The diplomatic relationship between both the country has been quite evident since decades. The recent instance being the UAE-India Comprehensive Economic Partnership Agreement (CEPA) enforced on May 1, 2022. The upshot of the agreement is that businesses can now take ascendancy of many new benefits that are inclusive of greater access for United Arab Emirates exports plunging into the Indian market through the reduction or removal of tariffs on more than 80 per cent of products. The CEPA, that was agreed and signed in February, with the conjecture to augment the total value of bilateral trade in goods to over dollar 100 billion and trade in services to over dollar 15 billion within five years. Both the countries looking completely optimistic over the future regarding their respective economic growth. While the international trades are expanding it becomes a necessity to have the amendments in various dispute resolutions in their respective spheres as well.
Mediation for the Settlement of Civil and Commercial Disputes in United Arab Emirates
On 29 April 2021, the UAE’s federal government promulgated Federal Law No. 6 of 2021 on Mediation in Civil and Commercial Disputes (the UAE Mediation Law). This law constructs and intensifies preceding groundwork for mediation by proffering a robust mediation framework throughout the United Arab Emirates. The law executes an umpteen number of international best practice features that are probably in favour to encourage mediation for resolving commercial disputes. These include freedom to select and appoint a private mediator, safeguarding and shielding of ‘without prejudice’ discussions, and a foreshadowed registration regime to ensure suitably qualified mediators.
The UAE Mediation Law is lodestar, comprehensive and groundbreaking legislation. It concotes an exhaustive regulatory structure for mediation throughout the United Arab Emirates commencing for the first time, corroborating that a consistent and harmonious framework applies in all Emirates. The law follows and heeds on a global trend towards regulation that either strongly invigorates or mandates mediation of civil disputes. For instance, local courts have potent to encourage mediation, provided both parties consent in United Kingdom, while in Australia there is a complete different scenario the courts have power to impel parties to mediate, regardless of their consent.
Chapters 2 and 3 of the UAE Mediation Law deals exclusively with Judicial and Non Judicial Mediation. Judicial Mediation, competent courts now have the authority to refer disputes to mediation at any stage of a case, provided both the parties consent. The court’s referral decision must also mention various matters, inclusive of the parties’ undertaking to appear at the mediation and to provide the mediator with all requisite information and documents, the subject of the mediation, its duration (that must not go beyond three months, with the provision to renew once) and the division of mediation costs stipulated under Article 5 of the UAE Mediation Law. And in the case of Non-Judicial Mediation, parties who have entered into a mediation agreement may directly resort to a ‘Mediation and Conciliation Centre’ (defined as a centre established under Federal Law No. 17 of 2016 as amended or any other local law) before the inception if any legal action before the local courts or an arbitral tribunal. Parties must make an application for Non-Judicial Mediation to a supervising judge. The court will impede either party to an active mediation from instituting any legal action before the courts or through arbitration, unless the mediation agreement is invalid or impossible to implement provided Articles 22(1) and 23 of the UAE Mediation Law. Procedural aspect of both Judicial Mediation and Non-Judicial Mediation are quite similar stipulated under Articles 9 and 23 of the UAE Mediation Law. A mediator must notify the parties regarding the mediation sessions (including through electronic means) and parties can attend the mediation sessions in person or through their respective legal representatives under a special power of attorney and can engage advisors to attend sessions with them. Prior to the first session, each party to the dispute must submit and conform a brief summary of the claims to the mediator not to the other party, accompanied by succouring documents and evidence. Mediation sessions can be held remotely and the mediator has broad power and authority to conduct sessions and utilize whatever methods appropriate to bring both the parties closer together, including holding private sessions with each party. The mediators may hear the testimony of third parties with the respective parties’ consent and appoint technical experts to assist them. Such experts can be selected from the expert rosters of the Ministry of Justice or (importantly) the parties may select any other expert expressed under Articles 10, 11 and 12 of the UAE Mediation Law. The UAE Mediation Law has made it evident that mediation procedures conducted in compliance with the law are confidential and no documents and information provided within them, that comprises of agreements or compromises, can be invoked before any court or any other entity whatsoever, unless all parties involved approves for the same or the documents or information relating to a criminal act that has been stipulated under Article 14 of the UAE Mediation Law. Articles 4, 6 and 25 of the UAE Mediation Law enumerates on the establishment of private mediation centres and branches of foreign mediation centres, subject to licensing requirements. Parties may avail and appoint a private mediator and in case of any failing agreement, the competent court will provide options for potential mediators who are registered on a list maintained by the Mediation and Conciliation Centre. The Proposed mediators must be in conformance with their neutrality and independence and should have a continuing duty to disclose any facts or circumstances that would cause either party to doubt the said circumstance. The mediation agreement must define the dispute to be resolved and must appoint a mediator or indicate a method for appointment. It is permissible for parties to agree that mediation can be conducted in a language other than Arabic as stated under Article 3 of the UAE Mediation Law. The UAE Mediation Law clearly aspires to avail and have access to high caliber mediators who are to be selected from the retired members of the judiciary, practising and non-practising advocates registered with the Ministry of Justice, and global experts in the field of business and law who are reputed for their expertise, integrity and neutrality as stated in Article 4(1) of the UAE Mediation Law. The status of UAE as a hub for international business, becomes a necessity to have access to multi-lingual mediators (fluent in Arabic, English and other languages) and if demand persisting for traditional in-person mediation remains strong, mediators based ‘on the ground’ will keep costs down. A comprehensive training system to accredit mediators (held in English and Arabic) must also be developed. The Mediation and Conciliation Centre will require the need to support the business community by providing a template mediation agreement in English and Arabic. This will ensure parties to have access to a template that is in accordance with the UAE Mediation Law and help in managing their expectation with the mediation process.
AN OVERVIEW OF INDIAN MEDIATION BILL 2021
The Indian justice system still grappling with the inadequacy and rising pendency for cases and the evolution of arbitration in these years the aim for now is to institutionalize the mediation settlements. The quest to have a statutory framework for compulsory mediation in certain cases of civil and commercial disputes and to strengthen the process of mediation in India, the Bill was placed before the Rajya Sabha (Upper House of Parliament) on December 20, 2021 and referred to the Parliamentary Standing Committee on the same day.
With sixty five sections and ten schedules in the current draft substantially covering institutional mediation, establishment of a regulatory body, acknowledging the entities conducting mediation, their respective role, qualifications and training of mediators, online mediation, community mediation, settlement of cross border disputes through mediation, compulsory pre-litigation mediation and enforcement of mediated settlement agreements. The Bill is pertinent to Indian residents or entities incorporated or having place of business in India; parties who have consented to subject their disputes to the provisions of the Bill by executing a mediation agreement; and international mediation. Section 3(f) of the Bill states international mediation as the mediation related to commercial disputes arising out of legal or contractual relationship governed by applicable Indian laws, where at least one party is a foreign national, or body corporate, limited liability partnership, or association of individuals having place of business outside India, or a foreign government. In essence, parties who wish to be governed by the Bill must choose Indian law as the substantive law of the contract. Additionally, the Bill also applies to commercial disputes where one of the parties is the Central or State government, or its agencies, public bodies, corporations, local bodies, or entities owned or controlled by the appropriate government. The application of the bill is however restricted to government and its agency and with regard to the consumer, industrial disputes are negated. Section 44 provides that if any matter is affecting the peace and harmony of a community or locality, it can be settled through this kind of mediation with the consent of the concerned parties. To initiate the proceedings, the parties have to present an application to the authority under the Legal Services Authorities Act, 1987, or to District Magistrate or Sub-divisional Magistrate, and then mediators will be appointed through the panel. The procedure of such mediation is given under Section 45 of the Bill. The Bill provides a written agreement between parties for the submission of one or more disputes to mediation. The requirement of a written mediation agreement can be easily fulfilled by drafting multi-tier dispute resolution clauses where mediation is the primary step and can be foreseen that parties are out of court in the near future. A robust institutional mechanisms called Mediation council of India would be formed where education and training will create promising and competent mediators. Though the Bill provides for the appointment of members of the council, there is a loophole regarding their qualifications and experience. An electronic depository of mediated settlement agreements will aid research and growth of jurisprudence in this field of law. But it is paramount and serious concern that the principles of confidentiality are not compromised in the process. Section 3(l) of the Bill defines a mediation service provider as a body or organization recognized by the MCI for conducting mediation. Such service provider will also include Lok Adalats, authorities constituted under the Legal Services Authority Act and court-annexed mediation centre. Section 6 of the Bill envisage pre-litigation mediation mandatory for civil and commercial disputes, regardless of parties getting into a mediation agreement.
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