Section 19 of the Act deals with Mediated Settlement Agreement (MSA). It is the agreement in writing that results from the mediation, settling some or all of the referred disputes between parties and it may extend beyond the disputes referred. It is to be signed by the parties and authenticated by the mediator. Once signed and authenticated, the MSA is final and binding like a decree – rather, a consent decree – between the parties which is enforceable under the Code of Civil Procedure, 1908 (‘CPC’) as per Section 27 of the Act.

MSA requires careful consideration since a decree is being attained without intervention and/ or adjudication and/ or authentication done by any court of law. It is a mere product of discussions and deliberations between parties, bordering on the edge of nuances of what seems right and its commercial implications for each party.

Since the MSA is capable of covering disputes beyond the mediation reference or since it could extend its coverage to more than one contract or to future disputes, it must be drafted with utmost care and extreme caution. Being a decree enforceable under the CPC, 1908, it shall also be subject to necessary provisions of security deposit, withdrawal of such securities, etc.

The MSA can be challenged only before the court having necessary pecuniary or territorial jurisdiction, having jurisdiction over the subject matter of mediation. Section 28(2) of the Act provides restrictive grounds for challenge like fraud, corruption, impersonation or where the subject matter of mediation fell under the ambit of clause 6 of the Act, which makes the Act inapplicable to certain disputes. The time limit to file such a challenge has also been capped to 90 days from date of receipt of the copy of the MSA, with further discretion of another 90 days upon ‘sufficient cause’ of delay being shown.    

The contours of the Act provide for space to accommodate the administrative functioning of a PSU, amongst others. Where the government or agency (includes PSU/PSE) is a party, then MSA shall be signed post the written consent of the competent authority of such government or any of its entities (Section 49). The existence of such a provision allows PSUs to bring in a checking process.


Source link