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.

Registration of mediated settlement agreement

For the purposes of record, the mediated settlement agreement that has been arrived at between the parties, which is distinct from those resolutions achieved through court or tribunal-referred mediation, or awards issued by Lok Adalat, or even the final awards rendered by the Permanent Lok Adalat under section 21 or section 22E of the Legal Services Authorities Act, 1987 (39 of 1987), may, at the option of the parties involved, be registered with an Authority specifically constituted under the provisions of the said Act or with any other recognized body that may be notified by the Central Government. This registration process shall occur in such a manner as may be specified through the relevant guidelines, ensuring a standardized procedure is followed by all parties. Moreover, it is important to note that such Authority or body shall issue a unique registration number to these settlement agreements, which serves to validate and formalize the recorded agreement effectively. Provided that, for the sake of clarity, the mediated settlement agreement under this section may only be registered with such Authority or body that is situated within the territorial jurisdiction of the court or tribunal of competent jurisdiction that is designated to decide the particular subject matter of the dispute. Additionally, an important clarification exists in the form of the Explanation provided: for the removal of doubts, it is explicitly stated that nothing contained within this sub-section shall in any way affect the rights of the parties involved to enforce the mediated settlement agreement under section 27 or, alternatively, to challenge the terms of the same under section 28 if they deem it necessary. The registration referred to in sub-section (1) is intended to be initiated by the parties or the mediation service provider within a designated period of one hundred and eighty days from the date they receive the authenticated copy of the mediated settlement agreement. However, it is also provided that in exceptional circumstances, the registration of the mediated settlement agreement may still be allowed to take place even after the expiry of this one hundred and eighty-day period, contingent upon the payment of such fee as may be specified in consultation with the Authority or any other body referred to in sub-section (1), ensuring flexibility in the process to accommodate the needs and situations of the parties involved. (Sec-20)

Enforcement of Mediated Settlement Agreement Under Section 27

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. This means that once all parties have agreed to the terms and conditions set forth in the mediated settlement, they are obligated to adhere to those stipulations without further dispute. Furthermore, this agreement shall be enforceable as per the provisions of sub-section (2) of section 27, ensuring that there is a clear legal framework for accountability. 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. This provides the agreement with a robust legal standing, allowing it to carry the weight of a formal court ruling. In consequence, it 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, thereby facilitating a clear path for resolution and minimizing the likelihood of future conflicts arising from the same matter, thus promoting the principles of justice and effective dispute resolution.

Challenging the mediated settlement agreement under Section 28

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. This provision is designed to ensure that parties have a fair opportunity to contest any agreements they find objectionable, safeguarding their rights in the process.

A mediated settlement agreement may be challenged only on all or any of the following grounds, namely:–
(i) fraud; in situations where deception or dishonesty has compromised the integrity of the agreement;
(ii) corruption; which may involve the misuse of power for personal gain, undermining the fundamental principles of fairness and justice;
(iii) impersonation; where one party may pose as another, thus invalidating the consent necessary for a legitimate agreement;
(iv) where the mediation was conducted in disputes or matters not fit for mediation under section 6, implying that certain issues may be too complex or contentious for such a process.

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. This time limitation is crucial to promote promptness and finality in mediated agreements, allowing parties to move forward without protracted disputes.

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, providing a necessary avenue for those who, due to extraordinary circumstances, are unable to act within the typical time frame.