MA Section 5 : Pre-litigation Mediation

Explanation using Example

Example 1: Commercial Dispute Between Two Companies

Introduction: Company A and Company B are involved in a commercial dispute over a contract breach. Both companies are considering litigation but want to explore pre-litigation mediation as per the Mediation Act, 2023.

Application: According to Section 5(1) of the Mediation Act, 2023, the parties may voluntarily and with mutual consent engage in pre-litigation mediation. Since this is a commercial dispute, they must also consider Section 12A of the Commercial Courts Act, 2015, if the dispute involves a Specified Value.

Outcome: The companies agree to appoint a mediator empanelled by a court-annexed mediation centre as per Section 5(3)(ii). They successfully reach a settlement, avoiding the time and cost of litigation.

Conclusion: By complying with the Mediation Act, 2023, both companies resolve their dispute efficiently. Non-compliance could have led to prolonged litigation and increased legal costs.

Example 2: Personal Injury Claim from a Car Accident

Introduction: Mr. X is involved in a car accident and files a compensation claim with the Claims Tribunal. The parties fail to reach a settlement under Section 149 of the Motor Vehicles Act, 1988.

Application: As per Section 5(6) of the Mediation Act, 2023, the Claims Tribunal refers the parties to mediation. A mediator from a recognised mediation service provider under the Act is appointed.

Outcome: The mediation process results in a settlement agreement, which is then submitted to the Claims Tribunal for consideration as per Section 5(7). If no settlement was reached, a non-settlement report would be forwarded for adjudication under Section 5(8).

Conclusion: The mediation process provides an opportunity for a quicker resolution. Failure to comply with the mediation referral could result in delays and additional legal proceedings.

Example 3: Landlord-Tenant Dispute

Introduction: A landlord and tenant are in dispute over unpaid rent and property damage. They consider filing a suit but decide to attempt pre-litigation mediation first.

Application: Under Section 5(1), the parties voluntarily agree to pre-litigation mediation. They choose a mediator empanelled by an Authority under the Legal Services Authorities Act, 1987, as per Section 5(3)(iii).

Outcome: The mediation results in a mutually agreeable payment plan and repair schedule. This avoids the need for court intervention and preserves the landlord-tenant relationship.

Conclusion: Engaging in pre-litigation mediation helps both parties save time and legal expenses. Ignoring this step could lead to a lengthy court process.

Example 4: Employment Dispute in a Tribunal

Introduction: An employee files a complaint with a tribunal regarding unfair dismissal. The tribunal is notified by the State Government for pre-litigation mediation.

Application: As per Section 5(2), the tribunal is subject to pre-litigation mediation provisions. The employee and employer agree to mediation with a mediator empanelled by a court-annexed mediation centre.

Outcome: The mediation leads to a settlement where the employee receives compensation and a positive reference. This avoids a formal tribunal hearing.

Conclusion: Pre-litigation mediation offers a confidential and less adversarial resolution. Non-compliance could result in a formal tribunal process with uncertain outcomes.