Encouraging mediation to settle disputes

Encouraging mediation to settle disputes

Article:

1. Chitra Narayan , Chennai-based advocate and mediator, discusses how mediation and conciliation used as a powerful tool to resolve commercial disputes.

Important Analysis:

2. India will participate in deliberation at the United Nations Commission on International Trade Law (UNCITRAL) in New York.

3. The deliberations will facilitate legal reform to ease commercial dispute resolutions.

4. Commercial disputes are resolved not only through courts and arbitration but also through mediation.

5. The deliberations will consider how these settlement agreements in disputes in international commercial transactions will be implemented by courts in different countries.

6. Other aspects of the draft convention would be:

• The convention will link laws adopted by countries to recognize domestic mediation and extend them beyond their boundaries.
• UNCITRAL has formulated principles on which countries should recognise and enforce mediation agreements arising from cross-border disputes.
• Once formalised, countries will have a consistent framework for enforcing mediation agreements made in other countries.
• The draft convention defines mediation as a “process whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person (the mediator) .
• The mediator lacks the authority to impose a solution upon the parties to the dispute.
• Courts of a country before which a mediated settlement agreement is brought must ensure implementation of the terms of settlement.
• The courts will allow a party to a settlement agreement to rely on this agreement as a defence in cases filed on the basis of disputes already settled by the agreement.

7. Several concerns make this draft important for India such as:

1. Mandatory pre-litigation mediation has been introduced in commercial disputes.
2. The adoption of the convention will address a policy gap on outcomes from the mediation process involving cross-border disputes.
3. India has lost substantial earnings as a result of international disputes being taken for resolution outside the country.
4. Strengthening the dispute resolution policies will encourage dispute resolution in India, where the commercial relationship once began.

8. Enforcement of settlement agreement

• When the settlement agreement comes up before the court for implementation, the court will review it on the basis of certain conditions.
• These include the capacity of the parties to enter into the agreement.
• Once the agreement has been reviewed, the court must enforce the agreement on the terms agreed.
• If, the court were to decline enforcement, this will be done on grounds that are known to international parties.
• Mediated settlement agreements typically don’t need court assistance for enforcement.

Note:

• One hundred and seventy-four countries recognise mediation and conciliation as a method of resolving disputes.
• International business and dispute resolution institutions( such as the International Chamber of Commerce, the Singapore International Mediation Centre and the World Intellectual Property Organisation )all have established rules and assist businesses in resolving disputes through mediation.