Companies Mediation and Conciliation Rules 2016. CA CS CMA eligible for appointment as mediator/conciliator in the panel of experts

Companies Mediation and Conciliation Rules 2016. CA CS CMA eligible for appointment as mediator/conciliator in the panel of experts under section 442

MCA has notified the Companies (Mediation and Conciliation) Rules, 2016. Under Section 442 of the Companies Act, 2013, the Central Government is authorised to maintain a panel of experts to be called as “Mediation and Conciliation panel” for mediation between parties during the pendency of any proceedings before the Central Govt./Tribunal/Appellate Tribunal. Mediation can be applied by any of the parties to the proceedings by application in prescribed form and on payment of prescribed fees. On receipt of application for mediation, one or more expert shall be appointed from the panel so maintained.

The Rules provide that the panel shall be prepared by the Regional Directors and placed on the website/portal of Ministry of Corporate Affairs (www.mca.gov.in). The Regional Director shall invite application every year during the month of February. Any person who intends to get empanelled as mediator or conciliator may apply to Regional Director in Form MDC-1.

Eligibility of Chartered Accountants, Company Secretaries and Cost Accountants for empanelment as expert/mediator or conciliator:

There is an opportunity for professionals for appointment as expert. As per the Rules, professionals like Chartered Accountants, company Secretary and Cost Accountants with at least fifteen years of continuous practice has also been made eligible for empanelment as an expert. However, he/she should not have been punished in any disciplinary proceedings.

Role of Mediator or Conciliator 

The mediator/conciliator shall attempt to facilitate voluntary resolution of the disputes by the parties and communicate the views of each party to the other, assist them in identifying issues, reducing misunderstanding clarifying priorities, exploring areas of compromise and generating options in an attempt to resolve the dispute emphasising  that it is the responsibility of the parties to take decision which effect them and he shall not impose any terms of settlement on the parties.

The mediator/conciliator shall not be bound by the Indian Evidence Act, 1872 or CPC 1908 but shall be guided by the principles of fairness and natural justice, having regard to the rights and obligations of the parties, usgaes of the trade and the circumstances of the case.

Time Limit for completion of mediation or conciliation proceedings

The process of mediation/conciliation has to be completed within three months and on expiry of three months from the date of appointment of an expert, the process shall stand terminated. However  in case of mediation/conciliation in relation to proceedings before Tribunal/Appellate Tribunal, it can be extended to further three months.

Fees of the Mediator or Conciliator

Fees/remuneration shall be fixed at the time of referriing the dispute to an expert by the Central Government/Tribunal/Appellate Tribunal as the case may be. The fee may be fixed as a consolidated amount then a rate for each session or meeting.

Ethics to be followed by Mediator or Conciliator

(a) follow and observe the rules strictly and with due deligence.
(b) not carry on any activity or conduct which shall reasonably be considered as conduct unbecoming of a mediator or conciliator.
(c) uphold the integrity and fairness of the mediation/conciliation process.
(d) ensuring that parties involved are fairly informed and have an adequate understanding of the procedural aspects of the process.
(e) Satisfy that he/she is qualified to undertake and complete the assignment in a professional manner.
(f) disclose any interest or relationship likely to affect impartiality or which might seek an appearance of partially or bias.
(g) avoid, while communicating with the parties any impropriety or appearance of impropriety>
(h) be faithful to the relationship of trust and confidentiality imposed in the office of mediator/conciliator.
(i) conduct all proceedings related to the resolutions of a dispute, in accordance with the relevant applicable Law.
(j) recognise that the mediation or conciliation is based on principles of self determination by the parties and that the mediation or conciliation process relies upon the ability of parties to reach a voluntary, undisclosed agreement.
(k) maintain the reasonable expectations of the parties as to confidentiality and refrain from promises or guarantees of result.

Matters that can not be referred to mediation or conciliation

The following matters are not covered under the mediation/conciliation:

(a) Matters related to proceedings in respect of inspection/investigation under Chapter XIV or the matters related to defaults/offences for which application of compounding have been made.

(b) cases involving serious and specific allegations of fraud , fabrication of documents, forgery, impersonation and coercion etc.

(c) cases involving prosecution for criminal and non-compoundable offences.

(d) cases involving public interest or interest of numerous persons who are not parties before the Central Government/The Tribunal/Appellate Tribunal as the case may be.

Download Companies (Mediation and Conciliation) Rules, 2016 Click Here >>