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India’s Mediation Act of 2023

08 December 2023

India’s Mediation Act of 2023

Bhavya Verma, Junior Associate, Khurana & Khurana, Delhi

India’s approach to dispute resolution received a substantial overhaul as the Mediation Act of 2023 came into effect on September 15, 2023. Despite mediation already being used as a pre-litigation or dispute resolution method, this significant legislation formalizes the country’s mediation procedures, solidifying its status as a highly effective alternative to lengthy litigation. 

The act, designated to promote and facilitate mediation, emphasizes institutional, online and community mediation to “resolve disputes in a time-bound manner.” Bhavya Verma, a junior associate at Khurana & Khurana in Delhi, highlighted Section 18 of the act. This section mandates mediation to be completed within 120 days from the initial appearance, extendable to 180 days by mutual agreement.

Among its key features, the act also establishes a regulatory body overseeing mediator and institution registrations and enforcing mediated settlement agreements.

Verma emphasized the act’s relevance in resolving complex IP disputes, particularly trademark infringement and passing off cases. Mediation’s flexibility in choosing mediators well-versed in technical aspects makes it a preferred avenue.

“The cases involving patents, geographical identification, trade secrets, etc. contain several technical aspects which are not so convenient for the courts to quickly grasp and deal with. Hence, litigation with respect to IP rights issues becomes even more tedious and time-consuming, and the IP rights owners get limited time to recover the associated costs in the development of the technology and gain monetary benefits,” explained Verma.

Many IP rights owners in India hesitated to take the mediation route due to flaws in the mediation process. These include the absence of stand-alone laws on mediation, lack of standardization and varying approaches followed by different mediators. Verma stressed the act’s crucial role in refining the mediation system, aiming to convert critics into believers in its efficacy.

According to her, the act’s biggest strength concerning resolving IP disputes is the incorporation of the provision about pre-suit mediation. Section 5(1) of the act enables parties to engage in mediation before court filing, regardless of whether a mediation agreement exists or not. The act defines pre-litigation mediation as a process of undertaking mediation to settle disputes before filing a claim before a court of law.

The provision also stipulates that pre-litigation of commercial disputes must be in accordance with Section 12-A of the Commercial Courts Act, which envisages pre-institution mediation as a mandate unless urgent interim reliefs are sought.

“The key point is that nearly all commercial IP disputes contemplate and demand urgent interim reliefs to conduct civil raids. When it comes to trademark infringement or counterfeiting, IP owners typically assert their right to conduct search and seizure operations. However, the entire process of carrying out court commissions or civil raids will be rendered pointless if a rights holder considering immediate relief chooses pre-litigation mediation. This will alert the infringers of such objectionable use and a forthcoming lawsuit beforehand. Thus, to safeguard the rights holder’s interests, the majority of IP lawsuits include prayers for urgent interim relief,” said Verma.

- Espie Angelica A. de Leon

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