2018 (12) TMI 1548 - Tri - Companies Law

Mediation and Conciliation - parties to the proceeding during the proceedings pending before this Tribunal as entitled to apply for mediation - Held that - From a perusal of Section 442 as extracted above, it is seen that by virtue of Sub-section 2 of Section 442, any of the parties to the proceeding during the proceedings pending before this Tribunal is entitled to apply for mediation. A further reading of Section 442, more particularly sub-section 3 of Section 442 also gives suo motu powers to this Tribunal to refer any matter pertaining to the proceedings to such number of experts from the Mediation and Conciliation Panel. The provision of Section 442 has been made effective on and from 1.04.2014 and the Central Government has also framed the rule 6 titled as The Companies (Mediation and Conciliation) Rules, 2016. Further, Central Government has also notified a Mediation and Conciliation Panel as displayed in the website maintained by Ministry of Corporate Affairs. In the present instance as already stated, even though the parties are in consensus for mediation but has failed to reach the consensus in relation to the mediator to whom the matter can be referred to for mediation. Taking into consideration the provisions of Section 442 of Companies Act, 2013 as well as the Rules as referred to above and the Mediation and Conciliation Panel as notified by the Central Government, the following two persons are appointed as mediators to mediate as between the parties.

Issues involved:
1. Dispute between parties under Sections 241 and 242 of the Companies Act, 2013
2. Application under Section 442 of the Companies Act, 2013 for mediation
3. Lack of consensus on mediators between parties
4. Appointment of mediators for the dispute resolution

Analysis:

1. The petitioners filed a petition under Sections 241 and 242 of the Companies Act, 2013 due to a dispute with the first respondent company. The Tribunal listed the matter on various dates and directed the parties to consider mediation under Section 442 of the Companies Act, 2013. Both parties submitted lists of mediators, but there was no consensus on a common mediator despite agreeing to mediation.

2. Section 442 of the Companies Act, 2013 allows parties in proceedings before the Tribunal to apply for mediation. The Tribunal also has the power to refer matters to experts from the Mediation and Conciliation Panel. The provision came into effect from 1.04.2014, and the Central Government framed The Companies (Mediation and Conciliation) Rules, 2016. The Central Government has notified a Mediation and Conciliation Panel for such purposes.

3. Despite the consensus on the need for mediation, the parties could not agree on a mediator. Considering the provisions of Section 442 and the Rules, the Tribunal appointed two mediators to facilitate the mediation process. Dr. Subash Purohit, Advocate, and Sh. Sanjiv Aggarwal, Practising Chartered Accountant, were appointed as mediators to mediate between the parties.

4. The appointed mediators were instructed to inform the parties about the mediation commencement and follow the rules outlined in The Companies (Mediation and Conciliation) Rules, 2016. The mediation process should be completed within three months from the first intimation date to the parties. The parties were directed to negotiate fees with the mediators and share the expenses equally. The Tribunal disposed of the application under IA No. 19/JPR/2018 with these directions.

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