Alternative Dispute Resolution- An Analysis Of The Mediation Act, 2023

The principle of alternate dispute resolution is enshrined in Section 89 of the Code of Civil Procedure, 1908. The other forms of platforms for alternate dispute resolution, i.e., arbitration, conciliation and Lok Adalat, are duly codified under the Arbitration and Conciliation Act, 1996 and Legal Services Authority Act, 1987 and have also significantly evolved and developed. However, now, the Government, with its aim to promote and facilitate mediation for the resolution of disputes, has enacted the Mediation Act, 2023. On July 13, 2022, the Standing Committee issued its 117th Report on the Mediation Bill to make various suggestions to its provision. In furtherance to this, the Mediation Bill 2023 was passed by the Rajya Sabha on August 2, 2023, and by the Lok Sabha on August 7, 2023. The Bill received assent from the President on September 15, 2023, and the Bill came to be known as the “Mediation Act, 2023” (“Mediation Act”).

Simply put, one can say mediation is a method of resolving conflicts where two or more parties arrive at a compromise with the support of a neutral party, i.e., a mediator. The object of the Act is to promote and facilitate mediation, especially institutional mediation, for the resolution of disputes. It also aims to establish a Mediation Council of India, encourage community mediation, make online mediation acceptable, and make it a cost-effective process overall. The present article attempts to analyse the Act and highlight its key features.

Key Features of the Mediation Act, 2023

The Act consists of 65 Sections and ten schedules. And the key and salient features of the Act can be categorised as follows:

  1. Definition

Section 2 provides for the application of the Act to mediations conducted in India and

  • All or both parties habitually reside in or are incorporated in or have their place of business in India; or
  • The mediation agreement provides that any dispute shall be resolved in accordance with the provisions of the Mediation Act; or
  • There is an international mediation; or
  • Wherein party to the dispute is the Government or its authorities and where the matter pertains to a commercial dispute; or
  • To any other kind of dispute, if deemed appropriate and notified by the Government for resolution through mediation under this Act wherein the Government or its authorities is a party.

Therefore, the Act will be applicable to disputes involving the Government or its authorities only when either the dispute is commercial in nature, or such dispute is notified to be resolvable through mediation.

Section 3(g) defines international mediation as mediation that relates to a commercial dispute arising out of a legal relationship, contractual or otherwise, under any law for the time being in force in India, and where at least one of the parties is:

  • An individual who is a national of, or habitually resides in, any country other than India; or
  • A body corporate with its place of business outside India; or
  • An association or body of individuals having a place of business outside India; or
  • Government of a foreign country.
  1. Mandatory pre-litigation mediation- Under Section 5(1), it is mandatory for the parties to take steps to settle the disputes by pre-litigation mediation in accordance with the provisions of the Act before filing any suit or proceedings of a civil or commercial nature in any Court. However, in commercial disputes of specified value, the pre-litigation mediation is to be undertaken in accordance with the provisions of Section 12A of the Commercial Courts Act, 2015.
  2. An indicative list providing such disputes or matters not fit for mediation- Section 6 of the Act provides that the mediation shall not be conducted for the resolution of any dispute or matter contained in the indicative list under the First Schedule. The matters in the first schedule include disputes involving allegations of serious and specific fraud and fabrication of documents. Forgery, impersonation, coercion, disputes related to claims against minors, persons of unsound mind, suits for declaration of title against Government, declaration having effect of right in rem, disputes involving the prosecution of criminal offences, etc. Section 6(2) provides that if the central Government feels it necessary or expedient to do so, it can amend the First Schedule.
  3. Appointment of Mediators- Section 8(1) states that unless otherwise agreed upon by parties, a person of any nationality who possesses such qualification, experience, and accreditation as may be specified may be appointed as a mediator. Parties are free to agree upon the mediator’s name and the procedure of their appointment. In case parties are not able to reach a consensus, then they can seek appointment of a mediator by way of an application to a mediation service provider.
  4. The time limit for completion of mediation – A period of 120 days from the date fixed for the first appearance before the mediator has been stipulated for completion of mediation with an extension of a further 60 days, with the consent of parties, under Section 18 of the Act.
  5. Parties may settle some or all of the disputes in mediation- Section 19 suggests that the parties also have the option to settle some or all of the disputes through mediation and draw a mediated settlement agreement with respect to the same.
  6. Registration of mediated settlement agreement- the mediated settlement agreement is required to be registered with the authority (situated within the territorial jurisdiction of the competent Court having jurisdiction to decide the subject matter) constituted under the Legal Services Authority Act, 1987, which will also provide a unique registration number to the same. The registration is required to be done within a period of 180 days from the date of receipt of a copy of the mediated settlement agreement. An extension can be sought upon payment of fees.
  7. Enforcement of mediated settlement agreement- a mediated settlement agreement has been defined under Section 19 as an agreement in writing between some or all the parties resulting from mediation, settling some or all of the disputes and which is authenticated by the mediator.

The Act under Section 27 recognises the mediated settlement agreement to be final and binding upon parties and makes it enforceable in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a judgment or decree passed by the Court.

  1. Grounds to challenge the mediated settlement agreement- Section 28(2) provides four grounds to challenge the mediated settlement agreement, i.e.,
  • Fraud
  • Corruption
  • Impersonation
  • Where the mediation was conducted in disputes not fit for mediation under Section 6.

The Act under Section 28(3) provides for the limitation of 90 days for challenging the mediated settlement agreement, and such limitation starts from the date of receipt of a copy of the mediated settlement agreement by that party. The period can be extended to a further period of 90 days by the Court.

  1. Recognition of institutional mediation – Section 3(f) defines institutional mediation as one conducted under the aegis of a mediation service provider.

Section 3(m) defines a mediation service provider as a body provided under Section 40(1), which includes a body or organisation that provides for the conduct of mediation under the Act and is recognised by the Mediation Council of India, which will be established under Section 31. An authority constituted under the Legal Services Authority Act, 1987, and the mediation centres annexed to a Court or tribunal are also included in the term “mediation service provider”.

As per Sections 41 and 42 of the Act, mediation service providers shall be graded by the Mediation Council of India and must maintain a panel of mediators, provide infrastructure and facilities for the efficient conduct of mediations, register and file Settlement Agreements, amongst other functions.

  1. Mediation Council of India- Chapter VIII of the Act provides for the establishment and incorporation of a Mediation Council of India by the Central Government to perform duties and discharge functions as per the Act.

It will comprise a Chairperson, 2 full-time members, 3 ex-officio members and 1 part-time member. Some of the essential functions of the council include laying down the guidelines for the continuous education, certification, and assessment of mediators by recognised mediation institutes, providing for the manner of registration of mediators, recognising mediation institutes, etc.

  1. Online mediation- Chapter VII of the Act recognises online mediation conducted with the use of electronic form or computer networks and can be resorted to at any stage of mediation with the written consent of the parties.

To facilitate and promote online mediation, the Act under Section 22(5) stipulates that a mediated settlement agreement includes an agreement resulting from online mediation.

  1. Community mediation- Under Chapter X, the Act provides for the different kinds of disputes that can be settled through community mediation with the prior consent of the parties, i.e., disputes relating to peace, harmony, and tranquillity amongst residents or families.


Up until now, India lacked a specific law with the express aim of mediating disputes through mediation. In light of this, the step to codify the mediation law and enact the Mediation Act, 2023 while making the pre-litigation mediation mandatory is a move which will ensure reduction of the backlog of cases in the Indian legal system significantly and has the ability to facilitate a time-bound resolution of disputes.