India’s journey into private commercial mediation

Posted in Insights March 7, 2019

In India, a taste for revenge is but one of the bumps to championing greater use of mediation, writes Laila T Ollapally. Legislation reform and India being a signatory to the Singapore Convention could turn things around.

A staggering 32 million cases pending in India’s courts bear testimony to the predominance of the adversarial approach to dispute resolution in the administration of justice in our country. In 2006, the Chief Justice of my State, Karnataka, eager to set up a Court annexed mediation programme, invited me to be a Founding Coordinator of the Bangalore Mediation Centre.

Within a year of mediating cases, I was excited. I had resolved more cases through mediation than I had done in over two decades of legal practice. I knew I was at the cross roads of my legal career. I realised that with the prevalence of mediation in our system, our litigants could have a choice between the adversarial and the collaborative route to dispute resolution. This strengthened my resolve and in 2010, I decided to commit fully to the practice of mediation.

Turning point

Until 2011, my exposure to mediation was in the Court mediation programme and the majority of the cases referred for mediation in the court programmes were matrimonial disputes.

In 2011, I was invited to an international fellowship with JAMS Foundation. As a Fellow, I had the opportunity to witness disputes over intellectual property, maritime affairs and employment, as well as one of the biggest bankruptcy disputes in the history of America being mediated. It was then I learnt how the fundamental principles of mediation, viz confidentiality, voluntariness and self-determination were maintained with the utmost attention in commercial mediation.

Furthermore, I learnt that mediation for the commercial sector additionally requires a conducive ambience, mediation skills with high levels of sophistication and efficient case management services. However  (I am reluctant to use the word contrary) as court-annexed mediation programmes in India are managed by the Courts and services are provided pro bono, it is not possible to provide individualised services as may be required in the commercial sector. The parties are not given a choice of mediator. The mediation environment in the Court programmes, however hard we try, continue to bear the adversarial flavours. Bearing in mind the numbers and limited time frame, the mediators are required to adopt an assembly line approach to the process.

After having served as a Founding Coordinator of the Bangalore Mediation Centre for almost nine years, private commercial mediation was a challenge that excited me and my mind opened to the limitless possibilities of mediation and to dispute resolution expanding beyond the borders of the Court system.

“[In India] parties are habitually adversarial and the current level of awareness is not sufficient to quell the burning fire of revenge and validation that they hope to achieve in the adversarial system.”

Today, the lack of awareness of commercial mediation in India remains our greatest challenge, among others:

The need for high-quality mediators:

Parties need a choice of commercial mediators. The expectations from mediators are high in private commercial mediation. Tenacious mediators who do robust preparation, good risk analysis, have a calm demeanour, and have strong interpersonal and negotiation skills make a decisive difference in mediation outcome in private commercial mediation.

Stakeholders’ resistance:

Mediators in India are amidst a group of reluctant stakeholders. The lawyers often consider mediation a threat to short-term revenue. A commercial dispute that was pending for 18 years was resolved in a day at CAMP. When the senior lawyer who brought in the case was approached for more cases, his reply (half in jest) was “what would be my ‘pension plan’ if my cases settle in a day”. A fair response in the background of the average life of a case in courts being several years.

The parties are habitually adversarial and the current level of awareness is not sufficient to quell the burning fire of revenge and validation that they hope to achieve in the adversarial system.

The number of judges passionate to push the boundaries of mediation beyond the Court system are few.

Lack of statute for mediation:

There is no stand-alone legislation for mediation in India. ‘Enforceability’ and ‘Confidentiality’ are of great importance to corporate clients. Currently private mediators creatively use the Arbitration and Conciliation Act, 1996 to provide enforceability to mediated settlements. Confidentiality is ensured through well-structured binding agreements that parties enter into prior to the mediation.

The winds of change are beginning. It is encouraging that in the recent past, mediation has found mention in the Company’s Act, Commercial Courts Act and Consumer Protection Bill. I firmly believe that India needs to consider a legislation for mediation which includes mandatory mediation with an easy ‘opt-out model’ as in Italy. This would boost the use of mediation.

International trade and commerce is rapidly growing in India. India has moved up in ranking in the ‘Ease of doing Business’ Index of the World Bank. However concerns over dispute settlement and enforcement of contract remain high. The availability of high quality mediation services with enforceability being secured would boost the confidence for trade and commerce with India. The Singapore Convention is timely and by being a signatory to the convention, India can gain huge economic advantage.

I believe the universe is conspiring to make collaborative dispute resolution an important way forward for India.

About the author:

Laila T Ollapally is a SIMC mediator and ambassador. She is the founder of CAMP Arbitration and Mediation Practice, a private commercial mediation practice in India founded on April 1, 2015 in Bangalore. Having been a litigating lawyer for over two decades, she has witnessed the tribulations of clients and watched them suffer through the course of long-drawn litigation. She has been mediating full-time since 2010.