IMPACT OF SINGAPORE CONVENTION IN THE INDIAN MEDIATION MARKET
Author: Amber Gupta, V year of B.A.,LL.B.(Hons.) from G.D. Goenka University, Gurugram, School of Law.
Mediation has gained popularity and preference in India over the years, as the Indian legislature and courts have been inclined to establish the country's alternative dispute resolution system in line with international standards. This also stems from the fact that corporate organizations are increasingly preferring for strategies such as mediation over litigation. While mediation is widely used in India as a method of alternative conflict resolution when resolving family and civil law cases, various government bodies are taking aggressive steps to facilitate mediation as a means of dispute resolution.
Also, in 2015, the Indian Institute of Arbitration and Mediation signed an MOU with the Singapore International Mediation Centre to encourage the country's international trade mediation. After, in 2018, the Indian Parliament amended the 2015 Commercial Court Act and ordered the parties to have access to mediation before bringing a lawsuit before a Commercial Court. Nevertheless, following the affirmative actions, the development of international commercial mediation has been impeded due to some outbreaks. To demonstrate, a lack of sufficient laws and state mechanisms to implement a compromise agreement, inconsistency with interpretations of words such as conciliation and mediation, etc. Present a challenge in progressing the mediation method. The signing of the 2019 Singapore Mediation Convention comes as a positive change in the light of these concerns. This historic move is believed to cause an array of changes and developments regarding the growth of Indian commercial mediation.
The distinction between ‘mediation’ and ‘conciliation’
The Convention, while describing the word 'mediation,' lacks the distinction between 'mediation' and 'conciliation' by its nomenclature. In the same way, some jurisdictions make interchangeably the use of the words "mediation" and "conciliation." The same does not hold for India, however, because there is ambiguity as to whether the two words are interchangeable. A simple reading of Section 89 of the Civil Procedure Code, 1908, and Section 30 of the 1996 Arbitration and Conciliation Act indicates that mediation and conciliation are defined as two distinct forms of conflict resolution. In comparison, India's Supreme Court has opined differently on many occasions. In the M/S Afcons Infra. Ltd. &Anr. vs Cherian VarkeyConstruction Co. (P) Ltd. &Ors. case, the Court claimed that mediation is synonymous with the word conciliation. A majority of leading voices on India's ADR system, such as Justice Indu Malhotra, also hold the same opinion. The use of the word 'conciliation' in the Act is proposed to include both mediation and conciliation, and if there is some discrepancy between the two procedures, the same is due to the facilitator's difference in the degree of involvement, which is not, in fact, a difference of practice.
The Convention has rectified this lack of clarity about the relationship between the two concepts, as it clearly describes the term mediation in Article 3 of its text. It clearly defines mediation as any mechanism that seeks to resolve conflicts by friendly resolution, supported by a third party, irrespective of the terms used to refer to that mechanism. This will serve as a roadmap to the enactment of the legislation in India and thus help to promote clarity about the reach of the two methods.
Another major hurdle affecting the country's development in international trade negotiations is the lack of awareness and practicability of international negotiations settlement agreements. Mediation under the aegis of the court is regulated by the Civil Procedure Code, and the settlement arrangement as a result of that mediation is implemented in the form of a court decree. Besides, a settlement arrangement forming part of an international arbitral award shall be implemented in compliance with Part II of Arbitration and Conciliation Act, 1996 as a consent award. Convention Article 1(3) precludes its application to mediations concluded either under the aegis of a trial or in arbitral proceedings in which the parties decide to use mediation rather than arbitration. These settlement arrangements may also continue to be followed as decrees of consent and awards of consent, respectively, and are beyond the scope of the Convention.
Also, settlement deals emerging from private negotiations are implemented as contracts in India. Thus, parties must initiate legal action to implement the terms of settlement as part of a verdict so that the settlement agreement achieves the sanction of law. The underlying flaw with this approach is that it requires the parties to obtain a decision in court after having sat through a lengthy mediation procedure, creating delay and frustration in the dispute resolution process. Besides, the legitimacy of such an arrangement may be questioned only based on Indian Contract Law's general principles and not based on the nature of the conflict.
Besides, the settlement agreements concluded by private conciliation are enforced by Part III of the Act. Under Section 73 of Arbitration and Conciliation act, 1996, where a conciliator defines 'elements of settlement' which are agreeable to the parties, a settlement arrangement may be chalked out after taking into account the parties' comments. This settlement agreement must be signed obligatory by the parties and certified by the conciliator to attach a binding effect to the settlement agreement.
Defined in section 74 of Arbitration and Conciliation Act, 1996, this Arrangement shall be considered to have the status and effect of an arbitral award on terms negotiated during arbitration proceedings. Although this legal fiction indeed protects the parties from the hassle of launching fresh compliance proceedings in court, at the same time it makes the settlement arrangement vulnerable to arbitral award challenges.
Because of the prevailing problems, the Convention's signing comes because of a respite as it provides for immediate acknowledgment and compliance of the settlement agreement, thus saving the parties from the difficulties of implementing the settlement agreements as arbitral awards or as decisions.
The Parliament is required, according to Article 253 of the Indian Constitution, to enact legislation to give effect to any foreign Convention. India must, therefore, enact legislation that would govern the country's mediation mechanism. An important advantage of such promulgation is that it will assist in the establishment of a formal mediation system. India is also under an obligation to have sufficient state mechanisms in place to ensure the mediation process runs smoothly. Also, the government approved the establishment as a legislative body of the New Delhi International Arbitration Centre. There were reasons to establish such body in India, manage the ADR mechanisms adequately, Promoting ADR-sector research and development through workshops, conferences, training programs, etc, Create and manage a permanent Arbitrator's Panel and other administrative and support commissions for ADR facilities, Keep reports of government grants and all these were enacted under the New Delhi International arbitration centre act, 2019.
Expanding mediation as a means of resolving disputes will ease the burden on Indian courts that are infamous for being inundated with the backlog of cases. Besides this, the signing of the Convention has come as a strategic step on the part of India as it promotes foreign direct investment in the region. Foreign investors also concentrate on more convenient dispute resolution methods, such as mediation, rather than lengthy litigation. Being a party to the Convention warrants confidentiality, balanced results, cost reduction, and the preservation of business associations.
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