An Act to promote and facilitate mediation, especially institutional mediation, for resolution of disputes, commercial or otherwise, enforce mediated settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as acceptable and cost effective process and for matters connected therewith or incidental thereto.
1. Short title, extent and commencement.—(1) This Act may be called the Mediation Act, 2023.
“Section 1 enforced w.e.f. 9-10-2023, vide Noti. No. S.O. 4384(E), dt. 9-10-2023.”
3. Definitions.—In this Act, unless the context otherwise requires,—
(r) “participants” means persons other than the parties who participate in the mediation and includes advisers, advocates, consultants and any technical experts and observers;
(u) “pre-litigation mediation” means a process of undertaking mediation, as provided under Section 5, for settlement of disputes prior to the filing of a suit or proceeding of civil or commercial nature in respect thereof, before a court or notified tribunal under sub-section (2) of Section 5;
Chapter III
MEDIATION
4. Mediation agreement.—(1) A mediation agreement shall be in writing, by or between parties and anyone claiming through them, to submit to mediation all or certain disputes which have arisen or which may arise between the parties.
(2) A mediation agreement may be in the form of a mediation clause in a contract or in the form of a separate agreement.
(3) A mediation agreement is in writing, if it is contained in or recorded as—
(a) any document signed by the parties;
(b) an exchange of communications or letters including through electronic form as provided under the Information Technology Act, 2000 (21 of 2000);
(c) any pleadings in a suit or any other proceedings in which existence of mediation agreement is alleged by one party and not denied by the other.
(4) A reference in any agreement containing a mediation clause shall constitute a mediation agreement if the agreement is in writing and the reference is such as to make the mediation clause as part of the agreement.
(5) The parties may agree to submit to mediation any dispute arising between them under an agreement, whether entered prior to arising of the dispute or subsequent thereto.
(6) A mediation agreement in case of international mediation shall refer to an agreement for resolution in matters of commercial disputes referred to in clause (a) of Section 3.
5. Pre-litigation mediation.—(1) Subject to other provisions of this Act, whether any mediation agreement exists or not, the parties before filing any suit or proceedings of civil or commercial nature in any court, may voluntarily and with mutual consent take steps to settle the disputes by pre-litigation mediation in accordance with the provisions of this Act:
Provided that pre-litigation mediation in matters of commercial disputes of Specified Value shall be undertaken in accordance with the provisions of Section 12-A of the Commercial Courts Act, 2015 (4 of 2016), and the rules made thereunder.
(6) Notwithstanding anything contained in sub-sections (1) and (2) and the Motor Vehicles Act, 1988 (59 of 1988), when an application for compensation arising out of an accident is made before the Claims Tribunal, if the settlement as provided for in Section 149 of that Act is not arrived at between the parties, the Claims Tribunal shall refer the parties for mediation to a mediator or mediation service provider under this Act.
(7) Where the parties arrive at a settlement agreement under sub-section (6), it shall be placed before the Claims Tribunal for its consideration.
(8) If the parties do not reach to settlement agreement under sub-section (6), a non-settlement report prepared by the mediator shall be forwarded to the Claims Tribunal, which has referred the matter for mediation, for adjudication.
6. Disputes or matters not fit for mediation.—(1) A mediation under this Act shall not be conducted for resolution of any dispute or matter contained in the indicative list under the First Schedule:
Provided that nothing contained herein shall prevent any court, if deemed appropriate, from referring any dispute relating to compoundable offences including the matrimonial offences which are compoundable and pending between the parties, to mediation:
Provided further that the outcome of such mediation shall not be deemed to be a judgment or decree of court referred to in sub-section (2) of Section 27, and shall be further considered by the court in accordance with the law for the time being in force.
(2) If the Central Government is satisfied that it is necessary or expedient so to do, it may, by notification, amend the First Schedule.
7. Power of court or tribunal to refer parties to mediation.—(1) Notwithstanding the non-settlement of dispute under sub-section (1) of Section 5, the court or tribunal may, at any stage of proceeding, refer the parties to undertake mediation.
(2) If the court or tribunal refers the parties to undertake mediation, it may pass suitable interim order to protect the interest of any party if deemed appropriate.
(3) The parties shall not be under obligation to come to a settlement in the mediation pursuant to a reference under sub-section (1).
Chapter IV
MEDIATORS
8. Appointment of mediators.
9. Preference of parties.—The mediation service provider shall, while appointing any person from the panel of mediators maintained by it, consider his suitability and the preference of the parties for resolving the dispute.
10. Conflict of interest and disclosure.—(1) The person appointed as a mediator shall, prior to the conduct of mediation, disclose in writing to the parties regarding any circumstance or potential circumstance, personal, professional, financial, or otherwise, that may constitute any conflict of interest or that is likely to give rise to justifiable doubts as to his independence or impartiality as a mediator.
(2) During the mediation, the mediator shall, without delay, disclose to the parties in writing any conflict of interest, referred to in sub-section (1), that has newly arisen or has come to his knowledge.
(3) Upon disclosure under sub-section (1) or sub-section (2), the parties shall have the option to waive any objection if all of them express in writing, which shall be construed as the consent of parties.
(4) Upon disclosure under sub-section (1) or sub-section (2), if either party desires to replace the mediator, then, in case of—
(i) institutional mediation, such party shall apply to the mediation service provider for termination of the mandate of mediator;
(ii) mediation other than institutional mediation, such party shall terminate the mandate of mediator.
11. Termination of mandate of mediator.—A mediation service provider may terminate the mandate of a mediator upon—
(i) the receipt of application from a party under clause (i) of sub-section (4) of Section 10; or
(ii) the receipt of information about the mediator being involved in a matter of conflict of interest from participants or any other person; or
(iii) his withdrawal from mediation for any reason:
Provided that termination under clause (ii) shall be effected if, after giving a hearing to the mediator, mediation service provider finds that there is justifiable doubt as to the independence or impartiality of the mediator and that the same has been brought to the notice of parties and that either party desires to replace the mediator.
12. Replacement of mediator.—
Chapter V
MEDIATION PROCEEDINGS
13. Territorial jurisdiction to undertake mediation.—Every mediation under this Act shall be undertaken within the territorial jurisdiction of the court or tribunal of competent jurisdiction to decide the subject matter of dispute:
Provided that on the mutual consent of the parties, mediation may be conducted at any place outside the territorial jurisdiction of the court or tribunal, or by way of online mediation.
Explanation.—For the removal of doubts, it is clarified that where the parties agree to conduct the mediation at any place outside the territorial jurisdiction or online, for the purpose of enforcement, challenge and registration of the mediated settlement agreement, the same shall be deemed to have been undertaken within the territorial jurisdiction of the court or tribunal of competent jurisdiction.
14. Commencement of mediation.
15. Conduct of mediation.
(5) The mediator shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908), or the Indian Evidence Act, 1872 (1 of 1872).
(6) The mediator with the consent of the parties shall determine the language or languages to be used in the mediation process.
16. Role of mediator
17. Role of mediator in other proceedings.—The mediator shall not—
(a) act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial proceeding in respect of a dispute that is the subject matter of the mediation proceedings;
(b) be presented by the parties as a witness in any arbitral or judicial proceeding.
18. Time-limit for completion of mediation.—(1) Notwithstanding anything contained in any other law for the time being in force, mediation under this Act shall be completed within a period of one hundred and twenty days from the date fixed for the first appearance before the mediator.
(2) The period for mediation mentioned under sub-section (1) may be extended for a further period as agreed by the parties, but not exceeding sixty days.
19. Mediated settlement agreement.—(1) A mediated settlement agreement includes an agreement in writing between some or all of the parties resulting from mediation, settling some or all of the disputes between such parties, and authenticated by the mediator:
Provided that the terms of the mediated settlement agreement may extend beyond the disputes referred to mediation.
Explanation.—A mediated settlement agreement which is void under the Indian Contract Act, 1872 (9 of 1872), shall not be deemed to be lawful settlement agreement within the meaning of mediated settlement agreement.
(2) Where a mediated settlement agreement is reached between the parties with regard to all or some of the disputes, the same shall be reduced in to writing and signed by the parties.
(3) Subject to the provisions of Section 26, the mediated settlement agreement signed,—
(i) in case of institutional mediation, shall be submitted to the mediator, who shall, after authenticating the same, forward it with a covering letter signed by him, to the mediation service provider and also provide a copy to the parties;
(ii) in all other cases, shall be submitted to the mediator who shall, after authenticating the mediated settlement agreement, provide a copy to all the parties.
(4) The parties, may, at any time during the mediation process, make an agreement with respect to any of the disputes which is the subject matter of mediation.
(5) Any mediated settlement agreement under this section includes a settlement agreement resulting from online mediation.
20. Registration of mediated settlement agreement.—(1) For the purposes of record, mediated settlement agreement arrived at between the parties, other than those arrived in a court or tribunal referred mediation or award of Lok Adalat or final award of the Permanent Lok Adalat under Section 21 or Section 22-E of the Legal Services Authorities Act, 1987 (39 of 1987), may, at the option of parties, be registered with an Authority constituted under the said Act, or any other body as may be notified by the Central Government, in such manner as may be specified and such Authority or body shall issue a unique registration number to such settlement agreements:
Provided that the mediated settlement agreement under this section may be registered with such Authority or the body situated within the territorial jurisdiction of the court or tribunal of competent jurisdiction to decide the subject matter of dispute.
Explanation.—For the removal of doubts, it is clarified that nothing contained in this sub-section shall affect the rights of parties to enforce the mediated settlement agreement under Section 27 or challenge the same under Section 28.
(2) The registration referred to in sub-section (1) may be made by the parties or mediation service provider within a period of one hundred and eighty days from the date of receipt of authenticated copy of mediated settlement agreement:
Provided that mediated settlement agreement may be allowed to be registered after the expiry of period of one hundred and eighty days on payment of such fee as may be specified in consultation with the Authority or any other body referred to in sub-section (1).
21. Non-settlement report.—Subject to the provisions of Section 26, where no agreement is arrived at between the parties, within the time period as provided under Section 18, or where, the mediator is of the view that no settlement is possible, he shall,—
(i) in the case of institutional mediation, submit a non-settlement report to the mediation service provider in writing;
(ii) in all other cases, prepare a non-settlement report and provide a signed copy to all the parties:
Provided that the report referred to in this section shall not disclose the cause of non-settlement, or any other matter or thing referring to their conduct, during mediation.
22. Confidentiality.
(2) No audio or video recording of the mediation proceedings shall be made or maintained by the parties or the participants including the mediator and mediation service provider, whether conducted in person or online to ensure confidentiality of the conduct of mediation proceedings.
(3) No party to the mediation shall in any proceeding before a court or tribunal including arbitral tribunal, rely on or introduce as evidence any information or communication set forth in clauses (i) to (iv) of sub-section (1), including any information in electronic form, or verbal communication and the court or tribunal including arbitral tribunal shall not take cognizance of such information or evidence.
(4) The provisions of this section shall not prevent the mediator from compiling or disclosing general information concerning matters that have been subject of mediation, for research, reporting or training purposes, if the information does not expressly or indirectly identify a party or participants or the specific disputes in the mediation.
Explanation.—For the removal of doubts, it is hereby clarified that nothing contained in this section shall apply to the mediated settlement agreement where its disclosure is necessary for the purpose of registration, enforcement and challenge.
23. Admissibility and privilege against disclosure.
(2) There shall be no privilege or confidentiality that will attach to—
(a) a threat or statement of a plan to commit an offence punishable under any law for the time being in force;
(b) information relating to domestic violence or child abuse; and
(c) statements made during a mediation showing a significant imminent threat to public health or safety.
24. Termination of mediation.—The mediation proceedings under this Act shall be deemed to terminate—
(a) on the date of signing and authentication of the mediated settlement agreement; or
(b) on the date of the written declaration of the mediator, after consultation with the parties or otherwise, to the effect that further efforts at mediation are no longer justified; or
(c) on the date of the communication by a party or parties in writing, addressed to the mediator and the other parties to the effect that the party wishes to opt out of mediation;
(d) on the expiry of time limit under Section 18.
25. Cost of mediation.—(1) The cost of mediation, other than community mediation shall be such as may be specified.
(2) Unless otherwise agreed by the parties, all costs of mediation, including the fees of the mediator and the charges of the mediation service provider shall be borne equally by the parties.
26. Proceedings of Lok Adalat and Permanent Lok Adalat not to be affected.—The provisions of this Act shall not apply to the proceedings conducted by Lok Adalat and Permanent Lok Adalat under the Legal Services Authorities Act, 1987 (39 of 1987).
Chapter VI
ENFORCEMENT OF MEDIATED SETTLEMENT AGREEMENT
27. Enforcement of mediated settlement agreement.—(1) A mediated settlement agreement resulting from a mediation signed by the parties and authenticated by the mediator shall be final and binding on the parties and persons claiming under them respectively and enforceable as per the provisions of sub-section (2).
(2) Subject to the provisions of Section 28, the mediated settlement agreement shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a judgment or decree passed by a court, and may, accordingly, be relied on by any of the parties or persons claiming through them, by way of defence, set off or otherwise in any legal proceeding.
28. Challenge to mediated settlement agreement.—(1) Notwithstanding anything contained in any other law for the time being in force, in any case in which the mediated settlement agreement is arrived at between the parties and is sought to be challenged by either of the parties, such party may file an application before the court or tribunal of competent jurisdiction.
(2) A mediated settlement agreement may be challenged only on all or any of the following grounds, namely—
(i) fraud;
(ii) corruption;
(iii) impersonation;
(iv) where the mediation was conducted in disputes or matters not fit for mediation under Section 6.
(3) An application for challenging the mediated settlement agreement shall not be made after ninety days have elapsed from the date on which the party making that application has received the copy of mediated settlement agreement under sub-section (3) of Section 19:
Provided that if the court or tribunal, as the case may be, is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of ninety days, it may entertain the application within a further period of ninety days.
29. Limitation.—Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963) or in any other law for the time being in force, in computing the period of limitation fixed for any proceeding relating to disputes in respect of which a mediation has been undertaken under this Act, the period from the date of commencement of mediation under Section 14, and up to—
(i) submission of report under Section 21; or
(ii) termination of mediation under Section 24,
shall be excluded.
Chapter VII
ONLINE MEDIATION
30. Online mediation.—(1) Online mediation including pre-litigation mediation may be conducted at any stage of mediation under this Act, with the written consent of the parties including by the use of electronic form or computer networks but not limited to an encrypted electronic mail service, secure chat rooms or conferencing by video or audio mode or both.
(2) The process of online mediation shall be in such manner as may be specified.
(3) The conduct of online mediation shall be in the circumstances, which ensure that the essential elements of integrity of proceedings and confidentiality are maintained at all times and the mediator may take such appropriate steps in this regard as he deems fit.
(4) Subject to the other provisions of this Act, the mediation communications in the case of online mediation shall, ensure confidentiality of mediation.
Chapter VIII
MEDIATION COUNCIL OF INDIA
31. Establishment and incorporation of Mediation Council.
32. Composition of Council.
33. Vacancies, etc., not to invalidate proceedings of Council.
Chapter IX
MEDIATION SERVICE PROVIDERS AND MEDIATION INSTITUTES
40. Mediation service provider.—
Chapter X
COMMUNITY MEDIATION
43. Community mediation.—(1) Any dispute likely to affect peace, harmony and tranquillity amongst the residents or families of any area or locality may be settled through community mediation with prior mutual consent of the parties to the dispute.
(2) For the purposes of sub-section (1), any of the parties shall make an application before the concerned Authority constituted under the Legal Services Authorities Act, 1987 (39 of 1987) or District Magistrate or Sub-Divisional Magistrate in areas where no such Authority has been constituted, for referring the dispute to mediation.
(3) In order to facilitate settlement of a dispute for which an application has been received under sub-section (2), the concerned Authority constituted under the Legal Services Authorities Act, 1987 (39 of 1987) or the District Magistrate or Sub-Divisional Magistrate, as the case may be, shall constitute panel of three community mediators.
44. Procedure for community mediation.
(3) In every case where a settlement agreement is arrived at through community mediation under this Act, the same may be reduced into writing with the signature of the parties and authenticated by the community mediators, a copy of which be provided to the parties and in cases where no settlement agreement is arrived at, a non-settlement report may be submitted by the community mediators to the Authority or the District Magistrate or the Sub-Divisional Magistrate, as the case may be, and to the parties.
(4) Any settlement agreement arrived at under this Chapter shall be for the purpose of maintaining the peace, harmony and tranquillity amongst the residents or families of any area or locality but shall not be enforceable as a judgment or decree of a civil court.
(5) The provisions of Section 20 shall, mutatis mutandis apply, in relation to the registration of mediated settlement agreement under this section.
Chapter XI
MISCELLANEOUS
45. Mediation Fund.
49. Mediated settlement agreement where Government or its, agency, etc., is a party.—Notwithstanding anything contained in this Act, no dispute including a commercial dispute, wherein the Central Government or State Government or any of its agencies, public bodies, corporations and local bodies including entities controlled or owned by them is a party, the settlement agreement arrived at shall be signed only after obtaining the prior written consent of the competent authority of such Government or any of its entity or agencies, public bodies, corporations and local bodies, as the case may be.
55. Provisions of Act to have overriding effect on mediation or conciliation contained in other laws.—(1) Subject to the enactments mentioned in the Second Schedule, the provisions of this Act shall have overriding effect for conduct of mediation or conciliation notwithstanding anything inconsistent therewith contained in any other law for the time being in force, and any instrument having force of law.
(2) If the Central Government is satisfied that it is necessary or expedient so to do, it may, by notification, amend the Second Schedule and thereupon it shall be deemed to have been amended accordingly.
56. Act not to apply to pending proceedings.—This Act shall not apply to, or in relation to, any mediation or conciliation commenced before the coming into force of this Act.
THE FIRST SCHEDULE
(See Section 6)
Disputes or matters not fit for mediation
1. Disputes which by virtue of any law for the time being in force may not be submitted for mediation.
2. Disputes relating to claims against minors, deities; persons with intellectual disabilities under Paragraph 2 of the Schedule and person with disability having high support needs as defined in clause (t) of Section 2 of the Rights of Persons with Disabilities Act, 2016 (49 of 2016); persons with mental illness as defined in clause (s) of sub-section (1) of Section 2 of the Mental Healthcare Act, 2017 (10 of 2017); persons of unsound mind, in relation to whom proceedings are to be conducted under Order XXXII of the Code of Civil Procedure, 1908 (5 of 1908); and suits for declaration of title against Government; declaration having effect of right in rem.
3. Disputes involving prosecution for criminal offences.
4. Complaints or proceedings, initiated before any statutory authority or body in relation to registration, discipline, misconduct of any practitioner, or other registered professional, such as legal practitioner, medical practitioner, dentist, architect, chartered accountant, or in relation to any other profession of whatever description, which is regulated under any law for the time being in force.
5. Disputes which have the effect on rights of a third party who are not a party to the mediation proceedings except only in matrimonial disputes where the interest of a child is involved.
6. Any proceeding in relation to any subject matter, falling within any enactment, over which the Tribunal constituted under the National Green Tribunal Act, 2010 (19 of 2010), has jurisdiction.
7. Any dispute relating to levy, collection, penalties or offences, in relation to any direct or indirect tax or refunds, enacted by any State legislature or the Parliament.
8. Any investigation, inquiry or proceeding, under the Competition Act, 2002 (12 of 2003), including proceedings before the Director General, under the Act; proceedings before the Telecom Regulatory Authority of India, under the Telecom Regulatory Authority of India Act, 1997 (24 of 1997) or the Telecom Disputes Settlement and Appellate Tribunal established under Section 14 of that Act.
9. Proceedings before appropriate Commissions, and the Appellate Tribunal for Electricity, under the Electricity Act, 2003 (36 of 2003).
10. Proceedings before the Petroleum and Natural Gas Regulatory Board, and appeals therefrom before the Appellate Tribunal under the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006).
11. Proceedings before the Securities and Exchange Board of India, and the Securities Appellate Tribunal, under the Securities and Exchange Board of India Act, 1992 (15 of 1992).
12. Land acquisition and determination of compensation under land acquisition laws, or any provision of law providing for land acquisition.
13. Any other subject matter of dispute which may be notified by the Central Government.
(See Section 58)
In Section 28 of the Indian Contract Act, 1872 (9 of 1872), for Exception 1 and Exception 2, the following shall be substituted, namely—
“Exception 1.—Saving of contract to refer to arbitration or mediation dispute that may arise.—This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to resolution through arbitration or mediation.
Exception 2.—Saving of contract to refer questions that have already arisen.—Nor shall this section render illegal any contract in writing, by which two or more persons agree to refer to arbitration or mediation any question between them which has already arisen, or affect any provision of any law in force for the time being as to references to arbitration or mediation.”.
THE FOURTH SCHEDULE
(See Section 59)
In the Code of Civil Procedure, 1908 (5 of 1908),—
(i) under Part V, under the heading SPECIAL PROCEEDINGS, the sub-heading “ARBITRATION” shall be omitted;
(ii) for Section 89, the following section shall be substituted, namely—
“89. Settlement of disputes outside the Court.—Where it appears to the Court that the dispute between the parties may be settled and there exists elements of settlement which may be acceptable to the parties, the Court may—
(a) refer the dispute to arbitration, and thereafter, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for arbitration were referred for settlement under the provisions of that Act; or
(b) refer the parties to mediation, to the court-annexed mediation centre or any other mediation service provider or any mediator, as per the option of the parties, and thereafter the provisions of the Mediation Act, 2023 shall apply as if the proceedings for mediation were referred for settlement under the provisions of that Act; or
(c) refer the dispute to Lok Adalat, in accordance with the provisions of sub-section (1) of Section 20 of the Legal Services Authorities Act, 1987 (39 of 1987) and thereafter, all other provisions of that Act shall apply in respect of the dispute;
(d) effect compromise between the parties and shall follow such procedure as deemed fit for judicial settlement.”.
THE NINTH SCHEDULE
(See Section 64)
In the Commercial Courts Act, 2015 (4 of 2016),—
(a) for Chapter IIIA, the following Chapter shall be substituted, namely—
“Chapter III A
Pre-litigation Mediation and Settlement
12-A. Pre-litigation Mediation and Settlement.—(1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-litigation mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.
(2) For the purposes of pre-litigation mediation, the Central Government may, by notification, authorise—
(i) the Authority, constituted under the Legal Services Authorities Act, 1987 (39 of 1987); or
(ii) a mediation service provider as defined under clause (m) of Section 3 of the Mediation Act, 2023.
(3) Notwithstanding anything contained in the Legal Services Authorities Act, 1987 (39 of 1987), the Authority or mediation service provider authorised by the Central Government under sub-section (2) shall complete the process of mediation within a period of one hundred and twenty days from the date of application made by the plaintiff under sub-section (1):
Provided that the period of mediation may be extended for a further period of sixty days with the consent of the parties:
Provided further that, the period during which the parties spent for pre-litigation mediation shall not be computed for the purposes of limitation under the Limitation Act, 1963 (36 of 1963).
(4) If the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties and the mediator.
(5) The mediated settlement agreement arrived at under this section shall be dealt with in accordance with the provisions of Sections 27 and 28 of the Mediation Act, 2023.”;
(b) in Section 21-A, in sub-section (2), for clause (a), the following clause shall be substituted, namely—
“(a) the manner and procedure of pre-litigation mediation under sub-section (1) of Section 12-A;”.
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