Mediation

Mediation is a voluntary, confidential form of alternative dispute resolution (ADR) in which a trained, neutral third party, the mediator, helps disputing parties communicate, narrow the issues in contention, and negotiate their own settlement. The mediator facilitates rather than adjudicates: unlike a judge or arbitrator, they do not decide the matter or impose a solution, so the parties retain full control over whether and how the dispute is resolved. In India, mediation now operates under a dedicated statute, the Mediation Act, 2023.

Legal basis

The Mediation Act, 2023 (Act No. 32 of 2023) is the principal law. It works alongside Section 89 of the Code of Civil Procedure, 1908, under which courts refer suitable disputes to ADR, and Section 12A of the Commercial Courts Act, 2015, which makes pre-institution mediation mandatory for commercial disputes that do not require urgent interim relief. The Act also creates the Mediation Council of India to register and regulate mediators and mediation service providers.

How it works

• Parties may mediate before or during litigation; pre-litigation mediation under the Act is voluntary.
• Under Section 18, mediation must be completed within 120 days from the first appearance, extendable by up to 60 further days by agreement.
• Proceedings are confidential and generally cannot be used as evidence in later court or arbitral proceedings.

Enforcement of the settlement

A signed Mediated Settlement Agreement (MSA) is enforceable under Section 27 in the same manner as a judgment or decree of a court, which makes it far stronger than an ordinary contract. It can be challenged only on narrow grounds such as fraud, corruption, impersonation, or a dispute being unfit for mediation, and only within 90 days under Section 28.