Guest post by Pallavi Mohan
Recently, the High Court of Jammu & Kashmir and Ladakh upheld a trial court’s order, holding that the court cannot use any offer made or settlement discussed during a mediation proceeding in deciding the case.
Let us understand the implications of this a little more.
What is Mediation?
Mediation is a negotiation-based form of dispute resolution, where the disputing parties discuss contentious issues with each other with the help of a neutral party called a mediator. Mediations are a less expensive, faster and more accessible form of dispute resolution than conventional litigation or arbitration. Parties can start mediation on their own by appointing a mediator to decide the dispute.
Where a court case has already been started, parties can request the court to allow them to settle their dispute through mediation. In such cases, the court can adjourn the proceedings and direct the parties to undergo court-annexed mediation. In such mediation, if the parties reach a settlement, the mediator sends the signed settlement to the court. The court incorporates the terms of the settlement in the final order that it passes and the parties then have to abide by this order.
What happens when parties cannot reach a settlement during a court-annexed mediation?
Where parties cannot reach a settlement in a court-annexed mediation, the mediator sends a non-settled report to the court. The mediator does not disclose any other information revealed/discussed during the mediation proceedings in their report since mediation proceedings are confidential. This means that any offers made by either party during the mediation should not influence the court while deciding the case.
What was the case before the High Court and what did the court hold?
The High Court was dealing with an appeal from trial court order, which had partly declined a party’s plea for amending the plaint in a suit. Before the trial court, the plaintiff had requested permission to amend their plaint. They wanted to bring on record events that had happened after the filing of the suit, which would be relevant to the suit. One such event was that the disputing parties had reached a compromise while the suit was pending. The trial court partially allowed the amendment of the plaint, but did not allow the amendment about the compromise. The court observed that the defendant had retracted from the compromise before a signed copy of it could be presented to the court, so the court could not rely on the compromise.
The High Court observed that anything that has transpired between the parties during the mediation sessions is confidential and cannot be the subject of adjudication, if the parties do not reach a settlement. Neither party can use any offer made during a mediation proceeding against the other side in court, if they have failed to arrive at a settlement.
The High Court upheld the trial court’s order, partially declining the amendment of the plaint. For this, it relied on Rule 20 of the J&K Mediation and Conciliation Rules 2019, which provides for confidentiality of mediation proceedings, the manner for disclosure of information revealed by parties during mediation, and the inadmissibility of such information for adjudication before the court. Most states have a similar provision in their State Mediation and Conciliation Rules.