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The Companies (Mediation and Conciliation) Rules, 2016 was essentialy enacted to implement the provisions under section 442 of the Companies Act, 2013 which allows for mediation and conciliation as a dispute redrassal mechanism for the corporate affairs and an effective incorporation of Alternative Dispute Resolution (ADR) in solving company related disputes. The rules were brought in to reduce the burden of the quasi-judicial bodies like the tribunals that were established to dispose of the cases effeciently and expeditiously.

Under the rules, a Regional Director shall be appointed by the Central Government in the Ministry of Corporate Affairs. The Regional Director has been assigned a certain degree of autonomy in constituting the Mediation and Conciliation panel. He/she may appoint a panel of experts as mediators or conciliators if they possess the necessary qualifications and eligibilty as is required. Such appointment should be made only after the applications of the people interested to be empanelled has been invited by the Regional Director. His autonomy is also evident from his power of removing any person from the panel after recording adequate reasons for the same.  A member desiring to leave the panel shall apply to the Regional Director for such withdrawal from the panel accompanied with a statement of intent and the Regional Director, in turn, shall within fifteen days of such application update the panel accordingly. The rules, however, significanty deviate when it comes to qualifiactions for empanelment as the rules strictly lays down the professions from which a mediator/ conciliator might be chosen. In theory, though, an adjudicator in mediation/ conciliation can be any neutral person who might not necessarliy belong or be a part of the legal field.

The usual procedure of mediation and conciliation has been adhered to in the rules with the appointment of the mediator/conciliator (whether two or more) by the Central Government or the tribunal or the appelate tribunal, as the case maybe. The date, time and place of the meetings shall be decided by the mediator/ conciliator in consulatation with the parties or the Central Government or the tribuanl or the appelate tribunal and joint or separate meetings maybe scheduled accordingly with the parties. The mediator/ conciliator shall be bound by the principles of fairness and justice and not strictly by the Indian Evidence Act, 1872 or the Code of Civil Procedure, 1908. The parties may choose to delegate their represenatation to any authorised person or counsel with the permission duly obtained from the mediator/ conciliator. A mediation/ conciliation proceeding shall be deemed to have failed in the circumstance of the parties abstaining themselves from participation in such proceeding on the due date, place and time. The parties are allowed independence and have the right to put forward any suggestion of settlement to the mediator/ conciliator " without prejudice ". A settlement agreement shall be drawn up by the mediator/ conciliator on successful completion of the procedure within a time period of three months and a report of an unsuccesful proceeding shall be sent to the Central Government or the tribunal or the appelate tribunal.

The role of mediator/ conciliator is of immense importance here, as he is the supervising authority of the entire mediation/ conciliation proceeding. He assists the parties in reducing their misunderstandings, helps them to reach grounds of compromise amidst other functions. The rules also mentions the various ethical and moral values that are to be upheld by the mediator/ conciliator while conducting the proceedings.

  • Need of the enactment of the Companies ( Mediation and Conciliation ) Rules, 2016
  • Role of the Regional Director under the Rules
  • Procedure followed while conducting mediation/ conciliation under the Rules

BY : Mekhla Chakraborty

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