The Indian government plans to set up the Mediation Council of India (MCI) by the end of this year to improve out-of-court dispute resolution and enhance ease of doing business

• The government is expected to establish a Mediation Council of India (MCI) by the end of this year to improve the ease of doing business.

KEY HIGHLIGHTS

• The initiative aims to facilitate the resolution of disputes, especially those related to business, outside the court system.
• Earlier this year, a committee formed by the Insolvency and Bankruptcy Board of India (IBBI) suggested the introduction of a voluntary mediation framework to expedite the resolution of disputes out of court.
• This framework can also alleviate the burden on courts, similar to how the government’s decriminalization of over 100 legal provisions aims to achieve the same goal.
• The proposed MCI will be established under the Mediation Act, which was enacted last year.
• According to a disclosure in the Rajya Sabha, this Act requires mediation proceedings to be completed within 180 days from their commencement, the business-daily claimed.
• The council will set the rules for mediation and empower mediators.
• The MCI will oversee the education, assessment, and certification of mediators through accredited institutes. It will also establish standards for mediator conduct and recognize mediation service providers.
• The council will consist of a chairperson and two members with expertise in mediation, as specified by the Act.
• It will also include a chief executive officer and a representative from a recognised body of commerce and industry appointed by the central government.

Why is mediation important in business?

• Mediation is a process where a mediator helps disputing parties to reach an agreement outside of court.
• Unlike other forms of out-of-court dispute resolution, mediation does not result in a binding award or judgement.
• Instead, the mediator assists the parties in reaching a mutually satisfactory settlement.
• The Mediation Act, passed last year, mandates the completion of mediation proceedings within 180 days of their initiation.
• The MCI will be established under this legislation.
• The council will also be responsible for the training and certification of mediators through accredited institutes, as reported.
• Currently, mediation is typically pursued only when required by law, such as under the Commercial Court Act of 2015, which mandates that parties attempt mediation before proceeding to court