Author(s): Shivangi Prabha
Paper Details: Volume 2, Issue 3
Citation: IJLSSS 2(3) 14
Page No: 145- 150
ABSTRACT
Mediation serves as a practical and efficient solution to the overwhelming burden on the judicial system, much like a home remedy for complex ailments. With the current court system often bogged down by prolonged proceedings, as highlighted by the phrase “Tareekh Pe Tareekh,” mediation emerges as a crucial alternative. Unlike litigation, which often leads to rigid, win-lose outcomes, mediation emphasizes collaboration and mutually beneficial solutions.
Mediation in commercial disputes offers a strategic and efficient alternative to traditional litigation, providing businesses with a way to resolve conflicts without the time, cost, and public scrutiny associated with court proceedings. In the fast-paced world of commerce, disputes between companies, whether domestic or international, can disrupt operations, harm reputations, and strain relationships. Mediation in commercial disputes thus not only resolves conflicts efficiently but also strengthens the fabric of corporate governance by emphasizing transparency, fairness, and the long-term interests of all parties involved.
Despite its benefits, mediation faces challenges, such as a lack of awareness and concerns over confidentiality, which can sometimes hinder transparency. However, these drawbacks are outweighed by the advantages of resolving disputes discreetly, preserving relationships, and avoiding the lengthy court process. To enhance its efficacy, it is recommended that companies establish internal mediation cells governed by UNCITRAL or relevant state laws.
Keywords: Mediation, UNCITRAL, Arbitration and Conciliation Act 1996, Commercial Disputes.
MEDIATION: A HOME REMEDY FOR COURT BATTLES
The Mediation is the tool that should be incorporated within every fabric of the state to settle dispute without roaming around the courts and involving in the timely judgements. The famous line of “Tareekh Pe Tareekh” is the current scenario of the Court system.
Arvind Datar, Senior Advocate of SC, suggested to dispose of the cases by appointing the Retired Judges under Art.128 of Indian Constitution[1] to release the heavy burdened heart of the Judicial System. However, this also will be apparently throwing of the small stone in an ocean of cases.
Mediation is the tool as recognized and brought to the mainstream by UNCITRAL Model Laws[2], is the agreement and settlement between the two parties through a third party (an authentic eligible mediator) having mutual trust or consensus ad idem. The Model clearly laid down all the requirement and procedures through which the Mediation can be proceeded for the party.
For International Mediation, the Singapore Convention which is already covered under UNCITRAL Model Law under Article 16 to 20 deals with the fair, transparent and effective dealing with the parties who are in the need of amicable settlement. In comparison with the Indian laws, Arbitration and Conciliation Act, 1996[3] is the recent development based on the bible of the Arbitration and Mediation i.e. UNCITRAL Model Law. The Act clarifies the procedures for the Fast-track disposal of cases through Mediation considering the core pillars of truthfulness, timely execution, and meeting of minds settlement.
The trend of globalization lead to sudden increase of the dispute between the States of different jurisdiction. The pace of Mediation is not at par with the dispute level due to the lack of awareness among the people. In the era of socialization and busy world the people are absolutely fine with dumping money with the courts as proceeding fees and further expenses, but not aware with the concept of Mediation that requires less spending as compared to Courts settlement and leads to better results and solution. Ironically, the busy people should take up the mediation as the option due to effective and timely treatment of the cases without burdening the Court.
Mediation has different parameters to consider, as the roadside third party cannot sit as a mediator to resolve dispute. The principles laid down should be adequately followed such as the eligibility of the mediator, the burden of Confidentiality (Art.6) etc.
EVERY COIN HAS TWO FACES
The drawbacks of Mediation if we interpret first is non-disclosure to the general public that reduces the transparency and accountability of the Mediation System. The Confidentiality clause under the UNCITRAL Laws not always help with protecting the confidentiality of information of the parties, hence making it more prone and penetrable for the benefit of any party. In famous case of Moti Ram (D) T. LRs. & Anr Vs. Ashok Kumar & Anr.[4] the SC upholds the confidentiality of the mediation process and strictness of non-disclosure.
However, the drawbacks act as the power-up boost for the Mediation System in a way that, keeping the conflict of married couple between the four walls of the house is equally important for the reputation and relation of the couple. As like, keeping the conflicted dispute internally and resolving it through the mediator following the correct procedure leads to better understanding and relation of the company in future.
INTERNATIONAL COMMERCIAL MEDIATION: THE PROFITABLE DEAL
The main aim of this paper is to draw the attention of my heartiest reader to the unlimited possibility and scope of the Mediation in the Commercial Dispute arena. In the companies, the lack of Corporate Governance is the basic parameter to judge the company of having serious problem with either the competitors, or with self.
The dispute with competitors of one’s State or outside the jurisdiction of the State can take up the Mediation Resolution as the bald eagle gliding on the surface of water to catch prey swiftly without creating ripples in the water. The Mediation catches the disputable companies up in its warm consideration without dropping it to the four walls of courtrooms.
Commercial Disputes are one-of-a-kind disputes that requires extra effort and deliberations of the court which can be escaped through Mediation. In court the matter which goes remains pending and is also the decision of the court becomes binding on the parties at any cost. In the process, parties of different jurisdiction can be fully involved in the issue of settlement, watching it getting done, is fully aware with the process and solution so provided leads to better understanding and maintain the healthy relationship between the parties.
International Mediation as per analysing the global parameters is the way through which Commercial Dispute are moulding into a new better relation with the more opportunities and future prospects between the companies.
Who wants to Roam to Court if you have effective Mediation Resolution Process at First Stage? It is always better to cure the Cancer at the very First Stage.
International Mediation is the home-remedy for the companies dealing with the disputes to resolve them without getting attention of Media or unnecessary involvement of various peoples. Furthermore, under Sec 12A of Commercial Dispute Act, 2015[5] states that before filing a suit, the plaintiff must first attempt pre-institution mediation. The “mandatory” clause of pre-mediation was widely discussed under Patil Automation Pvt. Ltd. Vs. Rakheja Engineers Pvt. Ltd.[6] case. The SC interpreted that the suit if does not involve any urgent request for interim relief will be required to follow the process and rules established by the Central Government for this pre-mediation. However, in case of Bromptons Lifestyle Brands Vs. Riveria Commercial Developers[7], the plaintiff was granted “urgent interim relief” due to which the Sec 12A of Commercial Dispute Act, 2015 will not be applied mandatorily.
IMPLEMENTATION OF THE HOME REMEDY
Every company should have the Internal Mediation Cell as the mandatory body that should be governed by the UNCITRAL Model Laws or related State’s Laws to deal with the cases internally. The dispute should remain in the four walls of the company. It should be enbibed in as the first stage to be initiated when any dispute takes place. It will have two-way possibility of reducing the pending of the cases on the International Courts and keeping the matter internally to the companies without letting the outsiders or the general public indulge in the Internal dispute matter.
The International Mediation if implemented effectively will repel the effect of jurisdictional challenge. The guidelines if adopted properly will leave a significant release of burden on the courts and will increase the global sustainability and co-operation.
Hence, it is suggestable for not just India, but for the global economy to not run and hoard the court with the cases as the famous proverb says – Foolish runs where Angels fears to tread.
CONCLUSION
Mediation is a crucial mechanism for resolving disputes in a world increasingly characterized by complex, cross-border commercial interactions. Its significance lies in its ability to provide a faster, more cost-effective, and less adversarial alternative to traditional litigation. By emphasizing collaboration and mutual agreement, mediation fosters a conducive environment for maintaining and even strengthening business relationships, which can be invaluable in sustaining long-term partnerships.
However, the effectiveness of mediation depends on its proper implementation and awareness among businesses. Despite challenges like concerns over confidentiality and a general lack of understanding, the benefits of mediation far outweigh its drawbacks. The creation of internal mediation cells within companies, guided by UNCITRAL or relevant state laws, is a forward-thinking approach that can ensure disputes are handled efficiently and discreetly. Such a strategy not only aligns with the principles of good corporate governance but also contributes to reducing the overburden on the judiciary, which is often clogged with cases that could be more appropriately handled through alternative dispute resolution mechanisms.
In essence, mediation serves as a “home remedy” for the ailing judicial system, offering a viable solution that aligns with the fast-paced and interconnected nature of modern commerce. By embracing mediation, companies can navigate conflicts with agility, preserve their reputations, and focus on growth, all while contributing to a more streamlined and effective legal environment.
[1] Arvind Datar, Legal Notes by Arvind Datar: Reviving the Neglected Articles 128 and 224A, Bar and Bench – Indian Legal news (2024), https://www.barandbench.com/columns/legal-notes-by-arvind-datar-reviving-the-neglected-article-128-and-224a (last visited Jul 8, 2024).
[2] UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation, 2018 | United Nations Commission on International Trade Law, https://uncitral.un.org/en/texts/mediation/modellaw/commercial_conciliation (last visited Jul 8, 2024).
[3] Arbitration and Conciliation Act, 1996, An Act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto. (1996), http://indiacode.nic.in/handle/123456789/1978 (last visited Jul 8, 2024).
[4] Moti Ram (Dead) Through Lrs. And Another v. Ashok Kumar and Another, Supreme Court Of India, Judgment, Law, casemine.com, https://www.casemine.com</span>, https://www.casemine.com/judgement/in/5609aedce4b0149711414eda (last visited Aug 25, 2024).
[5] Commercial Courts Act, 2015, An Act to provide for the constitution of Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and matters connected therewith or incidental thereto (2016), http://indiacode.nic.in/handle/123456789/2156 (last visited Aug 25, 2024).
[6] Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd., (2022) 10 SCC 1
[7] Brompton Lifestyle Brands (P) Ltd. v. Riveria Commercial Developers Ltd., 2023 SCC Online Del 1539