralidhar unveiled the foundation stone of the newly established Mediation Cell and ushered in a new beginning of institutionally-run Alternate Dispute Resolution forum in India.

The inauguration was followed by a multilingual presentation by the members of the Centre for Mediation and Negotiation, NLUO wherein they emphasised about the importance of the centre, the vision and goal with which it is set up and the Mediation Cell. Apart from this, the presentation also included the initiatives that have already been undertaken by the Centre as a part of its social activism. The Centre had recently organized its first outreach drive in collaboration with Legal Aid Society and Pro Bono Club of the University which was attended by Self-Help groups and students.

After the presentation, Justice Muralidhar inspected the mediation room which was already equipped with all the resources to formally commence with the mediation sessions. He lauded the student members for having organized the room in a professional yet welcoming way. The student volunteers from the first year of the University had also prepared a skit on, “Mediation: An Alternate Dispute Resolution Mechanism” to spread awareness about the same amongst the local masses and they performed the same. Multilingual handouts containing information about the Centre and the Cell were distributed amongst the attendees. Justice Muralidhar commended the student members, volunteers and faculty advisers of the Centre for having undertaken this initiative which paves the way for Mediation and Negotiation as other feasible methods of dispute resolution amongst the masses.

The NLUO Mediation Cell is the first institutional-run mediation cell in India to provide live mediation services (both private and court-referred mediation). With this initiative, NLUO is striving hard to achieve the constitutional goal of access to justice and free legal aid. NLUO, with the establishment of NLUO Mediation Cell, is also not far from achieving the SDG 16 under UN Sustainable Development Goals 2030, i.e., Peace, Justice and Strong Institutions.

The NLUO Mediation Cell would be handling multifarious legal disputes including family, matrimonial, property, land and consumer disputes through mediation with the help of faculties-cum-trained mediators, and is looking forward to collaborate with other centres at NLUO and other organizations around. CMN acknowledges the efforts of the Legal Aid Society and the Pro-Bono Club for organizing CMN’s first joint outreach drive to create awareness about the resolution of disputes through mediation amongst the masses.

At the beginning, the Cell will focus on people from nearby places and will gradually extend to the whole state and provide free mediation services both physically and virtually through Online Dispute Resolution (ODR).

Delhi High Court
Case BriefsHigh Courts

Delhi High Court: Asha Menon, J. upheld the maintenance decree granted by the Family Court directing the husband to pay Rs 20,000 monthly to the wife and his child as maintenance keenly analyzing his earning vis a vis his expenditure.

The present petition was filed under Section 482 Criminal Procedure Code i.e., CrPC for quashing of an order dated 11-12-2021, passed by the Family Court, North-East, Karkardooma Courts whereby directions were issued to the petitioner-husband to pay a sum of Rs.20,000/- as a consolidated amount towards the interim maintenance of the respondents i.e., wife and child.

The Court noting that the present petition has no merits observed that the power of the Court under Section 482 CrPC is an extraordinary power, to be used sparingly, carefully and with caution and only when the continuation of the criminal proceedings will lead to miscarriage of justice or there was a disclosure of abuse of process of the court.

Based on evidence available on record and documents placed before Court, it is apparent that it is the petitioner who had inflated his expenditure especially Rs.10,000/- per month for his aged parents, who are admittedly living in their own residence on a 50 sq. yds. plot at Bhajanpura, Delhi owned by his father. The petitioner owns a Hyundai EON car and a smartphone of Samsung yet, he wishes to peg the maintenance of the respondent to Rs.4,000/- (before this Court Rs.5,000/-) i.e., less than half of the sum he allegedly spends on his old parents. A growing child and a mother who is taking care of all the needs of such a growing child is to somehow manage with Rs.4,000/-, whereas the petitioner and his parents can have a greatly enhanced level of comfort by spending Rs.25,000/- to Rs.28,000/- on themselves.

The Court noted that such an attitude is shameful no husband or a father must deny a fair standard of living for a wife who is a homemaker and their child of tender age.

The Court observed that matrimonial relationships can come to an end for a variety of reasons including ego clashes. The creation of Family Courts, the entire set up of Counseling Centers, and the availability of mediation whether before litigation or during litigation, are all intended for a more amiable and less torturous resolution of matrimonial and family problems. To deny maintenance to an estranged wife and child is the worst offence, even from a humanitarian perspective. Yet, it is a sad truth that husbands force their wives to file execution petitions to delay payments, even after a court of law has determined her entitlement, albeit, even if as an interim measure.

The Court dismissed the petition directing Rs 20,000 to be paid to the respondent wife as maintenance on the next date of hearing before the Family Court.

[Pradeep Kumar v. Bhawana, 2022 SCC OnLine Del 2082, decided on 18-07-2022]


Advocates who appeared in this case :

Mr. Pradeep Kumar Yadav, Advocate, for the Petitioner;

Mr. Praveen Goswami and Mr. Vijay Chauhan, Advocates, for the Respondent.


*Arunima Bose, Editorial Assistant has reported this brief.

Delhi High Court
Case BriefsHigh Courts

Delhi  High Court: Prateek Jalan, J. took up a petition which was filed under Section 9 of the Arbitration and Conciliation Act, 1996.

The claim of the petitioners is that they are the legal heirs of Mr. Vijay Kumar Sondhi, who was a partner in L & L Partners Litigation, a partnership firm of lawyers (respondent 6). Mr. Sondhi passed away on 28-01-2022 and the petitioner’s claimed that his share in the partnership firm has devolved upon them by his Will dated 01-04-2014 founded upon Clause 13 of the partnership deed dated 01-04-2022, which reads as follows:

“13 That the death or insolvency shall not result the firm into dissolution and shall be taken over by the legal heirs of the Partners. If the legal heir/s do not qualify to become the Partner in the firm, the capital balance lying in the firm shall be paid to the legal heir/s.”

 

The deed also contained an arbitration clause and keeping in mind the nature of the disputes, the parties were referred to mediation before a former Judge of this Court. The mediation was unsuccessful despite the sustained efforts of the Mediator. Counsel for all the parties agreed that the mediation proceedings have been closed, however the last session’s report was not placed before the Court. The counsel  for parties also agreed that the dispute would have to be referred to arbitration and that the present petition will be treated as an application under Section 17 of the Act before the learned Arbitrator.

 

The parties consented to the appointment of an arbitrator in these proceedings itself. Mr. Justice Deepak Gupta, a former Judge of the Supreme Court of India was therefore appointed as the Arbitrator to adjudicate the disputes between the petitioners and respondent  1, 4 -6.

 

In context to the ad interim measures sought by the petitioners of restraining the respondents from changing/ altering / modifying the structure and/or constitution of the Respondent 6 firm and restraining the Respondents from selling or transferring or creating any charge or encumbrance or security interest of any kind whatsoever, on the immovable properties which are either owned or in which the investments have been made by the Respondent 6 it was submitted by the counsel of the respondent 6 that respondent  6 does not intend to create any third party interests or security interests or any other encumbrance in the immovable properties owned by the firm. He further submits that as far as the investments of the respondent  6 were concerned, certain investments are liquidated as required for the purpose of meeting the operational expenses of the respondent  6, including salaries.

 

The Court stated that keeping in mind the statement of the Counsel above, the same will bind respondent  6, as far as the immovable properties of respondent 6 were concerned.

  • They were allowed to utilize those investments only for the purpose of meeting operational expenses, and maintaining accounts in this regard.
  • It was further directed that the share of Mr. Sondhi in the partnership firm, which according to the respondents is to the tune of approximately 20.8%, will not be disturbed.
  • The induction of any new equity partners in the partnership of the firm will also be subject to the prior approval of the learned Arbitrator.
  • In the event, any of the existing partners seeks to resign from the partnership firm, they may do so, and the proportion of their share which would have gone to Mr. Sondhi will also be maintained undisturbed.

 

It was made clear by the Court that these directions will take effect, subject to any orders, whether ad interim or final, passed by the Arbitrator in the application under Section 17 of the Act and that he will be free to vary, vacate or modify these directions, which are intended only to preserve the position of the parties until the Arbitrator has had an opportunity to enter into the reference, and consider the proceedings under Section 17 of the Act.

 

[Sangeeta Sondhi v. Rajiv K. Luthra, O.M.P.(I) (COMM.) 155 of 2022, order dated: 01-06-2022]

For petitioners: Mr Ashwini Kumar Mata & Mr Sunil Dalal, Senior Advocates with Mr Abhishek Rana & Mr Ashish Mohan

For respondents : Ms Haripriya Padmanabhan, Ms Pooja Dhar & Mr Zeeshan Diwan (For R-1)

Mr Raghvendra Singh (for R-2)

Mr Rajiv Nayar, Sr. Advocate with Mr Saurabh Seth & Mr Gaurav Chauhan (for R- 3 to 6)


*Suchita Shukla, Editorial Assistant has reported this brief.

Experts CornerTariq Khan

For many years, alternative dispute resolution (ADR) has been used to describe arbitration, conciliation and mediation as alternatives to litigation. The idea behind calling these methods of dispute resolution “alternate”, is that litigation has been, and will always be the primary mode of dispute resolution. However, in the last one decade, we have seen a paradigm shift in this approach. Young lawyers, general counsel, micro, small and medium enterprises (MSMEs) as well as companies are moving away from protracted litigation and accepting ADR as primary modes of dispute resolution. Litigation is a time-consuming and costly affair. Pursuing a case in court may result in loss of time, efforts and money whereas resolving a dispute by ADR can be quicker and cheaper. Another reason why ADR gained popularity is perhaps the dissatisfaction created by the litigation process. However, it cannot be denied that formal adjudication system will always be there as there will always be certain disputes that can only be resolved through it. Barring such disputes, all other disputes that one can resolve without burdening the court system, can be efficaciously resolved through ADR.

 

Over the last decade, ADR has gained traction in India. Both legislative framework as well as judicial precedents have aimed at promoting ADR as a preferred mode of dispute resolution rather than a mere substitute or alternative to the formal judicial system. In particular, the Arbitration and Conciliation Act, 1996 (Arbitration Act) has been amended[1] time and again with the view of keeping at par with other legal regimes and making India an arbitration-friendly jurisdiction. This has been buttressed by the Indian judiciary which has also actively adopted and recommended a minimal intervention approach, such that confidence is instilled in the arbitral process, amongst parties.

 

Particularly, with the current arbitration regime in place in India, the arbitral process is party friendly, time bound and confidential. The courts are slow in granting anti-arbitration injunctions, interfering with foreign awards, and a challenge to an arbitral award is now available to a party on limited grounds. This has allowed parties to attain a final and binding decision in a shorter timeline as against long-drawn battles before judicial fora.

 

The global business community has reaped benefits of ADR, both for containment of disputes as well as quick resolution. Across various sectors, the growing trend now, particularly in relation to commercial contracts, is to opt for an arbitration clause or med-arb clause for dispute resolution to ensure access to justice in reduced time and cost and in an efficient and satisfactory manner.

 

While the course of arbitration in India has been flourishing, mediation in India has been slowly gaining recognition. Mr Justice N.V. Ramana, the Chief Justice of India, recently said that prescribing mediation as a mandatory first step for resolution of every allowable dispute will go a long way in promoting mediation[2].

 

The primary reason for slow growth of mediation in India was the lack of awareness and its acceptance as a mode of dispute resolution. Other reasons why mediation could not gain popularity include lack of domain experts and suitable infrastructure. Recently, the Mediation Bill, 2021 (Mediation Bill) has been introduced with the aim of promoting domestic and international mediation in India, including online mediation, and is currently pending before the Rajya Sabha.

 

In April 2022, the Ministry of Law and Justice, India, indicated that the cases pending before the Supreme Court of India are 70,154, before various High Courts are 58,90,726 and 4,09,85,490 before District and Subordinate Courts, as of March 2022[3]. Further, on 15-4-2022, the Chief Justice of India while addressing the inaugural session of Telangana State Judicial Officers Conference, 2022 said that the judiciary is overburdened.[4]

 

In view of this surmounting pendency, adopting ADR as a primary mode of dispute resolution, as opposed to a mere alternative, is now the need of the hour. This will also result in decongesting the court system and bring about much-needed relief to the judiciary, which is overburdened.

 


Legislative Framework and Other Initiatives


Section 89 of the Code of Civil Procedure 1908 (CPC) was introduced in 2002 with the objective of promoting non-judicial dispute resolution. Section 89 contemplates reference of a dispute to arbitration, conciliation, judicial settlement through Lok Adalat or mediation, where there exists an element of settlement in the opinion of the court.

 

In 2018, Section 12-A was introduced in the Commercial Courts Act, 2015, mandating mediation before a party can approach a commercial court with a suit. The exception to pre-litigation mediation is cases where urgent interim relief is being sought. Thereafter, the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 were notified, which enumerate the manner in which the mediation proceedings would be conducted for reconciling and settling commercial disputes between the parties.

 

The Arbitration Act, from its inception, has endorsed a minimum interference approach. Recently, the judiciary has also strongly adopted a minimal intervention approach to encourage more parties to arbitrate. The key amendments introduced to the Arbitration Act in 2015 and 2019 are also in keeping with the objective of promoting arbitration as well the minimal interference approach, such that India can be transformed into a global hub for arbitration.

 

Before the 2015 Amendment, in relation to Section 34 proceedings, certain High Courts had the practice of allowing new evidence, documentary as well as oral, at the stage of challenge which was akin to a trial. With the amendment in 2015, this practice is now eliminated, and challenge proceedings are strictly summary in nature, requiring parties to establish a challenge based on the arbitral record filed before the Arbitral Tribunal.

 

The 2019 Amendment also provided for establishing an independent body, the Arbitration Council of India (ACI). ACI’s envisaged duties include promoting alternative dispute resolution, policy making, operation and maintenance of uniform professional standards, grading arbitral institutions and accrediting arbitrators.

 

Additionally, the real estate sector, recognising the benefits to parties of a quick and cost-effective resolution of disputes, has adopted conciliation as a mode of dispute resolution. In 2016, the Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted with the aim of protecting homebuyers from unscrupulous real estate developers and to provide quick dispute resolution. RERA has established a Real Estate Regulatory Authority (Authority) in each State for regulation of the real estate sector, which also acts as an adjudicating body for dispute redressal. Section 32(g) of the RERA provides for measures to be taken by the Authority to facilitate amicable conciliation of disputes between the promoters and the allottees through dispute settlement forums comprising of representatives from consumers and promoters associations. In line with this provision, several States have set up conciliation forums.

 

The Mediation Bill seeks to set up a Mediation Council of India (MCI) to promote and regulate domestic and international mediation in India, including online mediation. The Mediation Bill contemplates pre-litigation mediation or a subsequent reference, at the request of the parties, at any stage of the proceeding before a forum. The mediation proceedings envisaged are time bound, to be completed within 180 days, which is further extendable with the consent of the parties by another 180 days. The mediation settlement agreement, being a culmination of the disputes, is envisaged to be final, binding and enforceable in the same manner as courts judgments.

 

The First Schedule of the Mediation Bill enlists the disputes or matters which are not fit for mediation. Further, the Second Schedule enumerates an extensive list of matters which cannot be subjected to mediation. In cases where the Government is a party, the reference is confined to commercial disputes. Although the provisions in the Mediation Bill suggest that these are indicative, the legislature has adopted a restrictive approach and has failed to appreciate that there is a need to make the mediation process more inclusive and that only certain categories of proceedings should be reserved for adjudication by the judicial system, as a matter of public policy. In this regard, the principles set out in the decision of the Supreme Court in Vidya Drolia v. Durga Trading Corpn.[5] on arbitrability of disputes can be a yardstick to determine whether disputes can be referred to mediation or not.

 

The advancement and adoption of technology, as well as the shift towards online dispute resolution, has resulted in popularisation of online mediation. Online mediation has the potential to revolutionise the justice-delivery system by promising simple and affordable justice for all[6]. This shift will likely depend on the legislative framework, which is ultimately adopted by India and steps taken for its enforcement.

 

In a step forward, the Law Department of the Government of Telangana has issued an order dated 17-3-2022 designating the International Arbitration and Mediation Center, Hyderabad (IAMC) as the arbitral or mediation institution (as the case may be) in cases where ministries, departments, public sector companies, or other entities controlled or managed by the Government of Telangana are a party and where the value of the dispute is more than Rs 3 crores. In relation to existing contracts where the contract value is Rs 10 crores or above, parties have been directed to consider amending the dispute resolution clause, in consultation with the other parties to the contract, to designate IAMC.

 


Recommendations


All stakeholders have a role to play to pave the way for ADR to become more seamless, time and cost-efficient, and as such, a preferred and complete system for accessing justice.

 

The non-intervention approach adopted and recommended time and again by the Supreme Court of India should be followed by High Courts as well as lower courts as a rule. In addition, an active role by courts to recognise ADR and encourage parties to mandatorily explore settlement through mediation, before litigation can proceed, could result in early resolution of cases that are fit for settlement.

 

The promptness with which arbitration-related litigation, which comes before a court, either before, during or after the conclusion of the arbitral proceedings, is disposed of by courts is also crucial to increase the efficacy of arbitration as a dispute resolution method.

 

Particularly, expeditious disposal of challenge proceedings under Section 34 of the Arbitration Act, which applies to arbitral proceedings where the legal or juridical seat of arbitration is India. Although, challenge proceedings are now summary in nature and time bound, delays are inevitable in view of an overburdened judiciary. In addition, an appeal lies from an order setting aside or refusing to set aside an arbitral award, under Section 37 of the Arbitration Act, making it a two-tier challenge. The legislature could consider doing away with a Section 37 appeal currently in place, in order to ensure that awards attain finality at the earliest and enforcement can proceed. Additionally, heavy costs should be imposed on litigants where the court finds that the challenge proceedings have simply been preferred as a delay tactic to stall the enforcement of an award.

 

The State Governments could take steps to support and promote institutional arbitration and mediation in a similar manner as the State of Telangana. Both development and promotion of institutional forums for resolution of disputes have the potential of converting India into a global hub for arbitration and mediation, like London and Singapore.

 

In addition, strengthening the pool of arbitrators and professionals conducting mediation proceedings to ensure effective dispute resolution, and in case of arbitration, to reduce the susceptibility of awards to legal challenges is also of significance.

 

Lastly, while there is recognition and public awareness amongst individuals in relation to arbitration as a mode of dispute resolution, the awareness and understanding of ADR as a whole system is lacking. The role of legal professionals, therefore, assumes relevance both for promoting ADR as well as advising on the non-judicial options available to parties.

 


Conclusion


A rapid paradigm shift is the need of the hour where stakeholders start accepting arbitration, conciliation and mediation as primary modes of dispute resolution (PDR). The journey from ADR to PDR is underway and with the efforts of the Supreme Court of India and the legislature, the gap between the two is diminishing. Whether arbitration, conciliation and mediation will become the primary mode of dispute resolution or not will depend on the implementation and enforcement of the existing framework. The implementation must be in line with the overall objective i.e. minimum judicial interference, meeting the interests of disputing parties, cost-effective and speedy justice. Moreover, apart from creating an appropriate regulatory framework for arbitration and mediation, promoting awareness amongst stakeholders is crucial. Further, developing capacities both in terms of infrastructure as well as professionals with the required skill set and specialisation for successfully administering ADR mechanisms for dispute resolution is also critical. The phrase alternative dispute resolution is going to stay but we hope that in times to come it will be used as a reference to litigation at least in commercial disputes.


† Registrar, International Arbitration and Mediation Centre.

†† Advocate.

[1] Arbitration and Conciliation (Amendment) Act, 2015; the Arbitration and Conciliation (Amendment) Act, 2019.

[2]Mediation for Everyone: Realising Mediation’s Potential in India, India-Singapore Mediation Summit, 2021.

[3]Government of India Ministry of Law and Justice, Answer to Unstarred Question No. 5042, Lok Sabha.

[4] See HERE .

[5] (2019) 20 SCC 406.

[6] Speech delivered by Chief Justice of India Shri N.V. Ramana at Mediation and Information Technology Conference, 9-4-2022.

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Introduction

Multi-tiered dispute resolution clauses are even termed escalation, multi-step, or “ADR first” agreements. Both parties understand that if an issue arises, they will use a process-based approach, which may include negotiation, mediation, or conciliation, along with expert determination or arbitration, if appropriate.[1] These preliminary procedures are designed to help both parties to resolve any disputes before taking the subject to court or arbitration. Such articles often begin with an obligation to negotiate, including bringing in top management or involving being involved in conciliation or mediation processes. The adjudicatory process (arbitration) is the final tier of these clauses to speed up the resolution of disputes, and it is employed only if the initial stages have failed. Multi-tier provisions are found in all of these types of construction contracts, service contracts that need specialised knowhow, and turnkey contracts.[2]

One of the most critical questions is whether the non-adjudicatory portions of these articles, such as the tiers requiring dialogue and/or mediation, are mandatory and enforceable. Let us say a party does not do anything, in the beginning, to move forward in the talks or mediation, and submits an arbitration request instead. These initial efforts are a requirement to further arbitration, correct? The outcome of this lawsuit will be decided by tribunals or courts. Should the parties complete the preliminary stages of a conflict before initiating arbitration proceedings? Respondents in several International Chamber of Commerce (ICC) cases have taken exception to the request’s admissibility because they could not comply with the arbitration requirement, which required them to negotiate amicably.[3] A court will grant a motion to proceed with a case only if it believes that an arbitration agreement may exist and will allow the Arbitral Tribunal to make the ultimate determination of whether the parties have upheld their end of the agreement.

This clause is of critical importance, but it must be crafted with great care. If the wording is unclear, then it could lead to uncertainty and the unenforceability of the agreement. While scholars, courts, and Arbitral Tribunals have been split on the enforceability of such consensual and non-deterministic forms of conflict resolution. One school of thought holds that the non-determinate nature of the clauses makes them impossible to enforce, while the other holds that the parties’ choice of such clauses should be given precedence and so be binding and enforceable.[4]

Commonly adopted tiers in multi-tier clauses

When used to refer to alternative dispute resolution (ADR), it can be defined as a variety of dispute resolution techniques that do not include the court or arbitration. As such, avoid the imposition of any mandatory obligation.[5] These are in contradistinction of arbitration and litigation, which are judicial processes leading towards binding obligations; therefore, categorised as more formal processes. Some of the commonly adopted ADR methods that form part of the hierarchy in a multi-tiered dispute resolution clause leading finally to an arbitration process are —

Negotiation.— Negotiation is a well-accepted technique in commercial contracts.  It is a non-binding method in which direct discussions are used to arrive at a probable conclusion, and a third party is not used. A properly written conflict resolution clause that describes the subject-matter to be negotiated and the negotiating method and composition of the group may reduce or even eliminate the chances of the disagreement lingering. While a poorly conceived clause could cause any binding dispute resolution mechanism to be delayed, on another side, appropriately crafted clauses could expedite the process.[6]

Mediation.— Mediation envisions a skilled expert who serves as a neutral facilitator by aiding the parties in reaching a mutually agreeable settlement to the problem, all while staying outside the resolution process itself.[7] This type of practice is sometimes referred to as mediation, which involves a voluntary agreement on the side of both parties or a court-sponsored program. Aiding in the consolidation of trust between the parties and removing any psychological barriers results from the technique. To ensure that the third party’s intervention is not counterproductive and gives the parties control, the procedure begins with the parties’ consent.

Expert Determination.— A third person facilitated process expert determination is similar to arbitration – it results in a binding decision.[8] The critical distinction between the two, depending upon immunity from liability. An arbitrator in arbitration has immunity from liability, whereas an expert must bear liability for carelessness. Even further, the difference results from the way the binding judgment is enforced. In the absence of voluntary compliance by the parties, an arbitral award is enforceable under the New York Convention on the Enforcement of Foreign Arbitral Awards, 1958[9], but an expert determination can only be enforced through judicial actions.

Dispute Adjudication Boards.— Dispute Adjudication Boards (DABs) are created under a distinct agreement. Many firms have adopted the International Federation of Consulting Engineers’ model clauses and procedures since they are considered an industry standard (FIDIC). The DABs are dedicated to resolving any concerns that emerge while the contract is in effect, and they keep this up for the duration of the agreement. These Boards serve multiple purposes; they are both preventive and restorative. The usage of these particular terms in international construction and engineering contracts is increasing. When it comes to large initiatives supported by the World Bank, such forums can be found with a total value above $50 million.[10] One of the ICC’s Rules, called the ICC Dispute Board Rules, includes three alternative Dispute Boards, which it terms the Dispute Resolution Board, the Dispute Adjudication Board, and the Combined Dispute Board.[11]

Arbitration.— The private technique of conflict settlement known as arbitration is a final and binding solution when all parties agree. Unlike Judges, arbitrators appointed by the parties via an agreement do not have to adhere to the same strict standards of procedure and law that apply in courts but can instead follow the procedure and substantive law that fits the particular situation as spelled out in the arbitration agreement’s framework. All of these international agreements, as well as national arbitration legislation and even the rules that govern arbitrations, have all helped increase the binding nature of the process.

Indian position in terms of enforceability

Although frequently included in dispute resolution clauses, the legal status of pre-arbitration procedures in India is uncertain. According to the data, courts have had to deal with this topic multiple times, and there have been contradictory results. One approach, in general, has been that of the courts, which generally have taken two approaches. For the most part, courts have ruled that all pre-arbitration procedures must be carried out, including things like gathering evidence and issuing subpoenas. Courts, in general, consider voluntary and non-mandatory pre-arbitration steps to be applicable (the minority opinion).

In M.K Shah Engineers & Contractors v. State of M.P.[12], the Supreme Court held that the prerequisites procedures mentioned in the arbitration clause are essential in nature. Parties cannot bypass or skip the prerequisites to invoke arbitration directly.

In Simpark Infrastructure (P) Ltd. v. Jaipur Municipal Corpn.[13], the Rajasthan High Court held that the procedure of dispute resolution has to be made a condition precedent for invoking arbitration. In this case, the clause stated that the parties will resolve the dispute amicably as a condition precedent.

In Tulip Hotels (P) Ltd. v. Trade Wings Ltd.[14], the Bombay High Court held that the pre-arbitral step was mentioned in the clause as a mandatory procedure to be followed for invoking arbitration. The procedure mentioned in the clause is mandatory in nature to invoke arbitration.

In Nirman Sindia v. Indal Electromelts Ltd.[15], the Kerala High Court on the escalation clause was of the opinion that:

  1. … When the parties to a contract agree to any special mode for resolution of the disputes arising out of the agreement and they are bound to comply with the mode prescribed under the agreement. Without resorting to the first step provided for the resolution of the dispute in the agreement they cannot jump to the second step or to the final step to settle the disputes between the parties.

However, some of the High Courts have taken a divergent view on the same “Whether the clause is mandatory or directive in nature.” The Bombay High Court while analysing the issue in S. Kumar Construction Co. v. Municipal Corpn. of Greater Bombay[16] held that the language of the clause was not able to establish a mandatory nature of pre-arbitral steps.

On the other side, the Delhi High Court (DHC) has adopted a firm position. The Delhi High Court in legion of cases has held that the pre-arbitral steps or multi-tier dispute resolution clause is directive in nature. In Ravindra Kumar Verma v. BPTP Ltd.[17] the Court has considered pre-arbitral requirements as a directive and not mandatory. In Sikand Construction Co. v. SBI[18] and Saraswati Construction Co. v. East Delhi Coop. Group Housing Society Ltd.[19] and a legion of cases, the Delhi High Court has reiterated the pre-arbitral steps as not mandatory requirement for invoking arbitration.

Analysis

Courts and arbitrators have employed a wide range of dispute resolution mechanisms in the event of multi-tier clauses. Many times, emphasis was put on discovering practical responses to the many specific situations, as opposed to a focus on doctrinal concerns and on more exact legal concepts. Arbitrators should ultimately be permitted to make this decision if there is a legitimate arbitration agreement in place.[20] This illustrates the principle of kompetenz-kompetenz. Arbitrators must rule on the issue of whether or not the conditions for the initiation of arbitration have been met.[21] This concludes that the correct parties to make the arrangement for performing a mediation obligation are those with authority to mandate specific performance under the applicable law. The Tribunal, not the courts, will decide this because there is an arbitration clause in the contract. Such orders may or may not be accessible in State courts as preliminary measures. An argument can be raised against such an order being preliminary or intermediate, rather than final, because it would not be in keeping with the agreement.[22]

There are also other points that must be addressed. Among these points is whether or not a failure to meet the agreement’s conditions for negotiation or mediation impacts the Tribunal’s jurisdiction. There are competing views, but the correct answer is “no” unless the parties have already agreed to exclude[23] the Arbitral Tribunal from hearing the matter if there are any delays in proceeding to the pre-arbitral phases. The Tribunal’s jurisdiction describes its authority to decide a dispute. Both parties agreed to choose a tribunal to act as a stand-in for the State courts and also agreed to exclude State courts from the arbitration agreement. To say that this depends on prior pre-arbitration steps means that a party can back out of the arbitration agreement if they fail to comply. It is difficult to believe that parties agreed to forego State courts in favour of arbitration only if, prior to the pre-arbitration negotiation and/or conciliation, the other party made it clear that he or she would not follow the agreed-upon pre-arbitration steps.[24] If a party realised that the other party would not follow the agreed-upon pre-arbitration steps, then that party would prefer to litigate rather than arbitrate the dispute. The parties did not intend this. Therefore, it should not be assumed that the process by which the parties have reached their ultimate decision-making body was influenced by the question of whether they went through the agreed-upon settlement procedures. Both Articles 13 and 14 of the UNCITRAL Model Law[25] appear to be grounded on the same conclusion. According to the document, a project of this magnitude should be accomplished by the Arbitral Tribunal with power. Also, if one were to consider the pre-arbitral steps as conditions precedent to the arbitrators’ jurisdiction (as opposed to conditions precedent to the admissibility of the request for arbitration), this could create difficulties in connection with the potential necessity of preliminary measures prior to completion of the pre-arbitral steps and could have an adverse effect on the question of lis pendens and the interruption of limitation periods.[26] In any event, the issue of whether a multi-tiered dispute resolution clause raises a valid condition precedent to the Tribunal’s authority to decide on the matter is a question of jurisdiction, which under the principle of kompetenz-kompetenz is to be decided by the Tribunal itself.[27]

The language of the clause also plays an important role in deciding the nature of the pre-arbitral steps. While drafting the clause, the draftsmen should emphasise on the words which are clear and mandatory in nature. The draftsmen can use the word “should comply” rather than “may comply” or the pre-arbitral steps should be described in more detailed manner rather than using the terms like amicable settlement. In engineering contracts, the adjudicating authority in beginning phase of dispute should not be the Engineer-in-Charge or any other head from the companies an independent mediator or lawyer should be appointed to be resolve in the beginning phase only.  Justice N.V. Ramana, Chief Justice of India in his address at the India-Singapore Mediation Summit said that mediation should be made compulsory as the first step of dispute resolution[28]. If the disputes arising from the multi-tier dispute clause can be stopped by mentioning in the clause that mediation is compulsory which needs to be followed by the parties and parties agree to abide by the pre-arbitration steps, and the non-fulfilment of the clause should not be entertained by the court or the Arbitration Tribunal.

Conclusion

Multi-tiered dispute resolution clauses use several dispute resolution procedures to handle different levels of cases, with cases proceeding through a number of dispute resolution stages as long as the first stage does not solve the issue. When one of the parties fails to abide by the steps agreed upon in the contract, issues relating to multi-tiered dispute resolution clauses are not handled properly, and thus the dispute resolution clause’s enforceability is in jeopardy. Despite the growing usage of multi-tier dispute resolution clauses around the world because of their flexibility in dealing with a wide range of issues, a few countries remain unclear on how to enforce the clauses.


3rd Year student, BA LLB (Hons.), NMIMS School of Law, Bangalore. Author can be reached at <ashish.kumar11@nmims.edu.in>

[1]Klaus Peter Berger, Integration of Mediation Elements into Arbitration — Hybrid Procedures and Intuitive Mediation by International Arbitrators, 19 Arb. Int’l 387 (2003).

[2]James H. Carter, Issues Arising from Integrated Dispute Resolution Clauses: Part I, in New Horizons in International Commercial Arbitration and Beyond, ICCA Congress Series No. 12, 446 [A.J. van den Berg (Ed.), 2005].

[3] Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration 43 (2004).

[4]Dana H. Freyer, Practical Considerations in Drafting Dispute Resolution Provisions in International Commercial Contracts — A US Perspective, 15 J. Int’l Arb. 7, 9 (No. 4, 1998).

[5]Kayali, Enforceability of Multi-Tiered Dispute Resolution Clauses, 553.

[6]Dana H. Freyer, Practical Considerations in Drafting Dispute Resolution Provisions in International Commercial Contracts — A US Perspective, Journal of International Arbitration 15, No. 4 (1998), 7.

[7] Martin Hunter, The Freshfields Guide to Arbitration and ADR: Clauses in International Contracts, Kluwer Law and Taxation Publishers, 1993), 64.

[8]Alan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration, (London: Sweet & Maxwell, 2004), 50.

[9] New York Convention, 1958 (Enforcement of Foreign Arbitral Awards).

[10]Walter Mattli, Private Justice in a Global Economy: From Litigation to Arbitration, International Organization, 55 No. 4, (Autumn 2001), 920.

[11]James H. Carter, Issues Arising from Integrated Dispute Resolution Clauses: Part I, in New Horizons in International Commercial Arbitration and Beyond, 2005, A.J. van den Berg (Ed.) (Kluwer Law International, 2005), 446.

[12] (1999) 2 SCC 594.

[13] 2012 SCC Online Raj 3833.

[14] 2009 SCC Online Bom 1222.

[15]1999 SCC Online Ker 149, 442.

[16] 2017 SCC OnLine Bom 130.

[17] 2014 SCC OnLine Del 6602.

[18] 1978 SCC OnLine Del 180 : ILR (1979) 1 Del 364.

[19] 1994 SCC OnLine Del 563 : (1995) 57 DLT 343 : 1994 RLR 458.

[20] A decision by Zurich Court of Appeals of 9-11-2001, published in ZR 101 (2002), No. 21, 77-81; Bernardo M. Cremades, p. 7 et seq.

[21] Kathleen Scanlon, Country Report for the US, in Enforcement of Multi-Tiered Dispute Resolution Clauses, IBA Newsletter of Committee D (Arbitration and ADR), Vol. 6, No. 2, October 2001.

[22]Philip Naughton Q.C., Country Report for England in Enforcement of Multi-Tiered Dispute Resolution Clauses, IBA Newsletter of Committee D (Arbitration and ADR), Vol. 6 No. 2, October 2001.

[23]Robert N. Dobbins, The Layered Dispute Resolution Clause: From Boilerplate to Business Opportunity, Hastings Business Law Journal, 2005.

[24] Decision BGH, reported in (1984) Neue Juristische Wochenschrift, Heft 12, pp. 669-670.

[25] UNCITRAL Model Law on International Commercial Arbitration.

[26] Nathalie Voser, Sanktionen bei Nichterfullung einer Schlichtüngsklausel, case note decision of 15-3-1999, of the Zurich Court of Cassation, ZR 99 (2000) No. 29; ASA Bulletin 2002, pp. 376-381.(not clear please check)

[27] Craig Tevendale, Hannah Ambrose and Vanessa Naish, Multi-Tier Dispute Resolution Clauses and Arbitration, The Turkish Commercial Law Review No.1, February 2015, 37.

[28]Make mediation first step to settle disputes: CJI N. V. Ramana, The Times of India, dt. 18-7-2021, <https://timesofindia.indiatimes.com/india/make-mediation-first-step-to-settle-disputes-cji-n-v-ramana/articleshow/84515193.cms>

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In an age of increased cross-border investment, transaction and trade, modern day commercial contracts incorporate arbitration clauses as an efficient means of resolving disputes in a time-bound manner. Despite its benefits, arbitration proceedings can be expensive and is not an economical means of resolving petty disputes. Thus, a growing number of contracts have seen parties incorporate certain preconditions that must be satisfied before invoking arbitration. These preconditions take the form of “multitiered” and “escalation” clauses which generally envisage conciliatory cost-efficient methods of mutually resolving disputes before resorting to the zero-sum game of arbitration.

 

This proposed silver bullet has instead given rise to new conundrums that affect the efficacy of arbitration proceedings. The non-compliance of these preconditions have instead been used by parties to challenge the legality of an Arbitral Tribunal so constituted and in rare cases, some of the domestic courts around the world have gone so far as to annul the awards arising from improperly constituted tribunals.

 

The present article attempts to characterise the pre-arbitration procedural requirements and whether the same is a matter of jurisdiction (the theory that until the precondition procedures have been satisfied, the arbitration agreement is not triggered and that the constitution of a tribunal is invalid and the issue concerning the same cannot be heard by the tribunal as it goes to the root of its jurisdiction) or a matter of admissibility (the theory that the arbitration agreement exists and provides the arbitrators with jurisdiction to hear the issue of non-compliance of the preconditions, but does not permit adjudication of material claims until the issue of adherence to the preconditions has been satisfied).

 

Position in India

As of date, the aforementioned issue has not presented itself before the courts of India in order to determine the position of Indian laws with respect to it. However, before delving into the basket of foreign jurisprudence that have definitively opined on the aforesaid issue, it is necessary to examine the judicial pronouncements made by the courts of India that differentiate the issues of “jurisdiction” from those of “admissibility”.

 

In this regard, it is pertinent to highlight the case of BSNL v. Nortel Networks (India) (P) Ltd.[1], wherein the  Supreme Court has applied the “tribunal versus claim test” to determine whether the issue of a statutory time bar is a matter concerning jurisdiction or admissibility. To put it succinctly, the “tribunal versus claim test” asks whether the objection/issue is targeted at the tribunal (in the sense that the claim should not be arbitrated due to a defect in or omission to consent to arbitration), or at the claim (in that the claim itself is defective and should not be raised at all). In the present case, the Court decreed in favour of holding the issue of limitation as one towards admissibility as it challenges the nature of claims raised as opposed to challenging the jurisdiction of the Tribunal.

 

Another case of import, is United India Insurance Co. Ltd. v. Hyundai Engg. and Construction Co. Ltd.[2], wherein the Supreme Court held that in a case where the amount under the car policy has to be admitted as a precondition to bring forth the claim in arbitration, it is necessary that the said precondition has to be satisfied before arbitration can be invoked as only the admitted amount can be made part of the dispute to be adjudicated by the Tribunal. Thus, to reiterate, the arbitration clause would come to life only if the liability in respect of the car policy is admitted by the purportedly defaulting party, as a precondition.

 

The Supreme Court in Demerara Distilleries (P) Ltd. v. Demerara Distillers Ltd.[3], took a different stance altogether with respect to the examination of the preconditions and stated that one must also consider whether such preconditions have been complied with by the correspondence of the parties, and the likelihood of success especially in cases where the preconditions are open-ended and do not provide conclusive definitive terms to measure the attempt of satisfying the preconditions. In the instant case, the Court decreed after inferring the correspondence exchanged that the attempts to resolve disputes by mutual discussion and mediation as a precondition is merely an empty formality and not mandatory. It is pertinent to note that the Court itself determined the nature of preconditions without considering whether the Arbitral Tribunal was sufficiently empowered to decide the same.

 

Whereas the Supreme Court in S.K. Jain v. State of Haryana[4], had held that the language of the arbitration clause necessitated the adherence of pre-requirements, however the decision by the Supreme Court was reached after the Arbitral Tribunal was constituted and the said Tribunal held that it cannot assume jurisdiction as the mandatory requirements were not satisfied.

 

The courts in India have not conclusively dealt with the issue of whether non-compliance of arbitral preconditions are to be treated as a matter affecting the jurisdiction of the Tribunal, or whether the same is a matter of admissibility.

 

In light of the divergent and inconclusive Indian jurisprudence on the characterisation of preconditions, it is imperative to examine foreign jurisprudence in recent years which have definitively opined on the characterisation of preconditions.

 

Prevailing Trend in International Jurisprudence

Perhaps the earliest known case to attempt the delineation of the issues of admissibility and jurisdiction is in the US Supreme Court case of BG Group Plc v. Republic of Argentina[5]  where a challenge to an arbitral award was rejected, as the challenge was made on the premise that mandatory preconditions to arbitration have not been complied with. The precondition arose out of a bilateral investment treaty (BIT) agreement between UK-Argentina, which required the claimant to litigate their claims for 18 months in the domestic courts of Argentina prior to commencing a claim in arbitration.

 

The US Supreme Court went on to hold that in absence of a contrary provision in the arbitration agreement, questions as to whether the parties are bound by an arbitration clause are for the courts to decide and it is for the constituted Arbitral Tribunal to decide the meaning and import of procedural preconditions, including their non-compliance.

 

Recently, the Hong Kong Court of First Instance (HKCFI), in T v. B[6], held that any matter concerning the compliance or non-compliance of arbitral preconditions is a question of admissibility and not jurisdiction even though the parties and the arbitrator in the instant case referred to it as a “jurisdictional challenge”. This Court affirmed and upheld the rationale in C v. D[7] and stated that it is prudent to deem preconditions as a matter of admissibility rather than jurisdiction as the same would be in line with the general trend of judicial restraint in interfering with the arbitration proceedings and would facilitate expeditious disposal of matters rather than annulling awards after a long and expensive process on non-fulfilment of preconditions, which would render the arbitration process as circuitous and would defeat the very object of time-bound and expeditious disposal of arbitration proceedings. Since there is no doubt as to the mutual consent to arbitration and the challenge to the award was with reference to certain procedural prerequisites that have not been followed, it would not be appropriate for the domestic courts to hear such a challenge where the Arbitral Tribunal is empowered to hear such disputes.

 

The aforesaid case of C v. D[8] has also been upheld in Kinli Civil Engg. v. Geotech Engg.[9]  in the context of a dispute brought under a contract containing an arbitration agreement providing that a party may submit a dispute to arbitration. The Court granted a stay of litigation proceedings in favour of arbitration noting that the Court has no role in determining whether conditions with respect to the right to arbitrate have been satisfied.

 

The English High Court has taken the same view in Republic of Sierra Leone v. SL Mining Ltd.[10] expressly stating that any alleged non-compliance of preconditions is to be treated as a matter of admissibility, despite the fact that the defendant in the instant case failed to comply with the preconditions to arbitration. It also stated that the leading commentaries and authorities were all in favour of preconditions to arbitration being an issue of admissibility and not one of jurisdiction.

 

This rationale and reasoning shows a clear understanding of the distinction between issues of admissibility and those of jurisdiction, as can be evinced by a consensus of the domestic courts around the world using a similar line of thought, and thus framing a common standard governing international commercial arbitration.

 

Concluding Remarks

When characterising contractual preconditions to arbitration agreements, it is prudent to ascertain the intention of the parties when drafting such prerequisites, therefore as a general rule of thumb, the better approach is to treat preconditions which envisage mutual settlement or domestic litigation as aspirational or exhortive, unless the parties state otherwise in clear, unequivocal language that the said preconditions are a matter of jurisdiction. Whether the said preconditions are mandatory or optional must be left to be determined by the Arbitral Tribunal and not by the domestic courts, thereby observing the kompetenz-kompetenz principle.

 

To quote Gary Born’s International Commercial Arbitration (3rd edn. 2021):

“The best approach is to presume, absent contrary evidence, that pre-arbitration procedural requirements are not jurisdictional, but matters better determined by the arbitrators.”

However, the aforesaid approach seeds doubt as to the malleable nature of preconditions, and would seem contrary to the contractual intent of the parties to commence arbitration when the preconditions have not been satisfied. In the same vein, if these contractual preconditions are not satisfied a dispute arises between the parties, and if an arbitration agreement exists, the disputes must be referred to arbitration. If the parties had intended for all issues and disputes between the parties to be resolved by arbitration, it would be imprudent to label the non-compliance of preconditions as an issue to be determined by the courts which would ultimately treat preconditions as a matter of jurisdiction than that of admissibility.

 

It is pertinent to clarify, that characterising preconditions to arbitration as an issue of admissibility does not give a go-by to the preconditions to be satisfied. Whether the preconditions are mandatory or exhortive in nature is to be determined by the arbitrator who is vested with the authority to arbitrate and resolve all issues arising out of the contract. For example, where the preconditions use certain words such as “shall” rather than “may”, it is to be treated as a mandatory preconditions. The arbitrator if, he deems the preconditions as mandatory to the tee, may direct the parties to instead comply with the preconditions or apply a sanction of costs to the non-complying party.

 

The underlying basis for this assumption is that any pre-conditional procedures often require interpretation of the contractual intent and application of the preconditions by itself acts as a moratorium period for parties to settle some or all of the disputes. Thus, from its very nature, these preconditions to arbitration act as a stopgap from bringing claims to arbitration and should any claims which are not subject to preconditions be brought before the Arbitral Tribunal, the said claims would be treated as premature.

 

At this juncture I refer to the Oxford Handbook of International Arbitration (OUP 2020) at Paras 6-7:

“… the question of jurisdiction concerns the power of the Tribunal. The question of admissibility is related to the claim, rather than the Tribunal, and asks whether this is a claim which can be properly brought. In particular, it considers the question of whether there are any conditions attached to the exercise of the right to arbitrate which have not been fulfilled. Those conditions might be, for example, a limitation period applicable to the right to commence arbitration, or a requirement to mediate and/or negotiate before arbitral proceedings may be commenced.”

 

Hence, if a claim is deemed to be premature by the Tribunal and consequently, not admissible, in such circumstances, the parties would be constrained to appoint a new tribunal after complying with the preconditions. It is clearly established that preconditions by its very nature are a matter of admissibility and its adjudication is best left to the Tribunal rather than the domestic courts, which would be counter-intuitive to the purpose of arbitration.

 

It is perhaps fortunate and unfortunate that the courts in India have not conclusively determined on the characterisation of preconditions as a matter of admissibility or jurisdiction as this allows the courts to prepare a comprehensive set of rules and judicial tests in line with the global arbitration practices of treating preconditions to arbitration as a matter of admissibility. Once, the characterisation of arbitral preconditions is deemed as one of admissibility, there is no scope for interference by the domestic courts. However, if the said precondition were to be treated as a matter of jurisdiction it would give way to a slew of frivolous litigation and congest the already saturated Indian courts with inane applications to set aside the award on petty grounds such as that of non-compliance of arbitral preconditions.

 


† Hiroo Advani, Founder and Chairman, Advani Law.

†† Asif Lampwala, Senior Partner, Advani Law.

††† Kenneth Martin, Associate, Advani Law.

[1] (2021) 5 SCC 738.

[2] (2018) 17 SCC 607.

[3] (2015) 13 SCC 610.

[4] (2009) 4 SCC 357.

[5] 188 L Ed 2d 220 : 134 S Ct 1198 : 572 US 25 (2014).

[6]  2021 HKCFI 3645.

[7] 2021 HKCFI 1474.

[8] 2021 HKCFI 1474.

[9] 2021 HKCFI 2503.

[10] 2021 Bus LR 704 : 2021 EWHC 286 (Comm).

Legislation UpdatesStatutes/Bills/Ordinances

On December 20, 2021, a Mediation Bill (Bill No. XLIII of 2021) has been introduced in Rajya Sabha with an object to promote and facilitate mediation, especially institutional mediation, for resolution of disputes, commercial or otherwise, enforce mediated settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as acceptable and cost effective process.

Applicability 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.

Key features of the Bill:

  • subsuming conciliation under Part III of the Arbitration and Conciliation Act, 1996, in mediation as per international practice of using the terms “conciliation” and “mediation” interchangeably;
  • compulsory pre-litigation mediation in matters of civil or commercial dispute, before parties approach a court or a tribunal as provided;
  • conduct of online mediation;
  • an indicative list of matters which are not fit for mediation under the First Schedule;
  • mediation that will take place within the territorial jurisdiction of the court or tribunal of competent jurisdiction, unless parties agree otherwise or undertake mediation in online mode;
  • a period of one hundred and eighty days, for completing the mediation process which is further extendable to a maximum period of one hundred and eighty days with the mutual consent of the parties;
  • the mediated settlement agreement resulting from mediation which will be final and binding and will be enforceable in accordance with the provisions of Code of Civil Procedure, 1908, in the same manner as if it were a judgment or decree of a Court;
  • establishment of Mediation Council of India, objects of which would be, inter alia, to promote mediation and to develop India as a robust centre for domestic and international mediation, make regulations for registration of mediators, grade mediation service providers, specify criteria for recognition of mediation institutes and mediation service providers, to hold training workshops and courses in the area of mediation, etc.; and
  • conduct of community mediation with consent of parties for disputes which are likely to affect peace, harmony and tranquility amongst the residents or families of any area or locality.
Op EdsOP. ED.

Introduction

The benefits of alternative dispute resolution (ADR) are recognised and continue to be recognised by courts in the UK as well as internationally. The current ongoing pandemic has increased the speed and use of ADR mechanisms and in particularly mediation as an effective method in resolving variety of disputes both domestic and international.

Mediation and investment treaty disputes

On 26-3-2021, the Singapore International Mediation Centre (SIMC) and International Centre for Settlement of Investment Disputes (ICSID) entered into an Agreement on General Arrangements. The Agreement provides for the use of SIMC’s facilities and services for mediation proceedings conducted under the auspices of ICSID, as well as enhanced technical collaboration between the two centres.  The Agreement complements the use of mediation to settle investor-State disputes, particularly those involving Asian investors or States under the ICSID Mediation Rules[1].  This is a significant step globally in terms of mediation becoming a powerful tool in resolving international disputes.

Further on 16-7-2021, Justice N.V. Ramana, the Chief Justice of India during the India-Singapore Mediation Summit outlined the importance of ADR and mediation in particular as a means of resolving large backlog of cases, saving resource, time and allowing litigants a degree of control over the process and outcome of their dispute resolution process in India[2].

The English courts and compulsory mediation

In England, also on 26-3-2021, in a speech to Hull University, Sir Geoffrey Vos, the Master of Rolls of England and Wales, discussed the notion of compulsory mediation as the Civil Justice Council, which he chairs, is looking at whether it may be desirable for forms of ADR to be made compulsory[3]. Sir Vos, in his speech, also highlighted a number of areas where ADR has been successful, such as the Online Mediation Information and Assessment Meetings and Financial Dispute Resolution appointments in family claims and the early conciliation notifications to Advisory, Conciliation and Arbitration Service (ACAS) in employment claims.

A central theme of his speech was that ADR should not be considered alternative, but that mediated interventions should be part and parcel of the process of resolving disputes. The legal industry’s increasing use of online tools for dispute resolution provides significant opportunities to integrate ADR, and potentially compulsory mediation into the process, but there are still a number of practical considerations and potential drawbacks to consider.

The often-advanced arguments against compulsory ADR is that it prohibits individual’s access to Court, thus restricts access to justice as provided by law. The recent decisions of the English courts suggest that the courts are also becoming increasingly supportive towards the concept of compulsory mediation.  In Halsey v. Milton Keynes General NHS Trust4,the Court held that while the Court may strongly encourage parties to engage in ADR (such as imposing costs sanctions for unreasonable refusals to mediate), but the Court does not have the power to compel unwilling parties to do so.

The Court of Appeal of England and Wales in Halsey also made clear that one party’s unreasonable refusal to mediate could lead to adverse costs consequences against that party. The Court of Appeal of England and Wales added to this point in PGF II SA v. OMFS Co. 1 Ltd.5 where it held that silence, as a response to a request to mediate, could be considered to be an unreasonable refusal, and therefore would also lead to adverse costs consequences. The Court stated that this decision “sends out an important message to civil litigants, requiring them to engage with a serious invitation to participate in ADR, even if they have reasons which might justify a refusal, or the undertaking of some other form of ADR, or ADR at some other time in the litigation”.

Following this decision6, some legal analysts started questioning if mediation has become mandatory in all but name7.

By 2019, the decision in Lomax v. Lomax8 further suggested that courts have begun to lean towards requiring parties to participate in compulsory ADR. In this case, one party sought Early Neutral Evaluation (ENE) but the other party did not consent to ENE.  Ultimately, the Court held that it may order an ENE hearing under Civil Procedure Rule (CPR) 3.1(2)(m) whether or not the parties give their consent. The decision in Lomax case9 is part of a trend toward the integration of ADR within the civil justice process, citing the compulsory ADR in family law.

Last year, in McParland & Partners Ltd. v. Whitehead10, Sir Geoffrey Vos commented in obiter on  Lomax decision11 noting that Lomax12 “inevitably raised the question of whether the court might also require parties to engage in mediation despite the decision in Halsey13”.The parties in McParland14 agreed to attempt mediation voluntarily, but the comments in the judgment may indicate that the Court could be open to reviewing  Halsey decision15 in due course.

In terms of procedure, the Civil Procedure Rules in England and Wales itself encourages parties to consider ADR. CPR44.4 (3)(a) clearly states that the court will consider the parties’ efforts at ADR and CPR 26.4 allows proceedings to be stayed so that the parties may attempt to settle. Additionally, Para 11 of the new Practice Direction–Pre-Action Conduct and Protocols states that “parties may be required by the court to provide evidence that ADR has been considered” and echoing Halsey16, warned that ignoring to refusing to mediation may be considered unreasonable and lead to adverse costs consequences.

In June 2021, the Civil Justice Council (CJC) of England released their report titled “Compulsory ADR”17 . In this report, CJC addressed two important questions. Firstly, can the parties to a civil dispute be compelled to participate in an ADR process? This was termed as the “legality” questions focusing fundamentally on the procedural laws of England and Wales and human rights law.  Secondly, if parties can be compelled and in what circumstances, in what kind of case and what stage should such a compulsory ADR requirements be imposed.  This was termed as the “desirability” question.

The CJC report extensively reviewed not only English case laws as cited above but also the European jurisprudence with reference to Rosalba Alassini v. Telecom Italia SpA18 and Menini v. Banco Popolare Società Cooperativa19.

In Menini20 the European Court of Justice provided further guidance in relation to what it considered to be the necessary features of a scheme which renders access to the courts conditional on attempting ADR:

  1.  the ADR procedure must be accessible online and offline to both parties, irrespective of where they are.
  2. Accordingly, the requirement for a mediation procedure as a condition for the admissibility of proceedings before the courts may prove compatible with the principle of effective judicial protection, provided that that procedure does not result in a decision which is binding on the parties, that it does not cause a substantial delay for the purposes of bringing legal proceedings, that it suspends the period for the time-barring of claims and that it does not give rise to costs—or gives rise to very low costs—for the parties, and only if electronic means are not the only means by which the settlement procedure may be accessed and interim measures are possible in exceptional cases where the urgency of the situation so requires….

The CJC report also referred to the fact that many other jurisdictions have adopted different forms of compulsory ADR such as in Italy, Ontario, Australia and Greece.21 The CJC report concluded that any form of ADR which is not disproportionately onerous and does not foreclose the parties’ effective access to the court will be compatible with the parties right of access to courts.

The CJC report recommended introducing further compulsory elements of ADR will be both legal and potentially extremely positive development with the three following observations:

(1) Where participation in ADR occasions no expense of time or money by the parties (as with answering questions in an online process as to a party’s willingness to compromise) it is very unlikely that the compulsory nature of the system will be controversial – as long as the ADR is otherwise useful and potentially productive.

(2) Judicial involvement in ENE, financial dispute resolution (FDR) and DRH (dispute resolution hearing) hearings is proving highly effective and these are of course available free to the parties. Again, as long as they seem appropriate for the particular type of case being considered and can be resourced within the court system, we cannot see that compulsion in an even wider range of cases will be unacceptable.

(3) We think that as mediation becomes better regulated, more familiar and continues to be made available in shorter, cheaper formats we see no reason for compulsion not to be considered in this context also. The free or low-cost introductory stage seems the least likely to be controversial.

However, the observations and recommendations of the CJC report are based on allowing the parties free choice to return to the court if they wish to do so to seek adjudicative justice (as at present they do) and as such the greater use of compulsion is justified and should be considered.

Indian courts and compulsory mediation

ADR in Indian litigation is prescribed as one of the methods that can be adopted to settle and/or adjudicate upon cases away from courts. Section 89 of the Code of Civil Procedure (CPC), 190822 recognises the mechanisms that can be adopted by courts to resolve disputes outside the courts, but the modus available under Section 89 CPC has time and again been held to be voluntary and not compulsory. Recognising this, the concept of compulsory mediation has been mooted by the Supreme Court in its landmark judgment in Salem Advocate Bar Assn. (2) v. Union of India23, which in turn has caught the attention of Parliament, which has, under the Commercial Courts Act, 201524, introduced Section 12-A25, whereby, parties are mandated to participate in a compulsory mediation prior to litigating under the Commercial Courts Act.  The exception to this rule is cases wherein urgent interim relief is being sought. In all other cases, there is a bar to the filing of such commercial suits, without engaging in compulsory mediation.

In furtherance to Section 12-A, the Central Government has notified the Commercial Courts (Pre-Institution Mediation and Settlement) Rules,(CCPIMS) 201826. Under the CCPIMS Rules, mediation is defined as a process undertaken by a mediator to resolve, reconcile and settle a commercial dispute between the parties. The process of mediation can be commenced by the parties to a commercial dispute by making an application to the “authority” concerned who will assign a mediator to conduct the mediation process. The time period prescribed for completion of the mediation process is three months from the date of receipt of the application for pre-institution mediation. The time period may be extended by two months, with the consent of the parties. The settlement arrived at during the mediation process will have the same status and effect as that of an arbitral award under Section 30(4) of the Arbitration and Conciliation Act, 199627.

The CCPIMS Rules further provide that, when a party refuses to participate in the mediation or when no settlement is arrived at between the parties, within the stipulated time period or where the mediator is of the opinion that the settlement is not possible, the mediator is required to submit a failure report to the authority. The CCPIMS Rules further ensure confidentiality, by directing all parties to the mediation process, including the mediator to maintain confidentiality in relation to the mediation proceedings.

Thus, the CCPIMS Rules consider and deal with one of the major concerns relating to litigation-connected mediation i.e. confidentiality. However, the CCPIMS Rules in India do not deal with or provide for any penal or punitive consequences for failure to engage in bona fide mediation.

Unlike in England and Wales, where relief in terms of costs are affected when a party failed to engage in bona fide mediation, in India, owing to the absence of a judicial culture of awarding significant or large adverse costs, there is no consequence for failure to engage in mediation, bona fide. Legislative interference in this regard may be warranted to make mandatory mediation more effective in India, as the approach of courts in India to mandatory mediation under Section 12-A of the 2015 Act has been very varied and different.

For example, the Bombay High Court in Ganga Taro Vazirani v. Deepak Raheja28 has held that, Section 12-A of the Act of 2015 is a procedural provision and if there is a substantial compliance, the plaintiff cannot be non-suited. Following that in Dhanbad Fuels Ltd. v. Union of India29, the Calcutta High Court considered in revision, an order passed by the Commercial Court rejecting an application under Order 7 Rule 11(d) of the Code of Civil Procedure, 190830 seeking dismissal of the suit in view of non-compliance of Section 12-A of the Commercial CourtsAct of 2015. In the facts of that case, the defendant in the suit filed an application under Order 7 Rule 11(a) of the Code of Civil Procedure, 1908 which was rejected. The defendant did not raise the issue of non-compliance of Section 12-A of the Act of 2015 therein. The subsequent application under Order 7 Rule 11(d) for rejection of the plaint on the ground of non-compliance of Section 12-A of the Commercial CourtsAct of 2015 filed more than a year since institution of the suit was rejected by the trial court. In revision, the Court had directed reference to mediation and stay of the suit for limited period so as to allow the process of mediation to run its course.

In Laxmi Polyfab (P) Ltd. v. Eden Realty Ventures (P) Ltd.31, the Calcutta High Court, while specifically considering the question of whether Section 12-A was mandatory in nature and would act as a bar against instituting legal proceedings in the absence of compliance with Section 12-A, held that no suit can be instituted in the absence of substantive compliance with the obligation for mandatory mediation.  As such, it does appear that Indian courts are taking proactive steps to ensure compliance with Section 12-A of the Commercial CourtsAct of 2015 requiring parties to undertake mandatory mediation.

Pandemic and online dispute resolution

 The current pandemic has had a devastating impact on the ability of the courts to function with physical hearings, which has created an opportunity for online dispute resolution platforms to nudge parties towards ADR at various stages of dispute. As early as 31-3-2020, at the beginning of the pandemic lockdown in the UK, Sir David Foskett, Chair of the Civil Mediation Council, published a letter noting that “established mediators have already started adapting their normal working arrangements to offer online mediation where practicable”.32

The online dispute resolution is particularly relevant today, 16 months into the pandemic as the legal industry, and its clients, have had to become quickly familiar with engaging in dispute resolution through virtual means, such as using e-filings and remote hearings, hybrid hearings using variety of online platforms such as Zoom, Microsoft Teams and others.

As the legal industry has become quickly familiar with online mediation and its associated technologies, some law firms have decided that online mediation is so advantageous that they intend to continue using it after the pandemic33. Online mediation has become so prominent that a former lawyer at Greenberg Traurig Chicago recently launched a start-up, New Era ADR, to offer completely virtual arbitrations and mediations34. The most oft-cited advantage is the potential costs savings as no travel expenses or room hire fees need to be incurred. Additionally, both parties may feel more amenable and positive towards the mediation knowing it can be done from the comfort of their homes.

The support for and newfound prevalence of online dispute resolution significantly bolsters the argument for compulsory mediation. Firstly, the rapid changes the legal industry made in response to the pandemic showed that the industry is more adaptable to remote settings than previously thought35. Thus, as both legal service providers and consumers become more comfortable with adapting to virtual dispute resolution, they may also become more open and accepting toward other ways to make dispute resolution more cost and time efficient, namely, by engaging in compulsory mediation going forward.

Mediation is also being recognised as a significant tool to alleviate the current backlog of cases facing the courts. A report by a committee of the House of Lords in the UK titled Covid-19 and the courts, published on 30-3-202136 stated that the backlog of cases has reached record levels. Additionally, a survey of 100 FSTE350 companies by Ernest Young showed that 59% of the companies surveyed expect the number of business dispute claims to be even higher than normal this year as many companies deferred litigation which they would have otherwise pursued in order to focus on navigating the pandemic in the past 12 months.37Should this occur, the record-high backlog will become even more onerous. The House of Lords Committee Report recommended that Her Majesty’s Courts and Tribunals Service facilitates and encourages greater use of ADR to reduce the volume of civil cases in the courts system.

Disadvantages of mediation

Despite the potential that compulsory mediation may hold, and the fact that most disputes would benefit from mediation, it must be acknowledged that there are settled and often recited arguments against mediation.  The disadvantages of mediation including the fact that mediation does not always result in a settlement agreement.

Firstly, in some civil disputes, where the parties attend purely for box ticking and costs reasons, to avoid adverse costs consequences, without any intention to reach settlement. In those cases, the mediator costs and legal costs will simply be additional time and costs on top of the inevitable and costly litigation.

Secondly, mediation lacks the procedural and constitutional protections guaranteed by the federal and State courts, as mediation is informal and there could be inequality in terms of resource and representation. Thirdly, mediation in practice has very little reference to settled legal precedents and case laws, which may be very valuable and potent legal power in a State court legal argument.  Fourthly, mediation has no formal discovery process, as there is no process by which to compel the parties to disclose relevant material.  Fifthly, remote meeting platforms such as Zoom have largely supported the argument for compulsory mediation. However, in cases where both parties have little desire to settle and are mainly mediating for costs purposes, a remote format can be particularly disadvantageous due to the ease at which parties can disengage by muting or simply focusing on another activity.

Practical considerations for compulsory mediation

The key question for legal practitioners is that if there is an introduction of compulsory mediation, then where and what stage of the proceedings it should be inserted? Should it be prior to the commencement of the claim as under Section 12-A of the Commercial Courts Act of 2015 or should it be later in the proceedings like currently in the UK for commercial disputes or at different stages of the proceedings as in Italy, Greece and Australia.

By way of an example, in the UK, in both Family and Employment Tribunal Claims, conciliation occur in the early stages of the proceedings. The advantage of early mediation is that settlement would help both parties avoid the time consuming and expensive litigation. On the other hand, it is often later in the dispute resolution process, such as when evidence is exchanged, where parties can better realise how settling might benefit them and be more willing to settle.

There will also inevitably be a small percentage of claims that will be clearly unsuited to mediation. In the Family Courts in the UK, where Mediation Information and Assessment Meeting is largely mandatory before making certain applications to court, there are exemptions that if one party lives abroad or if one party is a victim of domestic abuse. If compulsory mediations are brought in for civil disputes, then the court will have to consider vary the potential list of exempt or unsuitable cases for mandatory mediation.

Conclusions

Changes to the current dispute resolution processes are crucial due to the critical level of the courts backlog globally and increasing the use of mediation is a clear way to alleviate that backlog. Due to the courts current support for mediation, the significant benefits it would pose, and new technologies, compulsory mediation may be a likely addition to the dispute resolution process.

In the event that compulsory mediation is deemed too controversial to implement in the near future, Sir Vos’s aforementioned speech also suggested new ways to suggest and encourage parties to consider settlement, rather than mandating them to settle.  The example Sir Vos provided was that with the Money Claims Online and Online Civil Money Claims, “if the claim is for £1000 in respect of the failure to deliver 50 units, and the defence is that 25 were actually delivered, a bot could pop up and suggest that £500 be paid to settle the claim”.

Regarding these artificial intelligence (AI) driven pop-ups and encouragements, parties may feel as if their burden to act is lower than compulsory mediation, and therefore, these new and innovative methods of encouraging settlement would be more readily accepted by the public and more quickly implemented into their systems. Thus, even if the idea of compulsory mediation for all civil disputes proves too controversial or complex to implement in the near future, there are still a variety of innovative options the courts may use to integrate mediation in the dispute resolution process, to encourage parties to settle at different stages of a dispute and lighten the court backlog.

In essence, mediation as an effective ADR tool is here to stay internationally due not only to the Singapore Convention on Mediation but due to many national courts promoting mediation as a necessary ingredient in the delivery of civil justice system.  In India, the advent of Section 12-A of the Commercial Courts Act of 2015 and the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 is a significant step towards integrating mediation in the Indian civil justice system.


* LLB (Hons.), LLM, FCI Arb., Advocate and Barrister-at-Law, Fellow of the Chartered Institute of Arbitrators (London). Author can be reached at mg@gmadvocates.in

[1]ICSID Mediation Rules, International Centre for Settlement of Investment Disputes, available at <https://icsid.worldbank.org/sites/default/files/publications/WP.Mediation_Rules.pdf> (last accessed on 5-11-2021).

[2]Full text of speech delivered by Justice N.V. Ramana, Chief Justice of India, at Mediation for Everyone: Realising Mediation’s Potential in India, India-Singapore Mediation Summit, 2021, available at<https://www.livelaw.in/pdf_upload/cji-speech-at-mediation-summit-396853.pdf>(last accessed on 5-11-2021).

[3]Sir Geoffrey Vos, Master of the Rolls: Speech to Hull University, available at<https://www.judiciary.uk/announcements/speech-by-sir-geoffrey-voss-master-of-the-rolls-speech-to-hull-university/>(last accessed on 5-11-2021).

4(2004) 1 WLR 3002 : 2004 EWCA (Civ) 576 (CA).

5(2014) 1 WLR 1386 : 2013 EWCA (Civ) 1288 (CA).

6PGF II SA v. OMFS Co. 1 Ltd., (2014) 1 WLR 1386 : 2013 EWCA (Civ) 1288.

7 Maitland Chambers ‘Yet another reason to mediate (or is mediation now mandatory?)’ available at: <https://www.maitlandchambers.com/information/articles-publications/articles/yet-another-reason-to-mediate/downloadableArticle>(last accessed on 5-11-2021).

8(2019) 1 WLR 6527 : 2019 EWCA (Civ) 1467.

9(2019) 1 WLR 6527 : 2019 EWCA (Civ) 1467.

102020 Bus LR 699 : 2020 EWHC 298.

11(2019) 1 WLR 6527 : 2019 EWCA (Civ) 1467.

12(2019) 1 WLR 6527 : 2019 EWCA (Civ) 1467.

13(2004) 1 WLR 3002 : 2004 EWCA (Civ) 576 (CA).

142020 Bus LR 699 : 2020 EWHC 298.

15(2004) 1 WLR 3002 : 2004 EWCA (Civ) 576 (CA).

16(2004) 1 WLR 3002 : 2004 EWCA (Civ) 576 (CA).

17Compulsory ADR, Civil Justice Council, available at <https://www.judiciary.uk/wp-content/uploads/2021/07/Civil-Justice-Council-Compulsory-ADR-report.pdf>, (last accessed on 5-11-2021).

18(2010) 3 CMLR 17. [Joined Cases C-317/08, C-318/08, C-319/08 and C-320/08, ECLI:EU:C:2010:146, decided on 18-03-2010.]

192018 CMLR 15 [Case C-75/16, ECLI:EU:C:2017:457, decided on 14-6-2017.]

202018 CMLR 15 [Case C-75/16, ECLI:EU:C:2017:457, decided on 14-6-2017.]

21Compulsory ADR, Civil Justice Council, available at <https://www.judiciary.uk/wp-content/uploads/2021/07/Civil-Justice-Council-Compulsory-ADR-report.pdf>, (last accessed on 5-11-2021).

22http://www.scconline.com/DocumentLink/3iU0MzIU.

23(2005) 6 SCC 344.

24http://www.scconline.com/DocumentLink/7566Y3w5.

25http://www.scconline.com/DocumentLink/qSN305h9.

26http://www.scconline.com/DocumentLink/JF06Ib4V.

27http://www.scconline.com/DocumentLink/2B4qF8ZD.

282021 SCC OnLine Bom 195.

292021 SCC OnLine Cal 429.

30http://www.scconline.com/DocumentLink/o07vFz69.

312021 SCC OnLine Cal 1457.

32David Foskett, Coronavirus — A Letter from the CMC Chair to Members, available at <https://civilmediation.org/latest-news/coronavirus-a-letter-from-the-cmc-chair-to-members>, (last accessed on 5-11-2021).

33Andrew Bishop, The Benefits of Remote/Virtual Mediation during Covid-19 –Resolving Trust and Probate Disputes, Shoosmiths, available at<https://www.shoosmiths.co.uk/insights/articles/to-mediate-or-not-to-mediate-that-is-the-question>,(last accessed on 5-11-2021).

34Sara Merken, New Tech Platform Launches with Promise of Quick, Cheap Dispute Resolution, Westlaw News, available at <https://www.reuters.com/article/techplatform-disputeresolution-idUSL1N2MD25V>, (last accessed on 5-11-2021).

35Overcoming Lawyers’ Resistance to Change, Thomson Reuters Legal, available at <https://legal.thomsonreuters.com/en/insights/articles/overcoming-lawyers-resistance-to-change>, (last accessed on 5-11-2021).

36Select Committee on the Constitution, Covid-19 and the Courts (HL Paper 257), available at <https://publications.parliament.uk/pa/ld5801/ldselect/ldconst/257/25702.htm, (last accessed on 5-11-2021).

37John Hyde, Companies Resist Litigation During Lockdown – But the Truce won’t Last, The Law Society Gazette, available at<https://www.lawgazette.co.uk/news/companies-resist-litigation-during-lockdown-but-truce-wont-last/5108178.article>, (last accessed on 5-11-2021).

Experts CornerKhaitan & Co

With the advent of the Draft Mediation Bill, 2021, there is a growing interest to understand the functioning of private institutional mediation. It is important to know that besides the popular court annexed mediation programmes, India also has ad hoc private mediators and institutions offering private mediation services. Hundreds of hours have been spent on creating awareness through webinars and workshops, and you would be surprised to learn that private mediators are still misunderstood for money recovery agents, liquidators, investigators, and many other false identities.

 

Additionally, there is a misplaced fact that private mediation is only limited to pre-litigation mediation or mediations held before a case is filed in court. This is not accurate – as many High Court and Supreme Court Judges are referring disputing parties to private mediation centres. Many of these referrals are either initiated under Section 89 of the Code of Civil Procedure, 1908 (CPC), or before appointing the arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration Act).

 

The draft Bill on mediation as per reports, is likely to be introduced in Parliament this winter session and we sense that it will be passed into a legislation before the year end. There are plenty of provisions in the draft bill that recognise the roles and responsibilities of private “mediation service providers”; however, this article highlights existing provisions to bust some unfounded myths surrounding private mediation in India, in the pre-legislation era.


Myth: Participating in private mediation means waiving the right to future legal action in court


Fact: Private mediation is a voluntary process. The ultimate goal is to assist the parties in reaching an amicable settlement through dialogue and interaction. If mediation is not successful (parties are unable to arrive at a mutually acceptable solution), parties have the choice to approach the courts to exercise their legal rights and remedies. There is no law in India that prohibits disputing parties from approaching any court because they participated in mediation. In fact, the proposed mediation law [Section 6(1)] strongly advocates for parties taking all possible measures to settle disputes before filing a case in court.

 

As of November 2021, parties can initiate litigation and then pause proceedings to explore mediation, wherein the Judge can refer parties to mediation under Section 89 CPC.

 


Myth: Private mediation is an anti-lawyer practice; legal counsels are not welcome


Fact: Lawyers, who have a dynamic litigation or arbitration practice, continue to play a crucial role in mediation — though, a fundamentally different one. When approached by a client, lawyers orient the client on mediation as an option among other dispute resolution mechanisms. Lawyers assist in identifying the most suitable mediator for the case, bringing to focus relevant documentation and decision-makers, breaking down the complex dispute and streamlining the issues to enhance a fast-track resolution through mediation. Lawyers advise their clients in setting out their expectations, approach, demands and concessions during the mediation process. Of course, any settlement arrived at, during mediation, will also need to be vetted and drafted into a settlement agreement. Although, there is no obligation for parties to bring a lawyer to the mediation table, mediators encourage parties to have sound legal counsel before making and accepting offers.

 


Myth: A private mediation settlement is not recognised by courts, if parties dishonour terms


Fact: A mediation conducted without the reference/supervision/monitoring of the court can be termed as a private mediation. In India, although there is no dedicated legal framework or legislation governing private mediation or settlements reached through private mediation, there are enough legislations already in place giving validity to a mediated settlement reached through a private mediation process.

 

Very often, private commercial mediation in India leans on the procedural framework of conciliation and is governed by Part III of the Arbitration Act. A settlement agreement arrived at through this mechanism is enforceable as a conciliator’s award under Section 74, provided the procedure prescribed under the Arbitration Act is followed.

 

Alternatively, if the parties enter into a privately mediated settlement agreement during the arbitral proceedings, then under Section 30(4) of the Arbitration Act, the settlement agreement is granted the status of an arbitral award which can be enforced under Section 36 of the Arbitration Act.

 

Further, to encourage parties to mediate and settle the disputes, Section 12-A(5) of the Commercial Courts Act, 2015, was introduced. As a step further, it provides that the settlement arrived at under Section 12-A shall have the same status and effect as if it is an arbitral award on agreed terms under Section 30(4) of the Arbitration Act, which can be enforced under Section 36 of the Arbitration Act.

 

Further, an agreement arrived at through private mediation enjoys the same status and enforceability of a “contract” as defined in Section 2(h) of the Contract Act, 1872 i.e. “an agreement enforceable by law”. Thus, if a private mediation settlement agreement satisfies the threshold of being a legally enforceable contract, then the terms of the same can be enforced by seeking recourse to the relevant provisions of the Contract Act.

 


Myth: Private mediators are not recognised by court since they are not trained by the court


Fact: In private mediation, parties mutually agree to appoint a neutral third party as a mediator, based on their trust and comfort levels. Till date, there is no legal requirement that the appointed private mediator should be trained by the court programme — there is no such condition in the Draft Mediation Bill, 2021 too. In private mediation, parties generally appoint a mediator as per the terms stipulated in their contractual mediation clause or upon mutual terms. Once the dispute is resolved, parties enter into a binding settlement agreement. As long as the agreement entered is with the consent of parties and is legally enforceable, the qualifications and accreditations of the mediator have no bearing on the “recognisability” of the settlement.

 

Nevertheless, parties and lawyers are advised to do thorough research, obtaining clarity on their training, background, experience, cultural orientation, etc., before appointing a mediator. Ideally, and as per well-recognised and respected international standards, private mediators should have at the very least completed a 40-hour training by a reputed institute. Private mediators need not be lawyers and may include business and management leaders, teachers, doctors, architects, engineers, artists, social workers, counsellors or any other professionals.

 


Myth: Businesses and corporations must file a court case before considering mediation


Fact: Institution of any action before court is not a precondition to go for mediation. Mediation can be pursued at any time — soon after the disagreement has erupted, after negotiations between the parties have stalled, before filing in court or even after the matter has been pending in court. If the legal agreement between the parties mandates mediation, it would be pursued before a court filing. If not, parties may mutually agree at any time to refer their dispute to be resolved by mediation under the rules formulated by a mediation institution of their choice.

 


Myth: There is no scope for private mediation once arbitration proceedings begin


Fact: Section 30 of the Arbitration Act, which governs the alternate dispute resolution clauses in India, states that the Arbitral Tribunal, with the consent of the parties, may use mediation or conciliation or other procedures at any time during the arbitral proceedings to encourage settlement. This provision gives impetus to settlement by mutual agreement of parties and does not make it incompatible with an arbitration agreement. In the event that the parties settle the disputes during the arbitral proceedings, the Arbitral Tribunal would terminate the proceedings; and if requested by the parties, and not objected by the Arbitral Tribunal, record the settlement terms in the form of an arbitral award on agreed terms.

Of late, courts have referred parties to private mediation while appointing an arbitrator under Section 11 of the Arbitration Act, just innovating an arb-med structure in the Indian justice delivery system.

 


Myth: Mediation settlement agreements are necessarily stored in a depository and registered with the court, as per law.


Fact: A mediation settlement agreement arrived at in a pre-litigation scenario remains completely confidential and is not privy to anyone outside the parties, lawyers and mediators. The common practice by most private mediators and mediation institutes is not to sign on the mediation settlement agreement (even as a witness) as it is completely agreement made by the parties and the mediator has no authority over such an agreement. No outside party can get access to even the knowledge if a mediation has taken place, lest receive information on the mediation settlement agreement.

 

In mediation settlement agreements arising out of a court proceeding or arbitral proceedings, parties may by consent file the same with the arbitrator and request the arbitrator to take the same on record and pass an award in terms thereof or request the Tribunal to just make reference to the mediation settlement agreement and state that as the arbitration is settled in terms of the mediation settlement agreement, the proceedings stand terminated. As regards the court, a similar process may be followed by consent of parties where the court may be informed of and shown the mediation settlement agreement and requested to dispose of the proceedings in terms of the same. Parties may request the court to refer to the same but may not file the same in the court. If filed in the court, a request may be made to the court to place the agreement in a sealed envelope due to the nature of its confidentiality.


† Raj Panchmatia is a Partner in the Dispute Resolution practice group at Khaitan & Co. He has rich experience in the field of dispute resolution and commercial litigation, both at the domestic and international fora.

†† Jonathan Rodrigues leads the Corporate Relations vertical at CAMP Mediation.

Op EdsOP. ED.

On 20-12-2018, the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Mediation Convention) was adopted by the United Nations General Assembly and opened for signature for various State parties on 7-8-2019.[1] To date, the Singapore Mediation Convention has 54 signatories — including States such as India, the United States of America, and China — and out of these 54 signatories, 6 States have ratified the same.[2] This Convention was drafted for facilitating international trade through standardising and unifying the rules for mediation in international commercial disputes.[3] Despite the benefits provided by this Convention, India has not ratified it. Thus, in this article, firstly, the author shall briefly discuss the importance and purpose of the Singapore Mediation Convention. Secondly, the author shall analyse the challenges and implications for India for not ratifying this Convention. Thirdly and in finality, the author shall discuss whether a separate and exhaustive legislation is required for mediation in India.

1. Introduction: Importance and purpose of the Singapore Mediation Convention

In the Preamble of the Singapore Mediation Convention, we grasp that it has been lucidly acknowledged that mediation is an integral part of international commercial dispute settlement as it allows “amicable settlement” of disputes. This amicable settlement through mediation comes in the backdrop of “… reducing the instances where a dispute leads to the termination of a commercial relationship, facilitating the administration of international transactions by commercial parties and producing savings in the administration of justice by States.”[4] However, the general reason why international parties, States, and other stakeholders do not readily opt for mediation is that mediation has no legal force behind it. In other words, mediation is non-binding on the parties. The same conundrum was acknowledged by the General Assembly while adopting the Singapore Mediation Convention, wherein it also recognised the quintessential value of having an international legal framework for mediation.[5] Therefore, we comprehend that the Singapore Mediation Convention was established as an international framework to give legal recognition to “international settlement agreements” that result from international commercial mediation. This establishment of an international framework boosts foreign investors’ confidence and the host States’ willingness to resort to mediation as a dispute settlement mechanism. However, considering that majority of the signatories (including India) are yet to ratify the Singapore Mediation Convention, the consequential effect of such non-ratification must be analysed.

2. Challenges and implications: Consequential effect of non-ratification of the Singapore Mediation Convention on India

Earlier, arbitration was seen as an appropriate alternative to litigation. However, with the changing dynamics of the commercial realm, new dispute settlement mechanisms gained traction, such as mediation.[6] As mediation has no legally binding force, the Singapore Mediation Convention was introduced to resolve this decades long conundrum. However, to reap its full benefits and take full advantage of mediation, it is imperative for India to urgently ratify the Singapore Mediation Convention due to the following reasons.

Firstly, before the Singapore Mediation Convention, the parties could bring legal force to the mediation proceedings by entering into a settlement agreement. However, the problem with this settlement agreement was its enforceability. For example, parties X and Y enter into a settlement agreement. Party X wishes to enforce the settlement agreement in party Y’s State. To enforce this settlement agreement, party X must initiate domestic court proceedings in party Y’s State, which can prove to be time taking, resources draining, and cumbersome because it is highly probable that the settlement agreement may be inconsistent with the laws of party Y’s State. Alternatively, there can also be a situation where the Court may hold a different opinion towards the settlement agreement as the agreement may be against the public policy of party Y’s State. Thus, this essentially means that the enforceability of settlement agreements resulting from international mediation was a significant conundrum before the Singapore Mediation Convention, especially in the absence of an international framework.

However, presently, Article 3 of the Singapore Mediation Convention makes it mandatory for the parties to enforce a settlement agreement resulting from “international commercial” mediation.[7] This means that if parties X and Y have signed and ratified this Convention, then their domestic laws are consistent with the Convention, which, in turn, resolves the enforceability conundrum. This is because now, all that will remain for party X or party Y is to initiate “enforcement proceedings” in the domestic courts of the other party’s State. In such a situation, the probability of the settlement agreements being enforced is substantially higher as there is consistency between the domestic laws and the international standards. This increased and solidified probability of the settlement agreement being enforced is also evident from Article 5, which provides fixed grounds on which a court can deny the enforcement of a settlement agreement. These grounds essentially aim to minimise the hurdles that may arise during the enforcement proceedings.

Thus, this reduces the costs and resources involved in enforcing the settlement agreements, which, in turn, acts as a motivator for the parties to resort to mediation as a dispute settlement mechanism. Further, the credibility of international commercial mediation also substantially increases. However, it is also imperative for us to note that, according to Article 1, two types of mediations are excluded from the application of the Singapore Mediation Convention — those mediations that are (1) to resolve a dispute by a consumer for “personal, family, or household purposes”; and (2) to resolve “family, inheritance or employment law” issues. Further, this Convention also does not apply to those settlement agreements — that are approved by a court; that have been concluded during the proceedings of a court; that is enforceable as a part of a court’s judgment; or those settlement agreements that are “recorded and are enforceable as an arbitral award”.[8]

Although considerable efforts have been invested in increasing the demand for mediation in India since 2002 through various statutes such as the Companies Act, 2013[9], the Real Estate (Regulation and Development) Act, 2016[10], the Commercial Courts Act, 2015[11], and the Consumer Protection Act, 2019[12], and through the establishment of the New Delhi International Arbitration Centre,[13] the traction towards international mediation remains slow and insignificant in India. The reasons behind the same, as stated earlier, are due to the non-binding nature of mediation and the enforceability conundrum. Thus, if India does not urgently ratify the Singapore Mediation Convention, it will remain in the limbo of the pre-convention situation, which, in turn, is capable of hampering and severing investor and foreign relations. For instance, if we take the example of the Cairn case,[14] had the Singapore Mediation Convention existed back then and had India ratified the same, then the probability of the case going to arbitration would have significantly reduced as the parties may have seriously considered investor-State mediation as an option to resolve the dispute without jeopardising their resources.[15] Therefore, there arises an urgent need for India to ratify the Singapore Mediation Convention to resolve its international commercial disputes — through mediation — effectively and efficiently while ensuring the sustainability and fostering of its international relations with foreign investors and other stakeholders.

Secondly, Article 5(1)(e) crystallises and puts into writing that the mediator(s) must follow specific “standards”. Although these standards are not found in the Singapore Mediation Convention, the most proximate to these standards is the code of professional conduct by the International Mediation Institute.[16] In a pre-convention situation, we comprehend that the usage of this professional code of conduct or any other code of conduct (which remain absent for mediators) is not widely known for mediation as compared to arbitration.[17] However, presently, as these “standards” have been crystallised in the Convention in a generalised form, we comprehend that the urgent need for India to ratify this Convention substantially intensifies. This is because, as international commercial mediation was not earlier standardised, in a uniform manner, accompanied by a dearth of professional ethics and training, there was no substantial impetus for India to resort to international commercial mediation. However, as now international commercial mediation has been uniformly standardised to a large extent, accompanied by the crystallisation of specific professional “standards” for the mediators, through the Singapore Mediation Convention, the hesitancy towards international commercial mediation can be eradicated to a large extent. This hesitancy can now be overwritten by the newly found motivation (from the Singapore Mediation Convention) to seriously consider international commercial mediation a viable alternative to dispute settlement.

Thirdly and in finality, considering the Covid-19 pandemic, it has been lucidly found that the foreign investors are negatively impacted due to the regulatory measures adopted by various States, including India.[18] These regulatory measures are likely to act as a thorn in foreign investor relations, due to which the propensity of international commercial disputes arising exorbitantly rises. Further, other factors are likely to act as a catalyst in causing international commercial disputes in the Covid-19 pandemic, such as differences in political standings, significant disruption of the supply-demand chain, and other related factors. Therefore, considering how litigation and arbitration may result in severing foreign investor relations, India must focus on international commercial mediation by ratifying the Singapore Mediation Convention, which will, in turn, result in better fostering, development, and sustenance of commercial relations.

3. Conclusion: Is ratification of the Singapore Mediation Convention and separate legislation for mediation, the future way forward for India

Considering the arguments mentioned above, if hesitancy towards ratification of the Singapore Mediation Convention exists due to its potential limitations — such as lack of vivid distinction between conciliation and mediation, lack of definition for “commercial disputes,” opt-out mechanism under Article 5(1)(d), and other related limitations — then it is imperative to note that the Singapore Mediation Convention can be amended by way of Article 15, similar to how the UNCITRAL Model Law on International Commercial Conciliation, 2002 was effectively and efficiently amended and replaced with the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation, 2018. Further, suppose that mediation would be given priority, and the demand for arbitration would reduce. In that case, the same presumption is found on false premises because even in the contemporary scenario, we comprehend that mediation — being available in international institutions like the International Chamber of Commerce, Stockholm Chamber of Commerce, and London Court of International Arbitration — has not hampered the demand for arbitration.[19] Thus, the potential hesitancies are resolved and outweighed by the potential advantages offered by the Singapore Mediation Convention and the track record of mediation in settling disputes.

For India to ratify the Singapore Mediation Convention, the Indian Parliament must promulgate a legislation, under Article 253 of the Constitution[20], that gives effect to the Convention. In M.R. Krishna Murthi v. New India Assurance Co. Ltd.,[21] the Supreme Court lucidly held that:

  1. … Advantages of mediation are manifold. This stand recognised by the legislature as well as policymakers and needs no elaboration. Mediation is here to stay. It is here to evolve. It is because of the advantages of mediation as a method here to find new grounds. It is here to prosper, as its time has come. It is now finding statutory recognition and has been introduced in few statutes as well. Examples are the Companies Act, 2013[22], the Insolvency and Bankruptcy Code, 2016[23], the Commercial Courts Act, 2015[24], etc. In these enactments provisions are made even for pre-litigation mediation by making this process mandatory. There is, in any case, umbrella provisions in the form of Section 89 of the Code of Civil Procedure[25] which, inter alia, provides for court annexed mediation as well.… In fact, the way mediation movement is catching up in this country, there is a dire need to enact the Mediation Act as well.

Further, the New Delhi International Arbitration Centre Act, 2019[26], was passed to institutionalise arbitration, mediation, and conciliation as dispute settlement mechanisms. Thus, this essentially shows a growing, substantial acceptance for mediation in India wherein parliamentary approval and ratification of the Singapore Mediation Convention should not be a hurdle.

However, the issue arises for creating a separate legislation on mediation, consequently to the ratification of the Singapore Mediation Convention. Thus, in such a scenario, three options are available for India — firstly, Parliament can amend the Arbitration and Conciliation Act, 1996[27] (1996 Act), and add separate provisions for mediation; secondly, considering that in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd.[28] the Supreme Court held that mediation and conciliation are synonymous to each other, the 1996 Act can be amended to include mediation under Part III of the 1996 Act i.e. conciliation-related statutory provisions; and thirdly, a separate, non-lengthy, and exhaustive legislation can be prepared that is directly consistent with the Singapore Mediation Convention.

Although the most viable option that may be chosen out of the three is subject to parliamentary deliberations and other related factors, incorporating mediation-related provisions in the 1996 Act seems to be the most efficient and effective way because if a separate mediation legislation is created, then it may create a problem of lack of uniformity in the alternative dispute resolution (ADR) law and may also lead to the creation of a complex structure for ADR law. This complex structure can, in turn, be problematic in statutory compliance. Further, it is quintessential to note that amending a legislation is relatively simpler and faster than creating a new legislation. Therefore, incorporating mediation-related provisions in the 1996 Act can weed the inefficiencies that a separate mediation legislation would have created.


Executive Director Asia Pacific Centre for Arbitration and Mediation,
Director IIAM, e-mail: iram.majidadv@gmail.com.

[1] Status: United Nations Convention on International Settlement Agreements Resulting from Mediation, UNCITRAL, <https://uncitral.un.org/en/texts/mediation/conventions/international_settlement_agreements/status>.

[2] Status: United Nations Convention on International Settlement Agreements Resulting from Mediation, UNCITRAL, <https://uncitral.un.org/en/texts/mediation/conventions/international_settlement_agreements/status>.

[3] G.A. Res. A/73/198, Art. 1(1), United Nations Convention on International Settlement Agreements Resulting from Mediation (12-12-2018).

[4] G.A. Res. A/73/198, Preamble, United Nations Convention on International Settlement Agreements Resulting from Mediation (12-12-2018).

[5] G.A. Res. A/73/198, United Nations Convention on International Settlement Agreements Resulting from Mediation (12-12-2018).

[6] Iris Ng, The Singapore Mediation Convention: What does it mean for Arbitration and the Future of Dispute Resolution?, Kluwer Arbitration Blog (31-8-2019),

<http://arbitrationblog.kluwerarbitration.com/2019/08/31/the-singapore-mediation-convention-what-does-it-mean-for-arbitration-and-the-future-of-dispute-resolution/>.

[7] G.A. Res. A/73/198, Art. 3, United Nations Convention on International Settlement Agreements Resulting from Mediation (12-12-2018).

[8] G.A. Res. A/73/198, Art. 1(3)(b), United Nations Convention on International Settlement Agreements Resulting from Mediation (12-12-2018).

[9] <http://www.scconline.com/DocumentLink/A5aqjfDv>.

[10] <http://www.scconline.com/DocumentLink/u5bCT3Hd>.

[11] <http://www.scconline.com/DocumentLink/7566Y3w5>.

[12] <http://www.scconline.com/DocumentLink/P62rNTsE>.

[13] Laila Ollapally, India Signs the Singapore Mediation Convention, Mediate India! (April 2020) <https://www.mediate.com/articles/ollapally-india-singapore.cfm>.

[14] Cairn Energy Plc v. Union of India, PCA Case No. 2016-17, https://www.italaw.com/cases/5709. (not found, pls check)

[15] See also Iram Majid, Cairn Energy Plc and Cairn UK Holdings Limited (CUHL) v. Government of India: A rising and burning need for investor-State mediation in investor-State tax and energy-related disputes, SCC OnLine Blog (8-3-2021), 2021 SCC OnLine Blog Exp 15,

<https://www.scconline.com/blog/post/2021/03/08/cairn-energy-plc-and-cairn-uk-holdings-limited-cuhl-v-government-of-india-a-rising-and-burning-need-for-investor-state-mediation-in-investor-state-tax-and-energy-related-disputes/#_ftnref4>.

[16] Code of Professional Conduct, International Mediation Institute, <https://imimediation.org/practitioners/code-professional-conduct/>.

[17] Alison G. FitzGerald, The Singapore Mediation Convention, Norton Rose Fulbright (September 2019), <https://www.nortonrosefulbright.com/en-in/knowledge/publications/b5906716/the-singapore-mediation-convention>.

[18] Prabhash Ranjan and Pushkar Anand, Covid-19, India, and Investor-State Dispute Settlement (ISDS): Will India be Able to Defend its Public Health Measures?, 28(1) Asia Pacific L. Rev. 225, 225-247 (2020), <https://www.tandfonline.com/doi/full/10.1080/10192557.2020.1812255>.

[19] Iris Ng, The Singapore Mediation Convention: What does it mean for Arbitration and the Future of Dispute Resolution?, Kluwer Arbitration Blog (31-8-2019),

<http://arbitrationblog.kluwerarbitration.com/2019/08/31/the-singapore-mediation-convention-what-does-it-mean-for-arbitration-and-the-future-of-dispute-resolution/>.

[20] <http://www.scconline.com/DocumentLink/61pY4yl7>.

[21] (2020) 15 SCC 493 : 2019 SCC OnLine SC 315.

[22] <http://www.scconline.com/DocumentLink/A5aqjfDv>.

[23] <http://www.scconline.com/DocumentLink/86F742km>.

[24] <http://www.scconline.com/DocumentLink/7566Y3w5>.

[25] <http://www.scconline.com/DocumentLink/3iU0MzIU>.

[26] <http://www.scconline.com/DocumentLink/XEk9RbiK>.

[27] <http://www.scconline.com/DocumentLink/QWdt5a4f>.

[28] (2010) 8 SCC 24.

Op EdsOP. ED.

To make India a global destination for business and investment and accordingly, to improve its ease of doing business rankings, the Government of India took note of the observations made by the Law Commission of India[1] and established the Commercial Courts and the Commercial Division and the Commercial Appellate Division in the High Courts for speedy disposal of commercial disputes above a specified value[2]. To take this a step further, in 2018, the Government introduced a provision[3] in the law to make it mandatory for disputing parties in commercial disputes to attempt mediation before filing a claim in court. In furtherance of this provision, the Government introduced rules[4] for pre-institution mediation and settlement but authorised only the District and State Legal Services Authorities[5] to conduct these mediations.

Mediation, in its simplest avatar, is a method to resolve disputes amicably with the help of an expert mediator and without the intervention of courts. This move by the Government was welcomed by stakeholders across the board as it was believed that this would ensure timely resolutions of disputes while retaining business relationships between the parties, a win-win for all – the Government, the overburdened judiciary and the business community.

However, a recent judgment of the Bombay High Court[6] has raised the brows of many from the business and legal fraternity. In the judgment delivered on 16-2-2021, the Court observes that the provision that “compulsorily” requires disputing parties to attempt an amicable settlement via mediation is procedural and there is no absolute prohibition to file a suit before attempting mediation. The reasoning behind such an observation is three-fold:

  • The very purpose of putting in place such a mechanism was for speedy disposal of commercial disputes for their early resolution which would in turn create a positive image for the investor world about the independent and responsive Indian legal system. Routinely referring parties to compulsory mediation would run counter to the very purpose for which the law was brought into force. It would have the effect of delaying the proceedings rather than having a quick resolution of the dispute.
  • The provision itself contemplates that where any urgent interim relief is applied for, the party seeking relief is not required to exhaust the remedy of mediation before approaching the court. According to the Court, the purpose of the law appears to be that parties should try and resolve their disputes before coming to court. This is for the simple reason that if parties resolve their disputes, they need not approach the court at all. However, when parties have tried to resolve their disputes unsuccessfully, it would be futile to still drive the parties to pre-institution mediation.
  • The counterparty must object to non-compliance regarding pre-institution mediation at the earliest opportunity. If not, it would be presumed that he does not want to resolve his dispute through mediation.

One can hardly disagree with the rationale by which the Court has justified the interpretation of mandatory pre-institution mediation as procedural keeping speedy disposal of commercial cases at the helm of its observations. On the contrary, such a mindset can be seen as forward-looking as disputing parties need not routinely approach the already burdened District and State Legal Services Authorities for the purpose of pre-institution mediation, and can rather undergo mediation privately. In fact, world over online mediation through online dispute resolution (ODR) platforms has become the go-to mechanism for parties that want to settle their disputes amicably.

However, there is one observation that is concerning and will face flak by those well-acquainted with the concept of mediation, and this is the Court’s reliance on doctrine of substantial compliance in an attempt to drive its point home. The Court says:

  1. … Take a case, where through correspondence, the parties have tried to resolve their disputes before approaching the court without any success. Can it then be contended that parties are still to be referred to mediation to resolve their disputes when an attempt has already been made and failed? I think not. To my mind, one has to interpret this provision to see that there is substantial compliance, namely, that an attempt has been made to resolve the disputes amicably which has failed, and therefore, the plaintiff is constrained to approach the court for redressal of his grievances.

On a plain reading, one may wonder what is wrong with this particular observation of the Court, but on a careful reading, one will realise that this greatly undermines the process of mediation and the skills of a mediator. A standard or private attempt at an amicable resolution of a dispute by the parties or their representatives substantially differs from routing a dispute through the process of mediation and seeking an early and amicable resolution with the support of a competent and well-trained mediator.

Virtually every dispute goes through one (if not more) round of informal negotiations before it is escalated to a more serious forum. However, driving a dispute through the tunnel of mediation is wholly different from such informal negotiations and the chances of a successful settlement increases due the involvement of an independent and skilled mediator. This finds support in the fact that less than 5% of cases raised in courts across the US result in a full trial taking place. A substantial factor in that statistic is the successful use of mediation, which is estimated to result in a positive resolution of roughly 80% of cases[7]. A similar success story of mediation in India may not see the light of day if courts come to a conclusion that equates any form of correspondence between parties for amicable settlement with the process of mediation.

A well-balanced view could be such where so long as mediation is conducted through the State machinery or privately, online or in-person with the involvement of an accredited mediator or institution be looked at through the lens of the doctrine of substantial compliance. Perhaps, this could be the ground for challenge of the Bombay High Court judgment before the Supreme Court of India, unless of course, the matter is settled amicably.


*Author is the co-founder of Presolv360 – a legal-tech company that specialises in online dispute resolution. With an academic background in law and finance, he has a decade of experience in understanding law, commerce and conflict resolution.

[1] Report No. 253 on Commercial Division and Commercial Appellate Division of High Courts and Commercial Courts Bill, 2015 (January 2015)

[2] Commercial Courts Act, 2015

[3] Section 12-A, Commercial Courts Act, 2015

[4] Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018

[5] Ministry of Law and Justice, Noti No. S.O. 3232(E), dated July 3, 2018

[6] Ganga Taro Vazirani v. Deepak Raheja, 2021 SCC OnLine Bom 195.

[7] <https://www.skuld.com/topics/legal/pi-and-defence/us-vs-uk—a-comparison-of-mediation-processes/#:~:text=Currently%2C%20less%20than%205%25%20of,of%20roughly%2080%25%20of%20cases>.

Case BriefsSupreme Court

Supreme Court: In the petition seeking for standard operating procedures for implementation of pre-litigation mediation under Section 12A of Commercial Courts Act, 2015, the 3-judge bench of SA Bobde, CJ and AS Bopanna and V. Ramasubramanian, JJ has admitted the application for intervention made by Bridge Mediation, a policy think tank based out of New Delhi, seeking the creation of a committee of experts to guide on the ground level issues arising out of the implementation of Section 12A of Commercial Courts Act, 2015.

The bench has also sought clarification from respondent Union of India and the High Courts of several states on whether the Parliament is considering rollout of a standalone legislation on mediation in India. The matter has been listed on 25th March, 2021.

Anuroop Omkar, one of the founders of Bridge said,

“We have been continuously working to bring in laws that promote commercial mediation of disputes in India. We have trained more than 350 people in commercial mediation, insolvency and turnaround under the aegis of Ministry of Corporate Affairs, Government of India. But the real mediation revolution shall not come unless experts who understand what are international standards in mediation, problems with ground level implementation in India and expectations of commercial users do not join hands in laying down better processes for implementation of Section 12A of Commercial Courts Act, 2015. There is need to give parties freedom to choose their own mediator and institutional mediation service provider. It is time to make mediation a user friendly experience.”

[Youth Bar Association of India and Other v. Union of India and Others. WP(C) No. 000849 of 2020, order dated 19.03.2021]


For Bridge Mediation: Senior Advocate Arvind P. Datar and Advocate Anuroop Omkar, Partner of AK and Partners along with Advocate on Record in the matter Adv. Surabhi Guleria.

Op EdsOP. ED.

“An ounce of mediation is worth a pound of arbitration and a ton of litigation.”

— Joseph Grynbaum[1]

Introduction

Mediation is considered a cost-effective, time saving and a less antagonistic way of resolving the discords between the parties. It encourages the parties to find the common grounds for reaching a mutual agreement. In commercial disputes, it is considered to be an effective way to resolve the disagreements between the parties as it maintains the confidentiality between the mediator and the two parties. Further, the foremost reason for parties opting for mediation settlement as opposed to litigation or arbitration is that it offers a common platform for the parties to resolve the disputes cordially in front of the facilitator i.e. the mediator and reach a cordial settlement by mutual agreement without risking to spoil the business relationship between the parties involved.  This form of dispute resolution is popular and common in almost all the countries but at international level the parties tend to wither away with mediation because of lack of uniform framework for the execution of the mediated settlement unlike the New York Convention as available for arbitration.

To do away with this absence, the United Nations General Assembly in December 2018 adopted the UN Convention on International Settlement Agreements Resulting from Mediation known as the “Singapore Mediation Convention” which was declared open for signature in the year 2019.

The Singapore Mediation Convention (hereinafter “the Convention”) came into effect on 12-9-2020 with presently 53 signatories to the Convention including the major economical nations like China, United States as well as India. The Convention aims to ease the cross-border dispute resolution mechanism via effective mediation. It hones at creating a treaty-based regime in the international frontier for enforcing the agreements resulting from mediation in the international disputes.

The authors via the present article have analysed the scope of the provisions involved in the Convention and has tried to interpret the provisions of the Convention with the help of Travaux Préparatoires Reports, discussions of the Working Groups while drafting the Convention and the authors’ own understanding of the provisions while referring to the online sources and reports available on record. Further, the article provides for the major concerns that ought to be addressed while enforcing the cross-border mediated settlements and lastly, the authors  give  an overall insight on the Convention as per their own understanding  and suggest the way forward.

Key Features

  1. Promotes credibility in resolution of cross-border disputes.— The enforcement of the mediated settlement agreements (MSAs) are generally done by recording it in the form of court order or consent awards for execution of the settlement thus involving more costs, delay as well as loss of confidentiality, which is one of the core of mediation process. However, with this Convention in place, the parties can directly enforce the mediated settlements and place such settlements at par with the arbitral awards or judgments thereby proving mediation to be a credible source for resolution of commercial disputes internationally.
  2. The Convention will facilitate international trade and commerce which shall further lead to economic development and would help in the growth of the regions to which the parties to the Convention belong.
  3. It provides for an additional dispute resolution mechanism in cases of cross-border disputes and will strengthen the dispute resolution system internationally.
  4. Uniform framework for enforcing the international settlement agreements.— The Convention provides for a uniform and harmonious dispute resolution mechanism of mediation by way of which the signatory countries while adopting this framework can build up harmonious economic relations regardless of the differences in the social, economic and legal systems in their domestic country.[2]
  5. It will help in saving cost, time and reaching a mutually acceptable solution which is the key feature of dispute resolution via mediation.
  6. It will help in eliminating one of the barriers to the foreign investment i.e. the perceived risk of the commercial disputes being brought forth before the municipal courts and the judgment thereafter to be enforced in an ordinary manner via contract law provisions or other laws as applicable, which is indeed costly, time consuming and posses a high degree of uncertainty.

Analysis of the important provisions

Applicability and scope of the Convention – Article 1

  1. International settlement agreements.—The Convention shall be applicable to only those international settlement agreements that arise out of mediation for settling a commercial dispute covered under the Convention[3].
  2. Commercial dispute.— It is applicable in cases of settlement of international agreements that results from mediation and are concluded between the parties for amicably resolving the commercial dispute.
  3. In writing.— As per Article 1 which talks about the scope of the Convention, the applicability of the Convention shall extend to those agreements which results in mediation and are concluded in writing by the parties for opting to resolve the commercial dispute by way of a settlement agreement.
  4. Place of business.—At the time of the conclusion of the settlement agreement it should be international in the sense that:
  • (i) The place of business of at least two parties to the settlement agreement should be in different States; or
  • (ii) The State in which the place of business of the parties to the settlement agreement persists should be different from either the State where the substantial part of obligations as per the settlement agreement are performed, or the State where the subject-matter is most closely associated with the settlement agreement.

Exclusions

  1. The Convention is not applicable to those international agreements that are enforced in lieu of the judgment passed by the court or by way of an arbitral award.[4]
  2. The Convention is also not applicable in cases of family matters, international settlement agreements entered into for other household/domestic purposes, inheritance or employment law.[5]

Therefore, it can be said that the Convention places reliance on the subject-matter of the agreement rather than the subject-matter of the dispute. Additionally, this provision deviates from the normal understanding of the agreements wherein the place of signing of the agreement was given some reliance while determining the jurisdiction of the competent authority as according to this article, the place of dispute shall be taken as a basis for determination of the jurisdiction of the competent authority and not the place of signing of the mediation agreement.

Further analysing the article, it can be seen that the article does not specifically state if the mediation agreement should be pre-existing thereby leaving the room for the parties to enter into mediation agreement at any point of time, the agreement so entered would be considered valid as per the Convention[6].

Requirement for Reliance on Settlement – Article 4

Article 4 of the Convention provides for the production of the evidence of the settlement agreement which resulted in mediation as a proof to the competent authority which shall check the authenticity of the evidence. While verifying the authenticity of the documents produced as evidence, the competent authority may call upon the parties relying on the settlement agreement to provide for further documents necessary to substantiate the authenticity of the documents in compliance with the provisions of the Convention.

This provision was added so as to ensure that the Convention is not used for illegitimate purposes such as money-laundering.[7] Therefore, apart from the signatures of the parties in the settlement agreement the makers of the legislation acted cautiously and added a further requirement for furnishing the proof of evidence.

The evidence can comprise of any of the following:

  1. Signature of the mediator on the settlement agreement.
  2. Signature of mediator on a separate document expressly indicating that the mediation had taken place.
  3. Attestation by the administering institution.
  4. Any other valid proof as acceptable to the competent authority.[8]

Refusal to Grant Relief – Article 5

In order to leave no room for ambiguity, Article 5 of the Convention lists down the basic formalities like the signing of the agreement by the parties, evidence of the settlement agreement resulting due to mediation and others that ought to be fulfilled by the parties for getting a relief through the settlement agreement.

Further, the courts of a party to the Convention have the power of refusal in granting  relief to the parties as provided under Article 5[9]  including of cases wherein:

  • The party/parties to the settlement agreement are under incapacity.
  • If the relief prayed for is in contradiction to the public policy of the contracting party;
  • If the settlement agreement is null, void, inoperative, incapable of being performed under law to which it is subjected;
  • There is a serious breach on the part of the conciliator as to the standard applicable, having known of that, the parties would not have entered into an agreement.

Further, Article 5(1)(d)[10] also gives an option to the parties to opt out of the Convention by stating it expressly in the terms of the international agreement against any form of relief to be granted.

This provision makes sure that the defences are preserved for protecting the parties for non-compliance of the settlement agreement due to genuine reasons as listed in this article. The other argument in this regard is that this provision can also be misused in a way wherein either party provides for defences which are not foolproof or are taken as a gauze to avoid compliance to the Convention procedures and delay the mediation process. If the later argument becomes true, then the basic feature of mediation being an expeditious and cost-friendly approach is eliminated as this would lead to delay and extra costs of conducting meetings for mediation that could be eliminated.

Reservation –Article 8

 Article 8 provides for the reservation clause wherein it gives the freedom to the party to reserve the application of the Convention to which it or any government agency is a party. This clause has been exercised by Iran by making a reservation.

This article further limits the scope of this Convention by stating that the reservation can be made any time by the party and are to be applied only to the extent that the parties have agreed to and additionally  gives freedom to the party/parties to withdraw the reservation made at any time.

From the analysis of this article, it can be understood that even though the article expressly omits to provide for authorising reservation by private personals, the parties in the MSAs can agree upon exclusion of the Convention which would be considered as a defence based upon the compliance with the settlement terms.[11] Nextly, even though this provision seems to take away the rights of the party/parties to make an informed choice/self-determination by allowing the States to opt out of the Convention automatically by making a declaration[12], in essence, it would not really affect the private parties who can still opt in to the Convention in lieu of entering into private settlement for mediation. Therefore, this provision is more feasible as it helps the parties in complying with the articles of the Convention provided that both the parties are willing to opt in or opt out or else it might create an imbalance/disharmony in situations where the other party cannot enforce the agreement because of the other party making the reservation in its country[13].

Other important provisions

Article 3 of the Convention provides for the right to invoke the Convention agreement and the general compliance and obligations that are necessary for enforcing the settlement. However, it does not list down the detailed lists of the obligations that ought to be complied by. Thus, it can be inferred that Article 3 providing for the General Provisions is very primary/basic in nature and leaves enough scope for the States to provide for detailed lists of rules, obligations and compliances  in their domestic laws that the party(ies) is bound to follow while invoking the provisions of the Convention.

Article 7 of the Convention is an enabling provision which preserves the right of the parties to not to be deprived of any rights that they may have to avail in order to reach the settlement agreement in the manner and extend as allowed by law or the treaties of the parties to the Convention where such MSA is sought to be relied upon. As per the understanding of this provision the States would not be allowed to apply for settlement agreements excluded under Article 1(2) and Article 1(3)  as those settlement agreements would fall outside the ambit of the Convention. However, it provides the States with the flexibility to enact domestic laws which could include in its ambit such settlement agreement[14].

Article 12 provides for the participation in the Convention by the Regional Economic Integration Organisations (RIOs) constituted by the sovereign States having the competence over matters governed by the Convention. The RIOs are eligible to sign, approve, ratify and accede to the Convention in which case they shall have the rights and obligations as that of a party to the Convention.

Article 13 acts like an extension to the reservation clause under Article 8. It states that in cases wherein the parties to the Convention has more than one territorial units and  the laws in relation to the territorial units are different in each/any territorial unit, in that case, the party has an option to opt in or opt out of the Convention. That is to say, that the party may declare the applicability of the Convention to all or any one or more of its territorial units at the time of signing, ratification, acceptance or accession.

Article 16 of the Convention provides for denunciation of the Convention by a Party to the Convention. It states that the denunciation is to be done by way of a formal notification which shall be addressed to the depository which shall take effect 12 months after the receipt of the notification by the depository.

Further, the Convention delivers a flexible approach of allowing the defending States to use the MSAs as shield by allowing the parties to claim the benefit of the already settled dispute. During the deliberations in the negotiation groups relating to such recognition, there were some nations like European Union (EU) which were reluctant in including recognition as well as enforcement. But on the other hand, it was vehemently argued by some States that it should offer a sword as well as shield to its members. The argument was based on the fact that reorganisation is a crucial prerequisite of enforcement and the defending State should get an equal right as of the complainant, to rely on the settlement agreement.[15]

Major concerns

The major concerns that arise out of the Convention are:

  • There is no straitjacket formula or standards listed for the qualifications of the mediator. Regulation of such practice cannot be left to the domestic laws as this would create disharmony among the municipal and international laws.
  • The Convention stresses upon the confidentiality involved in acting through mediation but the cumbersome formalities and compliances provided under Article 1 does not seem to favour the same.
  • The provision to opt out of the Convention by expressly providing in the terms of the settlement agreement tends to limit the applicability and purpose of the Convention of submitting to the provisions of the Convention and facilitating cross-border international dispute settlement.
  • The Convention is silent on the form of the enforcement of the MSA. It does not mention whether the enforcement of the MSAs would be done by providing relief in the form of damages, specific performance or any other remedy as required and sought for as applicable as per the legislations of the nation where the enforcement is applied for. This acts as a concern because the laws of the domestic countries differ in their provisions with regard to the provision of relief and hence, the uniformity to be achieved via this Convention will fall apart.

Author’s comment

After analysing the scope of the Convention, the author is of the opinion that the Convention is definitely a way forward for implementing the international framework for using mediation as a dispute settlement mechanism. Further, as more and more States ratify the Convention, it will lead to further promotion and facilitation of international trade and commerce involving less risk and simplified and standardised procedures for enforcing the mediated settlements.

However, it can also be interpreted that the Convention gives much freedom to the States for enforcing the MSAs. For instance, in States where mediation is not highly recognised as a means of settlement mechanism or the States which are unfamiliar with the process of mediation, it would pose a lot of difficulty for the enforcement of the MSA. Thus, the gap in domestic legislation can become a driving factor for non-enforcement of MSA. In absence of such competent framework, the parties are again restricted to litigation or choosing other dispute resolution mechanisms like arbitration or hybrid mechanisms such as the mixture of arbitration and mediation as practiced in Iran.

Conclusion and suggestions

At the end, it can be concluded that the Convention acts as a step forward towards engaging the parties to use mediation mechanism as a widely used phenomenon for the settlement of the MSAs at the international frontier. It would also benefit India in reaching its goal of ease of doing business as the countries ratifying such Convention will have an easy and less antagonistic way of resolving any disputes amicably through mediation and enforce the same by way of this Convention.

However, considering the above concerns as well as the uncertainties involved in the language of the Convention, it is empirical that the domestic laws should make procedural laws clarifying the uncertainty as regards to such provisions. For instance, in cases of the uncertainty as regards to the “enforcement of the mediated settlement” provided under Article 3(1) and the “applicability of the standards” under Article 5(1)(e) the municipal legislation can clearly define as to what all relief would be available to the party/parties seeking enforcement under the Convention.

To solve Concern No. 4 as listed above with regard to the form of relief while enforcing the MSA and to make it harmonious for all the parties entering into MSAs as per the Convention it is imperative that an explanation be provided under General Principles provided under to Article 3 providing for the list of specific cases/instances wherein damages should be provided and when the relief for specific performance should be preferred.  Thus, the authors are  of the opinion that once the clarity is provided in these aspects, those days are not far away when international mediation will start supplementing international arbitration and the mediation clause is considered as the most viable mechanism for the resolution of cross-border commercial disputes.


* 5th year Law students, Symbiosis Law School, Pune.

[1] Principal Mediator and Engineer, Mediation Resolution Int’l, LLC, d/b/a Power Generation Consultants.

[2] United Nations Convention on International Settlement Agreements Resulting from Mediation, United Nations General Assembly Resolution A/73/198,  Preamble (2018).

[3] United Nations Convention on International Settlement Agreements Resulting from Mediation, United Nations General Assembly Resolution A/73/198, Art. 1 (2018).

[4] United Nations Convention on International Settlement Agreements Resulting from Mediation, United Nations General Assembly Resolution A/73/198,  Art. 3 (2018).

[5] United Nations Convention on International Settlement Agreements Resulting from Mediation, United Nations General Assembly Resolution A/73/198, Art. 1(2) (2018).

[6]  Note by Secretariat, UN Commission on International Trade Law, Report of the UN Commission on International Trade Law, Fifty-first session (25-6-2018 to 13-6-2018), UN Doc. A/ 73/17, at III C.2, available at <https://undocs.org/en/A/CN.9/942>, last seen on 27-1-2021.

[7] United Nations Commission on International Trade Law, Note by the Secretariat, Settlement of Commercial Disputes, International Commercial Mediation: Draft Convention on International Settlement Agreements Resulting from Mediation, UN Doc. A/CN.9/942, at II.B(1) (2-3-2018).

[8] United Nations Convention on International Settlement Agreements Resulting from Mediation, United Nations General Assembly Resolution A/73/198, Arts. 4(1)(a) and (b) (2018).

[9] United Nations Convention on International Settlement Agreements Resulting from Mediation, United Nations General Assembly Resolution A/73/198, Art. 5 (2018).

[10] United Nations Convention on International Settlement Agreements Resulting from Mediation, United Nations General Assembly Resolution A/73/198, Art. 5(1)(d) (2018).

[11] Report of Working Group II (Dispute Settlement) on the Work of its Sixty-sixth Session (New York, February 6-2-2017 to10-2- 2017), UN Doc. A/CN.9/901 (16-2-2017), Para 78 ; UN Doc. A/CN.9/934, United Nations Commission on International Trade Law; Report of Working Group II (Dispute Settlement) on the Work of its Sixty-eighth Session (New York, 5-2-2018 to 9 -2-2018); Report of the UN Commission on International Trade Law, Fifty-first Session (25-6-2018 to13-7- 2018), UN Doc. A/ 73/17, at III C.2 , ¶37-40, ¶68.

[12] United Nations Convention on International Settlement Agreements Resulting from Mediation, United Nations General Assembly Resolution A/73/198, Art. 8(1)(b) (2018).

[13] UN Commission on International Trade Law, Report of the UN Commission on International Trade Law, Fifty-first Session (25-6-2018 to13-7-2018), UN Doc. A/ 73/17, at III C.2 , ¶40.

[14] United Nation Commission on International Trade Law, Report of the UN Commission on International Trade Law, Fifty-fifth Session (3-7-2017 to 21-7-2017), UN Doc. A/73/17, at III B.1, ¶ 19.

[15] Ming Liao, Singapore Convention Series: Refusal Grounds in the UN Convention On International Settlement Agreements Resulting from Mediation, Kluwer Mediation Blog (12-4-2020),  available at <http://mediationblog.kluwerarbitration.com/2020/04/12/singapore-convention-series-refusal-grounds-in-the-un-convention-on-international-settlement-agreements-resulting-from-mediation/>, last seen on 27-1-2021.

Law Firms NewsNews

Mr. Hiroo Advani, Senior Managing Partner, Advani & Co. retains ranking as ‘Band I’ Dispute Resolution Lawyer under Chambers and Partners Asia-Pacific Rankings, 2021.

Mr. Advani is a leading dispute resolution lawyer and an Arbitration Specialist, and has consistently held the position of a Tier 1 dispute resolution Lawyer in the country as reported by reputed publications such as Chamber & Partners and Legal 500.

He has conducted, as Lead Counsel a wide range of Arbitration’s in a variety of fields, including, construction projects, infrastructure, Power Projects, Oil Refineries, Metro/Rail Contracts, conventional sources of power generation and renewable sources of power.

Case BriefsSupreme Court

Supreme Court: The bench of MM Shantanagoudar* and Vineet Saran, JJ has held that Section 89 of CPC and Section 69-A of Tamil Nadu Court Fees and Suit Valuation Act, 1955 contemplate the refund of court fees in all methods of out-of-court dispute settlement between parties that the Court subsequently finds to have been legally arrived at and not just to those cases where the Court itself refers the parties to any of the alternative dispute settlement mechanisms listed in Section 89 of the CPC.

Issue before the Court

Madras High Court had, on8.01.2020, held that, given their beneficial intent, Section 89 of CPC and Section 69-A of Tamil Nadu Court Fees and Suit Valuation Act, 1955 must be interpreted liberally, in a manner that would serve their object and purpose.

“Construing them narrowly would lead to a situation wherein parties who settle their dispute through a Mediation Centre or other centres of alternative judicial settlement under Section 89, CPC would be entitled to claim refund of their court fee, whilst parties who settle the disputes privately by themselves will be left without any means to seek a refund.”

The High Court was of the opinion that as such differential treatment between two similarly situated persons, would constitute a violation of Article 14 of the Constitution, a constitutional interpretation of Section 89 of the CPC, and resultantly Section 69-A of the 1955 Act, would require that these provisions cover all methods of out-of-court dispute settlement between parties that the Court subsequently finds to have been legally arrived at.

Challenging the said decision, the Madras High Court’s Registry had approached the Supreme Court with the contention that Section 69-A of the 1955 Act only contemplates refund of court fees in those cases where the Court itself refers the parties to any of the alternative dispute settlement mechanisms listed in Section 89 of the CPC. Hence, it does not apply to circumstances such as in the present case, where the parties, without any reference by the Court, privately agreed to settle their dispute outside the modes contemplated under Section 89 of the CPC.

Analysis

Understanding the object of the provisions in question

The object and purpose of Section 89 crystal clear is to facilitate private settlements, and enable lightening of the overcrowded docket of the Indian judiciary.

“This purpose, being sacrosanct and imperative for the effecting of timely justice in Indian courts, also informs Section 69-A of the 1955 Act, which further encourages settlements by providing for refund of court fee.”

The purpose of Section 69-A of the 1955 Act is to reward parties who have chosen to withdraw their litigations in favour of more conciliatory dispute settlement mechanisms, thus saving the time and resources of the Court, by enabling them to claim refund of the court fees deposited by them. Such refund of court fee, though it may not be connected to the substance of the dispute between the parties, is certainly an ancillary economic incentive for pushing them towards exploring alternative methods of dispute settlement.

Why a narrow interpretation would lead to absurd and unjust outcome

The narrow interpretation of Section 89 of CPC and Section 69¬A of the 1955 Act sought to be imposed by the Petitioner would lead to an outcome wherein parties who are referred to a Mediation Centre or other centres by the Court will be entitled to a full refund of their court fee; whilst parties who similarly save the Court’s time and  resources by privately settling their dispute themselves will be deprived of the same benefit, simply because they did not require the Court’s interference to seek a settlement. Such an interpretation would lead to an absurd and unjust outcome, where two classes of parties who are equally facilitating the object and purpose of the aforesaid provisions are treated differentially, with one class being deprived of the benefit of Section 69-A of the 1955 Act.

“A literal or technical interpretation, in this background, would only lead to injustice and render the purpose of the provisions nugatory – and thus, needs to be departed from, in favour of a purposive interpretation of the provisions.”

Further, parties who have agreed to settle their disputes without requiring judicial intervention under Section 89, CPC are even more deserving of this benefit. This is because by choosing to resolve their claims themselves, they have saved the State of the logistical hassle of arranging for a third¬party institution to settle the dispute.

“Though arbitration and mediation are certainly salutary dispute resolution mechanisms, we also find that the importance of private amicable negotiation between the parties cannot be understated. In our view, there is no justifiable reason why Section 69-A should only incentivize the methods of out-of-court settlement stated in Section 89, CPC and afford step brotherly treatment to other methods availed of by the parties.” 

Noticing that there may be situations wherein the parties have after the course of a long-drawn trial, or multiple frivolous litigations, approached the Court seeking refund of court fees in the guise of having settled their disputes, the Court said that in such cases, the Court may, having regard to the previous conduct of the parties and the principles of equity, refuse to grant relief under the relevant rules pertaining to court fees.

How the Registry and State Government would benefit in long run 

Finding it puzzling that the High Court’s Registry should be so vehemently opposed to granting such benefit, the Court said that

“Though the Registry/State Government will be losing a one-time court fee in the short term, they will be saved the expense and opportunity cost of managing an endless cycle of litigation in the long term.”

[High Court of Judicature at Madras  Rep. by its Registrar General v. MC Subramaniam, 2021 SCC OnLine SC 109, decided on 17.02.2021]


*Judgment by: Justice MM Shantanagoudar