This article is written by Astitva Kumar, a research associate at ICMCR. The article is the result of extensive research and analysis of the laws of developing countries in the field of mediation
The global health catastrophe caused by the coronavirus (COVID-19) is having a devastating effect on people all over the world. It has wreaked havoc on the global economy and commercial ties, causing havoc on a scale never before seen. As parties struggle to meet their contractual responsibilities, many business conflicts arise. There’s a good chance that the crisis will lead to an increase in litigation, which will put off the settlement of existing cases. Because of the extraordinary delays, the parties should look into alternate dispute settlement options (ADR). In the aftermath of this crisis, Online Dispute Resolution (ODR) or Virtual ADR has come into action. A devastating and helpless situation created by the onset of the pandemic makes the judicial system inefficient and overburdened. While the developed nations have the economic resources and manpower to tackle the upsurge in litigation, developing countries have been suffering at an unprecedented effect.
Today’s legal system is convoluted and outdated. The trial and decision-making process takes much too long. Evidence submission requires too much time and money. As a result, litigation is becoming increasingly expensive. Court cases are backlogged in the vast majority of countries across the world. To embark upon the journey of an out-of-court settlement in Developing nations, the article explores the existing practices and legislation adopted by courts and the prospective mechanisms that can benefit the nations.
Mediation Laws in Developing Nations
As the developed nations strenuously work to relieve the judicial burden by shifting to alternative dispute resolution mechanisms, developing nations are still skeptical about the adoption of the same. The section depicts four developing countries along with their progress in Mediation laws and regulations.
China is the fastest-growing developing nation in the world. It has been progressing with judicial efficiency and speedy resolution of cases. Meditation has been a part of Chinese culture since times immemorial. It is in recent times that Mediation has been developing and been crafted into proper legislation. “Modern China understands mediation as an effective dispute resolution mechanism, and it is adapting the tradition of mediation to the necessities of modern-day commerce, social norms, and political systems.” The surge in the number of litigating factors has served as an urgent need to bring creative and peaceful ways of dispute resolution.
In the current scenario, China supports and propagates five types of Mediation processes. Popular forms include “People’s Mediation,” often referred to as “Civil Mediation,” and “Judicial Mediation. People’s Mediation is handled by volunteer mediators from the local community. Judges mediate cases through Judicial Mediation. Other kinds of mediation include “Administrative Mediation,” in which government officials mediate disputes, “Arbitral Mediation,” in which arbitral administrative bodies mediate disputes, and “Business Mediation,” in which recognized industry groups mediate disputes. People’s Mediation is organized and conducted through PMCs. While Judicial Mediation is looked into by judges themselves. Judicial Mediation becomes an authoritative stand since the parties value the judgment and the stance reached upon in presence of a knowledgeable person, the judge.
In recent times, there has been a surge in the protection of personal rights during mediation. The Government has been taking steps to ensure that Mediation remains private and personal between parties. It is just the final settlement and the contract that is made public to maintain records. The second advancement is seen through an insistence on the professionalism of mediation. Despite a large number of mediators in China, practically none of them have undergone any formal training. Mediators are often underpaid or completely unpaid, and the majority of them are part-time employees. Mediations are hampered by these factors. People’s Mediation Committees now have greater resources since more resources are being put into training and educating mediators. Insurance, securities, intellectual property, and other fields have seen the rise of professional mediation groups, and China has begun to witness the emergence of full-time mediators in China. Furthermore, China has been making efforts to institutionalize Mediation and create a cooperative space between institutions. This would not only help to take the burden off the main judiciary but would also propagate Mediation as the first option of settlement rather than an alternative option.
“China has enacted a “People’s Mediation Law,” and it has amended the “Civil Procedure Law” to outline forms of mediation, qualifications for mediation, selection of mediators and procedures for judicial confirmation of mediated settlements.” The law is a revolutionary change in the working mechanism of Mediation in the country. It not only recognizes Mediation as a separate viable and efficient dispute resolution mechanism but also works forth to set the standards of an efficient and exemplary Mediation in the country. There has been Judicial Procedure Reform in the Special Administrative Region of Hong Kong, with an emphasis on using mediation to resolve conflicts. The Hong Kong Mediation Center has been created. Several organizations provide mediation services. To cope with mediation issues, HKIAC has created two mediation councils.
The growth of Mediation as an equal stand of judicial intervention is an important step in the history of Mediation. China being the fastest-growing developing nation, has the onus to set an example for other developing countries. The successor HKIC is seen as progress in the right direction.
Unlike China, India is in the nascent stages of adopting Mediation. Though the country’s judiciary is overburdened, the country’s resistance to the Mediation process as a viable option has been difficult. The judiciary and the legislative intervention have recently taken control of the situation and have been working to popularize mediation, thus opening gates of exploration, experimentation, and experience in the industry. An out-of-court settlement is not a new advancement, just an un-relied and unexplored area of dispute settlement. Since the 1990s, commercial arbitration has been well-established in India.
Since the year 1996, India has had a law governing arbitration and mediation. Under the CPC of India, mediation is a requirement. There are a plethora of mediation organizations out there that are doing well. The Delhi and Bangalore Mediation Centers have effectively mediated 39,969 cases in two months, reducing the massive court case backlog of 31,280,000 cases. Moreover, Mediation in the country is either court-annexed or private mediation. Private Mediation is a practice less adopted by parties. Multinational companies and firms are the only clients to private mediation to protect their reputation and work, voluntarily opt for Mediation. For individuals and private parties, Mediation continues to be a court-advised format of Mediation. This type of mediation is frequently used in Matrimonial disputes, particularly divorce cases.” “In the judgment of the Supreme Court of India in Salem Bar Association vs. Union of India, the Supreme Court has requested this committee to prepare draft model rules for Alternative Disputes Resolution (ADR) and also draft rules for mediation under section 89(2)(d) of the Code of Civil Procedure, 1908.”
Recent years have seen an increase in Mediation and court-annexed mediation. This makes the parties enter into mediation through the process referred by the courts. It not only acts as a popularization action for mediation but also helps in taking the burden off the courts. Court annexed mediation is a step to facilitate betterment in the country. The latest Mediation legislation is in the form of an amendment to the Alternative Dispute Resolution and Mediation Rules, 2021. They take a step forward to lay down specific and proper guidelines to govern the Mediation process in India. “Section 4 of the Industrial Disputes Act, 1967 gives conciliators the responsibility to mediate and settle industrial disputes and prescribes the procedure to be followed in depth.” RERA Development, MSME Act, along with certain provisions of CPC, include Mediation as a part of the legislative advancement. However, the Indian system lacks in possessing and uplifting specific legislation for Mediation. “The new amendment of the Consumer Protection Act dedicates an entire Chapter to the resolution of disputes through mediation first before approaching a consumer redressal agency. Due to the lack of one proper law for mediation, there is confusion in the interpretation and implementation of mediation provisions. The Supreme Court has set up a panel to submit draft legislation to give legal sanctity to disputes settled through mediation and would then be sent to the government as a suggestion from the apex court. Justice S.A.Bobde has also suggested starting degree and diploma courses in mediation in national law universities. Experts feel it is a progressive step but having an act on mediation is the need of the hour. Just like amending the Arbitration Act 1996 promoted institutional arbitration, overarching legislation on mediation would create legal sanctity and avoid inconsistencies between the various pieces of existing legislation.”
The current delay in handling cases is growing in quadratic proportions and is likely to lead to a crisis of trust, thus introducing court-annexed mediation into the Indian legal system at the start of the twenty-first century demands a firm commitment and strong will. It’s not an easy endeavor, but it’s not insurmountable.
Since 1993, alternative dispute resolution has been codified in Ghanaian law. “Even though customary law is not legally recognized, it is widely practiced in rural regions, especially under the guidance of traditional judges such as family head elders and tribe chiefs and queen mothers.” Ghana approved a new law in 2010 that considerably improves the function of ADR and includes numerous novel elements. It also incorporates mediation for the first time, codifying widely accepted concepts and reinforcing mediation agreements to make them as enforceable as arbitration decisions. For the first time in any African country, the official civil court system recognizes customary arbitration and mediation procedures.
As of 2014, the court-connected ADR program was implemented in 47 district and circuit courts, and mediation is expected to be implemented in all courts by 2017 under current plans. Court-connected mediation programs handled 4,918 cases in 2012-2013, with 46% of them being settled; long-term statistics show that 52% of mediation cases were settled. According to customer satisfaction surveys conducted in connection with the opening of a new mediation center in central Ghana, the center’s services have been well received. According to a study, the vast majority of people were happy with their settlements and thought the mediation process was fair and courteous.
Ghana along with Nigeria portrays two successful models of Mediation, even in economically difficult situations. Thus, the models defy the presumption that Mediation requires high economic investment and resources to be successful. The countries set a milestone in the development and advancement of Mediation in the world.
Columbia is one of the most sophisticated countries with a commercial mediation and arbitration approach. It is one of the few countries where ADR mechanisms are entrenched and enshrined in the spirit of the Constitution. Mandatory conciliation has resulted in great efficiency and the benefit that the parties are compelled to. Without fear of negotiating being perceived as a show of weakness, go ahead and do so. Colombia has mediators who work to resolve conflicts. “In 2015, the National Planning Department published an analysis and assessment of the 25 years of development of conciliation in Colombia. This report recommended that ADR remain important to strengthen and promote conflict resolution in rural areas, especially during the implementation of the possible peace treaty between the National Government of Colombia and the Revolutionary Armed Forces of Colombia-People’s Army (2016).”
Chapter 42 of the Uniform Law and Act of Columbia, includes Mediation as an inherent part of the judicial system. The chapter becomes important in imparting knowledge about Mediation and also becomes a guiding force in implementing Mediation in the country. A large number of cases have been solved and resolved using the Mediation rules. Meditation Centres in the country work to resolve consumer and matrimonial disputes through resolution in addition to the contractual cases that are referred through the same. Columbia has an existing framework of laws and mechanisms that govern Mediation in the country, however, it lacks trust and popularization in the country.
International Standards and Laws
The use of mediation to resolve disputes has been legislated in 80 countries and international organizations, to satisfy people’s needs while also eradicating the negative effects of deteriorating litigation and arbitration systems. This has been accomplished by establishing institutions to promote and support mediation use.
The International Chamber of Commerce (ICC) has issued a new set of alternative dispute resolution (ADR) guidelines to encourage the use of mediation in business disputes rather than litigation. The International Court of Justice (ICC) is a global advocate for mediation. At nearly every level of the dispute resolution process, the WTO’s dispute resolution system emphasizes the use of mediation to settle conflicts. WIPO establishes the Arbitration and Mediation Center to arbitrate and mediate disputes. The Asian Mediation Association (AMA) was established in 2002 to unite Asian meditation groups to better promote mediation and its use of it to settle conflicts throughout Asia.
The United Nations Commission on International Trade Law and Arbitration released the UNCITRAL Model Law on International Commercial Conciliation in 1990, sparking a global surge in mediation laws and activity. The UNCITRAL Model Law on Mediation becomes the international benchmark. Whenever countries fall short of their guidelines and are clueless about the procedure to be adopted, the Model Law acts as a guiding light. It not only helps in providing an ultimate goal for developing nations but also plays an important role in the settlement of international disputes between countries. In case any contravention arises between developing nations, and the dispute is referred through Mediation, UNCITRAL Model Law becomes the statutory principle. World over, online mediation has proved to be a success. Sitting anywhere, in any nook and corner of the world, disputes can be settled through online mediation due to the development of science and technology.
Judicial Efficiency and Tackling Burden
“Governments in high and especially low-income governments should promote ADR as a viable option to resolve disputes and thereby strengthen it.” The process is not just for speedy resolution and betterment of parties but also for the betterment of countries. Mediation involves low risk and low investment.
A prosperous growth of Institutional Mediation in developing nations would make them an attraction for foreign investments. As a result of the COVID-19 epidemic, lawmakers have had to impose new restrictions and amend existing legislation, which has caused corporate operations to become more difficult. The Indian economy is deteriorating steadily as a result of the lockdown imposed as a result of the COVID-19 epidemic. People and companies are left to fend for themselves, and they are doing everything they can to make it through. To limit the spread of the virus, the courts have likewise been operating at a reduced capacity and only considering urgent cases. Mediation looks to be a feasible and efficient alternative to traditional conflict resolution techniques in light of the current circumstances, as it may provide a cost-effective and quick settlement of disagreements, especially in commercial disputes.
A thorough analysis of the laws of the developing nations regarding Mediation signifies countries have begun incorporating Mediation as a part of their legislative outlook. It also signifies that though Mediation has found its place in developing countries, it still has a long way to go. Mediation continues to be considered as the last option of dispute resolution. Unless it is court-annexed Mediation, individual parties do not trust the process of Mediation, thus do not opt for the same. Though Mediation helps in improving the judicial efficiency of developing countries in a limited manner, it still has a scope of improvement and advancement.
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