Judges who refer the cases for settlement through any of the ADR methods are known as referral
judges. The role of a Referral Judge is of great significance in court-referred mediation. All cases are
not suitable for mediation. Only appropriate cases which are suitable for mediation should be referred
for mediation. Success of mediation will depend on the proper selection and reference of only
suitable cases by referral judges.
Reference to ADR and statutory requirement
Section 89 and Order X Rule 1A of Code of Civil Procedure, 1908 require the court to direct
the parties to opt for any of the five modes of alternative dispute resolution and to refer the case for
Arbitration, Conciliation, Judicial Settlement, Lok Adalat or mediation. While making such reference
the court shall take into account the option if any exercised by the parties and the suitability of the
case for the particular ADR method. In the light of judicial pronouncements a referral judge is not
required to formulate the terms of settlement or to make them available to the parties for their
observations. The referral judge is required to acquaint himself with the facts of the case and the
nature of the dispute between the parties and to make an objective assessment to the suitability of
the case for reference to ADR.
Stage of Reference
The appropriate stage for considering reference to ADR processes in civil suits is after the
completion of pleadings and before framing the issues. If for any reason, the court did not refer the
case to ADR process before framing issues, nothing prevents the court from considering reference
even at a later stage. However, considering the possibility of allegations and counter allegations
vitiating the atmosphere and causing further strain on the relationship of the parties, in family
disputes and matrimonial cases the ideal stage for mediation is immediately after service of notice
on the respondent and before the filing of objections/written statements by the respondent. An
order referring the dispute to ADR processes may be passed only in the presence of the parties and/
or their authorized representatives.
Consent
Under section 89 CPC, consent of all the parties to the suit is necessary for referring the suit for
arbitration where there is no pre-existing arbitration agreement between the parties. Similarly the
court can refer the case for conciliation under section 89 CPC only with the consent of all the
parties. However, in terms of Section 89 CPC and the judicial pronouncements, consent of the
parties is not mandatory for referring a case for Mediation, Lok Adalat or Judicial Settlement. The
absence of consent for reference does not effect the voluntary nature of the mediation process as
the parties still retain the freedom to agree or not to agree for settlement during mediation.
Avoiding delay of trial
In order to prevent any misuse of the provision for mediation by causing delay in the trial of the
case, the referral judge, while referring the case for mediation, shall post the case for further proceedings
on a specific date, granting time to complete the mediation process as provided under the Rules or
such reasonable time as found necessary.
Choice of Cases for reference
As held by the Supreme Court of India in Afcons Infrastructure Ltd. and Anr. V. Cherian
Varkey Construction Co. Pvt. Ltd. and Ors., (2010) 8 Supreme Court Cases 24, having regard to
their nature, the following categories of cases are normally considered unsuitable for ADR process.
i. (i) Representative suits under Order I Rule 8 CPC which involve public interest or interest of
numerous persons who are not parties before the court.
ii. Disputes relating to election to public offices.
iii. Cases involving grant of authority by the court after enquiry, as for example, suits for grant
of probate or letters of administration.
iv. Cases involving serious and specific allegations of fraud, fabrication of documents, forgery,
impersonation, coercion, etc.
v. Cases requiring protection of courts, as for example, claims against minors, deities and
mentally challenged and suits for declaration of title against the Government.
vi. Cases involving prosecution for criminal offences.
All other suits and cases of civil nature in particular the following categories of cases (whether
pending in civil courts or other special tribunals/forums) are normally suitable for ADR processes:
i) All cases relating to trade, commerce and contracts, including
-disputes arising out of contracts(including all money suits);
-disputes relating to specific performance;
- disputes between suppliers and customers;
- disputes between bankers and customers;
-disputes between developers/builders and customers;
- disputes between landlords and tenants/licensor and licensees;
- disputes between insurer and insured
ii) All cases arising from strained or soured relationships, including
- disputes relating to matrimonial causes, maintenance, custody of children;
- disputes relating to partition/division among family members/coparceners/co-owners; and
- disputes relating to partnership among partners.
iii) All cases where there is a need for continuation of the pre-existing relationship in spite of the
disputes, including
- disputes between neighbours ( relating to easementary rights, encroachments, nuisance, etc.);
- disputes between employers and employees;
- disputes among members of societies/associations/apartment owners' associations;
iv) All cases relating to tortious liability, including
- claims for compensation in motor accidents/other accidents; and
v) All consumer disputes, including
- disputes where a trader/supplier/manufacturer/service provider is keen to maintain his
business/professional reputation and credibility or product popularity.
The above enumeration of "suitable" and "unsuitable" categorisation of cases is not exhaustive
or rigid. They are illustrative which can be subjected to just exceptions or addition by the courts/
tribunals exercising its jurisdiction/discretion in referring a dispute/case to an ADR process.
In spite of the categorization mentioned above, a referral judge must independently consider
the suitability of each case with reference to its facts and circumstances.
Motivating and preparing the parties for Mediation
The referral judge plays the most crucial role in motivating the parties to resolve their disputes
through mediation. Even if the parties are not inclined to agree for mediation, the referral judge may
try to ascertain the reason for such disinclination in order to persuade and motivate them for mediation.
The referral judge should explain the concept and process of mediation and its advantages and how
settlement to mediation can satisfy underlying interest of the parties. Even when the case in its
entirety is not suitable for mediation a Referral Judge may consider whether any of the issues involved
in the dispute can be referred for mediation.
Referral Order
The mediation process is initiated through a referral order. The referral judge should understand
the importance of a referral order in the mediation process and should not have a casual approach in
passing the order. The referral order is the foundation of a court-referred mediation. An ideal referral
order should contain among other things details like name of the referral judge, case number, name
of the parties, date and year of institution of the case, stage of trial, nature of the dispute, the
statutory provision under which the reference is made, next date of hearing before the referral court,
whether the parties have consented for mediation, name of the institution/mediator to whom the
case is referred for mediation, the date and time for the parties to report before the institution/
mediator, the time limit for completing the mediation, quantum of fee/remuneration if payable and
contact address and telephone numbers of the parties and their advocates.
Role after conclusion of mediation
The referral judge plays a crucial role even after the conclusion of mediation. Even though the
dispute was referred for mediation the court retains its control and jurisdiction over the matter and
the result of mediation will have to be placed before the court for passing consequential orders.
Before considering the report of the mediator the referral judge shall ensure the presence of the
parties or their authorized representative in the court.
If there is no settlement between the parties, the court proceedings shall continue in accordance
with law. In order to ensure that the confidentiality of the mediation process is not breached, the
referral judge should not ask for the reasons for failure of the parties to arrive at a settlement. Nor
should the referral judge allow the parties or their counsel to disclose such reasons to the court.
However, it is open to the referral judge to explore the possibility of a settlement between the
parties. To protect confidentiality of the mediation process, there should not be any communication
between the referral judge and the mediator regarding the mediation during or after the process of
mediation.
If the dispute has been settled in mediation, the referral judge should examine whether the
agreement between the parties is lawful and enforceable. If the agreement is found to be unlawful or
unenforceable, it shall be brought to the notice of the parties and the referral judge should desist
from acting upon such agreement. If the agreement is found to be lawful and enforceable, the referral
judge should act upon the terms and conditions of the agreement and pass consequential orders. To
overcome any technical or procedural difficulty in implementing the settlement between the parties,
it is open to the referral judge to modify or amend the terms of settlement with the consent of the
parties.
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