Abstract
This assignment presents a critical assessment of the future landscape of mediation in India, arguing that the passage of the Mediation Act, 2023, is the single most significant legal reform positioning mediation as a foundational pillar of justice delivery. For decades, the Indian judiciary has struggled under the colossal weight of case backlog, necessitating a paradigm shift from adversarial litigation to collaborative resolution. The study first dissects the legal framework established by the 2023 Act, highlighting the institutionalization of mediation through the creation of the Mediation Council of India (MCI) and the statutory recognition of online mediation. It then analyses the powerful new legal status granted to Mediated Settlement Agreements (MSAs), which are now enforceable as court decrees. Despite this legislative momentum, the paper identifies persistent challenges, including deeply ingrained cultural resistance, significant gaps in mediator training quality, and the risks posed by the digital divide in ODR adoption. Finally, it offers concrete policy and institutional recommendations focusing on enhanced public-sector involvement and international alignment to ensure mediation successfully alleviates judicial burden and fulfils its promise of delivering efficient, party-centric justice across the nation.
Introduction
India, the world’s largest democracy, faces a paradox in its justice delivery system: a robust, independent judiciary straining under an unprecedented burden of case pendency. With arrears in the Supreme Court alone acknowledged to be in the tens of thousands, and millions of cases clogging the High Courts and subordinate courts, the need for an efficient, cost-effective, and sustainable alternative dispute resolution (ADR) mechanism has never been more acute. Mediation, long considered a peripheral tool, is now being repositioned—by the legislature and the judiciary alike—as the primary antidote to the nation’s litigation crisis. This extensive legal assessment delves into the evolving legal landscape of mediation in India, examining the foundational legislative shift brought about by the Mediation Act, 2023 (the Act), analyzing India’s historical and judicial position, and evaluating the substantial institutional and cultural hurdles that must be overcome for mediation to truly become the “game changer” the legal fraternity envisions. The future of mediation in India is not merely a legal or procedural question; it is a fundamental challenge to the established adversarial legal culture.
The Historical and Judicial Precursors to Formalisation
Mediation, in principle, is not new to India. The practice of parties approaching a neutral, respected third party—be it a family elder, a village head, or a local Panchayat—for dispute settlement is deeply ingrained in Indian cultural and community history. This traditional, community-based conflict resolution, focused on harmony and relationship preservation, stands in stark contrast to the adversarial framework introduced by colonial rule.
The Era of Statutory Recognition (CPC Section 89)
The first significant statutory recognition of court-referred mediation came with the amendment of the Code of Civil Procedure, 1908 (CPC) in 1999, which introduced Section 89. This provision empowered courts to identify and refer suitable disputes to four ADR mechanisms: arbitration, conciliation, judicial settlement (including Lok Adalat), or mediation. However, Section 89 was initially fraught with legal ambiguity, particularly concerning the difference between ‘mediation’ and ‘conciliation’ under the Arbitration and Conciliation Act, 1996 (ACA). The Supreme Court of India stepped in to provide much-needed clarity. The landmark ruling in Afcons Infrastructure Ltd v. M/s Cherian Varkey Construction (2010) was pivotal. The Court clarified the scope of Section 89, holding that the terms ‘mediation’ and ‘conciliation’ could be used synonymously in this context, effectively giving the courts broad power to refer parties to a neutral third-party process. Crucially, the Afcons judgment provided a working taxonomy, outlining which types of cases were best suited for ADR, such as family disputes, commercial matters, and minor civil claims, while clarifying that disputes involving criminal prosecution, third-party rights, or public interest were generally unfit. Following this, the Supreme Court, in M.R. Krishna Murthi v. The New India Assurance Co. Ltd. (2019) explicitly noted the legislative void and strongly emphasised the need for a comprehensive, dedicated, and uniform legal framework for mediation across India. This judicial push set the stage for the legislative process that culminated in the 2023 Act.
The Commercial Courts Act, 2015 and the Pre-Litigation Mandate
A targeted legislative move towards mandatory mediation occurred with the introduction of the Commercial Courts Act, 2015. Specifically, Section 12A of the Act mandated pre-institution mediation and settlement (PIMS) for commercial disputes where no urgent interim relief was sought. This was a direct, albeit restricted, step towards shifting the mindset from ‘litigate first’ to ‘mediate first’ in the business sector. While Section 12A was intended as a proactive measure, its success has been mixed. Statistical data has shown that a significant number of pre-institution cases filed under Section 12A fail to reach a mediated settlement, with many classified as ‘non-starters.’ This highlights a core challenge: a mandate is not a substitute for cultural acceptance and quality institutional support.
A. The Legislative Game Changer: The Mediation Act, 2023
The Mediation Act, 2023, is the most significant legislative intervention in the history of Indian dispute resolution. Enacted to provide a standalone, comprehensive, and institutional framework, the Act is designed to elevate mediation from a judicial appendix to a mainstream mechanism. It seeks to promote, facilitate, and enforce mediation for all types of disputes, commercial or otherwise.
Pre-Litigation Mediation (PLM): Voluntary butEncouraged One of the most debated provisions during the drafting stage concerned the mandatory nature of pre-litigation mediation. The final Act, addressing concerns about restricting the fundamental right to access justice (Article 21 of the Constitution), adopted a balanced approach:
● Voluntary PLM (Section 5(1)): Irrespective of any prior agreement, parties may voluntarily and with mutual consent opt to settle civil or commercial disputes through pre-litigation mediation before approaching any court or tribunal.
● Court Referral (Section 7(1)): Courts retain the power to refer parties to mediation at any stage of the proceedings, even if PLM fails.
● Commercial Courts Act Exception: The voluntary nature does not override the mandatory requirement under Section 12A of the Commercial Courts Act, 2015, which remains in force. The spirit of the Act encourages, rather than mandates, a good-faith attempt at resolution before formal litigation, addressing the Parliamentary Standing Committee’s observation that blanket mandatory PLM could lead to further delays and misuse by errant litigants. The Act mandates that a party may withdraw from the mediation process only after attending a minimum of two mediation sessions, ensuring parties are genuinely exposed to the process.
B. Institutionalisation and Standardisation:
The Mediation Council of India (MCI) A critical component aimed at building public trust and ensuring quality is the establishment of a dedicated regulatory body: the Mediation Council of India (MCI) (Chapter VII, Section 31). The functions of the MCI are pivotal to the future of mediation, including:
1. Registration of Mediators: Creating a central, standardized registry of qualified mediators.
2. Recognition and Grading: Recognizing and grading mediation service providers (MSPs) and mediation institutes (MIs) to ensure uniformity in standards and infrastructure.
3. Accreditation and Training: Setting the framework for the continuous education, certification, and assessment of mediators. This institutional push addresses a historical weakness: the inconsistency in mediator competence and the lack of a central professional benchmark. For India to be taken seriously as a global mediation hub, standardized, high-quality professional services are non-negotiable.
C. Enforceability:
Equivalence to a Court Decree The most transformative provision regarding the efficacy of mediation is the status accorded to the Mediated Settlement Agreement (MSA). Section 27 stipulates that an MSA resulting from a mediation conducted under the Act is final and binding on the parties and shall be enforceable in the same manner as if it were a judgment or decree passed by a court. This provision fundamentally changes the risk-reward calculation for litigants. By granting the MSA the status of a decree, the Act resolves the long-standing uncertainty regarding enforcement, which previously discouraged many businesses and individuals from committing to the process. The scope for challenging an MSA is extremely narrow, limited to grounds set out in Section 28, such as:
1. Fraud.
2. Corruption.
3. Impersonation.
4. Disputes related to matters not fit for mediation as per the First Schedule of the Act. This near-unassailable finality, likethe grounds for challenging an arbitral award, imbues the mediation process with the necessary judicial authority, addressing the societal preference for litigation which often stems from the belief that only a court verdict is truly final and authoritative.
D. Embracing Technology:
Online Mediation (ODR) Recognizing the vast geographical size and connectivity challenges of India, the Act legally validates and formalizes Online Mediation (Section 30). ODR platforms, leveraging video conferencing, secure chat rooms, and encrypted electronic mail, allow for remote participation while ensuring the confidentiality and integrity of the process. The ability to conduct mediation proceedings virtually is essential for enhancing access to justice, especially for parties in different cities or rural areas. It drastically cuts down on time and travel costs, which are often cited as reasons for prolonged litigation. The success of virtual hearings during the COVID-19 pandemic demonstrated the potential of ODR, and the Act ensures this facility is permanently integrated into the legal framework.
E. International Mediation and the Singapore Convention
India was one of the first prominent signatories to the United Nations Convention on International Settlement Agreements Resulting from Mediation (The Singapore Convention). This convention provides a uniform and efficient framework for the cross-border enforcement of mediated settlement agreements, like the New York Convention for arbitration awards. However, the Mediation Act, 2023, is somewhat restrictive in its current application to international disputes. As per Section 2, the Act primarily applies to mediations conducted in the territory of India. While it covers international mediations (commercial disputes involving at least one foreign party) if conducted within India, it does not currently provide for the direct recognition and enforcement of MSAs resulting from mediations conducted outside India. This is a critical gap. Since MSAs under the Act are treated as a judgment or decree of a court, they fall outside the scope of the Singapore Convention (which generally excludes settlements that already have the status of judgments or decrees). For India to truly emerge as a global hub for international commercial mediation, the legislative framework must evolve to fully operationalize the Singapore Convention, enabling parties to enforce cross-border settlements with ease.
The Role of the Judiciary and Supreme Court Directives
The Supreme Court of India has consistently championed mediation, viewing it as the most viable solution to manage the massive judicial backlog. The appointment of the new Chief Justice-designate further signals a focused effort, with the head of the judiciary calling mediation “one of the easiest solutions which can be a game changer” (Source 6.2). The judicial push focuses on two key areas:
Challenges and Cultural Roadblocks: An Institutional Assessment
Despite the robust legislative framework, the future of mediation hinges on its successful institutionalisation and a fundamental shift in the prevailing adversarial culture. Several systemic challenges remain:
A. Lack of Public Awareness and Trust Deficit
A significant barrier is the pervasive lack of awareness among the public and, surprisingly, among many legal professionals.
1. Preference for Litigation: India has a deeply entrenched tradition of relying on courts for authoritative dispute resolution. Many litigants perceive a court decision as possessing greater finality and legitimacy than a mediated settlement.
2. Skepticism: There is a trust deficit concerning mediator neutrality and competence, compounded by the historical lack of a centralized accreditation system. Parties often fear non-compliance by the opposing party despite the new law making MSAs enforceable as decrees.
3. Adversarial Culture: The ‘win-lose’ mindset inherent in litigation is antithetical to the ‘win-win’ philosophy of mediation, which seeks mutual benefit and relationship preservation. Changing this cultural preference, which has been entrenched for centuries, is a monumental task.
B. Quality and Standardisation of Mediators
The quality and training of mediators remain inconsistent across the country. While the MCI is tasked with creating a regulatory framework, the current pool of mediators suffers from:
1. Lack of Uniform Training: Until the MCI’s accreditation regime is fully implemented, variations in training standards lead to inconsistent service quality, which undermines confidence in the process.
2. Mediator Shortage: While India has thousands of mediators, the number of truly professional, full-time accredited mediators equipped to handle complex commercial and international disputes is insufficient to meet the projected demand. The future success of the Act relies entirely on the MCI’s ability to swiftly establish and enforce high, international-standard accreditation protocols and continuous education requirements for mediators.
C. The Bar’s Resistance and the Economic Model
The legal profession, particularly in India, operates on an adversarial model where prolonged litigation often correlates with higher professional fees. This creates a “moral hazard,” where some lawyers may view mediation as a threat to their earnings by settling cases prematurely. Drawing lessons from the United States, where lawyers initially resisted mediation but quickly adapted to become skilled mediators and “gatekeepers” of the process (Source 5.3), the Indian legal fraternity must pivot. Law schools must integrate mediation and other ADR methods as core subjects, equipping the next generation of lawyers with the skills to counsel clients on the cost-effectiveness and benefits of mediated solutions. The future lawyer in India must be an expert not just in courtroom advocacy but also in conflict management.
D. Infrastructure and Accessibility Disparities
The physical infrastructure for institutional mediation is highly concentrated in metropolitan and tier-one cities. States like Maharashtra and Kerala have shown relatively good adoption, but significant regional disparities persist. To achieve national success, infrastructure development is crucial:
● Dedicated Centres: Establishing high-quality, dedicated mediation centres with the necessary administrative and technological support at the district and taluka (sub-district) levels.
● Funding: Ensuring adequate government funding to support these centres and provide services, particularly for court-annexed mediation and community mediation.
The Opportunities and Future Trajectory
The Mediation Act, 2023, has opened several avenues for the robust growth and specialization of mediation in India, making the future look distinctly optimistic, provided the identified challenges are addressed.
A. Online Dispute Resolution (ODR) as a Force Multiplier
Technology will be the great equalizer. The legal recognition of ODR allows mediation to bypass geographical limitations, drastically improving accessibility for citizens and businesses. The future of mediation will see ODR platforms integrating cutting-edge technologies like secure AI-powered scheduling, document sharing, and even data analysis to help parties understand realistic settlement ranges. ODR is particularly crucial for:
● Small and Medium Enterprises (SMEs): Resolving low-value, high-volume commercial disputes quickly and affordably.
● Family Matters: Allowing estranged parties to participate from separate locations, reducing emotional friction.
● Cross-Border Transactions: Facilitating negotiations between parties residing in different jurisdictions without travel expenses.
B. Specialisation and Sectoral Mediation
The Act’s general framework allows for specialization in various dispute categories, leading to greater effectiveness:
● Insolvency and Bankruptcy: While insolvency proceedings are complex, mediation can be highly effective in resolving specific disputes between creditors and corporate debtors, especially concerning asset valuation, distribution plans, or pre-IBC negotiations.
● Real Estate: Disputes under the Real Estate (Regulation and Development) Act, 2016 (RERA) are already encouraged to use mediation. Specialized real estate mediation centreswill grow.
● Community Mediation: The Act formalizes community mediation (Chapter X) for disputes affecting local peace and harmony. This is a crucial area where traditional methods can be integrated with the statutory framework, focusing on social reconciliation rather than purely legal remedies.
C. Re-evaluating the Singapore Convention
Stance For India to achieve its ambition of becoming a global Alternative Dispute Resolution hub, it must revisit its stance on the international enforceability of MSAs. The Act needs a mechanism to ratify the Singapore Convention fully, allowing MSAs from foreign mediations to be readily enforced in Indian courts, and vice-versa. This legislative flexibility is vital for attracting international commerce and for securing the trust of global businesses that seek certainty in dispute resolution.
D. Government Adoption as a Mandate
The judiciary’s encouragement for government agencies to adopt mediation must transform into a policy mandate. Each ministry or PSU should have a dedicated, skilled internal mediation cell and a clear policy to refer disputes below a certain threshold to mediation as a first resort. This single institutional change would significantly lighten the load on the courts and send a powerful signal across the entire country.
Conclusion: A Call for Cultural Execution
The journey of mediation in India has transitioned from an informal, customary practice to a robust, legislatively backed mechanism. The Mediation Act, 2023, is undoubtedly a watershed moment a comprehensive, forward-looking piece of legislation that grants mediated settlements the authority of a court decree, mandates institutional standardization through the MCI, and legally embraces the power of online dispute resolution. However, the future is less about the excellence of the law and more about the excellence of its execution. The challenges are not legislative but cultural and institutional. The Indian legal ecosystem must overcome:
1. Cultural Inertia: The preference for adversarial litigation must yield to a collaborative problem-solving mindset.
2. Trust Deficit: The MCI must rapidly build confidence by establishing world-class standards for mediator training and accreditation.
3. Infrastructure Gaps: The promise of accessibility via ODR and new physical centres must be delivered, extending high-quality services beyond major cities.
4. Bar Engagement: Lawyers must recognize mediation not as a threat, but as an indispensable tool that offers quicker, better, and more creative solutions for their clients. If the stakeholders the judiciary, the government, the legal profession, and the newly established Mediation Council of India commit fully to executing the spirit and letter of the Act, mediation will cease to be a mere alternative. It will become the preferred, standard-setting method for dispute resolution, fulfilling its promise to decentralize justice, unclog the courts, and usher in an era of efficient and amicable conflict resolution, making the Indian justice system fit for the 21st century.
5th Year
Lovely Professional University
Shivam Sonkar
