I attended the Seminar for bringing awareness about Mediation and its benefits to SMEs, on Friday at the Taj President. Though I could only attend the first part of the seminar because of my flight schedule, I indeed gained a lot of knowledge from the part that I actively participated in.

The Seminar started with an introduction on mediation and the process explained by Mr. Sumit Banerjee (Chief Mentor for the Centre of Mediation and Conciliation initiated by Bombay Chamber of Commerce). While explaining the process, Mr. Banerjee also spoke about the statistics that have been observed globally about how 70% of mediation has been arrived at a settlement. Mr. Banerjee also addressed the doubts concerning the legal validity of a settlement agreement arrived through mediation. In his opinion, there is no need to question the legal validity of a settlement agreement since one must trust the word given by the parties in mediation. He also pressed on the cost – effective characteristic of mediation. He gave us a brief on how mediation helps save time, if the matter is resolved appropriately. He explained the importance of a Med-Arb Clause in contracts and how if the parties are given a chance to compulsorily include Mediation for a month before going on to arbitration; can prove to be beneficial for them. Med-Arb clauses also are worth giving that extra one or two months to mediation which possibly can straighten out the dispute and is not necessary to turn to arbitration later.

Mr. Banerjee, then went on to introduce and thank the panellists – Mr. Ramesh Chander (Commissioner of Income Tax, CBDT) and Mr. Sudhir Garg (Joint Secretary, Ministry of MSME).

Mr. Ramesh Chander started off with providing a disclaimer of how he is unaware about the procedure of mediation but went on to clarify that he is certain that this process will definitely be helpful in taxation disputes as well. Mr. Chander cited many personal examples where his friends could have benefited from mediation but instead chose to go litigate and lost the price of a certain property due to the dispute. Mr. Chander also focussed on how all parties in mediation will turn out as winners and no one will lose in a mediation process as everyone will have to equally compromise and equally balance the dispute. Mr. Chander also gave an appropriate taxation illustration of how when there is a dispute with respect to income tax payable of an amount if INR 10 lakhs by a citizen of India, and the dispute goes on for years together in litigation and the value of 10 lakhs keeps decreasing year by year, in fact causing loss to both the parties. Instead, mediation can be approached and the same dispute can be resolved within a week or maximum a month where both parties shall be winners. Mr. Chander also gave importance to expertise of mediators and how a list of expert mediators on specific topics should be maintained by all institutes including the Centre of Mediation and Conciliation. These mediators can be approached specifically for different expertise and the disputes can be resolved better. Another very important point made by Mr. Chander was to take care of the many entities involved in mediation and other forms of dispute resolution such as the lawyers, judges and the chartered accountants. These professionals may not appreciate the active participation in mediation because of the lack of expertise and because mediation as well as alternative dispute resolution might take away their bread and butter. However, all these entities can come together and learn the effectiveness of mediation and participate in mediations as well.

Mr. Sudhir Garg spoke majorly concerning the SMEs. His focus was to provide enough information to the SMEs on how to manage the affairs in a way that disputes do not occur. He spoke about certain practical considerations in a business such as ego management and negotiating power. SMEs are generally smaller suppliers to bigger companies and MNCs. They have lesser negotiating power when it comes to their contracts as well as disputes occurring from these contracts. Mr. Garg focussed on how to avoid these disputes. He also gave a very relevant example of road rage and how fights on the road are generally settled when there is a mediator present versus fights that escalate without a mediator. He also gave information about how the MSME Facilitation Council works and how the Council has helped many cases to be registered and resolved quickly. He also pressed on the effectiveness of the SAMADHAAN Portal for the MSMEs and how the Government is trying to provide many solutions for the MSMEs that they can take advantage of. He also invited suggestions from the audience members of the Seminar where practical issues faced by the MSMEs and the lawyers were taken into consideration and written down by him for better implementation, in the future.

The practical experiences and examples by Mr. Garg and Mr. Chander gave an insight into the many benefits that mediation may have, if implemented correctly.

The next session was an informative speech by Mr. Sameer Shah (Advocate, Arbitrator, Mediator) on how MSMEs can benefit from Mediation. He started off by quoting Benjamin Franklin – “Arms of prevention are worth pounds of cure”. He corelated this quote with the process of mediation and how mediation in fact can be used as a tool to prevent lengthy disputes rather than spending on litigation in order to cure disputes. Mr. Shah mentioned how courts provide us with a judgment that includes a clear right or wrong with respect to a dispute whereas Mediation goes on to pronounce both parties as right and forms a healthy balance and settlement between them. In mediation, parties themselves arrive at a solution with the help of a trained mediator.

Mr. Shah from his experience of a lawyer focussed on the traditional mindsets of people in India and the tactics they carry out in order to lengthen the disputes, especially when they are respondents. For SMEs having lesser negotiating power, it becomes difficult to then shorten the process and they have to wait for many years in order to recover their money or complete the dispute. In Mr. Shah’s opinion, many lawyers do not realise the importance of mediation and are not even trained in mediating the dispute which is a major lacuna in India. Mr. Shah then went on to explain the process of mediation and how party autonomy is most important in this process. He also gave an example of the Commercial Courts Act that provides for compulsory mediation for 3 months before the dispute is brought to court. Such a provision shall in fact provide many benefits to the parties. This provision has also been introduced because the Legislature has confidence in the mediation process and will reduce the number of cases coming to the Commercial Courts Act.

Mr. Shah also stated that in his opinion, there is not a single dispute that cannot be brought in the parameters of Mediation and be resolved through the same. Each and every dispute can be successfully resolved through mediation and that is the biggest benefit of such an alternative dispute resolution remedy. Mr. Shah also mentioned how lack of communication gives a push to formation of disputes. Mediation is in fact a form of informal communication between parties, sitting across the table and trying to resolve the problems they have with each other. This proves how mediation can be an effective tool of dispute resolution and problem solving for every kind of dispute. Mr. Shah also gave an example of cheque – bouncing S. 138 applications that can be successfully resolved through mediation instead of going to courts. People do not understand the gravity even when bouncing of cheque is provided as an offence. These cases go on for years together and can be successfully resolved through mediation instead of waiting for court’s judgment. Mr. Shah concluded by giving a statement that one must get inspired by: “In court you get law, in mediation you get justice.”

I had to unfortunately leave after Mr. Sameer Shah’s speech due to my flight schedule. I regret not being able to attend the other three sessions that had varied topics on mediation. This seminar helped me understand the importance of mediation in every kind of dispute. The Government is also taking important steps to promote mediation. The Bombay Chamber of Commerce has timely incorporated the “Centre of Mediation and Conciliation” that shall help its members and parties willingly wanting to acquire their mediation services. They also have a draft Med-Arb Clause that can be availed by parties. Mediation does seem like the way forward and it is about time lawyers, companies and other entities involved get together to collaboratively make alternative dispute resolution, a success.

– Shalvi Mehta, Arbitration Lawyer