Does commencement of mediation interrupt the limitation period for a court or arbitration claim?

As per the Commercial Courts Act 2015, any period during which the parties ‘remain occupied’ with the pre-institution mediation under the Act shall not be computed for the purposes of limitation.

In other cases, the mediation proceeding does not suspend the limitation period for a court claim. Section 77 of the ACA prohibits parties to conciliation from initiating any arbitral or judicial proceedings during the conciliation proceedings in respect of a dispute that is the subject matter of the conciliation proceedings, except that a party may do so where such proceedings are necessary to preserve its rights. So, in the event that the limitation period is close to expiring, the claimant is advised to initiate arbitral or judicial proceedings.

Forthcoming legislation is likely to address this issue and is expected to exclude the period of mediation from the period of limitation.

Enforceability of mediation clauses

Is a dispute resolution clause providing for mediation enforceable? What is the legal basis for enforceability?

A dispute resolution clause providing for mediation would be enforceable in India in the sense that if a suit is filed, then a court would most likely enforce the clause and send parties to mediation in pursuance of its power under section 89 of the CPC.

Confidentiality of proceedings

Are mediation proceedings strictly private and confidential?

Mediation proceedings are strictly private and confidential in India. Section 75 of the ACA provides that, notwithstanding anything contained in any other law in force in India, the conciliator and the parties shall keep all matters relating to the mediation proceedings confidential, and that confidentiality extends to the settlement agreement except where its disclosure is necessary for implementation and enforcement.

Best practices dictate that in a private commercial mediation, parties to the dispute and the mediator sign a confidentiality agreement prior to the commencement of mediation proceedings.

Section 80(b) of the ACA specifically provides that the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.

Section 81 of the ACA makes the following inadmissible as evidence in arbitral or judicial proceeding:

views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;

admissions made by the other party in the course of the conciliation proceedings;

proposals made by the conciliator; and

the fact that the other party had indicated to accept a proposal for settlement made by the conciliator.

In court-referred mediations, confidentiality is protected by the rules drawn up by courts under the CPC to regulate cases referred by judges to mediation (Rule 20 of the Model Civil Procedure (Mediation) Rules 2003). These rules are similar to the rules set out in the ACA. In their reports to the court, the mediators must only state whether the case has been settled or not; no further details are to be given.

Confidential information given by one side to the mediator in the mediation process cannot be revealed to the other party.

In the case of a breach of confidentiality, the injured party can sue for breach of contract, negligence or wilful misconduct. It can seek damages or a permanent injunction against disclosure. It may also be entitled to seek interlocutory injunctions to prevent disclosure. The court will take a serious view of a breach of confidentiality.

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