Conciliation under the 1996 Act and the Mediation Act, 2023

Two statutory regimes have governed assisted settlement in India. Part III of the Arbitration and Conciliation Act, 1996 supplied a procedural code for conciliation, drawn from the UNCITRAL Conciliation Rules of 1980, with no time limit, no regulator and no provision for challenging the settlement. The Mediation Act, 2023 replaced it with a full statute covering pre-litigation, court-referred, online and community mediation, with a time limit, a council to register and grade mediators, and a defined ground of challenge. Section 61 of the new Act with its Sixth Schedule effected the transfer, and the new Section 62 saves what was already under way.

The two regimes on the points where they differ, and the provision that made the change

1. How the Change Was Made

The Sixth Schedule to the Mediation Act, 2023, read with its Section 61

In the Arbitration and Conciliation Act, 1996, for sections 61 to 81, the following sections shall be substituted, namely:

61. Reference of conciliation in enactments. (1) Any provision, in any other enactment for the time being in force, providing for resolution of disputes through conciliation in accordance with the provisions of this Act, shall be construed as reference to mediation as provided under the Mediation Act, 2023. (2) Conciliation as provided under this Act and the Code of Civil Procedure, 1908 shall be construed as mediation referred to in clause (h) of section 3 of the Mediation Act, 2023.

62. Savings. Notwithstanding anything contained in section 61, any conciliation proceeding initiated in pursuance of sections 61 to 81 of this Act as in force before the commencement of the Mediation Act, 2023, shall be continued as such, as if the Mediation Act, 2023 had not been enacted.

Three consequences follow. The whole of the old Part III has gone as a procedural code, replaced by two short sections. Every statute that speaks of conciliation under the 1996 Act, including Section 89 of the Code of Civil Procedure, 1908, is now read as speaking of mediation. And a conciliation already initiated continues under the old provisions, which is why they still have to be known. The commencement of the Mediation Act has been staged, so in a particular matter the date from which the substitution operates should be verified.

2. The Two Regimes Compared

Basis	Part III of the 1996 Act	Mediation Act, 2023
Character	A procedural code for one process, within an arbitration statute	A standalone statute covering pre-litigation, court-referred, online and community mediation
How it begins	Section 62: a written invitation accepted in writing; silence for thirty days may be treated as rejection	Section 5: voluntary pre-litigation mediation, whether or not there is a mediation agreement; Section 7 for a court reference
The neutral	A conciliator appointed under Sections 63 and 64; no qualifications prescribed	A mediator appointed by agreement or by a service provider, with registration and grading contemplated by Chapter VIII
Powers of the neutral	Section 67(4): may formulate and propose terms of settlement	Section 3(h): no authority to impose a settlement upon the parties
Time	No limit prescribed	Section 18: 120 days from the first appearance, extendable by 60 with consent
Confidentiality	Section 75, with the admissibility bar in Section 81	Sections 22 and 23, with stated exceptions
The outcome	Section 73: signed by the parties and authenticated by the conciliator	Section 19: a mediated settlement agreement, signed and authenticated; registration with a legal services authority within 180 days where not court-referred
Enforcement	Section 74: the status and effect of an arbitral award on agreed terms, enforced under Section 36	Section 27: enforceable in the same manner as a judgment or decree
Challenge	None provided; the settlement is attacked only as an agreement	Section 28: fraud, corruption, impersonation, or a dispute not fit for mediation, within ninety days
Limitation	No express provision	Section 24: the period spent in mediation is excluded
Institutional framework	None	Mediation Council of India, established by notification dated 27 August 2026

3. What the New Act Adds

A time limit. The absence of any period under Part III meant a conciliation could drift. Section 18 fixes 120 days, extendable by 60 with the consent of the parties.
A remedy against a tainted settlement. Part III left a party who alleged fraud to sue on the agreement. Section 28 provides a direct challenge on four grounds within ninety days.
Protection of limitation. Section 24 excludes the period spent in mediation, so a party loses nothing by attempting settlement. Part III had no such provision.
Regulation of the neutral. Chapter VIII contemplates registration and grading of mediators and the recognition of service providers, which Part III did not attempt.
New forms of the process. Section 30 recognises online mediation; Chapter X provides for community mediation by a panel of three, for disputes affecting the peace of a locality.
A defined list of exclusions. The First Schedule lists disputes not fit for mediation, where Part III left conciliability to the general law.

4. What Is Lost

The interventionist neutral. Section 67(4) permitted the conciliator to propose terms. The definition in Section 3(h) says only that the mediator has no authority to impose a settlement, which does not prevent him from making proposals, but the statutory encouragement to do so has gone. In practice an evaluative approach remains open where the parties want it.
A settlement with the status of an award. Section 74 gave the outcome the character of an arbitral award on agreed terms, which carried with it the enforcement machinery of Section 36 and, for a cross-border settlement, the possibility of treatment as an award. Section 27 makes the mediated settlement enforceable as a decree, which is equivalent domestically but not abroad.
The express bar on parallel proceedings. Section 77 prevented a party from starting an arbitration or a suit during the conciliation except to preserve its rights. The new Act relies instead on the exclusion of the limitation period and on the terms of any reference.

⚠ The cross-border gap

A settlement under the old Section 74 had the status of an arbitral award on agreed terms, which at least raised the possibility of treatment as an award for enforcement abroad. A mediated settlement agreement under Section 27 of the Mediation Act, 2023 is enforceable as a decree in India, but it does not travel. India signed the United Nations Convention on International Settlement Agreements Resulting from Mediation, the Singapore Convention, on 7 August 2019 and has not ratified it, so a settlement reached in an international mediation must still be sued upon abroad. This is the principal gap in the new framework.

5. Practical Guidance for a Pending Matter

Identify when the process began. A conciliation initiated under Sections 61 to 81 before the commencement of the substitution continues under those provisions by force of the new Section 62.
Read statutory references correctly. Where a statute such as the MSMED Act, 2006 or Section 89 of the Code speaks of conciliation, it is now to be read as mediation under the Mediation Act, 2023.
Check which enforcement provision applies. A settlement under the old regime is enforced through Sections 74 and 36 of the 1996 Act; one under the new regime through Section 27 of the Mediation Act.
Check the ground of challenge. A settlement under the old regime can be attacked only as an agreement; one under the new regime is challenged under Section 28 within ninety days.

6. Related Topics and Provisions

Topic or provision	Connection
Conciliation under Part III: Sections 61 to 81	The code that has been substituted
Conciliation: Meaning, Nature and Scope	The concept and its comparison with mediation and arbitration
Types of ADR Mechanisms	Mediation under the Act of 2023 in outline
Sections 3(h), 5, 18, 22 to 24, 27, 28 and 30, Mediation Act, 2023	The provisions of the new regime relied on here
Sections 30, 36, 73 and 74, A&C Act, 1996	The award on agreed terms and the old enforcement route
Singapore Convention on Mediation, 2019	Signed by India and not yet ratified