Mediation On The Table
Business Today|May 16, 2021
MEDIATION IS YET TO BECOME THE PREFERRED CHOICE FOR CORPORATE DISPUTE RESOLUTION, BUT PERSPECTIVES ARE CHANGING
VIJAYALAKSHMI SRIDHAR
HOW IT HAS EVOLVED

2002 Section 89 of the Civil Procedure Code amended to include mediation as a solution to workplace disputes

2005 Mediation and Conciliation Project Committee established by the Supreme Court to oversee implementation of mediation outcomes

2018 Section 12 A introduced as an amendment to the Commercial Courts Act 2015, making it mandatory for parties to opt for mediation before filing a suit; Mediation settlements allowed to have the effect of a civil court order or arbitration award on agreed terms

A Bollywood celebrity checked into one of the popular spa chains in the airport for a shoulder mas sage. In the middle of the massage, she called off the session and made a distress call to the police, claiming that the masseuse touched her inappropriately. The police immediately sealed off the spa. Soon, both parties got into a long-drawn, intense legal wrangle. With no solution in sight, the case was eventually referred for mediation. The mediator reviewed the case, listened to the two sides — the spa owner didn’t want to take a hit on the brand’s image and the celebrity wanted to avoid publicity on the topic. The mediator suggested that instead of a long-drawn trial, the owner could pay a compensatory fee for the inconvenience and trauma caused to the celebrity by the spa employee’s behaviour. Both parties found the verdict reasonable and the case was settled amicably.

Soon after acquiring a well-known hospital brand, a business group in Orissa discovered that crores of money was owed to some medical equipment dealers who had supplied to the hospital. There were no documents or personnel involved to prove the transaction. The suppliers were MSME businessmen who had been doing business with the hospital for a long time. When the case was referred for mediation, the mediator helped the new owners realise that waiving off the money owed or facing the suppliers in court would be tantamount to breaking their long-term trust in the hospital. It would not work in favour of the fresh start for the hospital. In the end, the new owners paid a portion of the dues and both parties agreed to a beneficial supply agreement going forward with a better process for reconciliation. Further, in an effort to honour and renew the suppliers’ goodwill gesture, the hospital gave stall spaces within the campus free of lease for four years.

In both cases, mediation helped in working out solutions more effectively than arbitration. But, though conciliation has been a traditional practice in the rural administrative system, it is still not the widely adopted route for settling civil disputes.

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