Mediation Council of India

• 26 Dec 2024

Source: LM 

Why in News?  

The push for establishing a Mediation Council of India (MCI) has intensified amid growing calls for faster, cheaper dispute resolution. 

 Note: Mediation is a process where a neutral mediator facilitates communication between parties to help them reach a mutual agreement, without making decisions for them. 

•  Types of Mediation: Settlement Conference ( attorney-led, focuses on reaching a settlement), Facilitative Mediation (focuses on improving relationships and mutual understanding), and Transformative Mediation (empowers parties to resolve the conflict themselves, with settlement as a secondary goal). 

 Why is the Mediation Council of India Needed? 

• 2023 Mediation Act: The Mediation Act, 2023 mandates the creation of the Mediation Council of India (MCI).  
  • Although the government aimed to set up the MCI by the end of 2023, its formation has been delayed. 
• Role of Proposed MCI: The MCI will be responsible for setting the rules and procedures for mediation in India. 
  • It will grant authority to mediators and ensure that mediation practices adhere to established standards. 
  • The Council will oversee the education, assessment, and certification of mediators, making the process more transparent and regulated. 
• Need: A functional mediation council is essential for reducing legal bottlenecks and fostering a business-friendly environment by resolving commercial disputes more quickly and cost-effectively than arbitration. 
  • Mediation provides a flexible, less adversarial alternative to litigation, aiding in mutually agreeable settlements. An efficient MCI can reduce judicial burdens. 
  • While mediation is often court-mandated, the MCI's establishment is expected to lead more businesses to choose mediation voluntarily, enhancing its role in resolving commercial disputes. 
    • For instance, under the Commercial Court Act, 2015, parties are mandated to try mediation before entering courts.  
  • Online dispute resolution (ODR) services, including e-mediation, are set to grow rapidly. 
  • A well-regulated mediation framework will boost confidence in India’s commercial dispute resolution, enhancing its global business standing, attracting investors, and facilitating smoother transactions. 

How is Commercial Dispute Resolution Currently Handled in India? 

• Commercial Courts: Established under the Commercial Courts Act, 2015, these courts expedite the resolution of disputes involving monetary thresholds above Rs 3 Lakhs.  
  • They are staffed with judges experienced in commercial law and aim to reduce litigation delays and enhance business efficiency.  
  • Commercial courts also encourage arbitration, before formal litigation. 
• Arbitration: Governed by the Arbitration and Conciliation Act, 1996, (amended in 2015, 2019, and 2021) enhances neutrality, reduces judicial intervention, and ensures timely resolutions. 
  • Arbitration, with a neutral arbitrator chosen by both parties, offers binding decisions. It can be ad hoc or institutional, such as through the Indian Council of Arbitration. 
  • The India International Arbitration Centre Act, 2019 established the India International Arbitration Centre for domestic and international arbitration. 
• Conciliation: It is an out-of-court dispute resolution method where a neutral conciliator helps parties resolve their commercial disputes.  
  • Conciliation, governed by the Arbitration and Conciliation Act, 1996, helps preserve relationships by facilitating discussions and proposing solutions, without imposing decisions like Arbitration. 
• Negotiation: Negotiation is a voluntary, non-binding Alternate Dispute Resolution (ADR) process where parties directly engage to settle differences without third-party intervention, commonly used in commercial disputes. 

 UPSC Civil Services Examination Previous Year Question (PYQ) 

Prelims 

Q1. With reference to Lok Adalats, which of the following statements is correct? (2010) 

(a) Lok Adalats have the jurisdiction to settle the matters at the pre-litigation stage and not those matters pending before any court 

(b) Lok Adalats can deal with matters which are civil and not criminal in nature 

(c) Every Lok Adalat consists of either serving or retired judicial officers only and not any other person 

(d) None of the statements given above is correct 

Ans: (d)