Mediation Act 2023: Transforming Dispute Resolution in India

Introduction

The Mediation Bill, 2021 (the Bill) as introduced in the Rajya Sabha on 20.12.2021 provides for the setting up of the Mediation Council of India (MCI). There is no process currently pending with the Government for setting up of the MCI. It can be undertaken only after the bill is passed by the Parliament and assented by the President.

Mediation has emerged as a fast-growing dispute redressal mechanism. The Supreme Court of India has constituted the Mediation and Conciliation Project Committee (MCPC) to oversee the effective implementation of Mediation and Conciliation in the country. Referral Judges and Mediators play an important role in mediation. A need was felt to prepare a uniform Training Manual applicable throughout India, which can be used by the Trainers, Mediators, Referral judges, Litigants etc. Read more..

MEDIATION ACT, 2023

The Government has taken various steps and measures towards revitalizing and strengthening the contract enforcement and commercial dispute resolution regime including alternative dispute resolution, to enable ease of doing business and boost investor confidence. The legislative interventions and policy initiatives in the field have gone a long way in highlighting India as a rule of law prevailing jurisdiction.

In furtherance to this and to have a consolidated law on mediation, the Mediation Act, of 2023 has been passed. Mediation law will prove to be a pivotal reform towards providing comprehensive recognition to mediation and enabling the growth of a culture of out-of-court and amicable settlement of disputes. A successful settlement not only helps in preserving the relationship amongst the parties, offering ease of living but also contributing in the growth of the economy.

The Mediation Act, of 2023, lays down the legislative framework for mediation to be adopted by disputing parties, especially institutional mediation where various stakeholders have been identified to establish a robust and efficacious mediation ecosystem in India. The key/main provisions of the Mediation Act, 2023, inter-alia, include provisions relating to voluntary pre-litigation mediation in matters of civil or commercial dispute before parties approach a court or Tribunal; matters or disputes not fit for mediation, process of mediation to be completed within a maximum period of 180 days; procedure for appointment of mediator and conduct of mediation; functions of Mediation Service Providers and Mediation Institutes; Mediated Settlement Agreement resulting from mediation being final, binding and enforceable in accordance with the provisions of Code of Civil Procedure, 1908, in the same manner as if it were a judgment or decree of a Court; challenge to Mediated Settlement Agreement to lie on limited grounds of fraud, corruption, impersonation etc.; community mediation for reference of disputes with consent of parties which are likely to affect peace, harmony and tranquillity amongst the residents or families of any area or locality; online mediation; establishment of the Mediation Council of India and power to make rules and regulations inter-alia for conduct of mediation.

Mediation Act 2023

NO. 32 OF 2023

[14th September, 2023.]

MINISTRY OF LAW AND JUSTICE
(Legislative Department)

New Delhi, the 15th September, 2023/Bhadra 24, 1945 (Saka)

The following Act of Parliament received the assent of the President on the 14th September, 2023 and is hereby published for general information:—

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.

BE it enacted by Parliament in the Seventy-fourth Year of the Republic of India as follows:––

CHAPTER I
PRELIMINARY

1- (1) This Act may be called the Mediation Act, 2023.
(2) It shall extend to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.

2- This Act shall apply where mediation is conducted in India, and—

(i) all or both parties habitually reside in or are incorporated in or have their place of business in India; or
(ii) the mediation agreement provides that any dispute shall be resolved in accordance with the provisions of this Act; or
(iii) there is an international mediation; or
(iv) wherein one of the parties to the dispute is the Central Government or a State Government or agencies, public bodies, corporations and local bodies, including entities controlled or owned by such Government and where the matter pertains to a commercial dispute; or
(v) to any other kind of dispute if deemed appropriate and notified by the Central Government or a State Government from time to time, for resolution through mediation under this Act, wherein such Governments, or agencies, public bodies, corporations and local bodies including entities controlled or owned by them, is a party.

3- In this Act, unless the context otherwise requires,—

(a) “commercial dispute” means a dispute defined in clause (c) of sub-section (1) of section 2 of the Commercial Courts Act, 2015;
(b) “community mediator” means a mediator for the purposes of conduct of community mediation under Chapter X;
(c) “Council” means the Mediation Council of India established under section 31;
(d) “court” means the competent court in India having pecuniary and territorial jurisdiction and having jurisdiction to decide the disputes forming the subject matter of mediation, if the same had been the subject matter of a suit or proceeding;
(e) “court-annexed mediation” means mediation including pre-litigation mediation conducted at the mediation centres established by any court or tribunal;
(f) “institutional mediation” means mediation conducted under the aegis of a mediation service provider;
(g) “international mediation” means mediation undertaken under this Act and 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—
(i) an individual who is a national of, or habitually resides in, any country other than India; or
(ii) a body corporate including a Limited Liability Partnership of any nature, with its place of business outside India; or
(iii) an association or body of individuals whose place of business is outside India; or

(iv) the Government of a foreign country;
(h) “mediation” includes a process, whether referred to by the expression mediation, pre-litigation mediation, online mediation, community mediation, conciliation or an expression of similar import, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person referred to as mediator, who does not have the authority to impose a settlement upon the parties to the dispute;
(i) “mediator” means a person who is appointed to be a mediator, by the parties or by a mediation service provider, to undertake mediation, and includes a person registered as mediator with the Council.
Explanation—Where more than one mediator is appointed for a mediation, reference to a mediator under this Act shall be a reference to all the mediators;
(j) “mediation agreement” means a mediation agreement referred to in sub-section (1) of section 4;
(k) “mediation communication” means communication made, whether in electronic form or otherwise, through—
(i) anything said or done;
(ii) any document; or
(iii) any information provided,
for the purposes of, or in relation to, or in the course of mediation, and includes a mediation agreement or a mediated settlement agreement;
(l) “mediation institute” means a body or organisation that provides training, continuous education and certification of mediators and carries out such other functions under this Act;
(m) “mediation service provider” means a mediation service provider referred to in sub-section (1) of section 40;
(n) “mediated settlement agreement” means mediated settlement agreement referred to in sub-section (1) of section 19;
(o) “Member” means a Full-Time or Part-Time Member of the Council and includes the Chairperson;
(p) “notification” means notification published in the Official Gazette and the expression ‘‘notified’’ with its cognate meanings and grammatical variations shall be construed accordingly;
(q) “online mediation” means online mediation referred to in section 30;
(r) “participants” means persons other than the parties who participate in the mediation and includes advisers, advocates, consultants and any technical experts and observers;
(s) “party” means a party to a mediation agreement or mediation proceeding whose agreement or consent is necessary to resolve the dispute and includes their successors;
(t) “place of business” includes—
(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a party stores it’s goods, supplies or receives goods or services or both; or
(b) a place where a party maintains its books of account; or
(c) a place where a party is engaged in business through an agent, by whatever name called;

(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;
(v) “prescribed” means prescribed by rules made by the Central Government under this Act;
(w) “Schedule” means the Schedule annexed to this Act;
(x) “secure electronic signature” with reference to online mediation means, electronic signatures referred to in section 15 of the Information Technology Act, 2000; and
(y) “specified” means specified by regulations made by the Council under 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.