The
concept of mediation is sought to be brought into the statute book by the
legislature in the new Consumer Protection Act, 2019 (notified but not yet
enforced). Recently, in November 2019, the central government issued draft
rules with respect to mediation (“Mediation Rulesâ€). This update seeks
to highlight the salient features of the Mediation Rules.
A.
Mediation
Cell
a. A
Mediation Cell is to be set up by the consumer forums which shall have a panel
of Mediators and shall also comprise of other supporting staff for providing
administrative assistance.
b. A
Mediation Cell shall be competent to deal with ongoing disputes as well as
disputes which have not yet been initiated by the complainant. Therefore,
Mediation Rules even provide for ‘pre litigation’ mediation. In other words, a
complainant may approach the mediation cell of the appropriate forum even prior
to institution of a case against the opposite party. This concept of ‘pre
litigation’ mediation seems to have been adopted from the recent commercial
courts law which has been introduced in civil courts for the purpose of
resolving commercial disputes between parties.
B.
The
Excepted Matters
Certain
categories of matters are excluded from the scope of mediation and the
Mediation Cells are refrained from entertaining such matters. In general,
matters relating to offences which are not compoundable under any law cannot be
settled in mediation. A few such matters beyond the purview of mediation proceedings
are as follows:
a. Matters relating to proceedings in respect of medical
negligence resulting in grievous injury or death;
b. Matters which relate to defaults or offences for which
applications for compounding have been made by one or more parties;
c. cases involving serious and specific allegations of
fraud, fabrication of documents forgery, impersonation, coercion etc;
d. Cases involving prosecution for criminal and
non-compoundable offences;
e. Cases which involve public interest or interest of
numerous persons who are not parties before the consumer forum.
It is noteworthy that the given list is not exhaustive
and is merely illustrative.
C.
Mediator Immunity
Mediators
are provided immunity against any action taken by him in good faith during the
mediation proceedings, including from civil and criminal proceedings.
D.
Status and effect of settlement agreement
Every
order made by the consumer forum endorsing the settlement agreement (arrived at
between the parties pursuant to mediation proceedings) shall be considered to
be a decree of a civil court and shall be final and binding on signatory
parties. No appeal shall lie from such order.
Further,
a settlement agreement arrived at between the parties shall be enforceable even
on the legal representatives of the parties (in case of demise of any party).
In case of demise of a party during the continuation of the mediation
proceedings, the mediator so appointed and conducting the proceedings will
continue his role for the remainder of the mediation process.
E.
Scope of Communication
The
Mediation Rules postulate limited scope of communication between the Mediator and
the forum. The intent behind this is to preserve the confidence of contesting
parties as well as the neutrality of the Mediator. In case any communication is
necessary, then the same shall be made in writing with copies of the same to
the parties concerned. In fact, the communication is limited to the following
situations/circumstances:
i)
About the
failure of a party to attend the mediation proceedings;
ii)
About consent of
the parties;
iii)
Regarding the
assessment of the Mediator for cases which may be unsuitable for mediation; and
iv)
About settlement
of the dispute.
F.
Refund of Court
Fee
Just like in civil cases, in matters which are
settled by parties through mediation, the complainant would be entitled to a
refund of court fee.
G.
Arbitral/Judicial proceedings
Parties to ongoing mediation
proceedings would be prevented from initiating any arbitral or judicial
proceedings during the continuation of such proceedings except in the limited
situation where an order of the court is necessary to protect any interest of
the parties therein. This rule would largely apply to ‘pre litigation’
mediations.
