Information Technology Industry – Scope And Suggestions On Mediation

facebook-cover-1The Information Technology Industry (the “IT Industry” in short) comprise of the software sector, IT enabled sector (“ITes”) saw the light of the day in the post liberalization of our economy and contribute well to our GDP, generates substantial direct and indirect employment opportunities and is poised to grow further.

Software companies like TCS, Infosys, Wipro are global players and Business Process Outsourcing (e.g. Convergys), Knowledge Process Outsourcing (e.g. Genpact), Legal Process Outsourcing (e.g. Bodhi Global Services) are successfully operating in the Indian IT space rendering services catering industries globally. New concepts at the micro level within the IT industry is emerging (e.g. Cloud computing, Intellectual Property docketing and profiling, digital record keeping, data security/protection).

The challenges that the IT industry experiences are much beyond what conventional sectors have been facing. With technology playing a pivotal role, business emerging and consummating at the virtual space with cross border engagements, the Government has been amending laws and promulgating new ones to administer and regulate its functioning.

Difference of views, disagreements and conflict situations, both within and without is invariably a natural consequence with respect to (w.r.t.) many aspects of business, operations and functioning of the IT Industry. Internally, situations may arise w.r.t promoter/shareholders relationship, the employer-employee relationship, interse employees and external situations may arise w.r.t breach of contractual terms between Landlord and Tenant, Vendors, Service providers, Customers, Clients, Administrative authorities and the Government.

Though different mechanisms are available for dispute resolution including the
adjudicatory process through Court, Arbitration and conciliation, with specific law and regulations, these often come with enormous investments, of time, money and other resources only resulting in a win – loose situation between the litigants, loss of respect and reputation/goodwill, apart from severing existing relationships with loss of privacy and confidentiality. The reality of their clogging the already burdened judicial and quasi-judicial system has led to dissatisfaction at all levels.

Given an option, the humans, business and the Sovereign would be the last one, to sort out conflicts situations of civil/commercial nature through adjudicatory mechanism and this is where, “Mediation” as an Alternate Dispute Resolution (ADR) mechanism can provide a simple, convenient, effective solution to do away with demerits of the adjudicatory dispute redressal system prevalent in our Country.

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The term “Mediation” is not specifically defined under any known Indian law though it finds reference under Section 89 of the Code of Civil Procedure 1908, is used and inferred interchangeably with the term “Conciliation” under the Arbitration and Conciliation Act, 1996, the Companies Act, 2013. The “Court annexed mediations”, “Court referred mediations”, ”Judicial mediations”, “Private mediations” are forums that are not unheard off but are yet to garner much required awareness, popularity and voluntary admissibility.World Intellectual Property Organization defines “Mediation” as a confidential procedure. It further specifies that Mediation is first and foremost a non-binding procedure. In this sense, the parties remain always in control of mediation. The continuation of the process depends on their continuing acceptance of it.
Mediation as a form of ADR can benefit the IT industry in many ways, as follows:

a) With respect to labor and personnel situations, with many of the States in their
industrial policy exclude IT industry from complying with the provisions of the
Industrial Disputes Act, 1947, mediation can play a pivotal role in resolving
conflict situation between the Employer and the Employee, regardless of the
level/role/hierarchy of the employee.
b) Allegations of Sexual harassment at work place conflict situations between the
employee inter-se, thus saving face for the business and employee(s) concerned.
c) Disputes between the Shareholders w.r.t Oppression, Mismanagement, Transfer
or transmission of securities, deadlock in management, rights of shareholders,
d) Breach of commercial contracts may not only be sorted out amicably but can give
rise to other business opportunities for the disputants and thus strengthening
their relationship.
e) Difference of views and conflict situations with the administrative authorities
and the Government including those w.r.t refusal to grant licenses and permits
under the Telecommunications Act, the Shops and Commercial Establishment
Act, Refund of taxes and duties w.r.t EOU/SEZ units), Corporate tax (w.r.t
transfer pricing mechanism/arrangements).

With the judiciary itself devoted and inclined to the cause of encouraging Mediation as an ADR, the time cannot be better for the IT Industry to explore this ADR tool, to adapt to this promising procedure to create value in business and WIN–WIN situation for all.


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Mr. Rajneesh Sood has successfully completed the IICA 40 hours training program on commercial mediation and negotiation. He is the managing partner at Rajneesh Sood & Co. LLP, Attorneys at Law & Corporate Trustees, in New Delhi. He is a registered mediator with the Ministry of Corporate Affairs and a registered Trade Mark Attorney with the Controller of Patents, Designs and Trademarks. He has over 18 years of experience in the legal field and regularly appears before courts and tribunals.

For more information on the 40 hours training program on commercial mediation and negotiation by IICA, Ministry of Corporate Affairs, visit or email us at

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