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National Law University Odisha: (Semester Vii)

This document provides an analysis of introducing compulsory mediation in the Commercial Courts Act of India. It begins with background on the Commercial Courts Act of 2015 and the 2018 amendment. It discusses the structure and purpose of the Act, including defining commercial disputes. The document then examines pre-institution mediation procedures and the pros and cons. Finally, it proposes introducing compulsory mediation in the Act prior to filing cases in commercial courts to help resolve disputes between parties and better implement the objectives of the Act by easing differences.

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0% found this document useful (0 votes)
200 views

National Law University Odisha: (Semester Vii)

This document provides an analysis of introducing compulsory mediation in the Commercial Courts Act of India. It begins with background on the Commercial Courts Act of 2015 and the 2018 amendment. It discusses the structure and purpose of the Act, including defining commercial disputes. The document then examines pre-institution mediation procedures and the pros and cons. Finally, it proposes introducing compulsory mediation in the Act prior to filing cases in commercial courts to help resolve disputes between parties and better implement the objectives of the Act by easing differences.

Uploaded by

AnanyaSinghal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 16

NATIONAL LAW UNIVERSITY ODISHA

ALTERNATE DISPUTE RESOLUTION


(SEMESTER VII)

TOPIC:
INTRODUCING COMPULSORY MEDIATION IN
COMMERCIAL COURTS ACT – AN ANALYSIS

Submitted to:
Mr. AKASH KUMAR
(Asst. Professor of Law)
MR. ABHAY KUMAR
(Asst. Professor of Law)

Submitted by:
ANANYA SINGHAL (16/BBA/008)
JYOTIRMOY NATH (16/BBA/025)
SREYOSI ROY (16/BBA/045)
INTRODUCING COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT

TABLE OF CONTENTS

STATEMENT OF PURPOSE................................................................................................3

IMPORTANCE OF RESEARCH..........................................................................................4

CHAPTERIZATION...............................................................................................................5

1. THE COMMERCIAL COURTS ACT, 2015................................................................5

BACKGROUND.....................................................................................................................5

STRUCTURE OF THE ACT....................................................................................................6

Commercial Courts (Statistical Data) Rules, 2018........................................................7

PRESENT SCENARIO............................................................................................................7

IMPORTANCE OF THE 2018 AMENDMENT...........................................................................8

2. PRE-INSTITUTION MEDIATION............................................................................10

PROCEDURE FOR INITIATING PRE-INSTITUTION MEDIATION............................................10

THE PROS..........................................................................................................................11

THE CONS.........................................................................................................................12

3. COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT........................13

CONCLUSION.......................................................................................................................16

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INTRODUCING COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT

STATEMENT OF PURPOSE

The purpose of undertaking research on this topic is to examine in a broad way the general
regime of rights and obligations catered to by the Commercial Courts Act, 2015, and the
contours of the mediation process which is one of the methods of Alternate Dispute
Resolution (ADR). In this paper, we will look at the various facets of Commercial Courts
Act and understand the process of Mediation, and how they overlap. We shall be analysing
the purpose and objectives of the Commercial Courts Act and looking at how compulsory
mediation can be used as prior step to approaching the Commercial Courts to ease out the
differences between parties to the suit and be able to better implement the Commercial Courts
Act.

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INTRODUCING COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT

IMPORTANCE OF RESEARCH

Supreme Court in the recent cases1 held that the need for more mediation efforts in the
country is generally felt and noted that “the way the mediation movement is catching up in
this country, there is a dire need to enact an Indian Mediation Act as well.” Acting upon this
note, it held that “we impress upon the government to also consider the feasibility of enacting
an Indian Mediation Act to take care of various aspects of mediation in general.”2

An ‘Indian Mediation Act’ as suggested by the Supreme Court is indeed a promising proposal
for India. Even though various statutes have given the parties the autonomy to get their
disputes resolved via mediation and there exist court-referred as well as private means of
engaging in mediation, there is a scarcity of clear procedural guidance on this aspect. The
Mediation and Conciliation Rules, 2004 are inadequately framed and do not cover the entire
spectrum of the mediation process. Moreover, these rules have been lazily drafted as they
seem to be more or less lifted from the Arbitration and Conciliation Act, 1996. This lends a
great lack of confidence and uncertainty to the mediation process in India. A comprehensive
statute will certainly clear up the muddle.

1
M.R. Krishna Murthi v. The New India Assurance Co. Ltd., Civil Appeal No. 2476-2477 of 2019, order dated
5 March 2019.
2
M. Siddiq (D) v. Mahant Suresh Das, Civil Appeal No. 10866-10867 of 2010, order dated 8 March 2019.

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CHAPTERIZATION

1. THE COMMERCIAL COURTS ACT, 2015

BACKGROUND
The need to set up commercial courts exclusively for quicker dispute resolution was first
raised in the 188th Law commission Report in the year 2003. The motion was passed ‘sua
sponte’ by the Law Commission of India in view of the constant fault-finding by foreign
courts citing sluggish and deferral procedures followed in Courts in India. The Commission
cited ‘doctrine of forum non conveniens’, and was of the view that unnecessary procedural
delay is equivalent to not providing any remedy at all. This led to the introduction of The
Commercial Division of High Courts Bill, 2009 (2009 Bill). 3 However, it was only in 2013
that the 2009 Bill was introduced to the Law Commission and it was not before 2015 that the
Commission’s report on the same was first published.
Meanwhile, a change in government took place and the new government’s primary goal was
to improve “investor confidence” and upgrade India’s position in ‘Doing Business’ report of
the World Bank. Enforcing contracts is one of the indicators for the ease of doing business
index, which studies the time and cost of resolving commercial disputes in the courts of first
instance, and the adoption of good practices to improve the quality of justice.4
Post the 253rd Report of the Law Commission in 2015, The Commercial Courts, Commercial
Divisions, and Appellate Division of High Courts Bill, 2015 (2015 bill) was finally passed on
29th of April, 2015; eventually culminating into The Commercial Courts Act, 2015 (2015
Act).5 This bill had certain key differences as opposed to the 2009 bill. It brought down the
“specified value” for qualifying as a “commercial dispute” from INR 5 crores to INR 1 crore.
Further, it established for the first time Commercial Courts at the district-level (for areas
where the High Courts did not exercise original civil jurisdiction), as the courts of first
instance as an independent system for commercial cases under it. The 2015 bill additionally
set up Commercial Appellate Divisions in each High Court, and abolished a “direct appeal”
to the Supreme Court as provided in the 2009 bill earlier.6
Thus, as can be seen the primary aim of the legislature was to single out “high value
commercial disputes”. Nonetheless, in 2018, an amendment to the Act was put forth in the

3
The Commercial Division of High Courts Bill 2009.
4
Jauhar AV Misra, ‘Commercial Courts Act: An Empirical Evaluation’ (VIDHI Center for Legal Policy).
5
The Commercial Courts Act, 2015.
6
ibid.

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INTRODUCING COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT

Parliament Commercial Courts, Commercial Division and Commercial Appellate Division of


High Courts (Amendment) Ordinance, 2018 (Commercial Courts Ordinance, 2018), 7 ‘2018
amendment’, which inter alia brought down the least limit of specified value of INR 1 crore
to INR 3 lakhs. The reason cited for the same was to attract more commercial cases within
the Act’s ambit. Another reason for the same was to ensure that smaller commercial cases
could avail the same benefit as accorded to bigger commercial cases.
STRUCTURE OF THE ACT
Under s.2(c) of the 2015 Act, a “commercial dispute” is defined to include various kinds of
transactions ranging from ordinary to commercial to disputes arising out of intellectual
property infringement. Further, under s.2(c)(xxii) the Government is empowered to list any
other disputes it considers valid under the same.
The 2018 Amendment made certain major changes to the 2015 Act, mostly to sections 3 and
4 of the Act with a view to accommodate commercial courts and appellate platforms at the
district-level. Further, it diverged section 13 with regard to the process of appeal, and
provided for separate Commercial Appellate Court at the District Court and the Commercial
Appellate Division at the High Court.
The amendment also brought down the pecuniary limit to 3 lakhs from the earlier limit of 1
crore.
In order to obtain “time-bound” and “streamlined adjudication” in case of commercial
disputes, the Civil Procedure Code, 1908 (CPC)8, underwent certain amendments. The
following are some processes included in the Act:
1. Case Management Hearing- Under Order XVA of CPC, this provision has been
given which essentially means that the judge and the litigants should decide on a
mutually favourable plan in order ensure a smooth process bound by time. the Act
provides that such a hearing is mandatory and one can not normally adjourn the same
and after conducting the CMH once, all arguments shall be concluded within 6 months.
Further, such CMHs shall be held “during trial” and thus ensures accelerated disposal
of the cases.
2. Summary Judgement- In this, the Court requires either of the parties to make a
“summary disposal” of the suit and in case the facts favour any one side significantly
over the other the Court may rule in his favour thus reducing the elaborate evidence-
gathering trial procedure.
7
Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment)
Ordinance 2018.
8
The Civil Procedure Code 1908.

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3. No appeals against interim order- The law further provides that there shall be no
appeals against an interim order in a commercial dispute and an appeal can only be
made against the final decree. However, as per Article 227 of the Constitution, a High
Court can exercise superintendence powers over all courts and tribunals under its
territorial jurisdiction.
4. Pre-Institution Mediation- This provision became mandatory post the 2018
amendment. According to this, the parties should mandatorily try mediating and settle
the dispute out of court before approaching the traditional court of law. This has been
incorporated with the sole purpose of disposing off cases on time, saving cost of
litigation as well as reducing the burden on the traditional courts.

Additionally, the 2015 Act specifies that in case where conflict arises between the provisions
of CPC as per the amendment made by this Act and the amended provisions of CPC as done
by state, the former shall prevail.9
Commercial Courts (Statistical Data) Rules, 2018
S.17 was incorporated in the 2015 Act with the objective of systematically collecting and
publishing data in an organised format that would help review the performance of the courts
established under the Act. This section was aimed to boost the trust of the litigants in the
adjudication process as well as ensure transparency in the process. Further, in 2018 to
supplement the same, Commercial Courts (Statistical Data) Rules, 2018 (Statistical Data
Rules)10 was introduced. Under this, High Courts are entrusted with maintaining and
publishing statistical data with respect to the number of suits, applications, appeals or writ
petitions filed under the Act. This data is required to be published on the websites of the
respective High Courts on the 10th of every month.
PRESENT SCENARIO
Presently, in practice, however, it is seen that most High Courts have not complied with the
provision under S.17 while some have made ‘partial disclosure’ under the Act according to
studies. It is important to note, that the Law Commission had pointed out the fact that there
exists a lack of ample and accurate judicial statistical information. The purpose of
incorporating S.17 was to correct this trend and record the time required in disposing of
cases. However, with the Courts not complying with the above provision and some even
failing to not just publish data on their websites but also to collect it is quite dissatisfactory.

9
R Associates, 'What Does The Commercial Courts Act, 2015 Do?' (Legally India, 2019)
<https://www.legallyindia.com/views/entry/commercial-courts-act-2015f> accessed 21 August 2019.
10
Commercial Courts (Statistical Data) Rules 2018.

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INTRODUCING COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT

This in turn hinders and restricts the evaluation of the degree of effectiveness of the Act.
Further, the number of Courts designated have absolutely no co-relation with the pendency of
cases in those courts. For instance, in Himachal Pradesh 2 judges were assigned to form the
Commercial Division for dealing with roughly 125 pending disputes, while 6 judges or 3
division-benches were assigned at Commercial Appellate Division which would obviously
have to deal with lesser number of cases sent for appeal only. Additionally, the Act clearly
specifies that judges dealing in such commercial disputes at the Commercial Courts or
Divisions or Appellate Divisions level, ‘must have experience in dealing with commercial
litigation’ and must possess special skills required for the same. However, in practice, this is
not always the case. For instance, as per the information supplied by the Uttarakhand High
Court, the judge designated to Dehradun Commercial Courts was actually a judge at the
family court of Pauri district of Uttarakhand. Thus, tracing back we can see that the
legislative intent while formulating the Act was to dispose of high value commercial cases
and in order to attain the same goal we require judges who are solely proficient at disposing
off commercial cases. Further, in order to reduce the pendency of cases and boost the volume
of commercial litigation, we need more than one commercial court at the district level. When
judges are designated from the existing pool of judges instead of appointing new judges, it
affects the pendency of cases which are non-commercial in nature as well, since it gets added
on to their existing work-load.
IMPORTANCE OF THE 2018 AMENDMENT
In short, it could be seen that the government’s ulterior objective in formulating both the
2015 Act and 2018 Amendment was to turn India into an “investment destination” by
upgrading its rank in the Ease of Doing Business Index. In this process, the government has
made a foreign index, which only focuses on two cities, i.e., Delhi and Bombay, as the
fulcrum of a pan-Indian legislation. Thus, though the short-term goals of improving India’s
image has been attained, it failed to work on the actual procedural irregularities existing
within the judicial system.
The 2018 Amendment to the 2015 Act has thus, correctly inserted S.12A, which
contemplates compulsory ‘pre-institution mediation and settlement’ before initiating any suit
in a Court of law. Judicial mediation programmes can help lower backlogs and delay and
relieve judges of a huge portion of their work-load as it creates a win-win situation for both
the parties, who are in essence the actual decision makers in a mediation process, the
mediator being merely a facilitator. Thus, the most fundamental change brought about by The
Commercial Courts Act, 2015, is the change in perception that mediation should offer an

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INTRODUCING COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT

“effective intervention” before disputes culminate into the legal character of a Court case,
marking a paradigm shift from the process of “adjudication” to “settlement”.

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INTRODUCING COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT

2. PRE-INSTITUTION MEDIATION

Section 12A of the Commercial Courts Act provides parties with an alternative means to
resolve disputes through discussions and negotiations with the help of a mediator. The
provision states that a plaintiff must initiate mediation before filing a suit, with a limited
carve out for suits filed with applications for urgent interim relief.
Courts in India frequently refer ongoing patent infringement suits to mediation when there
exists a possibility for the parties to arrive at a settlement. However, in the absence of a law
imposing a time limit for completion of such court-referred mediations, in many cases,
mediations of patent infringement suits go on for months with no resolution. Mediation under
the Commercial Courts Act bridges this gap by making mediation a time-bound process. In
India, most IP infringement suits are filed with an application seeking a preliminary
injunction. This would qualify as “urgent interim relief” under Section 12A and initiation of
mediation prior to filing of the suit would not be mandatory. However, in disputes where a
patentee is not seeking a preliminary injunction and wants to use litigation as a tool to
negotiate terms for granting limited rights to their IP, pre-initiation mediation is a viable
option.
PROCEDURE FOR INITIATING PRE-INSTITUTION MEDIATION
The procedure to be followed in such mediation proceedings is set out in the Commercial
Courts (Pre-Institution Mediation and Settlement) Rules, 2018 (“Rules”). As per the Rules,
the plaintiff must file an application with the State Legal Services Authority or the District
Legal Services Authority constituted under the Legal Services Authorities Act, 1987
(“Authority”) to initiate mediation. Once an application is received, the Authority will issue
notice to the opposing party to appear within 10 days of receipt of notice and give consent to
participate in the mediation proceedings. The Rules provide for issuance of a final notice if
the Authority does not receive a response within 10 days of the initial notice. If the opposing
party fails to appear following the final notice or refuses to participate in the mediation
proceedings, the Authority will treat the mediation process as a non-starter and prepare a
report to that effect. If the opposing party agrees to participate, then the mediation process
begins. Following negotiations and meetings with the mediator, if the parties arrive at a
settlement, it will be recorded in a settlement agreement.

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THE PROS
Instituting pre-initiation mediation holds many advantages over out-of-court interparty
negotiations:
1. Time and cost-effective: Pre-institution mediation initiated under the Commercial Courts
Act must be completed within a period of three months from the date of application made by
the plaintiff, with a possible extension of two months with the consent of the parties. The
time bound process saves time and costs incurred by the parties involved. A recent example
of effective use of this mechanism is the mediation instituted by Nokia to negotiate licenses
for its standard-essential patents relating to technology used in handsets. The mediation
procedure was reportedly completed within a time span of 8 months and Nokia was able to
resolve the dispute without filing a suit.
2. Patent litigations in India are known to be lengthy: According to one report from 2017,
a total of 143 patent infringement suits were filed between 2005 and 2015 in the Delhi High
Court, Bombay High Court, Madras High Court and Calcutta High Court out of which
judgments were delivered in only five cases after completion of trial proceedings. Exploring
the possibility of a settlement before filing a suit could avoid such lengthy litigation.
3. Confidentiality: Confidentiality of negotiations with a potential licensee is key to prevent
disclosure of important business strategies to competitors. The Rules ensure confidentiality
by providing that the mediator, the parties, and their counsels must maintain confidentiality
about the mediation. Stenographic or audio or video recording of the mediation proceedings
is prohibited under the Rules.
4. No threat of a validity challenge: A patentee must always assess the strength of their
patent before filing a suit since a defendant can challenge the validity of a patent. Even at the
interim stage, a defendant can avoid an injunction being granted against them by raising a
credible challenge to the validity of a patent. When the patent is susceptible to a challenge,
pre-initiation mediation can be a good choice to negotiate a license without the threat of a
validity challenge.
5. Assessing the strength of the opponent’s case: Through negotiations in a mediation
proceeding, a patentee can get a sense of the opponent’s strengths and weaknesses and
prepare for the possibility of contesting a suit. The opponent might reveal that their product is
covered by another patent or is based on technology available in the public domain. The
patentee then has time to assess the likelihood of its success in a suit. There is no bar on
seeking interim relief if a suit is filed in the event of a failure of mediation proceedings.

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Depending on the patentee’s assessment of its case, a patentee may still seek an interim
injunction even after trying mediation.
6. Negotiating in good faith: Licensee negotiations between parties can often go on for
months. During this time, a potential licensee may at time engage in infringing acts. The
threat of possible litigation that could result due to an unsuccessful mediation under the
Commercial Courts Act would possibly motivate a potential infringer/ licensee to negotiate
license terms in good faith. The Rules also provide that parties shall participate in the
mediation process in good faith with an intention to settle the dispute.

THE CONS
Section 12A imposes a mandatory obligation upon the plaintiff to initiate mediation.
However, the Rules give the opposing party the right to refuse to participate in the mediation
proceedings. If the opposing party does not appear, it will also result in the mediation
proceedings being deemed a non-starter. This optional approach arguably results in the
provision lacking teeth.

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INTRODUCING COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT

3. COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT

Chapter IIIA titled Pre-Institution Mediation and Settlement was introduced in 2018 by way
of Amendment to the Commercial Courts, Commercial Division and Commercial Appellate
Division of High Courts Act, 2015 (‘the Act’) and was made retrospectively applicable from
03.05.2018. Section 12A was introduced via Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts (Amendment) Bill, 2018 in the parent
Commercial Courts Act, 2015, which requires that the plaintiff has to compulsorily exhaust
the remedy of mediation before he can file a suit as per the Commercial Courts (Pre-
Institution Mediation and Settlement) Rules, 2018, unless any urgent interim relief is to be
granted. Keeping in mind the fact that mediation is hardly given its due recognition and is not
a widely used dispute resolution mechanism in India, this introduction of a compulsory prior
mediation can be the much-needed impetus which makes mediation a viable form of dispute
resolution. Since commercial disputes comprise a substantial number of disputes between
Indian parties, opting for Mediation can really help in quicker resolution of commercial
disputes. Mediation will be cost-effective, maintain confidentiality of the parties and a
solution will be negotiated in good faith.11
The model of going for mediation seems to be modelled after the highly successful model
introduced in Italy and Turkey. Under this model, the parties have to attend a session with a
mediator who explains them to the process of mediation. This allows the parties to make a
well-informed decision if they want to pursue litigation or whether they should try mediation
first.
Throughout the process, voluntariness to take part in mediation is maintained and the Rules
expressly refer to the principles of self-determination and voluntariness. Any mediated
settlement assumes the status of a deemed arbitral award under section 30(4) of the
Arbitration and Conciliation Act, 1996 and can accordingly be enforced as an arbitral award.
Although this process of ensuring mediation as a first step has been implemented, the actual
effectiveness of this model depends on how the entire process shall be dealt with. Under the
Commercial Courts Act, 2015, the State Authorities and the District Authorities, constituted
under the Legal Services Authorities Act, 1987, have been authorised to conduct the
mediation for the parties to a commercial dispute. The Authorities are required to ensure the
11
Aparna Gaur and Arushi Jain, ‘Pre-Institution Mediation Under the Indian Commercial Courts Act: A
Strategic Advantage’ (Nishith Desai, May 2019) <http://www.nishithdesai.com/fileadmin/user_upload/
pdfs/NDA%20In%20The%20Media/News
%20Articles/190506_A_Pre_Institution_Mediation_Under_the_Indian_Commercial_Courts_Act.pdf> accessed
24 August 2019.

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INTRODUCING COMPULSORY MEDIATION IN COMMERCIAL COURTS ACT

completion of the mediation process within a period of three months from the date of
application made by the plaintiff. If the parties come to a settlement through the mediation
process, then the settlement shall have the same status and effect as if it is an arbitral award
on agreed terms under S.30(4) of the Arbitration and Conciliation Act, 1996. 12 Now, we
know that object of the Legal Services Authorities Act is to ‘provide free and competent legal
services to the weaker sections of the society to ensure that opportunities for securing justice
are not denied to any citizen by reason of economic or other disabilities’. The Legal Service
Authorities are involved in legal services to the vulnerable sections of the society who cannot
afford lawyers, and they also hold Lok Adalats (people’s courts) for settlement of disputes.
It is not a big secret that with so many people in India who cannot legal services, the Legal
Service Authorities are mostly catering to ensure justice for this section of the society, and as
a result is heavily overburdened with work. Their ability to take on this additional
responsibility is highly questionable, especially in light of the fact that the new Commercial
Courts, Commercial Division and Commercial Appellate Division of High Courts
(Amendment) Bill, 2018 has reduced the required monetary threshold of a suit from one crore
(Indian Rupees) to three lakhs (Indian rupees). Furthermore, the broad definition of what
constitutes a ‘commercial dispute’ under section 2(1)(c) of the Act means that many suits can
be filed under the Commercial Courts Act, and for each and every case the Legal Services
Authority have to facilitate mediation. The Legal Services Authority are quite understaffed in
proportion to the new number of cases they will have to deal with, and they will not be able
to dispose of so many cases unless they compromise on the justice that is being administered
to the poorer sections of the society, or the quality of mediation they are offering to the
parties to the commercial disputes. This will completely undermine the purpose of the
allotting them the work of mediating and also not make a good case for mediation.
Furthermore, not only are there administrative problems plaguing the LSA, but the persons in
Legal Service Authorities are also hugely lacking in experience and expertise to mediate
disputes related to commercial matters. The LSA Authorities have mostly dealt with labour,
family and insurance matters and, this will be a completely new field where they will be
expected to mediate. It is imperative that the Authorities involved in mediating commercial
disputes undergo prior training as commercial disputes tend to be technical in nature and a
well-informed mediator will be better able to understand the problems and ensure effective
dialogue and a workable settlement. This is all the more needed considering the fact that most
12
Sohini Mandal, ‘Mandatory Pre-Institution Mediation: Commercial Courts’ (Mondaq, August 2018)
<http://www.mondaq.com/india/x/727214/Arbitration+Dispute+Resolution/Mandatory+PreInstitution+Mediatio
n+Commercial+Courts> accessed 25 August 2019.

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people are not aware of mediation and they will look to the mediator for guidance during the
process. A skilled mediator will not only ensure proper facilitation of settlement of disputes,
but he will also instil confidence in the mediation process.
We have to understand that if we are trying to replicate the successful mediation model of
Turkey and Italy in India, we also have to look to at the prior steps taken by those countries.
To ensure successful implementation of pre-institution mediation in the respective countries,
these countries had invested in resource-building prior to their respective pre-institution
mediation reforms, which have played a pivotal role in the success of the reforms. India’s
mediation machinery is minimal – there is no pool of certified accredited mediators, there is
no central statute governing mediation and the opportunities to be trained are limited. It is
imperative that India designates external institution and centres dedicated to Alternate
Dispute Resolution as these institutions have qualified mediators who are more likely to have
experience in dealing with cases which are commercial in nature.
Further, it is to be noted that when Section 12A talks about ‘urgent interim relief’ which will
excuse parties from going for compulsory pre-mediation. Unfortunately, neither the Bill nor
the Act gives us clues as to what can qualify as ‘urgent’ interim relief, and this loophole can
be used by parties to dodge the mediation process or simply delay the entire process, thereby
defeating the purpose of this recent inclusion in the Act. In addition, it is not clear if pursuit
of the urgent interim relief temporarily delays the mediation or eliminates the mandatory
requirement to mediate altogether. There are other issues such as whether the timeline of
three months for mediation can be extended and will parties participate seriously in the
mediation process, which will finally go on to decide how effective this amendment really
will be.

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CONCLUSION

India currently faces a lack of not merely a dedicated mediation statute, but also mediation
focussed institutions with trained professionals as well as public awareness on the meaning
and significance of the mediation process.
With the option of time-bound pre-institution mediation, it is now possible for patentees to
target infringers in India and prevent infringement without spending years in litigation.
Weighing the pros and cons of the situation, patent holders can decide to press for immediate
relief in a suit or settle the matter using pre-institution mediation.
While urgent reforms are required to promote mediation in India, and in particular
commercial mediation, any such reform requires an enabling environment to succeed, which
India currently lacks. Allocation of the responsibility to the LSA Authorities reflects short-
sightedness and lack of careful thought on the part of the legislature. Now that only the
President’s assent is required to make the Bill into law (which will almost certainly be given),
it remains to be seen how this reform will work in practice. A silver lining, perhaps, is that
this Bill may hopefully generate discussion and awareness about commercial mediation,
which could lead to more sensible initiatives and reforms in the future.

ALTERNATIVE DISPUTE RESOLUTION PAGE | 16

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