In News:

Chief Justice of India (CJI) B.R. Gavai lauded the Bar Council of India (BCI) for amending rules to allow foreign legal professionals and law firms to advise on non-litigious matters in India.

Key Features of BCI’s Reform (2024 Update to 2022 Rules):

• Scope of Practice for Foreign Lawyers:
  • Permitted: Advisory roles in foreign law, international law, and arbitration.
  • Prohibited: Appearing in Indian courts/tribunals or advising on Indian law.
• Nature of Work Allowed: Only non-litigious activities.

Rationale Behind the Reform:

• Boosting Arbitration Quality:
  • India ranks 5th globally in arbitration case volume (ICC 2024 Report).
  • Reform aimed at enhancing arbitration standards via foreign expertise.
• Facilitating Legal Reciprocity:
  • Enables Indian lawyers to access international legal markets.
  • Promotes mutual recognition and cooperation with foreign bar associations.
• Supporting Institutional Arbitration:
  • Benefits centres like:
    • Mumbai Centre for International Arbitration (MCIA)
    • Delhi International Arbitration Centre (DIAC)
    • India International Arbitration Centre (IIAC)
• Filling Talent Gaps:
  • Expertise needed in fields such as:
    • Climate litigation
    • Technology and data law
    • Cross-border commercial arbitration

Challenges and Concerns:

• Market Displacement Fears: Indian lawyers worry about reduced share in arbitration and consultancy services.
• Reciprocity Barriers: Unequal treatment in countries with restrictive legal entry norms.
• Uneven Playing Field: Foreign firms possess larger capital, advanced tech, and international clientele.
• Regulatory Oversight Needed: BCI must ensure strict compliance to maintain sovereignty of Indian legal framework.

Significance of the Reform:

• Positioning India as an Arbitration Hub: Enhances India's global legal profile, especially in infrastructure and trade.
• Strengthening Indo-UK Legal Cooperation: Reform highlighted during Indo-UK Arbitration Conference, deepening bilateral ties.
• Modernizing Legal Sector: Brings global legal best practices and innovation to India.
• Upholding Indian Legal Integrity: Complies with the Advocates Act, 1961 – no foreign practice in Indian law.
• Opportunities for Indian Lawyers Abroad: Reciprocity clause allows dual practice in India and foreign jurisdictions.

What is the News ?

The Parliament has passed the Mediation Bill 2023 to reduce pendency of court cases.

Facts About:

The Mediation Bill, 2021

• It was introduced in the Rajya Sabha in December, 2021, with the Parliamentary Standing Committee being tasked with a review of the Bill.
• The Bill aims at institutionalising mediation and establishing the Mediation Council of India.                                                       

Key Features of the Bill

Pre-litigation mediation

1. Parties must attempt to settle civil or commercial disputes by mediation before approaching any court or certain tribunals.
2. Even if they fail to reach a settlement through pre-litigation mediation, the court or tribunal may at any stage refer the parties to mediation if they request for the same.

Disputes not fit for mediation

1. The Bill contains a list of disputes which are not fit for mediation.
2. These include disputesrelating to claims against minors or persons of unsound mind, involving criminal prosecution, and affecting the rights of third parties. The central government may amend this list.

Applicability

• The Bill will apply to mediations conducted in India:

involving only domestic parties

involving at least one foreign party and relating to a commercial dispute (i.e., international mediation)

if the mediation agreement states that mediation will be as per this Bill.

• If the central or state government is a party, the Bill will apply to commercial disputes, and other disputes as notified.

Mediation process

• Mediation proceedings will be confidential, and must be completed within 180 days (may be extended by 180 days by the parties).
• A party may withdraw from mediation after two sessions.
• Court annexed mediation must be conducted as per the rules framed by the Supreme Court or High Courts.

Mediators

• Mediators may be appointed bythe parties by agreement, a mediation service provider (an institution administering mediation).
• They must disclose any conflict of interest that may raise doubts on their independence.
• Parties may then choose to replace the mediator.

 Concerns Highlighted by the Parliamentary Standing Committee

Pre-Litigation

• The panel highlighted many key issues including mandatory and coercive nature of pre-litigation mediation.
• Making pre-litigation mediation necessary may result in case delays and provide another instrument in the hands of truant litigants to prolong case disposition.

Clause 26: The panel was against Clause 26of the draft which gives power to the SC or the High court to make laws of pre-litigation according to them.

Non-Applicability to Non-Commercial Disputes: The members questioned the non-applicability of the provisions of the Bill to disputes/matters of non-commercial nature involving the Government and its agencies.

Appointments: The panel had discussions about the qualifications and appointment of the Chairperson and Members of the proposed Mediation Council.

Recommendations Accepted by the Union Cabinet

Reducing the Time for Concluding a Mediation

• The Union cabinet has accepted the recommendations of the standing committee by reducing the time for concluding a mediation from 180 to 90 days.

Making Pre-Litigation Mediation Voluntary

• The recommendation for making pre-litigation mediation voluntary instead of mandatory was also much needed as voluntariness is an essential principle of mediation.

Recognition and Enforcement of Agreements

• Recognition and enforcement of settlement agreements arising out of mediation is a welcome move.
• This is also in line with India’s commitment as a signatory to the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention). 

 Provisions of the Final Bill that Require a Relook

Limited Grounds to Challenge a Settlement Agreement

• The limited grounds listed to challenge the enforcement of a settlement agreement and the fact that a period of 90 days is given to raise the challenge need a relook.
• The fact that a settlement agreement is essentially a contract between the parties; there are several instances where grounds for challenge such as fraud and impersonation are detected at a later stage.

Technical Flaws in Clause 8

• Clause 8 of the Bill entitles a party to move the Court before the commencement or during mediation for interim relief but only in “exceptional circumstances”.
• The term “exceptional circumstances”is not only undefined in the Bill but is also abnormal to the settled principles of seeking interim relief before the civil courts.
• Moreover, there is no remedy of appeal available against an order passed under this proposed section.

The Concept of Online and Community Mediation

• A recent Niti Aayog report reveals that only 55 per cent of India have access to the internet and only 27 per cent possess compatible devices. 
• For online mediation to be a success, the government will have to scale the bandwidth accessibility to remote parts of the country. 
• As for community mediation, the Bill makes it mandatory to have a panel of three mediators.This requirement is unnecessary and impinges on the flexibility that mediation brings.

Restricting the Government’s Participation in Mediation to only Commercial Disputes

• The real issue is that the government is the biggest litigant in the country.
• Restricting the ability of the government to participate in mediation proceedings arising only out of commercial disputes goes against the objective of enacting the legislation.

 Way Forward

Legal Aid Setup: Setting up legal aid or access to justice clinics with adequate IT infrastructure could address the issue of online mediation.

Inclusion of Government Related Disputes in the Bill

• The standing committee had also recommended that government-related disputes be included in the Bill.
• The common litigant sees the government as an adversary before the court of law. The Bill provided a golden opportunity to the government to change that perception.
• This will inspire confidence amongst all stakeholders but would also help in reducing pendency backlog.

Conclusion

Mediation should be promoted as a preferred and voluntary mode of securing justice. 

Although the legislature may have intended to lighten the load on the judiciary, the law needs to be improved because it may cause a delay in the administration of justice and raise the cost of litigation.

Source: https://www.livelaw.in/news-updates/parliament-passes-mediation-bill-234671