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Published : September 04, 2013 | Author : stutiraibagkar
Category : Company Law | Total Views : 2413 | Rating :

Stuti Raibagkar 5th Year Law Student, Institute of Law, Nirma University is eager to publish my article on your online Legal Resource. The Topic of Article is "How Mediation Can Benefit The Business Community"

How Mediation Can Benefit The Business Community

Alternate Dispute Resolution, commonly known as ADR. Mediation is most helpful in case of disputes. The name itself signifies that it is an alternative option to some kind of proceeding. And this proceeding is known as litigation. In mediation the disputes are resolved outside the court “Kacheri”.

ADR is ultimate mechanism where the process of trial is speeded up as a normal trial in the court of law takes much long time.

Where you go without any worry, your disputes gets resolved in 4 or 5 sittings, you don’t have to pay exorbitant price, you come with amicable solution and the dispute ends, this is called mediation in simple words.

In this speedy mechanism you don’t need to follow any sections or articles of any code because this is the only method which does not bind the party to a strict formula of Acts and Codes. The only code which applies here is a natural justice code and it is also free from the court mandatory rule of precedents. This is a process where both the parties come to an easiest way which is totally satisfying to both the parties which might not be possible in the case of court proceedings.

In India we have more than 1 crore of cases, pending in the Indian courts. We have to adopt a system which is fast, effective and useful. The cases are increasing day by day in the courts. We need a really good solution, and that solution is MEDIATION. We have to adopt and transfer more and more cases towards mediation. And more than anything else, the parties come to a conclusion which is in favor of both of them. That is the best part of the mediation, which you cannot find it anywhere else. What can be so good than this?

Now suppose a problem has occurred. The parties went to the court and filed the case, but they think that if they wait for a month’s/ years time they will suffer a great loss. So, they decided to go to the process of mediation.

These parties are X and Y. X and Y went to a third person who is neutral, who is not interested in your matter at all and also he is impartial, and he is capable of solving your problem. X and Y went there and sat with him, had some preliminary talks. After this X and Y starts narrating their problems and discuss about their position and disclose all the relevant material. The mediator would then tell parties to come to the conclusion which is in the benefit for Both, but if suppose both of them fails to come to a conclusion or if there is a deadlock seen then the third neutral person will have private session with both the parties. In the private session more facts will come into the pictures and the case would be clearer. After having the private session with both the parties the third person would tell to disclose off the relevant facts by each the parties or else he will narrate it. Now the main procedure comes. After telling the facts, both the parties have to come to an amicable and novel conclusion. The third person would help the parties but they have to come to a conclusion of their own choice which is just for both the sides.

In the whole process we can see that it is a win-win process. Here nobody wins and nobody losses the case because the final outcome is the best middle way searched by the parties. The whole process explained above is known as mediation and the third neutral, impartial, non-judgmental, faithful person is known as a mediator. This whole process takes place outside the court proceeding within maximum 2/3 months!!! In the end there is no grudge or animosity between the parties and it’s a happy ending for both of them. And with the solution which is difficult to find in the court or any other proceedings.
Confidentiality is the back bone of the mediation process. The mediator ensures both the parties that whatever they will disclose will kept definitely with him only. The mediator will not come in the court as a witness. So both the parties can freely disclose the exact facts. This point attracts the parties towards it. Specifically in business matter where they are very worried about their reputation they want that their matter should not be spared in the media or anywhere.

The mediation process is useful in many fields. Matrimonial cases, land cases, vehicle accidents, civil cases, etc

One of them is business disputes. When we refer to a team business we think why a grave dispute will occur in a company or any kind of business? They have agreements which they have to follow. If there is any conflicts regarding any points they have the agreement which they can refer. But sometimes when a dispute occurs in a business firm/ company it is so grave that even the best partners becomes enemy to each other. And to solve a dispute between them is very necessary because that affects the whole business world as well as a country.

A person is having an aviation business. He has 42 aircrafts and using Airport for passenger and Cargo travel. He is doing good business and has also achieved good fame in terms of service and time adherence. Then they thought of expansion of their business by acquiring a similar aircraft company which was having debt and they would get the aircraft a lower price as compared to the market price with huge loss and thinking that by increasing the fleet would help them to cope up with increasing air traffic and would also increase their revenue eventually.

The deal was struck and the cash flow would come from three financial institutions in terms of loan. But the calculations went wrong and slowly the spending was more in terms of fuel (which became costly), maintenance, and tax for using Airport, employee’s pay etc. and the losses started mounting. The crew started to resign and part of the crew was forcefully terminated without due compensation and notice with a risk of going to the court. Slowly the debt became so big that Government started giving notices and ultimately it had to reduce the number of flights with a fear of stopping the business.

Now we have a situation where in, a company cannot function without finances. As company was doing good business before, it wants to continue, but cannot go on as before.

The government on the other hand has helped enough and now cannot continue with the same help. Imagine if either of the parties went to the court, it would take long time to come to any reasonable solution. Till that time the aircrafts would become old and when decision comes there would be no point in flying those old aircrafts. And hence it’s something like forgetting the business. But if both the parties decide a mediator who can come to a reasonable solution within months, everything would be back to normal in due course of time. It would serve the employees and the common public.

The mediator would ask a third party to put in his own finances and bail out the crises and would request the Government to increase the period of payment of term loan. So, the company starts running again making business and would start repaying the loan amount, and things could be evened out. This becomes a win-win situation for the company as the company starts doing business again. Government gets their required dues back. The third party gets his due share and the people at large are at a benefit.

The company will have to take back its employees and give the payment of their back date dues as the termination was illegal and there would be no law suits.

The whole process would be in a close room without any media and would thus prevent from getting bad publicity and bad name.

Nowadays in towns and villages the “Panchayat” and a committee of people have started solving day to day problems rather than going to the courts. In businesses and joint businesses also mediation is included in their agreement clause which will maintain the good will of the company.

Mediation is a natural process. It starts the day you are born. And you become convinced that this only keeps family, society, state, country together.
Mahatma Gandhi has said about mediation in his Autobiography:
…But, both were happy over the result, and both rose in the public estimation. I had learnt the true practice of law. I had learnt to find out the better side of human nature and to enter men’s hearts. I realized true function of lawyer was to unite parties riven asunder. The lesson was so indelibly burnt into me that large part of my time during the 20 years of my practice as a lawyer was occupied in bringing about private compromises of hundreds of cases.
I lost nothing thereby-not even money; certainly not by soul

The  author can be reached at: stutiraibagkar@legalserviceindia.com

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