In a world where disputes and conflicts are inherent, efficient
dispute-resolution methods are indispensable. The Mediation Act of 2023, a
significant legal development in India, establishes a structured framework for
mediation as a means of resolving disputes outside the courtroom.
paper explores the key provisions and implications of the Act, shedding light on
its potential impact on the legal landscape. The Act covers various aspects of
mediation, including its application, mediation agreements, enforceability of
mediated agreements, pre-litigation mediation, compensation claims under the
Motor Vehicles Act, and more. It also addresses issues like confidentiality,
time limits, and the role of mediators.
Notably, the Act introduces provisions
for online mediation, adapting to the digital age and enhancing accessibility.
One of the Act's critical features is the establishment of the Mediation Council
of India, responsible for overseeing the implementation of mediation-related
laws and promoting mediation domestically and internationally.
This article highlights the benefits of the Mediation Act, including the
reduction of court backlogs, preservation of relationships, flexibility in
crafting solutions, and the promotion of a culture of mediation. It underscores
the Act's potential to transform dispute resolution in India and foster a more
harmonious and efficient legal landscape
In a world where disputes and conflicts are inevitable, the need for efficient
and effective methods of resolution is paramount. The Mediation Act of 2023, a
significant legislative development, seeks to provide a structured framework for
mediation as a means of resolving disputes outside the courtroom. This article
explores the key aspects and implications of this Act, shedding light on its
potential impact on the legal landscape.
Key features of the act
Chapter 2 of the act deals with the application of the act. The Act applies to
mediation conducted in India under various circumstances, such as when both
parties reside in India, the mediation agreement specifies its use, in
international mediations, or when one party is the Central or State Government
in a commercial dispute. Additionally, it can be applied to other dispute types
as determined by the Central or State Governments when they are parties
Chapter II of the act provides for the provision of the Mediation Agreement
Parties involved in a dispute may enter into a mediation agreement, which can be
part of a contract or a separate document.
A mediation agreement is considered in writing if documented through signed
documents, electronic communication, or acknowledged in legal proceedings.
International mediation agreements pertain to commercial disputes.
Mediated Settlement Agreement
A mediated settlement agreement is a written agreement between parties settling
some or all disputes through mediation. The terms of this agreement can extend
beyond the issues referred to mediation. It can be registered with the
appropriate authority for record-keeping.
Enforceability of Mediated Agreements:
Once an agreement is reached through mediation, the Act empowers the parties to
request that the court make it legally binding. This provision enhances the
reliability of mediated settlements.
Finality of Mediation Agreement
- Final and Binding: Mediated settlement agreements, signed by the parties and authenticated by the mediator, are considered final and binding on the involved parties and their successors.
- Enforcement Mechanism: These agreements can be enforced under the provisions of the Code of Civil Procedure, 1908, much like a court judgment or decree. They can be used as a defense, set-off, or in any legal proceeding.
- Challenging the Agreement: Parties may challenge a mediated settlement agreement through an application in a court or tribunal. The grounds for challenging such agreements include fraud, corruption, impersonation, or if the mediation was conducted in disputes not suitable for mediation under Section 6.
- Time Limit for Challenging: An application for challenging the mediated settlement agreement must be filed within ninety days from the date the party received a copy of the agreement under Section 19. If there is a valid reason for the delay, the court or tribunal may consider the application within an additional ninety-day period.
- Limitation Period: The Limitation Act, 1963, and other laws do not apply when calculating the time limit for proceedings related to disputes subjected to mediation under this Act.
The period during the mediation process (from the commencement of mediation
under Section 14 to either the submission of the report under Section 21 or the
termination of mediation under Section 24) is excluded from the limitation
Section 5 of the act deals with pre-litigation mediation
Exclusions from Mediation
- Parties can opt for pre-litigation mediation with mutual consent before filing any civil or commercial suit.
- The Commercial Courts Act, 2015, governs pre-litigation mediation in commercial disputes with specified values.
- This provision also applies to government-notified tribunals.
- Mediation can be conducted by registered mediators or those empaneled by court-annexed mediation centers or legal authorities.
- Compensation Claims under the Motor Vehicles Act: section 5 (6)
- In accident-related compensation cases, if parties fail to reach a settlement under the Motor Vehicles Act, the Claims Tribunal can refer them for mediation.
- Settlement agreements are presented to the Claims Tribunal for approval. Non-settlement reports are adjudicated.
Certain disputes listed in the First Schedule of the Mediation Act are not
eligible for mediation. However, exceptions may apply, such as compoundable
offenses and certain matrimonial disputes.
The outcomes of such mediations are not considered as court judgments but are
subject to further court review.
Here's a brief list of the 13 categories of disputes or matters that are not fit
- Disputes prohibited by current laws.
- Disputes involving minors, individuals with certain disabilities, and persons of unsound mind.
- Criminal prosecution cases.
- Complaints related to professional misconduct in regulated fields.
- Disputes affecting third parties (except in certain matrimonial cases involving children).
- Matters within the jurisdiction of the National Green Tribunal.
- Tax-related disputes at the state or national level.
- Cases under the Competition Act and related authorities.
- Electricity-related disputes, including those before the Appellate Tribunal.
- Disputes before the Petroleum and Natural Gas Regulatory Board.
- Cases before the Securities and Exchange Board of India and its Appellate Tribunal.
- Land acquisition and compensation disputes.
- Other dispute categories as notified by the Central Government.
Courts or tribunals have the authority to refer parties to mediation at any
stage of proceedings, even if pre-litigation mediation fails.
Interim orders may be issued to protect the interests of the parties.
Parties are not obligated to reach a settlement during court-annexed mediation.
Mediation proceedings usually take place within the territorial jurisdiction of
the court or tribunal competent to decide the dispute. However, parties can
mutually consent to conduct mediation outside the jurisdiction or opt for online
mediation. In such cases, the agreement will still be deemed to have taken place
within the court's jurisdiction.
Commencement of Mediation
Under section 14 the mediation proceedings commence either when parties have an
existing agreement to mediate, or they agree to appoint a mediator. In the
latter case, the mediator's consent to the appointment marks the beginning of
Mediators play a crucial role in assisting parties to reach an amicable
resolution. They must maintain neutrality, objectivity, and protect the
confidentiality and self-determination of the parties. The mediator can
determine the language of communication with the parties.
Section 22 of the Act emphasizes the importance of confidentiality in mediation.
It bars the use of any information shared during mediation in court or
arbitration proceedings. This rule is critical to create a safe space for open
discussions during the mediation process.
Section 18 of the act provides that mediation under this Act should ideally be
completed within 120 days from the first appearance before the mediator. Parties
can mutually agree to extend this period for up to 60 days if necessary.
According to section 5(8), If no agreement is reached or the mediator believes
that no settlement is possible, they must submit a non-settlement report without
disclosing the cause of non-settlement.
Privilege and Admissibility
The Act ensures that communications in mediation are privileged and inadmissible
in court or arbitration, with certain exceptions for professional misconduct,
threats of offence, domestic violence, child abuse, or threats to public safety.
Termination of Mediation
Section 24 of the act outlines the termination of mediation proceedings and
specifies that they shall be deemed to terminate:
Cost of Mediation
- On the date of signing and authenticating the mediated settlement agreement.
- On the date of a written declaration by the mediator, after consultation with the parties or otherwise, stating that further mediation efforts are no longer justified.
- On the date of written communication by a party or parties to the mediator and other parties, expressing the party's desire to opt out of mediation.
- Upon the expiration of the time limit as defined in section 18 of the act.
Section 25 of the mentioned act specifies the cost-sharing arrangement for
mediation. It states:
Exclusion from Lok Adalat
- The cost of mediation, except for community mediation, shall be such as may be
- Unless the parties agree otherwise, all mediation costs, which include mediator
fees and mediation service provider charges, will be shared equally by the
Section 25 of the mentioned act specifies that the act does not apply to
proceedings conducted by Lok Adalat and Permanent Lok Adalat under the Legal
Services Authorities Act, 1987. This means that the provisions of the act in
question do not pertain to or govern the legal proceedings and activities
carried out by these specific bodies established under the Legal Services
Authorities Act, 1987.
under section 30, Online mediation, including pre-litigation mediation, can be
conducted at any stage of mediation under this Act with the written consent of
the parties. It can use various electronic methods, such as encrypted email,
secure chat rooms, and video/audio conferencing. The specific process for online
mediation will be defined by relevant regulations or guidelines. Online
mediation must ensure the integrity of proceedings and maintain confidentiality.
Mediators can take appropriate measures to uphold these elements. Mediation
communications during online mediation must be kept confidential, in accordance
with the Act's provisions.
The Central Government under section 31 of the act established a Council called
the "Mediation Council of India" for the purposes of this Act. It is a body
corporate with perpetual succession, a common seal, and the authority to
acquire, hold, and dispose of property, as well as enter into contracts.
possesses the ability to initiate legal actions or defend itself under its name.
The Council's head office is in Delhi, although the Central Government can
notify another location. It can, in consultation with the Central Government,
establish additional offices both in India and abroad.
Under section 32 of the act, the composition of the Mediation Council consists
of a total 7 members in the following manner:
- Chairperson: A person of ability, integrity, and standing with expertise in law, alternative dispute resolution (preferably mediation), public affairs, or administration. Appointed by the Central Government.
- Member: A person with knowledge and experience in law related to mediation or alternative dispute resolution mechanisms. Appointed by the Central Government.
- Member: An eminent person with experience in research or teaching in the field of mediation and alternative dispute resolution laws. Appointed by the Central Government.
- Member (ex officio): Secretary to the Government of India in the Department of Legal Affairs, Ministry of Law and Justice or their representative not below the rank of Joint Secretary.
- Member (ex officio): Secretary to the Government of India in the Department of Expenditure, Ministry of Finance or their representative not below the rank of Joint Secretary.
- Member-Secretary (ex officio): Chief Executive Officer.
- Part-Time Member: One representative chosen by the Central Government from a recognized body of commerce and industry.
These members, other than ex officio members, serve for a term of four years and are eligible for reappointment, with specific age restrictions for their tenure. The salaries, allowances, and other terms and conditions for these members are as prescribed, and they are entitled to traveling and other allowances as prescribed.
Benefits of the Mediation Act:
- Reduced Court Backlog: The implementation of mediation as an alternative dispute resolution method can significantly reduce the backlog of cases in the court system, leading to faster resolution for those cases that do require legal action.
- Preservation of Relationships: Unlike adversarial court battles, mediation prioritizes amicable solutions. This approach can be especially valuable in family and community disputes where preserving relationships is paramount.
- Flexibility and Customization: Mediation allows parties to craft their own solutions, taking into account their unique circumstances and interests, which may not always be possible through litigation.
- Promoting a Culture of Mediation: By making mediation more accessible and promoting awareness through mandatory information sessions, the Act encourages a cultural shift towards dispute resolution outside the courtroom.
The Mediation Act of 2023 is a significant step forward in reshaping how society
approaches dispute resolution. By emphasizing the benefits of mediation,
ensuring confidentiality, and making the process more accessible, this Act aims
to reduce the burden on the court system, save resources, and promote amicable
solutions to conflicts. As individuals, organizations, and communities become
more familiar with this non-adversarial approach, the Mediation Act has the
potential to become a cornerstone of conflict resolution in the modern legal