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The Mediation Bill, 2023 (now Act)

  • In the recent monsoon session of Parliament, both Houses passed The Mediation Bill, 2023 (now Act).

  • Mediation Agreement: The Act requires every mediation agreement to be in writing, with the parties to the agreement agreeing to submit any dispute that may arise between them to mediation.

  • Pre-Litigation Mediation: The Act permits parties to a dispute (regardless of whether they have executed a mediation agreement) to voluntarily and mutually refer their dispute to mediation prior to filing a suit or instituting proceedings before any court.

    • To facilitate this process, the Act will also require courts and relevant institutions to maintain a panel of mediators.


  • Exceptions: The Act also provides an indicative list of matters which cannot be referred to mediation thereunder.

    • This includes disputes involving criminal offences, proceedings initiated in relation to the misconduct of any registered professional, and disputes relating to the levy and collection of any direct or indirect tax or refunds.


  • Time Period: Mediation proceedings under the Act must be completed within a period of 120 days from the date of the first appearance before the mediator, which may be extended for a maximum period of 60 days.

  • Mediated Settlement Agreement: Once the mediation has been successfully concluded (with respect to all or some of the disputes referred), the parties shall reduce the terms of settlement to a written agreement signed by the parties and duly authenticated by the mediator.

    • Once authenticated, an unchallenged Mediated Settlement Agreement may be enforced 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 a court.


  • Challenging the mediated settlement agreement: A mediated settlement agreement may be challenged only on the grounds of fraud, corruption, impersonation, and where the mediation was impermissible under the Act .

Significance of the Act

  • Overall: The legislation imposes stringent timelines for the conduct of proceedings, mandate confidentiality, obligate Indian courts to refer the parties to mediation or arbitration, provide a default mechanism for the appointment of a mediator or arbitrator, and prescribe the procedure for the termination of their mandate.

  • Reduced filing, confidentiality: This requirement is expected to reduce the filing of frivolous claims before Indian courts.

    • Owing to the confidentiality of a mediation, it may also mitigate the risk of deterioration of the parties’ relationship due to a publicly fought dispute.


  • Neutrality: The Act will require the mediation to ordinarily be conducted by an empanelled mediator, who must always be neutral and have uncompromising expertise.

  • Expertise, efficiency & balance: These provisions prioritise expertise and efficiency, while ensuring that the obligation of pre-litigation mediation is not weaponised.

    • The aim is to create a balanced framework which encourages the parties to focus more on their commercial dealings and less on their disputes.


Concerns Over Feasibility of a Mediation

  • Concerns are raised about the feasibility of a mediation conducted under the sword of an obligation as opposed to a sincere desire to arrive at an amicable resolution.

  • In the latter scenario, this may empower a recalcitrant defendant to delay a genuine claim.

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