Why does ten days matter? – Questioning the Validity of Mediation Agreement

I must call myself to be fortunate, firstly for working with the Bhutan National Legal Institute, and secondly for working with the different stakeholders specially with the lawyers and judges around Bhutan. I have got several opportunities to attend several training, workshops, meetings, and several alike, with lawyers, judges, and different people from different law implementing agencies. My experiences are greatest when I devote my maximum time with Justices and Judges because their wisdom and acquaintances through working in the Royal Court of Justice has immense impact on my promotion and understanding of the law. They got to share different thoughts of interpretation of law and how often similar things would interpret differently for the purpose of justice. However, there may be instances where the justice is not their primary concern but to read the letter of the law is. In this article, my focus is to analyze an always debated legal issue: – “Ten Days period to question the validity of mediation agreement.” I must make it clear that this paper will not limit itself to the ten days period to question the validity of mediation agreement, but also focus on few pertinent issues regarding mediation, arbitration, and negotiated settlement. The reason being that there seems to be diverse opinion and understanding amongst the legal fraternity; and through this work, my primary intention is not to clarify these misconstructions whatsoever, but to make them think and research to validate their argument.

I am not expert in the legal analysis of civil and criminal procedure code nor have I got enough working experience with the court system. However, I shall attempt to analyse from the layman point of view – a perspectives of a person who work outside the judicial system – and that I believe people working outside the courts, as an independent individual, seems to pour out how they perceive judicial system of Bhutan. Also, because I seems to know much of what public think of justice system, and the people who work outside the court are sometimes feel aggrieved and resort to criticizing publicly. On the contrary, people who work with the courts seems to be more reluctant to welcome the public thoughts. Court officers are public figure and if the public figure are not in a position to take the public opinion, there is no reason how the justice can be met. For instance, if courts of law are remarked for being not dispensing the justice on time, he or she, as a judicial personnel, has a reason to study and analyse the genuineness of the public comment. It is important that the judicial personnel look at from the glance of public, because our own mistakes are hard to be seen by ourselves. Perhaps, that will help to shape ourselves positively.

Whatever said and done, let me analyze what constitute the so called “ten days period” controversy to object the validity of the agreement. I was once attending the judge’s workshop on solving the legal anomalies in the judicial understanding of the law, and I have written about their discussions and anomalies in length in the report. However, my principal concern here is not to replicate what has been already said in the report, but to locate my understanding and provide honest and constructive opinion with regard to ten days period to question the validity of the mediation agreement.

Ten Days is repeatedly used in the Civil and Criminal Procedure Code and sometimes I wonder if this number was favorite for the drafters by then. The appeal period is ten days, the criminal preliminary hearing can be heard within ten days of registering the case in the Registry of the Court, and the party shall raise objection to the validity of mediation agreement within ten days of the agreement. However, as I said, my focus is to locate the reason and its associated problems of ten days period to object the validity of mediation agreement.

Ten Days Period – Why does it matter?

There is no concept called Court Annexed Mediation or Court Referred Mediation in Bhutan. It is, therefore, not mandatory for the parties to settle the disputes through mediation. However, courts are mandated by virtue of Section 150 of the Civil and Criminal Procedure Code of 2001 to encourage the parties to voluntarily mediate the case without formal adjudication proceedings.

Section 150 of the Civil and Criminal Procedure Code of 2001 beautifully incorporates Negotiated Settlement provision. It is for the purpose to provide justice expediently without delay with minimum cost to the litigants. The litigants are provided with every opportunity to settle the case outside the court without formal adjudication, and the judge provide this opportunity at any stage of the proceedings. The very purpose of these procedural inclusion of negotiated settlement in the judicial process is to provide parties to decide their own merit of the case voluntarily, and to maintain social fabric in a small society like ours. The parities ultimately benefit in terms of cost, time, and expense. The Code mandate the parties to request the court for adjournment in order to pursue the negotiated settlement, and the settlement shall be by voluntary consent and signed by the parties and the mediators in their presence. The settlement shall bear a proper legal stamp and shall be within the shadow of the law. The Code provides the parties to raise objection to the validity of such settlement agreement within ten days. If the agreement dehors existing laws or valid objection to its legality is raised by one of the parties, the court may declare such agreement null and void and resume hearing. Thus, the provision stipulates that the parties should provide valid objection to its legality to resume the hearing. Not all objection could be valid, however.

This ten days period pose series of questions and different people give different legal thoughts:-

  1. Some legal professionals and judges argue that any mediation agreement entered upon between the parties can be nullified within ten days if there is any objection. The parties’ mere submitting to the court to nullify the agreement itself is a good justification to resume the hearing. Thus, according to them, ten days period is to question the overall mediation agreement notwithstanding its question of validity. This class of people, therefore, neither argue that this provision is to question the validity of agreement within ten days nor opine to delete from the procedure code. They rather feels that the parties can object the agreement within ten days whether it is entered unlawfully or lawfully.
  1. Some lawyers and judges opine that the ten days period is not to question the overall agreement but to object the validity of the agreement. Therefore, people belonging to this class of group argue that if the mediation agreement is executed unlawfully – coercion, duress, for example – aggrieved party should question its validity within ten working days. Similarly, if the agreement is not within the purview of existing laws, the party can question is legality. If the agreement per se is valid, the provision of ten days period is not invoked. Therefore, this group of people opine that court should pause for ten days before awarding the mediation judgment. This is because despite their successful mediation people prefer to appeal from mediated judgment. If the judgment is passed only after ten days period of execution of agreement between the parties, there will be less likely to appeal in the higher court. Even if the parties wish to appeal, the court has right to stop the appeal.
  1. Some legal fraternities argue that ten days period itself is redundant and does not have any reason to occupy space in the procedural code. This class of people argue that if the mediation agreement is executed upon coercion and duress, any normal human being will question such agreement immediately or very likely to object during the time of court hearing; and it is unreasonable to wait for ten days to object its validity. Likewise, people under this thought question that if the agreement is not entered freely, and is not in consonance with the existing law, how can such agreement become valid and enforceable after ten days? Therefore, this group of people think that this provision is unnecessary insertion in the procedural code and deserve its deletion.

I appreciate all these views because all are well reasoned and justified in their own ways of interpretation and legal understanding. My argument would neither agree nor disagree all of them, rather try to dismiss some and agree some providing enough legal explanation of my understanding.

  1. Object the agreement – As said above, some legal minds argue that if the party object the agreement within ten days, the agreement shall be nullified despite its validity. I believe this argument must be in accordance with Section 36 (h) of the Evidence Act of 2005 which stipulates that “a written agreement shall not be valid, if it is objected to by any party in a Court within ten days.” If this interpretation is given a due consideration and put into practice, there may be a situation wherein the parties may willfully exercise out of court settlement in order to delay the justice. Moreover, the very idea of negotiated settlement is to settle the dispute amicably with less time and expense, and if any objection to the mediation agreement is considered as valid objection to nullify the whole agreement, then the very purpose of mediation principle is defeated. In this regard, I am of the view that any objection should be based on the legality and validity, not based on mere time factor.
  1. Court should pause for ten days without awarding mediation judgment – This argument is based on the principle that the parties prefer to appeal despite their voluntary settlement of dispute through mediation. Is this principally right? Any mediation is considered as voluntary action and that it is based on consensual decision between parties to the disputes. Thus, the mediation principle stipulate that there shall be no appeal from such settlement. Appeal lies only from the formal adjudication of legal proceedings and mediation is of purely informal settlement. The court judgment is not upon exhaustion of formal hearing procedure but based on the mediation agreement. Therefore, it is principally wrong to tolerate appeal from judgment passed upon mediation agreement. If that is the case, the appellant court will be busy doing the job of trial court.

There is also no reason that the court should wait for ten days to award mediation judgment. If the parties appear before the court of law with mediation agreement, and if the court is satisfied that the agreement is executed based on the free will of the parties within the parameter of the existing laws, and that neither of the parties object to its validity, then the court can award the judgment. If the court waits for ten days, again the very purpose of mediation is defeated because the main purpose of mediation is for speedy justice.

  1. Ten days period itself is redundant and does not have any reason to occupy space in the procedural code – To appreciate this statement, first of all we need to understand the intention behind this particular provision. Why the legislature has intentionally inserted this time frame?

In law, any timeframe stipulated in the legislation is the limitation period. In other words, it is a law that restricts the time within which legal proceedings may be instituted. Ten days period is a limitation period in which the parties are restricted to proceed with the legal proceedings but to abide by the agreement. The question still remains – how can invalid agreement become valid and enforceable after ten days?

The Civil and Criminal Procedure Code empowers the court to nullify the agreement if it dehors existing laws or valid objection to its legality is raised by one of the parties. As a common sense would speak, you extinguish your remedy by waiving off not to object within ten days. This does not mean, however, that invalid agreement can be enforced after ten days. I simply mean that the probability for the court to pass judgment based on invalid mediation agreement is very less. Even if the parties fail to object within ten days, it becomes the fundamental duty of a court officials to see if any of the agreement violates the existing provisions of the law, and if that is located, the court may nullify the agreement and resume the hearing. Given the comparatively less number of legal literate, people are ignorant of the legal provisions thereby increasing the likelihood of entering the contract beyond the prescribed law. If the judicial personnel carefully study the agreement, the legality can be traced therein and thus, the question of enforceability of invalid agreement does not arise. Similarly, I believe that the court ask the parties, before the award of judgment, if the agreement was entered willfully without coercion, duress, or intoxication. If court is satisfied that negotiated settlement was executed freely, and it is valid within the eye of the law, there is no question of enforcing the unenforceable agreement. Any parties, if preferred to appeal, may be with a motive to delay justice, and such appeal should not be entertained.

The general principle is that limitation bars the remedy and does not extinguish the right itself. Put in other words, the effects of the limitation periods are procedural rather than substantive in that they bar a remedy and do not extinguish the claim. Thus, waiving off to object the legality and validity of the agreement within ten days extinguish your procedural remedy to nullify the agreement and resume the hearing but does not extinguish the claims.

The conceptual idea to delete the limitation period of ten days from the Code can be considered provided the judiciary take active role said above. Judges can provide stipulated period of time for the parties to adjourn for mediation, and after completion of mediation, the judges can examine if mediation agreement is valid.

Arguing thus, the common judicial understanding is that the limitation period of ten days as enshrine in the procedure code is to question the validity of agreement and the agreement per se is valid if no objection is raised from either of the parties. Therefore, we need to abide by this interpretation because it is the law unless the letter of the law is amended by the Parliament. In other words, let us remain abided by this provision; and let us question the validity of agreement within ten days, unless parliament change the law otherwise.

Evidence Act vs. Civil and Criminal Procedure Code

I said that the ten days as it incorporated in the CCPC is to object the validity of the agreement. However, the Evidence Act does not use the word “validity or legality”. It simply states “a written agreement shall not be valid, if it is objected to by any party in a Court within ten days”. Can CCPC and Evidence Act be read together?

For me, I believe that these two provisions are completely different – that the CCPC refers to object the validity of mediation agreement, and Evidence Act is for the general written agreement. However, the intention of the legislation, I believe, is the same; that is to object the validity of a written agreement in a court within ten days. But then, people generally ask: how can invalid written agreement, under the Evidence Act, become valid after ten days? Can court admit the invalid agreement as evidence simply because parties did not object within ten days? To this, I put counter question: how can Court invalidate the valid written agreement after parties’ objection within ten days? These questions are bound to remain if we read the plain letter of the law as it is. But, for the purpose of justice, unlike the provision under the CCPC, Section 36(h) of the Evidence Act needs to be read to object the validity of the agreement. I also have a feeling that this particular provision needs to be either deleted or amended inserting the word “validity”. Court’s duty is to see the validity of agreement only during the time of disputes and no parties will approach the court to invalidate the agreement within ten days.

Finality of Arbitral Award

Analyzing this topic may be a slight diversion from my topic of discussion, however as clarified earlier in this writing, my writing would be total incomplete without providing adequate opinion on the finality of the arbitration award. The Alternative Dispute Resolution Act of Bhutan stipulate that the arbitration award is final and binding. However, if a person believe that the arbitration award is executed upon undue influence and coercion, then the aggrieved person may move the High Court for setting aside of the award. Section 150 of the ADR Act provide grounds in which the arbitration award may be set aside by the High Court. This, however, is not to be equated with appeal. For many reasons, I believe, many lawyers and legal fraternity are misunderstood with this concept. A clear and distinct conceptual line should be drawn between the appeal and setting aside of arbitral award. For appeal, it is an aggrieved person who move the appellate court asking to review the merit of case, and the statute does not provide a ground in which the appellate court can set aside the trial court’s verdict. However, setting aside of award is not to review the case but to set aside the arbitral award provided it fulfils the elements of Section 150. For example, if the arbitration award is manifestly contrary to the public policy of the Kingdom of Bhutan, the High Court may set aside the award. In short, the ADR Act stipulates a grounds in which the person can move to set aside the arbitral award, and if the court is not satisfied the award may be upheld.

Negotiated settlement – different from mediation?

One pertinent issue that I always overhear is that the Bhutan ADR Act does not provide any provision regarding mediation. When arguing that the Section 179 of the Act stipulates negotiated settlement and that includes mediation, there are diverse opinion that the negotiated settlement is very different from mediation and that the process and concept between two are completely different. This conceptual difference can be cleared reading the provisions of the ADR Act.

Section 163 of the ADR Act state that “Negotiated settlements means a process, whether referred to by the expression ‘conciliation’, ‘mediation’ or an expression of similar import, whereby parties request negotiator to assist the parties to settle dispute arising out of or relating to a contractual or other legal relationship, amicably”. Negotiated settlement is any legal arrangement, initiated and completed outside of the formal judicial process without involvement of courts and judges, but usually with active involvement of third party. Thus, negotiated settlement is synonym term for out of court settlement, and it includes mediation.

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