Mediation – a perspective from India and the UK

The UK has no specific law relating to the use of mediation as a settlement mechanism. Until recently, neither did India. That changed in October 2023 with the passing in India of the Mediation Act 2023 which will start to show its effects through 2024.

The New Act

The Act creates a more structured framework for mediation within India. This is intended to encourage the use of mediation in India and in doing so to reduce the load on the courts. Certainly, mediation has been effective in doing this elsewhere but given the very large backlog in India it is open to doubt whether mediation can do enough to make a noticeable difference. However, the government ultimately shied away from any attempt to make mediation compulsory. Whether this was the right decision is uncertain and only time will tell if there is take-up of mediation. Mediation is not compulsory in England but in England refusal to mediate has very real and enforceable consequences in the award of legal costs against the refusing party which provides considerable incentive to make use of it.

The main objectives of the Act are to:

• Allow the court to refer parties to mediation and stay cases to allow for that;
• Allow for online mediation and set standards around it;
• Provide a list of matters which are not fit suitable for mediation;
• Create a time limit of 180 days to complete the mediation process subject to agreed extensions from the parties;
• Make the mediated settlement agreements final, binding, and enforceable;
• Create structures to set standards for mediator training and practice;
• Create a framework for community mediation.

Some interesting takeaways are that:

• A Mediation Settlement Agreement may be challenged but on limited grounds such as fraud, corruption, impersonation and where the dispute and/or matter was not fit for mediation. Therefore, there is a presumption that mediation agreements are enforceable.
• The Act defines an international mediation as one in which at least one of the parties is outside India.
• Tight timeframes around completing mediation aims to support businesses by providing a faster and more cost-effective means of resolving disputes, thus promoting economic growth and stability.

English Law

While India has been long using ADR as a means of conflict resolution, although mainly through arbitration and conciliation, the introduction of the Act has now allowed for there to be a proper structure and recognition of the role mediation plays. The UK has used mediation for some time but has always declined to bring in legislation around it on the basis that the courts already provided ample mechanisms to allow for and support mediation. However, the key question that makes India of particular interest is whether the passing of the Act simply gives people greater confidence in mediation and whether the UK should, likewise, pass mediation-supporting legislation to encourage its use. In England compulsion has been a far stronger mechanism toward mediation. Initially through the award of legal costs in cases but now through making mediation compulsory for small claims matters worth £10,000 or less. However, creating confidence in the process is likely to be a far more effective means of encouraging mediation than simply compelling the parties to take part and so the contrast between the approach in India and England is interesting.

International Mediation

The United Nations General Assembly adopted the United Nations Convention on International Settlement Agreements Resulting from Mediation on 20 December 2018 (“Singapore Convention on Mediation”), which was a step towards ensuring a harmonised framework for cross-border enforcement of mediation settlement agreements. India became a signatory to the Singapore Convention on Mediation on 7 August 2019 although this is yet to be ratified. On a practical basis the Act’s definition of International Mediations and the ability to register those mediation agreements and enforce them opens the way to practical enforcement of overseas mediation agreements under the Singapore Convention.

Mediation Practice

There is also a considerable difference between the way mediation is practiced in England and in India. In England, mediation is dominated by one-day time-limited mediation with both parties present in the same building, although usually in separate rooms. The mediator then shuttles between the parties, but the mediation proceeds synchronously with both parties moving to settle. This structure is held to create a time pressure to settle which keeps thing moving and prevents mediation causing delay to court proceedings.

In India, by contrast, mediation proceeds asynchronously with the partes not together and the mediator passing between them over a longer period. This sacrifices the time pressure and immediacy of the English method but allows for more careful thought by the parties and reduces the risk of them regretting the settlement.

The English model is valuable in creating a pressure to settle but it is a more expensive means of proceeding and an asynchronous mechanism using technology has been used for lower value disputes.

The contrast between England and India and their use of mediation shows how two major legal jurisdictions are grappling with providing better and more effective means of resolving an ever-growing number of disputes. It is likely that some practices will become closer while others will diverge. Both jurisdictions can learn from one another, and it is likely that mediation will start to evolve to use different mechanisms for different types of dispute.