Pre-Instiution Mediation, a panacea for Covid 19, uncertainty

Understanding with an illustration:

T is the tenant by virtue of a tenured lease for 25 years running a paying guest hostel for students and working professionals. The terms of the lease stipulates  a monthly rent of Rs 40,000.00 with refundable deposit of  Rs 4,00,000.00. T has spent several lakhs on the premises to suit the business, besides  engaging several staff  members to run the business. The  students of educational institute situated close to the premises are  his main customers while the remaining are occupied by working professionals.

The Covid-19 pandemic & due to consequent lockdown,  students of educational institutions, and the business, the occupants have vacated the premises. T is not sure of the students returning to the premises in the near future and  the situation is gloomy due to  the continuing uncertainty.

Strapped of  a regular income from the business, T defaults in the payment of  rent,  besides the salary of  staff members. The landlord O, puts  T on notice, the consequence of default in payment of the rent.

O has his difficulties of repayment of  bank loan taken during construction, and  uncertainty of securing a new tenant  like T, who otherwise had been very  prompt.

Does law afford them a platform to resolve their conflict or approaching the Court of law  is their sole option ?

The Commercial Courts Act,2015, affords a platform for  disputants in a  commercial relationship to resolve the dispute  with the assistance of a neutral third  party (mediator) for assisted negotiation, for  a   win-win situation, rather than a win loose situation in a Court of law.

Unlike in an adjudicatory process like the Courts  or  arbitration,  mediation process focuses on identifying the  mutual problems, their underlying interests and  provides a platform for T & O to move from blame to understanding & un – certainty to certainty; mediation is  a  non judgmental process and both have  flexibility  to agree to agree on a mutually  workable  solution, which would be recognized  and enforceable in law, thereby saving time, cost and relationship.

Disputants usually  knock at the doors of Courts when adjudication to their dispute is inevitable and  sans a mutually acceptable resolution. It would well  be within  the rights of the parties to  resolve the dispute  by accepting  reduced rent for a stipulated period with liberty to fix enhanced rent, later with variety of  options including  to  renew or terminate the tenure of  the lease or permit T to change nature of business and forego the rent during such period of transition.

Pre- Institution Mediation is ideally suited to the occasion as it attempts to  effectively address their real apprehensions & facilitates   a workable new contract which shall be  binding, enforceable  and  everlasting.

To conclude, the concept of Pre-Institution mediation under The Commercial Courts Act, 2015  is a game changer  and  a panacea for  ease of doing business  during the troubled economic situation.