Krupa & Co., a partnership firm dealing with supply of perfumes and essential oils enters into an agreement with Glassko Private Ltd (GPL). Pursuant to this agreement GPL was supposed to provide glass bottles for pac

CS Professional · Arbitration, Mediation and Conciliation · PYQS · June 2024
Krupa & Co., a partnership firm dealing with supply of perfumes and essential oils enters into an agreement with Glassko Private Ltd (GPL). Pursuant to this agreement GPL was supposed to provide glass bottles for packaging the products manufactured by Krupa & Co. The agreement between the two parties spelt out all the key clauses, including mediation as the mode of alternate dispute resolution, in case of any disputes. Both the parties were supportive of each other for their business. However, there was a change in GPL's management and the equation between the two parties also changed. There were concerns relating to equality of goods supplied by GPL. Krupa & Co., was evaluating to invoke the alternate dispute resolution mechanism as per the terms of the agreement. The matter was referred to mediation and the proceedings were taking place. However, during the pendency of the matter, GPL made the news of mediation public in one of Glass Association Forum's meeting, which impacted Krupa & Co. In the background of a case law, comment whether GPL's action is justified ?

Answer & Explanation:

Confidentiality is crucial in mediation because it allows for open and honest communication between parties, ensures fairness to all parties involved, and maintains the mediator's neutrality. Privacy is also a significant reason why many choose mediation as a form of dispute resolution. Confidentiality laws protect mediators and programs from distractions, harassment, and misuse of limited resources. Section 75 of the Arbitration and Conciliation Act, 1996 talks about confidentiality in conciliation proceedings. The case of Moti Ram Thr. L.Rs. and Anr. v. Ashok Kumar and Anr, established that mediation proceedings should be kept confidential. Prior to this case, parties had the option to choose whether or not to maintain confidentiality in their mediation proceedings. In this case, the Supreme Court directed that successful mediation results should be presented to the court in the form of a settlement agreement, signed by both parties, without mentioning any communication between them. If mediation is unsuccessful, the mediator should only report the result to the court without discussing the proceedings. In the Salem Bar Association v. Union of India case, a committee was formed to regulate mediation proceedings, and the Civil Procedure Alternative Dispute Resolution and Mediation Rules, 2003 were introduced, which provide non-binding guidelines for court-referred mediation. Rule 20 of these rules establishes all aspects of mediation as confidential, and the Supreme Court recommended that all High courts adopt these rules with certain modifications. Mediation proceedings are typically kept confidential, and it is considered unethical to disclose any communication that takes place during mediation sessions. This confidentiality has been upheld by courts in various cases, and it is generally not permissible to seek information regarding mediation proceedings through the Right to Information Act, 2005. However, in the Perry Kansagra case, an exception was made to the confidentiality rule for the first time. In view of the above discussion, it can be said that GPL's action is unjustified. Disclosing the details of mediation proceedings violates the principle of confidentiality as per the case law such as Moti Ram Thr. L.Rs. and Anr. v. Ashok Kumar and Anr. and Salem Bar Association v. Union of India.

Topics: Mediation

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