The Mediation Act, 2023: Reimagining The Role Of The State

Mediation, especially, institutional mediation, received a fillip as prominent provisions of the Mediation Act, 2023 (Act) came into force from 9 October, 2023. This landmark legislation constitutes an apex body - Mediation Council of India– under whose institutional aegis the benign legislative aspirations are intended to be implemented into action.

The Act is a complete code on court-annexed, institutional and community mediations. Except the indicative list of disputes mentioned in the First Schedule, almost all kinds of disputes can be resolved under this Act, which has an overriding effect over all other laws, except those specifically mentioned in its Second Schedule.

Legal Services Authorities

The Legal Services Authorities (LSAs), presently managing the Mediation Centres, are given an enhanced role under the Act. LSAs in turn are required to constitute an authority. This authority constituted under the aegis of the LSAs is a Mediation Service Provider (MSP) under the Act. The LSAs are required to maintain panel of Advocates for Pre-Litigation Mediation and court-annexed Mediation. The mediation process can be initiated at the level of LSAs by way of an application. LSAs are given a prominent role in the empanelment of Community Mediators too.

In sum, the onus of implementation of the Act is entirely on the judiciary – the courts, Advocates and LSAs. Barring its minimal role in constituting and staffing some of its officials in the Mediation Council of India, the State as such is not in the frontline of the process. The funding mechanism and respective roles of the State and Union are not well defined. It appears that the fiscal onus of managing the Mediation Centres – the authority already constituted by the LSAs - will continue to be on the shoulders of the judiciary. The acutely understaffed and resource starved LSAs will have to (continue to) manage the mediation institutions and its procedural and economic onus.

Option vs Compulsion

Apart from the clarity on its fiscal participation, the Act does not compel the State to deploy mediation as a compulsory mode of resolution of disputes, particularly the ones faced within. No doubt, the Act is made applicable to the disputes in which the State or its instrumentalities are a party, but then, it appears that applicability is only for commercial disputes. Other kinds of disputes can come within ambit only when notified by the governments.

Omnibus Engagement

Engagement of the State with its citizenry is hardly limited to monetary transactions. The disputes involving the State as a service provider, regulator is never explored to be resolved via mediation under the Act. The routine cases seeking writ of mandamus or implementation of directions can easily be mediated. The State can easily segregate the cases where the litigant has a legal right to be entitled to issuance of Writ of mandamus and such issues can be resolved even before the preliminary hearing.

Glaring Exclusions

Omission of electricity disputes before the regulatory commissions and Appellate Tribunal for Electricity (APTEL) from mediation ambit is an odd and avoidable exclusion. Many disputes before the State Electricity Regulatory Commissions are merely for payment of monies for the electricity supplied by the generators. Such issues can be resolved via mediation. Even though the disputes before the electricity regulators are essentially commercial, so far, no disputes have been referred to arbitration or mediation. Regulatory Commissions invariably adjudicate disputes by collecting ad valorem court fees and their orders are challengeable before APTEL situated in New Delhi. The consumers with laudable causes to espouse never dare to litigate given the fiscal and locational deterrents. Such matters are best resolved via mediation.

This exclusion has no rationale much less legal justification. An overwhelmingly large number of disputes before the Regulatory Commissions and APTEL The State being the sole shareholder of most distribution companies is contesting litigations with its own generating companies.

Proactive Role of State

The role of the State is, under the Act, debatably that of an onlooker or at best a facilitator rather than a vanguard or passionate participant. The State needs to assign itself a telling role in the economics of the mediation process besides making most of the mediation process for mitigating its own economic burden of litigating with its citizens and within its own constituents and instrumentalities.As per the Act, the parties to the mediation are required to equally share the cost of mediation. When the State expects its citizenry to self-fund and opt for mediation (in alternation or complementation to the constitutionally guaranteed adjudication) the State should lead by example – mainstream the mediation as its intra and inter departmental dispute resolution mode.

On 31^st December, 1991, to give effect to the directions of the Apex Court in the case of ONGC vs Collector of Central Excise, the Central Government, in its Cabinet Secretariat, constituted a High-Power Committee, later called the Committee of Disputes (CoD), to conciliate interdepartmental disputes. Later, in the case of Chief Conservator of Forests, Govt. of A.P. Vs. The Collector and Ors. (and reiterated in Mahanagar Telecom vs CBDT), the Supreme Court suggested constitution of similar committees by the State Governments. The conciliatory resolution of disputes within the Government continued till it was discontinued till a five-judge Constitution Bench of the Apex Court recalled all its orders in the case of Electronics Corporation of India vs Union of India.

Even though the earlier established mechanism was held to have outlived its utility, the Apex Court did not quash any of the official communications or memorandums. Thus, the mechanism was neither annulled nor dismantled nor prohibited but not pressed to service.

On 22^nd May, 2018, the Central Government issued an Official Memorandum constituting Administrative Mechanism for Resolution of CPSEs Disputes (AMRCD) for settlement of commercial disputes between Central Public Sector Enterprises (CPSEs) inter se and CPSE(s) and Government Departments and Organisations. Existence of similar mechanisms at the State levels is not known, particularly after the Supreme Court recalled all its earlier orders.

Option vs Compulsion

Now, with the Mediation Act in place, the governments at all (Union, State and the local self-governments) levels need to establish mediation mechanisms by inculcating and integrating with the objects and provisions of the Act. It is a popular misconception that mediation training is only for Judges and Advocates. Since mediation is an anathema (but confusingly similar) to arbitration or adjudication, the legally trained minds most often commit most dreaded mistakes in the mediation. However, the apex executive, trained in the art of public administration, may be most suitable for mediation training. Even though the essentials of governmental participation is not understandably manifest under the Act, the State needs to chalk-out specifics on effective participation its personnel in the mediation process. It is advisable to give legislative recognition or manifestation to the litigation policy, since the State needs to also create preventive and penal mechanisms for not adhering to it. For instance, Karnataka took an appreciable proactive step in enacting the Karnataka Conduct of Government Litigation Act, 2023, there is no disincentive much less a penal implication if the law is not followed. The mediation process, for the State, should not be an optional pastime but a legislative compulsion with penal implications when in default.

Conclusion

The Mediation Act harbingers a new promise to the dispute resolution space. The State needs to play a proactive role as a resource provider and a passionate participant in the mediation process. The utility disputes involving state instrumentalities need to be brought within the ambit of the law and internal mechanisms established to resolve its internal disputes need to be rejuvenated. The State needs to travel the extra mile to resolve the routine and resolvable litigations of the citizenry by deploying mediation and conciliatory tackles. Resources need to be infused into LSAs and their role as mediation service providers needs a reimagination.