While the Insolvency and Bankruptcy Code, 2016 has performed well over the last four years, time taken in concluding insolvency process has been a matter of contention and debate. Insolvency is not an adversarial process. Yet, disputes arise between parties clogging NCLT with cases and consume the time of insolvency professionals. It adds to the cost of resolution and leads to uncertainty. Mediation provides strong incentives for the parties in dispute to engage in fast and efficient dispute resolution and look for a common business solution. It is rapidly becoming as an acceptable mode of dispute resolution in insolvency in many countries with advanced insolvency systems as it allows the parties to reach an agreement through persuasion and ‘party-driven solutions’. The Indian Supreme Court has emphasised on the importance of Mediation as an ADR mechanism and observed that all (commercial) matters could be made to first go through pre-litigation Mediation. Mediation can be a viable option in a country like India, where the population is enormous, and wealth is not equally distributed. As of now Mediation has not been widely utilised in insolvency. Mediation in insolvency will lead to reduction in litigations by dissatisfied stakeholders.

Insolvency Law Academy is in the process of setting up a Centre for Mediation in Insolvency to promote the use of Mediation as a preferred choice over litigation for resolving disputes in insolvency. The Centre will also offer mediation through qualified and trained cadre of professionals.