[Answered] Compare and contrast mediation and commercial arbitration in India. How do recent legislative changes position them in the landscape of dispute resolution?

Recently President gave assent to The Mediation Bill, 2023 which encourages courts to refer the disputing parties to ADR procedures, including mediation. ADR or Alternate Dispute Resolution refers to a set of methods and processes used to resolve legal disputes outside of traditional courtroom litigation. ADR methods include negotiation, mediation, arbitration, and various other techniques that aim to facilitate the resolution of disputes more efficiently and cost-effectively than going to court.

Difference between mediation & commercial arbitration in India:

• Definition: Mediation is a voluntary and consensual process where a neutral third party (the mediator) assists disputing parties in reaching a mutually acceptable resolution. The mediator does not impose a decision but facilitates communication and negotiation. Commercial arbitration is a process where parties submit their dispute to one or more arbitrators, who render a binding decision called an arbitration award. It is often used for complex commercial disputes.
• Control: Parties have significant control over the outcome in mediation, as they actively participate in crafting the resolution. The mediator’s role is to guide and facilitate the discussions. While parties have some control over the choice of arbitrators and the arbitration process, the final decision rests with the arbitrator(s). The process is more formal compared to mediation.
• Legislation: The Mediation and Conciliation Act, of 1996, & Mediation Act of 2023 govern mediation in India. The Arbitration and Conciliation Act, 1996 & Arbitration and Conciliation (Amendment) Act, 2019, governs arbitration in India.

How do recent legislative changes affect dispute resolution?

• Necessary obligation: The new legislative change proposes that regardless of any previous mediation agreement, the Act mandates both parties to engage in pre-litigation mediation as a preliminary step before resorting to the Indian court system. To facilitate this procedure, the Act will also necessitate courts and relevant institutions to establish a roster of qualified mediators.
• Reduce the burden on courts: The act’s message is clear regarding commercial matters, that courts must no longer be the default venue for dispute resolution instead parties must go for ADR. Given the huge backlog of cases in courts the ADR mechanism can be an important tool in increasing access to justice by providing redress and settlement of disputes in a non-adversarial manner, free from the formalistic procedural practices of the law.
• Institutionalized Services: Both the Mediation Act & Arbitration and Conciliation Act emphasize institutional mediation. Mediation service providers would provide not only the services of a mediator but also all the facilities, secretarial assistance, and infrastructure for the efficient conduct of mediation.

Conclusion:

Both mediation and commercial arbitration have their roles in India’s dispute resolution landscape. Recent legislative changes have sought to enhance the appeal and effectiveness of both methods, positioning them as viable alternatives to lengthy and costly court litigation, depending on the nature of the dispute and the preferences of the parties involved.