IBC – Report of Committee on introduction of Mediation in Insolvency and proposed frame work in the backdrop of new Mediation Act, 2023.

It can be said that the Committee has given its report in true spirit of mediation.   On 6.3.2023 the Committee was constituted and on 31.1.2024.  

The Committee has rendered yeomen service and deserves kudos for its research / study on every aspect in its exhaustive Report of 129 pages divided in nine Chapters.

Some of the data, statistics and also information on the International Jurisprudence give useful references and guidance at a glance.

For example, Summary of International Jurisprudence reviewed by the Committee is given in Annexure III at pages 107 to 127.

As rightly said by the distinguished Chairperson of the Committee, it has rigorously examined the mediation landscape including the new Mediation Act, 2023 and also in Chapter IV (pages 50 to 53) “Insolvency Mediation Regimes in other Jurisdictions.

It may be mentioned that the Committee has noted that many countries have successfully introduced, used and implemented mediation insolvency processes both in their pre-insolvency and insolvency proceedings.

The Committee has also taken into consideration the data of total cases settled before admission, after admission and approval of resolution plan as also the amount involved in such cases.   It was found that during the period of 2017 to 2022 the cases settled before admission were 23,608 (Rs.7,21,282) and the pre-admission rate of settlement at 68.74% was larger than other stages.

The Committee has summarised 12 points for phased introduction of voluntary mediation as a dispute resolution mechanism under IBC and also identified “insolvency resolution processes” as subject matter for mediation reference.

Let us hope that it will go a long way in creating robust frame work as self-contained Code in IBC.