ISLAMABAD: The Supreme Court said the courts should not only encourage mediation but also exhibit a pro-settlement bias and a pro-mediation bias.
It explained that pro-mediation bias or pro-settlement means a predisposition or preference within the legal system for resolving disputes through mediation rather than through litigation or other forms of dispute resolution.
A three-judge bench, headed by Justice Syed Mansoor Ali Shah and comprising Justice Jamal Khan Mandokhail and Justice Athar Minallah heard the petitions of private contractors, the Punjab government, and the procuring agencies.
This bias is not about favouring one party over another but rather about favouring the process of mediation itself as a preferred method of dispute resolution. This bias is grounded in the belief that settlements are generally more efficient and satisfactory for all parties involved compared to outcomes determined by a court.
By fostering a pro-settlement bias, courts can contribute to a more harmonious and efficient dispute resolution landscape, where parties are empowered to resolve conflicts collaboratively and constructively. Encouraging mediation aligns with the broader goals of justice systems worldwide: to resolve disputes in a manner that is fair, efficient, and conducive to the long-term well-being of all involved parties. “In the future, it is likely that the traditional trial will be the exception rather than the rule.”
The court noted that that Rule 68 of the Rules provides that after the coming into force of the procurement contract, disputes between the parties to the contract shall be settled through mediation or arbitration.
It said even though in the instant case alternate dispute resolution mechanism was not available as interpretation of the Act and the Rules were involved, which is best left to the court of law, we wish to underline that courts must encourage out-of-court settlements through Alternate Dispute Resolution (ADR), in particular mediation.
The essence of mediation lies in its voluntary and confidential process, where a neutral third party, the mediator, assists disputants in reaching a consensus. Unlike in litigation, where the outcome is often a zero-sum game, mediation thrives on the principle of win-win solutions, preserving relationships and allowing for creative resolutions that legal parameters might not accommodate.
Through public advertisement procuring agencies i.e., Communication and Works Department and Irrigation Department of the Punjab Government, and Punjab Local Government, tenders were sought for various construction works. In pursuance thereof, the contractors submitted their bids.
Clause 26(A) of the General Directions for the Guidance of the Tenderers (bid document) provided that if there is a difference between the total tendered amount and the approved estimated amount, the lowest bidder shall deposit additional performance security ranging from five per cent to 10 per cent of the difference.
The Executive Engineer, Highway Division, Gujranwala and Narowal, respectively, through impugned letters dated 29.12.2020 and 18.01.2021 raised demand against the contractors for the payment of additional performance security.
The contractors challenged the said demand before the Lahore High Court (LHC), where the claim of the contractors was dismissed vide impugned judgment while interpreting Rule 56 of the Punjab Procurement Rules, 2014. The private contractors, the provincial government and the procuring agencies aggrieved of the impugned judgement for different reasons approached the apex court against the LHC’s verdict.
The central question before Court was whether the procuring agency could require the bidder to pay additional performance security over and above the bid security and performance guarantee provided under Rules 27 and 56 of the Rules.
Copyright Business Recorder, 2024
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