Mediation

Mediation is a process in which a neutral third person assists the parties to reach their own settlement, without any authority to impose one. Until 2023 it had no general statute in India: it was practised under Section 89 of the Code of Civil Procedure, 1908, under rules framed by the High Courts, and under scattered provisions in other enactments. The Mediation Act, 2023 supplies a complete code covering pre-litigation, court-referred, online and community mediation, with a time limit, a settlement enforceable as a decree, a defined ground of challenge and a Council to register and grade mediators.

1. Meaning and Nature

Two things are settled by the definition. The mediator's want of authority to impose is the defining limitation, and it is what separates mediation from arbitration and from every adjudicatory process. And conciliation is included, which ends the distinction Indian law had maintained since 1996 between a conciliator who might propose terms and a mediator who might not.

The nature of the process follows. It is consensual at both ends, since nothing happens without the parties' agreement to the outcome. It is interest-based rather than rights-based, because the question is what arrangement will serve both sides rather than who is right. It is private, and the private session with each party separately is its principal technique, which would be a fatal irregularity in an arbitration. And it produces terms a court could not grant, such as an apology, a continuing supply arrangement, a variation of the contract or a staggered payment.

2. The Guiding Principles

The four principles, and what each requires of the mediator

1. Voluntariness. No party can be compelled to settle. A court may refer parties to mediation, and Section 12A of the Commercial Courts Act, 2015 compels the attempt before a commercial suit, but what is compelled is participation and never agreement. A party may withdraw, and the claim survives.
2. Self-determination. The terms are the parties' own. The mediator may test them, suggest options and point out difficulties, but the decision belongs to the parties, and a settlement pressed on an unwilling party is open to attack on the ground of consent.
3. Confidentiality. Sections 22 and 23 protect mediation communications and bar their use as evidence, subject to stated exceptions. Without that protection no party could afford to explore a concession.
4. Neutrality and impartiality. The mediator must have no interest in the outcome and no undisclosed connection with either side, and must conduct the process even-handedly. Section 8 requires disclosure of any circumstance likely to give rise to justifiable doubts about independence or impartiality, and the obligation is continuing.

3. History of Mediation in India

The indigenous forms are older than the courts: the panchayat, the guild assembly and the caste or locality body all resolved disputes by settlement rather than by adjudication, and the character of those processes was conciliatory. The modern history begins with the legal aid movement and runs in five stages.

• 1987. The Legal Services Authorities Act placed Lok Adalats on a statutory footing and created the authorities that would later administer pre-institution mediation.
• 1999 and 2002. Section 89 and Order X Rules 1A to 1C were inserted into the Code of Civil Procedure, 1908 and brought into force on 1 July 2002, making reference to mediation a normal step in a civil suit.
• 2003 to 2005. The Salem Advocate Bar Association litigation upheld the amendments and produced the model civil procedure mediation rules on which the High Court rules are based; court-annexed mediation centres were established, beginning in Tamil Nadu and Delhi, and the Mediation and Conciliation Project Committee of the Supreme Court began training mediators.
• 2010 to 2018. Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., (2010) 8 SCC 24 corrected the drafting of Section 89 and listed the categories of case suited to settlement; Section 442 of the Companies Act, 2013 and the Consumer Protection Act, 2019 added sectoral machinery; and the amendment of 2018 inserted Section 12A into the Commercial Courts Act, 2015.
• 2020 to 2023. In M.R. Krishna Murthi v. New India Assurance Co. Ltd., (2020) 15 SCC 493 the Supreme Court recommended a standalone statute. The Mediation Bill, 2021 was introduced in the Rajya Sabha, examined by the Parliamentary Standing Committee, which recommended that pre-litigation mediation be made voluntary, and the Mediation Act, 2023 received assent on 14 September 2023. The Mediation Council of India was established by notification dated 27 August 2026.

4. Kinds of Mediation

The three techniques, the six settings, and the position of international mediation

4.1 By technique

• Facilitative. The mediator manages the process, clarifies issues, carries offers and tests positions in private, without expressing any view of the merits. This is the dominant model in Indian court-annexed practice and the one the statutory description of the mediator's role reflects.
• Evaluative. The mediator indicates his assessment of the strength of the respective cases, and what a court or tribunal is likely to do. Commercial parties often want this, and it is the technique the old conciliation regime expressly licensed through Section 67(4) of the Arbitration and Conciliation Act, 1996.
• Transformative. The object is recognition of each party's position by the other and the empowerment of both to deal with the conflict, with settlement a by-product rather than the aim. It is used in community and family disputes, where the relationship matters more than the terms.

4.2 By setting

• Court-annexed. The court refers a pending case, under Section 7 of the Mediation Act, 2023 or Section 89 of the Code, to a mediation centre attached to the court. No consent is required for the reference, and the process is free or nearly free to the parties.
• Private. The parties agree to mediate under a mediation agreement within Section 4, and choose their own mediator and terms of engagement.
• Institutional. A recognised mediation service provider administers the process under its rules, supplying the panel, the venue and the record; Chapter VIII contemplates the recognition of such providers and of mediation institutes.
• Pre-litigation. Voluntary under Section 5, which permits parties to refer a civil or commercial dispute to mediation before filing a suit whether or not there is a mediation agreement. Compulsion exists only under Section 12A of the Commercial Courts Act, 2015.
• Online. Section 30 permits mediation to be conducted online at any stage with the written consent of the parties, subject to the integrity of the proceedings and to confidentiality.
• Community. Chapter X provides for mediation by a panel of three, for disputes likely to affect the peace and harmony of the residents of an area. A settlement under that chapter is not enforceable as a decree, which marks it off from the rest.

4.3 International mediation

The Act applies to an international mediation conducted in India, and a settlement so reached is enforceable here under Section 27. The gap is in the other direction: 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 produced by a mediation conducted abroad is not enforceable in India by force of the Convention and must be sued upon as a contract. This remains the principal limitation on the use of mediation in cross-border commercial contracts.

5. The Mediator

The mediator is appointed by agreement of the parties or, failing agreement, by a mediation service provider. Section 8 requires a person approached in connection with a possible appointment to disclose in writing any circumstance likely to give rise to justifiable doubts as to his independence or impartiality, and the duty continues throughout. Section 17 states his role: to assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement, without imposing any settlement or giving any assurance as to its outcome.

6. The Two Agreements

The course of a mediation under the Act, and what is protected throughout

• The mediation agreement, Section 4. The agreement by which parties submit to mediation. It must be in writing, may be a clause in a contract or a separate agreement, and may be contained in an exchange of communications, including by electronic means. It is the counterpart of the arbitration agreement in Section 7 of the Arbitration and Conciliation Act, 1996, though mediation may also be undertaken under Section 5 without any such agreement.
• The mediated settlement agreement, Section 19. The outcome. It must be in writing, signed by the parties and authenticated by the mediator, and where the mediation was not court- referred it may be registered with a legal services authority within 180 days under Section 21. A settlement may be partial, in which case the unsettled part returns for adjudication.

7. Enforceability and Challenge

Section 27 provides that a mediated settlement agreement shall be final and binding and enforceable in the same manner as if it were a judgment or decree passed by a court, and shall accordingly be enforced in accordance with the Code of Civil Procedure, 1908. No separate suit is needed and no proceeding to convert it. Section 28 confines a challenge to four grounds, namely fraud, corruption, impersonation, and mediation conducted in a dispute not fit for mediation under the First Schedule, and prescribes a limitation of ninety days extendable by a further ninety on sufficient cause.

8. Related Topics and Provisions