Mediation law could be a boon for MSMEs

On Tuesday, the long-awaited Mediation Bill 2021 was finally enacted by Rajya Sabha. It is anticipated that mediation legislation will provide relief to industry, business, and families from the delays of courts in resolving disputes, or in the parlance of legal luminaries, litigation.

- DR. P. MADHAVA RAO

The mediators assert that only disputes are brought to them. Neither mediators nor mediation institutions are responsible for resolving litigations. Leaving the argument unchanged, India's mediation legislation provides a legal foundation for institutional mediation.

It seeks to "promote and facilitate mediation, especially institutional mediation, for resolution of disputes, commercial or otherwise, enforce mediated settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as acceptable and cost-effective process and for matters connected therewith or incidental thereto."

Accordingly, the Mediation bill aims to reduce the burden on courts by encouraging disputants to resolve their own disputes with the assistance of trained mediators and mediations facilitated by authorised mediation Institutions. The bill goes the additional mile by giving the mediation settlement agreement or mediation settlement deed the status of a court's decree. To elaborate, if two parties go to a mediation institution, have their dispute mediated, resolve their dispute, reach a consensus on the issue, and write down their own terms and conditions, the mediator will attest to them. It will become a court order that is legally enforceable. The law encourages low-income individuals and MSMEs to settle their disputes amicably rather than resorting to litigation.