On 6th August, 2007, Hon’ble Mr. Justice Sanjay Kishan Kaul of High Court of Delhi passed an order which has taken the recent trend in the Delhi High Court of encouraging ADR in intellectual property disputes forward by leap and bounds. The order was passed in the case of Bawa Masala Company vs. Bawa Masala Company Pvt. Ltd. (OS No.139 of 2002).
The matter had earlier been referred for mediation as there were a number of interlinked disputes pending before the trial court. Although the two officials of the Delhi High Court Mediation and Conciliation Centre who had been appointed as mediators in the matter had successfully resolved all the other disputes, the instant suit had not been settled. In view of this, the counsel for both parties suggested that another attempt for amicable resolution through the ADR mechanism be made and instead of mediation, the endeavour should now be through the process of Early Neutral Evaluation (ENE).
The Judge in his order describes ENE in the words of Robert A. Goodin as “Early neutral evaluation is a technique used in American litigation to provide early focus to complex commercial litigation, and based on that focus, to provide a basis for sensible case management or offer resolution of the entire case, in the very early stages”. .
He then goes of to elaborate the scheme of ENE in the following words:
“A senior counsel or a panel with expertise and experience in the subject matter of litigation are called upon to conduct ENE. Such persons are referred to as the Evaluator or a neutral person. A written brief is provided by the lawyers to such neutral evaluator, summarizing the facts, legal arguments and authorities in support of each party’s case. In a nutshell, the process would be same as would be required for making submissions in court.
In the initial session before the evaluator, a decision-maker of each party accompanied by their lawyers would be present and a short concise presentation would be made by the counsels for each side referring to the documents and legal proposition. It is open to the evaluator to raise queries on the counsels for the parties and involve the decision-makers of the parties in the process. The neutral evaluator thereafter retires to prepare what according to the neutral evaluator is the central dispute in the case and what as per the neutral evaluator is the likely outcome on each of the issues/aspects. The evaluator also estimates the costs to each of the parties.
The evaluator thereafter shares his conclusion with the parties either at joint sessions or at private sessions, called caucuses. Said private caucuses are often useful as they may allow a more frank and free discussion about the strength and weaknesses of the respective parties. If no settlement is possible the matter is referred back to the court without disclosing the reason for the failure of the process of ENE. Thus, the confidentiality and the principles of mediation are equally applicable to such ENE”.
Finally, he observes that ENE is a worthwhile option in the instant case for the reason that unlike mediation when the solutions normally emerge from the parties and the mediator makes an endeavour to bridge the gap between the solutions, in ENE, the evaluator acts as a neutral person who assesses the strengths and weaknesses of each of the parties and discusses the same with the parties so that they get an instant evaluation of the merits of their case. Thus, the explicitly evaluative nature of ENE coupled with its focus on procedure of law as opposed to the interests of parties makes it a preferred option in the Judge’s opinion. Further its strength lies also in it not being a process of discussion towards negotiated settlement while retaining the inherent strengths of the mediation process of being not binding confidentially and participative .
He has of course factored in the willingness on the part of both counsels to opt for the same and has drawn statutory support from Section 89 of the Indian Code of Civil Procedure which inter alia provides for a ADR mechanism. The judge rules that Section 89 includes ENE as it also follows the same process as mediation. In view of this the Judge appointed the earlier mediators jointly as ENE evaluators in this case and placed it before them for resolution of the dispute. The success or failure of the initiative depends on whether this case does actually achieve an effective resolution which will then no doubt encourage other courts to follow suit.
