Mediation is an alternate dispute resolution method where the parties in dispute try to resolve the matter voluntarily and amicably with the assistance of a third party – the Mediator. The mediator does not have the power to enforce a solution and rather merely helps the parties resolve the dispute. It can either be an offline or an online mediation.
When can you opt for mediation?
Mediation can be opted for almost all cases where the parties are interested in an out-of-court settlement. However, some cases are more suitable for mediation like cases pertaining to:
- Recovery of money
- Rent, tenancy, and property matters
- Matrimonial and family disputes
- Labor and contract disputes
- Cheque bounce matters
- Motor vehicle accident claims, etc.
Is mediation legally binding?
Mediation is usually an informal out-of-court alternate dispute resolution method. It is primarily based on mutual consent and the free will of the parties in dispute and is often not enforceable in courts. However, mediation outcomes may be enforceable under certain circumstances. Parties need to draw a written, signed settlement agreement in compliance with S. 73 of the Arbitration and Conciliation Act, 1996.
Enforceability of mediation outcome in different cases:
- Court referred mediation.
Usually, it is enforced by way of obtaining a consent decree from the courts based on the settlement agreement. For instance, as per S. 80 of the Consumer Protection Act, 2019, the Consumer court may pass an order recording the settlement and dispose of the matter accordingly.
- Private mediation.
More settlement agreements entered into in private meditations are enforced under the Contract Laws, as long as they satisfy the requirements of a legally valid contract as laid drawn under the Indian Contract Act, 1872.
- Introduction and opening statement
The mediation process begins with an introduction by the mediator and the parties. The mediator then proceeds with the opening statement where the parties are explained about the stages involved in the process, the roles and responsibilities of the mediator and the parties, and the advantages and sanding of mediation.
- Agenda setting
The mediator then proceeds to lay down the timeline of the process – the date, time, and venue of each negotiation, issues to be discussed, etc.
- Facilitation of sessions
The mediator facilitates joint as well as individual sessions with the parties to understand the situation better and to encourage communication. Based on these discussions and insights gathered, the mediator then offers the best options available to the parties to settle the matter.
Based on the negotiations and the options presented by the mediator the parties may arrive at a mutual settlement. If the negotiations fail and parties do not arrive at a settlement, then the case is sent back to the court in case of court-referred mediations. In the case of private mediations, the parties proceed as they please, often leading to litigation.
There are no set guidelines for the closing of a mediation process. If the parties arrive at a mutual settlement then the mediator often helps them draft and execute a settlement agreement.
Why should you opt for mediation?
- Retention of control
Under mediation, you as one of the parties in dispute have complete control over the issues to be discussed during the mediation, the outcome, and the terms of the settlement.
- Free consent
The mediator does not have the authority to pass a judgment and both parties have complete freedom to accept or reject the settlement terms.
Litigations are usually immensely time consuming and expensive. Mediation often helps settle the matter before it reaches the courts, thereby helping to save huge amounts of money.
The terms of the settlement are highly confidential. You, the other party, and the mediator would be the only people having access to this information. This also helps build trust, confidence, and comfort between the parties and encourages freer discussions.
- Mandated under the law
Pre-litigation mediation is mandated under several legislations and judicial pronouncements. For example, S.12-A of the Commercial Courts Act mandates the parties to undergo mediation before proceeding with the litigation. Under S. 37 of the Consumer Protection Act, 2019 consumer courts have the discretionary power to direct the parties to settlement via mediation on the first date of hearing. Similarly, S. 89 of the Code of Civil Procedure, 1908 places discretionary power on the courts to refer matters to mediation before proceeding with the litigation. If parties fail to opt for mediation in such cases, then the cases are not admitted by the courts for adjudication. The parties need to submit proof of mediation if mediation is opted and completed by the parties voluntarily prior to the court’s direction.
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- Party to a legal dispute
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