Lok Sabha Question No. 981 (UNSTARRED), answered on 2023-12-08
Subject: Alternative Dispute Resolution System
Ministry: LAW AND JUSTICE
Asked by: Sanjay Bhatia, Anil Firojiya, Durga Das Uikey, Saikia Dilip, Pushpendra Singh Chandel, Prathap Simha, Ranjeetsingh Naik Nimbalkar

## GOVERNMENT OF INDIA MINISTRY OF LAW & JUSTICE DEPARTMENT OF LEGAL AFFAIRS ****

## LOK SABHA

UNSTARRED QUESTION NO. 981 TO BE ANSWERED ON FRIDAY, THE 8th DECEMBER, 2023

## Alternative Dispute Resolution System

981. SHRI SANJAY BHATIA:

SHRI ANIL FIROJIYA:

SHRI DURGA DAS (D.D.) UIKEY:

SHRI DILIP SAIKIA:

SHRI KUNWAR PUSHPENDRA SINGH CHANDEL:

SHRI PRATHAP SIMHA:

SHRI RANJEETSINGH NAIK NIMBALKAR:

Will the Minister of LAW AND JUSTICE be pleased to state:

- (a) the details of initiatives undertaken by the Government in the realm of alternative dispute resolution mechanisms/system over the past decade;
- (b) the key/main provisions of the India International Arbitration Centre Act, 2019 and the Mediation Act, 2023; and
- (c) the evaluation/assessment of the potential impact of these measures and legislations on improving the ease of conducting business and reducing case backlogs in traditional courts?

## ANSWER

## MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF LAW AND JUSTICE; MINISTER OF STATE IN THE MINISTRY OF PARLIAMENTARY AFFAIRS; AND MINISTER OF STATE IN THE MINISTRY OF CULTURE

(SHRI ARJUN RAM MEGHWAL)

****

- (a) During the past decade, the Government of India has taken various initiatives in the realm of Alternative Dispute Resolution (ADR) mechanisms/system. The Government is promoting ADR  mechanisms  including  arbitration  and  mediation  as  these  mechanisms  are  less adversarial and are capable of providing a better substitute to the conventional methods of resolving disputes. Various initiatives have been taken to strengthen these mechanisms and

make them user friendly, cost effective and expeditious. Some of the major initiatives over the years in this regard include:-

The Arbitration and Conciliation Act, 1996 has been progressively amended in the years 2015,  2019  and  2021.  These  amendments  aim  at  ensuring  timely  conclusion  of  arbitration proceedings, neutrality of arbitrators, minimizing judicial intervention in the arbitral process and quick enforcement of arbitral awards. The amendments are further aimed at promoting institutional  arbitration,  updating  the  law  to  reflect  best  global  practices  and  resolve ambiguities  thereby  establishing  an  arbitration  ecosystem  where  arbitral  institutions  can flourish.

The  India  International  Arbitration  Centre  Act,  2019,  was  enacted  to  provide  for  the establishment and incorporation of the India International Arbitration Centre (Centre) for the purpose  of  creating  an  independent,  autonomous  and  world  class  body  for  facilitating institutional arbitration and to declare the Centre to be an institution of national importance. The Centre shall be providing world class arbitration related services at its facilities in a cost effective manner for both domestic and international commercial disputes, including reputed empaneled arbitrators and requisite administrative support for the smooth conduct of arbitral proceedings.

The  Commercial  Courts  Act,  2015  was  amended  in  the  year  2018  to  provide  for  PreInstitution  Mediation  and  Settlement  (PIMS)  mechanism.  Under  this  mechanism,  where  a commercial  dispute  of  specified  value  does  not  contemplate  any  urgent  interim  relief,  the parties have to first exhaust the mandatory remedy of PIMS before approaching the Court. This is aimed at providing an opportunity to the parties to resolve the commercial disputes through mediation.

The  Mediation  Act,  2023,  enacted  recently,  lays  down  the  legislative  framework  for mediation to be adopted by disputing parties, especially institutional mediation where various stakeholders have been identified to establish a robust and efficacious mediation ecosystem in India.

(b) The key/main provisions of the India International Arbitration Centre Act, 2019 inter-alia include  provisions  relating  to  establishment  of  the  Centre  as  an  institute  of  national importance for domestic and international arbitration; composition of the Centre; objects and functions of the Centre; finance accounts and audit of the Centre; setting up a Chamber of Arbitration, which would empanel professional arbitrators at national and international level; setting  up  an  Arbitration  Academy  to  train  arbitrators  in  India,  to  compete  on  par  with reputed global arbitral institutions and power to make rules and regulations for the Centre.

The key/main provisions of the Mediation Act, 2023 inter-alia include provisions relating to voluntary  pre-litigation  mediation  in  matters  of  civil  or  commercial  dispute  before  parties approach a court or Tribunal; matters or disputes not fit for mediation, process of mediation to  be  completed  within  a  maximum  period  of  180  days;  procedure  for  appointment  of mediator and conduct of mediation; functions of Mediation Service Providers and Mediation Institutes; Mediated Settlement Agreement resulting from mediation being final, binding and enforceable in accordance with the provisions of Code of Civil Procedure, 1908, in the same manner  as  if  it  were  a  judgment  or  decree  of  a  Court;  challenge  to Mediated  Settlement Agreement  to  lie on  limited  grounds  of  fraud,  corruption,  impersonation  etc.;  community mediation for reference of disputes with consent of parties which are likely to affect peace, harmony  and  tranquillity  amongst  the  residents  or  families  of  any  area  or  locality;  online mediation;  establishment  of  the  Mediation  Council  of  India  and  power  to  make  rules  and regulations inter-alia for conduct of mediation.

(c)  The basic premise of using ADR mechanisms for resolution of disputes is to reduce the burden on the judiciary and thereby enable timely justice dispensation to the parties. A time line to the conclusion of disputes has been prescribed in the respective Acts. The legislative reforms  with  respect  to  the  Arbitration  and  Conciliation  Act,  1996  have  facilitated  the minimization of court-intervention in arbitration, emergence of pro arbitration judiciary and timely  and  cost  effective  settlement  of  commercial  disputes  thereby  enabling  ease  of conducting  business.  The  Mediation  Act,  2023  is  expected to  be  a  pivotal  legislative intervention  towards  providing  standalone  law  on  mediation  and  enabling  the  growth  of  a culture of amicable settlement of disputes out of court and the outcome being party driven.