Govt to form Mediation Council to streamline business dispute resolution

The proposed Mediation Council of India, established under the Mediation Act enacted last year, will mandate that mediation proceedings be completed within 180 days

The government is expected to establish a Mediation Council of India (MCI) by the end of this year to improve the ease of doing business, according to LiveMint. The initiative aims to facilitate the resolution of disputes, especially those related to business, outside the court system.

Earlier this year, a committee formed by the Insolvency and Bankruptcy Board of India (IBBI) suggested the introduction of a voluntary mediation framework to expedite the resolution of disputes out of court.

This framework can also alleviate the burden on courts, similar to how the government’s decriminalisation of over 100 legal provisions aims to achieve the same goal.

 

The proposed MCI will be established under the Mediation Act, which was enacted last year. According to a disclosure in the Rajya Sabha, this Act requires mediation proceedings to be completed within 180 days from their commencement, the business-daily claimed. The council will set the rules for mediation and empower mediators.

The MCI will oversee the education, assessment, and certification of mediators through accredited institutes. It will also establish standards for mediator conduct and recognize mediation service providers.

The council will consist of a chairperson and two members with expertise in mediation, as specified by the Act. It will also include a chief executive officer and a representative from a recognised body of commerce and industry appointed by the central government.

Why is mediation important in business?

Mediation is a process where a mediator helps disputing parties to reach an agreement outside of court. Unlike other forms of out-of-court dispute resolution, mediation does not result in a binding award or judgement. Instead, the mediator assists the parties in reaching a mutually satisfactory settlement.

The Mediation Act, passed last year, mandates the completion of mediation proceedings within 180 days of their initiation. The MCI will be established under this legislation.

The council will also be responsible for the training and certification of mediators through accredited institutes, as reported.

Currently, mediation is typically pursued only when required by law, such as under the Commercial Court Act of 2015, which mandates that parties attempt mediation before proceeding to court, the report said citing Namita Shah, co-founder of Presolv360, an online dispute resolution platform providing e-mediation services. Shah mentioned to Mint that the establishment of the MCI is expected to encourage more parties to voluntarily opt for mediation, rather than doing so only due to legal mandates.