The Indian legal framework has seen a major transition in the last decade towards promoting alternative dispute resolution (ADR) processes. Of these, mediation has become especially significant, particularly in commercial disputes.
Statutory Framework
The Commercial Courts Act, 2015, as amended in 2018, made an attempt mandatory on the part of the parties to try pre-institution mediation prior to seeking the court’s intervention in some commercial cases. The said provision was meant to lighten courts’ workloads and promote a culture of negotiated settlement.
Further, the Mediation Bill, 2021 (pending consideration) aims to establish a unified framework for mediation in India, including provision for institution mediation, mediation online, and enforcement of settlement agreements through mediation as decrees.
Judicial Recognition
The Supreme Court has always stressed the role of mediation. In Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (2010), the Court reiterated that mediation is not just a procedural requirement but a strong weapon to settle disputes peacefully.
More recently, in M.R. Krishna Murthi v. New India Assurance Co. Ltd. (2019), the Court noted mediation must become a part of the legal culture in India and not an exception.
Advantages for Businesses
For companies, mediation has various benefits:
Confidentiality: Commercial sensitive information is kept confidential, as opposed to open court proceedings.
Speed and Cost-Efficiency: Cases are disposed of speedily at reduced costs as opposed to lengthy litigation.
Preservation of Relationships: Mediation encourages a cooperative over an adversarial spirit, which is especially worth preserving in long-term business partnerships.
Enforceability: Mediated settlements can be formalized before courts or arbitral tribunals and thus can be binding.
Challenges Ahead
Even with its benefits, mediation in India has practical challenges:
Low awareness among litigants and companies.
Shortage of professionally trained mediators.
Resistance from certain legal practitioners apprehending loss of traditional litigation work.
Overcoming these challenges will take more institutional support, capacity-building programs, and attitude change within the legal fraternity.
Conclusion
India’s commercial landscape becoming more complex and integrated globally, mediation is no longer a choice but a necessity. It can revolutionize the nature of dispute resolution—relieving the courts of a lot of burden, saving time and resources, and, most importantly, maintaining business relationships.
As the law relating to mediation is developed, it is the responsibility of lawyers, companies, and policymakers to welcome this development and ensure that mediation becomes a key support for India’s system of dispute resolution.
