ADR UNCITRAL Model Law on International Commercial Mediation (2002, Amended in 2018) Constitutional and Legislative Framework of Mediation

UNCITRAL Model Law on International Commercial Mediation (2002, Amended in 2018) Constitutional and Legislative Framework of Mediation in India Mediation, as a structured process, is divided into distinct phases, including preparation,
opening statements, exploration of issues, negotiation of settlements, and the conclusion Effective mediation requires mastery of decision-making techniques, ethical guidelines,
Tuesday, 1 October 2024 1:33 PM The United Nations Commission on International Trade Law (UNCITRAL) created the Model Law on International Commercial Conciliation (2002) to assist states in developing their domestic mediation frameworks. It was later The integration of mediation into India’s legal system reflects the commitment to with a formal agreement. The process is designed to foster communication, cooperation, and practical skills. Here’s a concise breakdown:
amended in 2018 to reflect evolving mediation practices and to incorporate enforceability provisions aligned with the Singapore Convention. ensuring accessible, timely, and affordable justice for all. Its foundation lies in the and mutually acceptable resolutions, as opposed to adversarial litigation.
constitutional principles of equality, access to justice, and judicial efficiency, 1. Decision-Making and Problem-Solving
1. Ancient India: The concept of mediation was inherent in the traditional justice Key Provisions of the Model Law supplemented by specific legislative frameworks to institutionalize and operationalize 1. Stages of Mediation
delivery systems, such as the Panchayat system, which emphasized amicable settlements mediation in diverse contexts. • Identifying Interests: Mediators uncover the underlying interests behind
1. Definition of Mediation (Article 1):
under the guidance of elders. The mediation process is typically divided into several key stages, each of which involves positions to foster creative solutions (Fisher, Ury & Patton, 2011). For example,
• Mediation (termed as “conciliation” in the 2002 version) is defined as a process where a neutral third party facilitates the amicable settlement of disputes without adjudicative authority. Constitutional Principles Supporting Mediation specific steps: understanding a party’s broader business needs can lead to mutually beneficial
2. Roman Law: Early Roman jurisprudence recognized forms of mediation in dispute
resolutions.
resolution, where mediators (intercessores) facilitated reconciliation. • The process is flexible and allows the mediator to assist parties in reaching a mutually acceptable resolution.
1. Article 21: Right to Life and Personal Liberty Stage 1: Initial Preparation • Generating Options: Mediators facilitate brainstorming, offering multiple
3. Common Law Influence: Mediation evolved as an alternative to adversarial 2. International Commercial Dispute (Article 1):
• The right to a speedy trial, an implicit guarantee under Article 21, is foundational • Role of the Mediator: The mediator’s role begins well before the formal solutions and helping parties consider alternatives (Moffitt & Lazarus, 2003).
litigation in English common law, with a focus on settlement outside courts to save time
• A dispute qualifies as “international” if: to mediation. session. This involves gathering information from the parties about their issues,
and costs.
expectations, and the context of the dispute. The mediator may set the ground rules for 2. Ethical Guidelines
4. Modern Codification: Statutes such as the Arbitration and Conciliation Act, 1996, • The parties’ places of business are in different states, or • In Hussainara Khatoon v. State of Bihar (1979), the Supreme Court emphasized
behavior and confidentiality and explain the mediation process to the parties.
that delays in justice equate to its denial, making mechanisms like mediation • Neutrality: Mediators must be impartial, ensuring fair treatment for both
and the provisions under Section 89 of the Code of Civil Procedure, 1908, have • The dispute involves a transaction connected with more than one country. essential for timely resolution of disputes. • Pre-Mediation Communication: In some cases, the mediator may meet parties and fostering a balanced process (International Mediation Institute (IMI),
institutionalized mediation in India’s legal framework.
• It is applicable to commercial disputes but may extend to other categories if agreed by the parties. individually with each party (known as caucusing) to better understand their concerns and Standards of Practice).
2. Article 14: Right to Equality clarify what they hope to achieve through the mediation.
3. Commencement of Mediation (Article 4): • Confidentiality: Maintaining confidentiality builds trust, encouraging open
• Mediation supports equal access to justice by creating a participatory and dialogue. Legal frameworks, like those in the ABA Model Standards of Conduct, ensure
Stage 2: Opening Statements
• Mediation proceedings commence on the date the parties agree to mediate. equitable process where disputants can resolve conflicts without the formalities of that information shared during mediation cannot be disclosed without consent.
1. Voluntariness: Mediation is a consensual process where parties willingly participate.
litigation. • Setting the Tone: The mediator opens the session, introduces the parties,
• Parties may withdraw at any time, maintaining its voluntary nature.
• Case Reference: Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) and explains the process again. This is an important step in creating a safe and respectful 3. Practical Skills Development
Ltd. [(2010) 8 SCC 24], where the Supreme Court emphasized the importance of voluntary 4. Role of the Mediator (Article 5): 3. Article 39A: Directive Principles of State Policy environment where each party feels heard.
participation. • Role-Playing: Through role-playing exercises, mediators practice conflict
• The mediator has no authority to impose a solution and must remain impartial. • Article 39A calls for equal justice and free legal aid, mandating the state to ensure • Party Statements: Each party is given the opportunity to make an opening resolution in a controlled setting, honing their ability to manage disputes effectively
2. Neutrality of the Mediator: The mediator must act as an impartial facilitator without alternative and cost-effective dispute resolution mechanisms. Lok Adalats and statement, outlining their perspective on the dispute. This stage serves to give each party (Goldberger, 2001).
• Parties retain control over the outcome, emphasizing party autonomy. mandatory pre-litigation mediation under certain statutes are manifestations of this the chance to express their grievances and desired outcomes without interruptions.
imposing decisions.
constitutional directive. • Case Studies: Reviewing real-world cases helps mediators apply theoretical
5. Confidentiality (Article 10):
3. Confidentiality: Mediation proceedings are privileged, as recognized in Section 75 of Stage 3: Exploration of Issues decision-making techniques, enhancing their understanding of mediation dynamics
the Arbitration and Conciliation Act, 1996. • Mediation proceedings are confidential unless disclosure is required by law or agreed upon by the parties. 4. Judicial Efficiency and Separation of Powers (Moore, 2014).
• Identifying Interests: The mediator guides the parties in identifying the core
4. Enforceability of Agreements: Settlements achieved in mediation are enforceable as • Statements made during mediation cannot be used as evidence in judicial or arbitral proceedings. • Mediation aids the judiciary by reducing case backlogs, ensuring that courts focus issues and underlying interests, rather than just the positions each side initially holds. The 4. Maintaining Confidentiality
decrees under Section 74 of the Arbitration and Conciliation Act, 1996, or by courts on complex cases requiring adjudication. This aligns with the principle of separation goal is to understand the why behind each party’s stance.
6. Termination of Mediation (Article 11): Mediation practices vary across jurisdictions internationally and within India, influenced by local legal systems, cultural values, and institutional support.
under Section 89 of the CPC. of powers, wherein the judiciary delegates suitable disputes to mediation or ADR • Building Trust: Confidentiality fosters a safe environment for open
Below is an examination of how mediation processes differ globally and in India: • Clarifying Positions: The mediator helps the parties reframe their positions
• Mediation terminates upon: channels. communication and encourages honest exchanges, crucial for finding solutions (IMI, Code
5. Focus on Interests, Not Positions: Mediation emphasizes reconciling underlying into interests, ensuring that they understand each other’s needs, fears, and desires. This of Professional Conduct).
interests rather than rigid legal rights. • The signing of a settlement agreement, stage encourages dialogue, clarification, and information exchange.
United States: • Legal Framework: In jurisdictions like India, confidentiality is legally
• A written declaration by the mediator or parties, or Stage 4: Negotiation and Settlement mandated, ensuring that information shared during mediation remains protected (Indian
• Mediation is often voluntary, with some jurisdictions mandating it in certain disputes like family law and labor disputes. For instance, Online Dispute Resolution (ODR): A Detailed Overview
Mediation Act, 2023).
• Withdrawal by any party. federal courts require mediation in some cases, particularly for disputes between large entities or in complex commercial matters. • Brainstorming Solutions: Once the issues are explored, the mediator
Online Dispute Resolution (ODR) refers to the use of technology to facilitate the facilitates brainstorming potential solutions, encouraging creative problem-solving. The
1. Facilitative Theory: The mediator facilitates dialogue without suggesting solutions, 7. Enforceability of Settlement Agreements (Article 14 & 18): • The Uniform Mediation Act (UMA) has been adopted by several U.S. states to standardize mediation procedures, ensuring consistent In summary, effective mediation involves a blend of strategic decision-making, adherence
resolution of disputes, typically through platforms that enable negotiation, mediation, or mediator helps the parties evaluate different options based on mutual interests and
enabling parties to explore their interests. ethical standards and the confidentiality of proceedings. to ethical standards, and hands-on practice through role-playing and case analysis,
• The settlement agreement reached in mediation is enforceable as if it were a court judgment or arbitral award. arbitration without the need for physical presence. ODR leverages digital communication feasibility. ensuring that mediators can facilitate resolutions effectively while maintaining trust and
• Practical Use: Effective in commercial disputes. • Federal Mediation and Conciliation Service (FMCS) offers mediation in labor disputes, playing a key role in industrial relations. tools, such as video conferencing, emails, chat rooms, and artificial intelligence (AI), to
• States may adopt provisions ensuring enforceability through domestic laws, such as those seen in the Arbitration and Conciliation Act, 1996 in India. • Exploring Trade-offs: Mediators often encourage parties to consider trade- confidentiality.
Source: Legal Framework for Mediation in the U.S. - American Bar Association provide an efficient, cost-effective, and accessible alternative to traditional dispute
2. Evaluative Theory: The mediator provides assessments or opinions about the resolution mechanisms. As the use of the internet and digital platforms grows globally, offs and concessions to move toward an agreement. Negotiation often involves give-and-
8. Resort to Arbitration or Litigation (Article 13):
strengths and weaknesses of each side’s case. ODR has emerged as a crucial development in legal systems worldwide, enhancing access take, where both parties adjust their positions to reach a balanced solution.
• Parties retain the right to initiate arbitration or litigation unless they have explicitly agreed not to do so during or after mediation. to justice, particularly for parties in different geographic locations.
• Example: Used in pre-trial mediations in tort cases. & European Union: • Generating Options: This phase includes generating possible settlement
2018 Amendments options and discussing the pros and cons of each. The mediator’s role is to guide, not
3. Transformative Theory: Focuses on changing parties’ perceptions and relationships • The Directive 2008/52/EC promotes mediation across EU member states, focusing on reducing judicial caseloads by encouraging pre- 1. The Evolution of ODR dictate, the terms of the settlement.
rather than settling disputes. litigation mediation. It allows for cross-border enforcement of mediated agreements, enhancing the EU’s position as a global leader in alternative
The amendments aligned the Model Law with the Singapore Convention, emphasizing: dispute resolution (ADR). The technological advancements that have contributed to the growth of ODR include:
• Case Application: Suitable for family disputes involving custody. Stage 5: Conclusion and Formal Agreement
1. Recognition of International Mediation Settlements: The amended law introduced provisions for the direct enforceability of international settlement agreements. • Member states have adapted mediation to varying extents, but all are encouraged to make mediation available and encourage its use • Secure Online Platforms: Platforms designed for safe, encrypted
4. Narrative Theory: Encourages parties to reshape conflict narratives to resolve issues. • Agreement Drafting: Once the parties reach an agreement, the mediator
2. Terminological Shift: Replaced “conciliation” with “mediation” to align with modern ADR terminology.
Legislative Framework for Mediation in India in civil and commercial disputes. communication between parties.
assists in drafting a formal settlement agreement. This agreement is typically signed by
1. Relevance in Mediation: Gandhian principles of Ahimsa and Satyagraha resonate Source: EU Mediation Directive 2008/52/EC • Video Conferencing Tools: Platforms such as Zoom, Skype, or dedicated both parties and may be legally binding, depending on the jurisdiction and the nature of
3. Uniform Enforcement Mechanism: Created a bridge between domestic and international enforcement regimes. Several procedural and substantive laws promote mediation as an effective ADR mechanism. These include provisions under the Code of Civil Procedure (CPC), 1908, the Commercial Courts Act, 2015, the Arbitration and Conciliation Act, 1996, and other
with mediation’s goal of achieving consensus without coercion. sector-specific statutes. ODR software that enable face-to-face communication remotely. the dispute.
Singapore Convention on Mediation (2019)
2. Dialogue and Trust-Building: Gandhi believed in truth-seeking dialogue as the Significance of the Model Law • Automated Tools: The use of AI to assist in mediating or arbitrating disputes • Closing the Session: The mediator concludes the session by reviewing the
1. Code of Civil Procedure (CPC), 1908 Singapore:
cornerstone of dispute resolution, promoting the principle of Gram Swaraj for The United Nations Convention on International Settlement Agreements Resulting from Mediation, commonly referred to as the Singapore Convention, addresses a critical gap in mediation practices: the enforceability of • Provides a template for legislation that ensures uniformity in mediation practices across jurisdictions. by analyzing past case data or suggesting solutions. key points of the agreement and ensuring that all parties understand and are satisfied
localizes dispute resolution. cross-border mediated settlements. Adopted on 7 August 2019, it is modeled on the success of the New York Convention on Arbitral Awards (1958). • Singapore’s Mediation Internationalization strategy is exemplified by the Singapore International Mediation Centre (SIMC), which with the resolution. In some cases, the mediator will provide a written summary of the
Section 89 (Amendment, 1999): facilitates mediation in international commercial disputes. • Blockchain: For ensuring transparency and record-keeping in settlement
• Balances flexibility and enforceability, making mediation attractive for commercial entities. agreement.
• Case Reference: Aruna Roy v. Union of India [(2002) 7 SCC 368], where Gandhian • Introduced as part of the 1999 amendments, Section 89 mandates courts to refer disputes to ADR mechanisms, including mediation, where feasible. processes and agreements.
principles inspired the participatory mechanisms in conflict resolution. • Encourages party-driven solutions, fostering cooperation and preserving business relationships. • The Singapore Convention on Mediation (2019) allows for the enforcement of mediated settlements across international jurisdictions,
Key Provisions of the Singapore Convention
• Objective: To divert cases suitable for settlement from litigation to amicable dispute resolution channels. establishing a global framework for mediation. 2. Features and Advantages of ODR
3. Constructive Conflict Resolution: His focus on resolving root causes of disputes 1. Applicability (Article 1):
aligns with the transformative approach to mediation. • Categories of disputes identified for mediation in Afcons Infrastructure Ltd. v. Cherian Varkey Constructions (2010) include: • Mediation in Singapore is formalized and institutionalized, often required as a first step before litigation, especially in commercial
a. Accessibility
• The Convention applies to settlement agreements resulting from mediation and concluded in international commercial disputes. disputes.
• Commercial and contractual disputes. Source: Singapore Convention on Mediation, SIMC
• Exclusions: b. Convenience and Speed
• Matrimonial disputes (excluding criminal cases like cruelty).
• Agreements involving personal, family, inheritance, or employment matters. c. Cost-Effectiveness
• Employment disputes (except service matters).
• Agreements enforceable as judgments or arbitral awards under existing frameworks. d. Flexibility
1. Shared Philosophical Ground: Both emphasize healing relationships over punishing Order X, Rule 1A–C:
offender. 2. Enforcement of Settlement Agreements (Article 3):
• Procedural provisions requiring courts to explore mediation as a pre-trial measure. e. Confidentiality
• Example: Community-driven justice in India often blends these approaches, as • Signatory states are required to enforce mediated settlement agreements without requiring parties to undergo fresh litigation.
Challenges in Implementation f. Global Applicability
seen in Lok Adalats.
• This provision promotes certainty and reduces delays in cross-border enforcement.
1. Limited Ratification: 2. Arbitration and Conciliation Act, 1996
2. Victim-Offender Mediation: A restorative justice practice where offenders and
3. Submission for Enforcement (Article 4):
victims dialogue to repair harm and rebuild trust. • As of now, only a few countries have ratified the Convention (India has signed but not ratified). Part III: Conciliation (Sections 61–81): 3. Stages in ODR Process (same as in Med)
• A party seeking enforcement must provide:
3. Focus on Reconciliation: Mediation and restorative justice prioritize addressing the • Without widespread adoption, its utility in resolving disputes remains constrained. • Although referred to as conciliation, these provisions are largely aligned with mediation practices.
emotional and relational aspects of conflicts, not just the legal. • The signed settlement agreement, and 4. ODR in India
2. Public Policy Exceptions: • The Act follows the UNCITRAL Model Law on International Commercial Conciliation, 1980, ensuring international consistency.
4. Community Empowerment: Both approaches align with social capital theory, • Proof that the agreement resulted from mediation (e.g., a mediator’s statement).
strengthening communal bonds to prevent future conflicts. • Ambiguity in interpreting public policy may lead to inconsistent enforcement across jurisdictions. India has recognized the growing importance of ODR, particularly with the increased use
4. Grounds for Refusal (Article 5): Key Provisions:
of e-commerce and technology. Platforms like Lok Adalat and e-courts have introduced
5. Indian Context: Initiatives like the Juvenile Justice (Care and Protection of Children) 3. Scope Limitations: online methods for dispute resolution in civil matters, consumer disputes, and family law
• Enforcement may be refused if: 1. Role of Conciliators (Section 67): They assist parties in reaching a settlement through negotiation and mutual agreement.
Act, 2015 encourage mediation and restorative practices to rehabilitate young • Excludes family and employment disputes, reducing its applicability to a broader range of conflicts. cases.
offenders. • A party was under coercion, fraud, or undue influence. 2. Confidentiality (Section 75): Ensures that communications during conciliation remain confidential.
• The National Legal Services Authority (NALSA) has been involved in promoting ODR
• The agreement is contrary to public policy of the enforcing state.
Comparison of UNCITRAL Model Law and Singapore Convention 3. Settlement Agreements (Section 73): Agreements reached are binding and have the same effect as arbitral awards under Section 74. in India, working toward the development of accessible online platforms for
UNCITRAL Model Law Singapore Convention
mediation and arbitration.
• The terms of the settlement agreement are unclear or incapable of performance. Objective Framework for regulating mediation processes. Enforces international mediated settlement agreements.
Scope Applicable to mediation processes and settlements. Limited to settlement agreements in international commercial disputes. 3. Legal Services Authorities Act, 1987 • Indian Arbitration and Conciliation Act, 1996, as amended, also provides for the
5. Role of the Mediator: Adoption Voluntary adoption as domestic legislation. Requires ratification by states as an international treaty. use of online arbitration services in certain commercial disputes.
Enforceability Domestic enforceability governed by national law. Cross-border enforceability mandated by treaty.
• Mediators must ensure that their conduct aligns with ethical principles, as any procedural irregularity may render the settlement unenforceable. Lok Adalats (Sections 19–22):
The Digital India initiative has further encouraged the use of technology in the justice
6. Promotion of Mediation (Preamble): • Lok Adalats provide a forum for mediation, ensuring cost-free and time-efficient resolution of disputes.
system, making ODR a promising area for future development in India.
• The Convention encourages states to integrate mediation into their dispute resolution frameworks to promote efficient and amicable resolution of international disputes. • Settlement reached in Lok Adalats is enforceable as a civil court decree under Section 21.
• The Mediation Act, 2023 incorporates several sections that directly influence the
integration of Online Dispute Resolution (ODR) into India’s legal framework:
Significance of the Singapore Convention 4. Family Courts Act, 1984
1. Section 30 of the Mediation Act, 2023 addresses the use of technology in
1. Cross-Border Enforceability: Mediated settlements gain legal recognition akin to court judgments or arbitral awards. Section 9: mediation, specifically permitting the use of ODR platforms. It empowers the Mediation
Council of India (MCI) to regulate ODR mechanisms, ensuring that digital mediation aligns
2. Efficiency in Trade: Reduces barriers to cross-border trade by facilitating quick and binding dispute resolution. • Family courts are obligated to attempt conciliation and mediation in matrimonial and family disputes. with conventional standards of confidentiality, neutrality, and fairness. This is a landmark
provision, as it acknowledges the growing role of technology in dispute resolution.
3. Legal Certainty: Businesses can rely on a globally accepted framework, enhancing trust in mediation. • This approach prioritizes the preservation of familial relationships and amicable settlements.
2. Section 31 allows for the registration of mediators and service providers
who wish to offer mediation through electronic platforms, setting standards for the
5. Commercial Courts Act, 2015, and the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 ethical and professional conduct of mediators in both traditional and digital settings.
The Commercial Courts Act, 2015, as amended in 2018, introduced mandatory pre-institution mediation for specified commercial disputes. The accompanying Pre-Institution Mediation and Settlement Rules, 2018, institutionalize this process. 3. Section 33 outlines the requirements for online platforms, including
ensuring data protection and security of communications during mediation processes
Key Provisions: conducted electronically. These provisions are crucial to creating a secure, trusted
a. Applicability: environment for online mediations .

Mandatory for all commercial disputes (as defined in Section 2(1)(c) of the Act) above the specified monetary threshold. Edelweiss Asset Reconstruction Co. Ltd. v. Punjab National Bank (2019): This case
highlighted the potential for digital platforms in resolving financial disputes, a principle
a. Pre-Institution Mediation: which is reinforced by the provisions for ODR platforms in the Act.
Rule 3(1): No commercial suit shall be instituted without first attempting mediation, except in cases where urgent interim relief is sought.
a. Mediation Procedure:
Mediation is initiated by submitting an application to the State Legal Services Authority (SLSA). A mediator is appointed from the panel maintained by the SLSA.
a. Timeframe:

Rule 3(8): Mediation must conclude within three months, extendable by two months with mutual consent.
a. Settlement Agreements:
Rule 3(10): Settlement agreements reached are binding and enforceable as decrees under Order XXIII, Rule 3 of the CPC.
a. Confidentiality:
Rule 10: All proceedings are confidential, and communications during mediation cannot be disclosed in subsequent proceedings.
a. Cost Sharing:

Rule 11: Mediation costs are shared equally, unless agreed otherwise.

6. Mediation Act (Refer Assignment)

The act, seeks to consolidate existing mediation laws and institutionalize pre-litigation mediation.

Key Features:
1. Mandatory Pre-Litigation Mediation:
• Makes mediation compulsory before filing disputes in certain civil and commercial matters.
2. Mediated Settlement Agreements (MSAs):
• Recognizes MSAs as binding and enforceable as court decrees.
3. Institutional Mediation:
• Encourages the establishment of mediation institutions to ensure quality and consistency in mediation practices.
4. Confidentiality and Neutrality:
• Mandates strict confidentiality and impartiality in all mediation proceedings.
5. Mediation Council of India:
• Proposes the creation of a regulatory body to oversee training, accreditation, and standards for mediators.

Judicial Precedents Supporting Mediation

1. Salem Advocate Bar Association v. Union of India (2005): Affirmed the constitutional validity of Section 89 CPC and directed the establishment of mediation centers across India.
2. Afcons Infrastructure Ltd. v. Cherian Varkey Constructions (2010): Clarified the scope of Section 89 CPC and identified categories of disputes suitable for mediation.
3. M.R. Krishna Murthi v. New India Assurance Co. Ltd. (2019): Directed the government to explore the feasibility of enacting standalone mediation legislation.
4. K. Srinivas Rao v. D.A. Deepa (2013): Emphasised the use of mediation in matrimonial disputes to preserve relationships and reduce adversarial litigation.