Author Name:   Sumer

Mediation in Civil Procedure Code needs to be implemented on more specific stage of the suit for better results.

Mediation in Civil Proceedings

In civil proceedings, the Court must refer the parties for mediation on appropriate stage. The success of any of the modes of Alternative Dispute Resolution mechanism is subject to the selection of appropriate cases and its reference on suitable stage. Power of referral judges to refer the parties to any of the modes Alternative Dispute Resolution is derived from Code of Civil Procedure. Section 89 is the substantive as well as enabling provision, which empowers the Court for such reference, Whereas Order X rule 1-A, 1-B and 1-C are procedural provisions.

The mediation having better results, once it is introduced in proceedings afterwards the completion of pleadings and before framing of the issues. The reference is obligatory on the account of the Court after recording admission or denial of documents. The framing of issues deemed to be the beginning of a trial, which restrains the scope of amicable settlement between the parties. However the Court is at discretion to refer the parties to Mediation at any stage whenever he deems fit.

Researcher, through this paper, discovers the most advantageous juncture of mediation in civil proceedings could be traced with reference to stages of civil suits laid down under Code of Civil Procedure, 1908. The paper possesses the scope under the theme of ADR Mechanisms and role of Judiciary. The nature of the research paper is descriptive and accommodated with some of the judicial trends with reference to various case laws.

Alternative Dispute Resolution:-

Alternative Dispute Resolution (hereinafter referred as ADR) is the mechanism of settlement of dispute outside the Court. Some disputes can be better resolved by agreement rather than Court decision. The emergence of ADR process has also been associated with real problems of delays in the Court System. The parties referred for ADR reach to an amicable settlement of disputes with the various modes prescribed. This concept is comparatively advantageous rather to seek the remedy from the Courts.

Mediation:-
Mediation is one of the recognized mode of ADR. Settlement by Mediation means the process by which a mediator appointed by the parties or by the Court as the case may be, mediates the dispute between the parties to the suit by the application of the provisions of Mediation Rules, 2006 in Part II, and in particular, by facilitating discussion between parties directly or by communicating with each other through the Mediator, by assisting parties in identifying issues, reducing misunderstandings, clarifying priorities, exploring areas of compromise, generating options in an attempt to solve the dispute and emphasizing that it is the parties own responsibility for making decision which affect them.

Reference to Mediation:-

Ø Enabling Provision:-

A) Sec 89 of Code of Civil Procedure:-

(1) Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observation of the parties, the court may reformulate the terms of a possible settlement and refer the same for (a) arbitration;

(b) conciliation

(c) judicial settlement including settlement through Lok Adalat; or

(d) mediation.

(2) Where a dispute had been referred-

(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act.

(b) to Lok Adalat, the court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of section 20 of the Legal Services Authority Act, 1987 and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;

(c) for judicial settlement, the court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;

(d) for mediation, the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.]

Order X

Rule 1A:-

1A. Direction of the court to opt for any one mode of alternative dispute resolution. - After recording the admissions and denials, the Court shall direct the parties to the suit to opt either mode of the settlement outside the court as specified in sub-section (1) of section 89. On the option of the parties, the court shall fix the date of appearance before such forum or authority as may be opted by the parties.

Rule 1B:-

1B. Appearance before the conciliatory forum or authority.- Where a suit is referred under rule 1A, the parties shall appear before such forum or authority for conciliation of the suit

Rule 1C:-

1C. Appearance before the Court consequent to the failure of efforts of conciliation.- Where a suit is referred under rule 1A and the presiding officer of conciliation forum or authority is satisfied that it would not be proper in the interest of justice to proceed with the matter further, then, it shall refer the matter again to the court and direct the parties to appear before the court on the date fixed by it.

Overview of Section 89:-

Section 89 of the Code of Civil Procedure does not create an obligation for the Court to necessarily conduct arbitration, but merely permits the Court to refer the dispute to arbitration or conciliation etc., where it is satisfied with respect to a reference to the dispute in a pending suit that there is a possibility of settlement of the same by way of arbitration or conciliation.

However, The Government of India or any party can create a compulsion or obligation on the Civil Court to necessarily arbitrate the matter between the parties depending upon the nature of the agreement entered by the parties. The fact that Government is one of the parties to the arbitration agreement makes no difference. The mandate under Section 89 ought to be made to settle the matter and every endeavor should be made for amicable settlement. It appears from Section 89(1) of the code of Civil Procedure that a duty is cast upon the court to refer the dispute either by way of arbitration, conciliation, judicial settlement including settlement through Lok Adalats or mediation if it appears that there are elements of settlement.

Ø Appropriate Cases:-

No absolute right is vested in a litigant to get his dispute referred to mediation. Also it is not every case, which qualifies for reference to mediation. The referral court has to take into consideration various factors such as nature of dispute, existence of element of settlement between the parties, conduct of the parties during trial etc. The cases are not to be referred to mediation in a perfunctory manner, which would only encourage the scrupulous litigants to misuse this laudatory process and cause more delay in disposal of the case.

It has been held in Dayawati vs Yogesh Kumar Gosain read with Afcons Infrastructure

Limited and another V Cherian Varkey Constructions Company Private Limited-

15. In civil cases, Section 89 of Code of Civil Procedure provides mediation as one of the Alternative Disputes Resolution mechanisms, for settling the issues between the parties in an efficacious and expeditious manner. In what can be termed the locus classicus on the subject Afcons Infrastructure Limited and another V Cherian Varkey Constructions Company Private Limited, (2010) 8 SCC 24, the Hon'ble Supreme Court has laid down an illustrative category of cases where mediation is normally not permissible and those where the same is permissible as a form of dispute resolution :-

27. The following categories of cases are normally considered to be not suitable for ADR process having regard to their nature:
(i) Representative suits under Order 1 Rule 8 CPC which involve public interest or interest of numerous persons who are not parties before the court.
(ii) Disputes relating to election to public offices (as contrasted from disputes between two groups trying to get control over the management of societies, clubs, association, etc.).
(iii) Cases involving grant of authority by the court after enquiry, as for example, suits for grant of probate or letters of administration.
(iv) Cases involving serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coercion, etc.
(v) Cases requiring protection of courts, as for example, claims against minors, deities and mentally challenged and suits for declaration of title against the Government.
(vi) Cases involving prosecution for criminal offences.

"28. all other suits and cases of civil nature in particular the following categories of cases (whether pending in civil courts or other special tribunals/forums) are normally suitable for ADR processes:

(i) All cases relating to trade, commerce and contracts, including disputes arising out of contracts. (Including all money claims); disputes relating to specific performance;
(ii) All cases arising from strained or soured relationships, including disputes relating to matrimonial causes, maintenance, custody of children;
(iii) All cases where there is a need for continuation of the pre-existing relationship in spite of the disputes, including disputes between neighbours (relating to easementary rights, encroachments, nuisance, etc.);
(iv) All cases relating to tortious liability, including claims for compensation in motor accidents/other accidents; and
(v) All consumer disputes, including disputes where a trader/supplier/manufacturer/service provider is keen to maintain his business/professional reputation and credibility or product popularity.

Stages of the Civil Suit:-

Table A

Stages of and Effect of Reference:-

Neither Section 89 nor the Afcons Infrastructure Ltd. Vs. Cherian Varkey Construction Co. (P) Ltd ((2010) 8 SCC 24) case imposes a complete restriction regarding the stage at any which, ADR mechanism is to be adopted.

1. Reference before completion of pleadings.

As the case is not particularly before the Court, the role of Advocates of the parties arises as they can mediate between the parties at their chambers. The mediation by the Advocates will lead to avoid the institution of the suit before Court of law and the parties will be able to reach at amicable settlement with all the benefits of ADR mechanism.

2. Reference between completion of pleadings and before framing of issues

(Most appropriate stage):-
This is the most appropriate stage to refer the parties to any of the modes of the ADR especially Mediation. The Hon'ble Supreme Court in Afcons case had laid down the appropriate stage at which the matter is to be referred for mediation. It was held that in civil suits. It was held that in civil suits, the appropriate stage would be after completion of pleadings. However, if for any reason, the court had missed the opportunity to consider and refer the matter to ADR process, nothing prevents the court from resorting to Section 89, even after framing issues. But once evidence is commenced, the court will be reluctant to refer the matter to ADR process lest it may become a tool for protracting the trial.

3. Reference after framing of issues.

Nothing prevents the court from resorting to Section 89, even after framing issues. It appears that decree has reached its last stage of finality. Settlement through mediation, at least on certain aspects, even in a post decree scenario, is not barred. Section 89 C.P.C. empowers court to adopt the Alternate Dispute Resolution mechanism at any stage and does not prohibit a mediation post decree, and even at execution stage.

Probably, the lapse of the time, the long wait for a decree and dispute having been finally adjudicated, declared and thereby respective rights of the parties stand crystallized, may prompt parties to reach the final resolution of the dispute, in a more meaningful and pragmatic manner, having regard to realities, which may even help to heal the wounds, if any, caused in the process of litigation. Hence the doors of the mediation should be kept open, till decree is finally satisfied or becomes non executable, subject to above condition.

End-Notes

# Sutlej Agriculture Pvt. Ltd. & Ors vs Yes Bank Ltd on 24 October, 2011 (Para 3)
# Dayawati vs Yogesh Kumar Gosain on 13 January, 2016 (Para No 15)
# Afcons Infrastructure Limited and another V Cherian Varkey Constructions Company Private Limited, (2010) 8 SCC 24, (Para No. 27 and 28)
# Revision vs Swami Prakasananda and Others, held by Kerala High Court.on 12 November, 2013.

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