National Arbitration And Mediation Rules


Posted On : April 19, 2022
National Arbitration And Mediation Rules
In corporate trade deals as well as certain private business agreements, the mention of resolution of disputes through arbitration is quite normal. So is the case with mediation rules in case of family disputes. Find out more about arbitration and mediation rules in India.
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Recently, the President of India as well as the Chief Justice of India batted for mediation and arbitration respectively. People generally know arbitration and mediation as two methods of alternative dispute resolution in India. Arbitration is more than often used as a dispute resolution method in business transactions. In addition, mediation is a common method for resolving family court cases. This was all the information which people are usually aware of. There is one contextual matter related to arbitration and mediation rules applicable during the process which people are not aware of. Hereunder, the arbitration rules and mediation rules India have been elucidated.  


UNCITRAL Arbitration Rules

The United Nations Commission on International Trade Law (UNCITRAL) adopted a model law regarding arbitration rules. The model UNCITRAL arbitration rules indicate desirability for uniform arbitration process and international commercial arbitration among member nations. The same has been adopted by India through Arbitration and Conciliation Act, 1996. It can be said that implementation of ADR in India can be accredited to UNCITRAL only.

 

Arbitration Rules in India

In India, the Arbitration and Conciliation Act, 1996 paves way for domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards. The arbitration rules and procedures involve several steps to be followed by the arbitrator as well as the parties involved.

 

What are the steps in the arbitration process?

The arbitration process does not necessarily involve following the Code of Civil Procedure, 1908. The arbitration rules and procedure may be determined by the parties involved.[1] However, in order to ensure principles of natural justice, the usual practice regarding arbitration rules in India is as follows:

1.     Arbitration Agreement

A prior agreement between parties involved to go for arbitration in case of any dispute while performing a particular business or other transactional contract. It may or may not specify the process and arbitrator during the arbitration process.

2.     Filing and Starting of Process

In case of a dispute and inability to resolve, one of the parties demands commencement of arbitration through a legal notice. This initiates the arbitration procedure.

3.     Appointment of Arbitrator

The parties to arbitration have to choose an arbitrator who is a neutral party to the matter and termed as arbitration tribunal. Arbitrator so appointed can be one or more, but the number has to remain odd, i.e. 1, 3, 5, etc.[2] An arbitrator may be anyone, but since applicable laws have to be taken care of, they should preferably be someone with a legal background. Place of arbitration is also to be decided mutually.[3]

4.     Exchange of Information

Information regarding the matter is presented before the arbitrator by both the parties, preferably through their arbitration lawyers. Any kind of evidentiary documents or other proofs are also submitted.

5.     Hearings

Matters under arbitration are although laborsaving, it still requires some time and is not decided in a day or two. A few hearings are decided upon whereby discussion as per applicable laws takes place based upon the evidence available.

6.     Arbitration Award

After hearing both the parties, the arbitrator decides the matter in favour of one of the parties as per the arbitration rules. Arbitration award is binding over both the parties. However, challenge against arbitration award is also allowed in certain cases.

 


Mediation Rules India

An ounce of mediation is worth a pound of arbitration and a ton of litigation.

~Joseph Grynbaum


There is no specific law dealing with the process of mediation in India. However, merely Section 89 of the Code of Civil Procedure, 1908 provides about court referred mediation. Thus, pre-litigation discourse through mediation rules is not applicable in the usual course. 

The process usually followed for mediation and family dispute resolution in India is as follows:

 

1.     Mediation Consensus

The parties to divorce or any other family dispute are usually made to go for mediation by the court. The parties may themselves also resort to mediation rules if the same deems fit for the case.

2.     Appointment of Mediator

A mediator is a legal professional in the courts at the mediation cell setup by the concerned Bar Association. However, parties are free to appoint anyone of their choice as a mediator in their matter.

3.     Opening Statements by Mediator

The mediator at first is responsible to set up the road-map to be followed during mediation. He/ she shall make the parties aware of how they will sail through the mediation process, what may be expected, what they are supposed to do, etc.

4.     Joint Session

Shortly after the mediator introduces both the parties with mediation rules, a joint session follows whereby both the parties are required to put forward their version of the dispute one by one. It is the responsibility of the mediator to prevent any kind of physical or verbal argument between parties.

5.     Individual Session

After listening to both the parties at one time, the mediator may have a session with individual parties if so deems fit. Confidentiality has to be maintained by the mediator as per the mediation rules India.

6.     Agreement/ Settlement

If asked ‘Is mediation legally binding in India?’, there is no discrete and affirmative answer. The parties may agree to a mediation agreement which is their mutual decision. However, mediation agreement is a non-binding document which can not be enforced through the court. It requires the mutual understanding of the parties involved.

 

What are 2 Major Differences Between Arbitration and Mediation?

Arbitration and mediation share the common essence since both of them are methods of alternative dispute resolution. However, there are numerous differences between arbitration and mediation when it comes to the procedure followed. The major difference between mediation and arbitration in India can be found through the procedure and award. The process followed under arbitration is similar to the one in court whereby the arbitrator acts like a judge listening to both the parties. However, the mediator, although hears both the parties, finds a middle negotiated ground. Mediator is there only for assistance purposes. Coming to the decision, arbitration award results in one of the parties being the winner and the arbitration award is binding unless there are some technical lacunae in the process followed. On the other hand, the outcome of mediation decision, although suitable to both, is a matter of choice to parties involved as to whether they wish to accept the same or skip out. To have the best option for particular matters, consultation with arbitration and mediation lawyers is always advised.

 

Can Mediation and Arbitration be Combined?

Combination of arbitration and mediation may not be the perfect terminology since the two have different paths and can not be opted simultaneously. However, mediation may be followed by arbitration, or it can be arbitration followed by mediation later on. The answer to ‘can mediation and arbitration be combined?’ can be answered this way. The parties may start with mediation but might be finding it difficult to resolve towards a middle ground, thus, they may decide to go for arbitration. Or after resolving the matter through mediation, parties might opt arbitration in order to get a binding award. It may be noted that the same person who was acting as a mediator may be appointed as the arbitrator if parties agree to. In that way, time will be saved since the person is already aware of the facts of the case. Also, the option might prove cost effective as well.


Is arbitration better than mediation?

If there is some scope for mediation, it is far better since it includes consent of both the parties at a middle ground. Nobody is specified as winner or loser in case of mediation. However, if there is no scope, then in that case arbitration is comparatively better. Reason being that arbitration is similar to court process in terms of consideration of evidence and application of laws. However, arbitration is way more time and money consuming as compared to mediation in India.


[1] Section 19 of the Arbitration and Conciliation Act, 1996.

[2] Section 11 of the Arbitration and Conciliation Act, 1996.

[3] Section 20 of the Arbitration and Conciliation Act, 1996.

Written By:
Ridhi Khurana

Ridhi Khurana

Gurgaon

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