Companies Act Section 442

Companies Act, Section 442: Mediation and Conciliation Panel for Dispute Resolution

Section 442 of the Companies Act, 2013 introduces a structured mechanism for resolving disputes through mediation and conciliation, rather than undergoing prolonged litigation. 

It mandates the establishment of a Mediation and Conciliation Panel, which provides an alternate dispute resolution (ADR) forum to help parties amicably settle disputes arising during proceedings before the Central Government, the National Company Law Tribunal (NCLT), or the National Company Law Appellate Tribunal (NCLAT).

This mechanism promotes efficiency, reduces the burden on judicial bodies, and strengthens collaborative dispute settlement in corporate matters.

1. Establishment of Mediation and Conciliation Panel

The Central Government must Maintain a panel of experts called the Mediation and Conciliation Panel.

The panel shall consist of experts with prescribed qualifications.

These experts assist in the mediation process while corporate legal proceedings are pending.

Their role is to facilitate settlement discussions between disputing parties and offer constructive solutions.

2. Application for Mediation by Parties

Any party involved in proceedings before:

The Central Government, The Tribunal (NCLT), The Appellate Tribunal (NCLAT) may apply at any stage of the proceedings for mediation. 

The application must be in the prescribed form accompanied by prescribed fees.

Upon such request, the authority concerned must appoint:

One or more experts from the Mediation and Conciliation Panel to assist in resolving the dispute through mediation

This empowers parties to actively select a cooperative path to settlement.

3. Suo Motu Referral by Authorities

The Central Government, NCLT, or NCLAT may independently, without any application from parties:

Decide to refer a matter to mediation, appoint experts as they find appropriate from the official panel.

This ensures that the judicial authority can encourage amicable resolution wherever possible and reduce unnecessary litigation.

4. Fees and Service Terms of Panel Experts

The Fees, Terms of service, and Other working conditions of the mediators and conciliators shall be prescribed by rules. 

This ensures clear regulation and transparency in the functioning of the ADR panel.

5. Time-Bound Dispute Resolution

The Mediation and Conciliation Panel:

Must follow a prescribed procedure for conducting mediation.

Must conclude the process within three months from the date of reference.

Should forward its recommendations to the authority that referred the matter (Central Government, NCLT, or NCLAT).

This introduces speed and certainty to the dispute settlement mechanism.

6. Right to File Objections

If a party is dissatisfied with the recommendation of the Mediation and Conciliation Panel:

They may file objections before the relevant authority. Ensuring that resolution remains voluntary and not imposed. This maintains fairness while promoting efficient solutions.