The Indian government is poised to establish the Mediation Council of India (MCI) by the end of this year, aiming to significantly improve out-of-court dispute resolution and enhance the ease of doing business in the country. Mediation, a process where parties engage a neutral third party to help them reach a mutually agreeable solution, has been identified as a key strategy to streamline conflict resolution in India.
According to sources familiar with the matter, the formation of the MCI is being prioritized, with members potentially being directly appointed by the central government or selected through a dedicated search-cum-selection committee. This proactive approach underscores the government’s commitment to promoting mediation as an effective dispute resolution mechanism.
The MCI will be established under the auspices of the Mediation Act, passed by the government in 2022, which mandates mediation proceedings to be completed within 180 days of initiation. The council will play a pivotal role in setting the standards for mediation practices, empowering mediators, and overseeing the education and certification of these professionals. Recognized institutions will be responsible for training mediators, ensuring they adhere to the highest ethical and competency standards.
The council’s structure includes a chairperson, two mediation experts, a chief executive officer, and a representative from a recognized commercial and industrial body. This comprehensive representation ensures a balanced approach to governing mediation practices in India.
The creation of the MCI marks a significant milestone in making mediation a preferred method of dispute resolution, particularly for businesses operating in India. Experts anticipate this initiative will further enhance the country’s attractiveness as a business destination. Namita Shah, co-founder of Presolv360, an online dispute resolution (ODR) forum, emphasizes the importance of this step, highlighting the growing focus on mediation, especially online mediation.
Currently, mediation is often pursued when mandated by courts or specific laws. However, the establishment of the MCI is expected to encourage more parties to voluntarily choose mediation as a preferred method of resolving disputes. This shift towards voluntary mediation is anticipated to significantly impact the landscape of dispute resolution in India.
The impact of efficient dispute resolution on the ease of doing business is undeniable. While India has witnessed an improvement in its overall ranking in the World Bank’s Doing Business Report (DBR), the country’s performance in enforcing contracts, a critical aspect of commercial dispute resolution, remains stagnant. The MCI is expected to address this challenge and contribute to a more efficient and transparent commercial environment in India.
