Mediation bill

Reading time : 8 minutes


According to National Judicial Data Grid (NJDG) over 30 million (3 crore) cases are pending in the courts of India. This highlights the fact that litigation in India is long, and a strenuous process and the aggrieved parties wait for a long time to receive justice. To facilitate people better in the legal process the government is bringing mediation as an Alternative Dispute Redressal (ADR). Introduced in December 2021, the mediation bill seeks to promote and facilitate mediation for resolution of disputes between the aggrieved parties in less time.

What is Mediation?

Mediation is an Alternative Dispute Resolution (ADR) method in which the aggrieved parties settle disputes without having to go the courts for justice. It is a structured, voluntary and interactive negotiation process where a neutral third-party uses specialised communication and negotiation techniques to help the two parties get their previously stated objectives. The mediator also helps by offering creative solutions and assisting in final draft settlement. If a resolution is reached a mediation agreement is formed. The agreement may be written or oral. The legal binding of the agreement depends on the jurisdiction of the area.

The mediation process is generally considered more fast, inexpensive and procedurally simple than formal litigation.

History of Mediation in India

The concept of mediation as an Alternative Dispute Resolution (ADR) is deep rooted withing our country’s history. The traces of mediation can be found from centuries before the British took over India. Back then informal panchayats were used to settle disputes between the aggrieved parties. Usually, the maharaja or the elder of the village were the head of the panchayats and executed the orders. Till date this, in some tribes of India, disputes are settrled through an informal panchayat which is headed by Panchas or Pancha Parmeshwars, as a neutral third party.

Mediation first came to legally recognised as a legal Alternative Dispute Resolution (ADR) in 1947 through the Industrial dispute act. Mediation gained popularity when the Legal Service Authority Act gave statutory status to Lok Adalat, in 1987. Giving statutory status to Lok Adalat encouraged people to try different approach for legal remedy, other than litigation. Mediation became the more chosen Alternative Dispute Resolution (ADR) than any other for of ARDs available.

The recognition of mediation as an ADR can also be attributed to the 1999 amendment of Civil Procedure Code (CPC). section 89 of the Civil Procedure Code (CPC), 1908, which was amended in the CPC, 1999, allowed courts to refer to ARDs to settle pending disputes.

Moreover, CIVIL PROCEDURE ALTERNATIVE DISPUTE RESOLUTION AND MEDIATION RULES, 2003 laid down the rules for settling disputes through ARDs. Rule 5(f)(III) made mediation mandatory through the Civil procedure-mediation law, 2003. This allowed courts to refer cases for mediation, if there was an element of settlement, even if the parties were not on- board, for mediation.

The 2003 amendment of the CPC regarding the Alternative Dispute Redressal (ADR) was challenged by a group of lawyers. Following this incident, The Malimath committee and the 129th law reform talked about the conditions of the formal litigation system and suggested the use of Alternative Dispute Redressal (ADR) to lessen the burden on courts and for fast and inexpensive legal relief.

Since then, there have been several contributions by The Supreme Court judges to encourage people to use mediation to seek legal remedies. In 2005, a Permanent Mediation Centre was inaugurated at the Tis Hazari court complex and judicial mediation was started at the Karkardooma court complex. Two mediation centres were also inaugurated, one at the Karkardooma court complex in Delhi and another at the Patiala court in 2015.

Salient features of the mediation bill, 2021

  • Section 2 of the Mediation bill defines ‘Domestic Mediation’ as
    • All the parties habitually reside or have business or are incorporated in India
    • The Mediation Settlement Agreement provides that the Mediation act, 2021 would be applied to the mediation
  • Section 3(c) of the bill defines international mediation as
  • An individual who resides in any country, besides India
  • The government of a foreign country
  • An association or body of individuals whose place of business is outside India
  • Body corporate including limited liability partnership of any nature, with its place of business outside India
  • Section 6 of the bill proposes that the parties of a civil or commercial dispute must try to settle the dispute through pre-litigation mediation before approaching the courts.
  • The courts and tribunals are given additional powers to refer parties to a meditator and grant interim relief.
  • Potential mediatory will have to disclose any conflict of interest that they may have with any of the parties. Furthermore, the parties are allowed to terminate any mediator of their position if they have given a false information on conflict of interest
  • Section 29(2) of the bill allows the aggrieved party to approach the court or a tribunal in the event of a fraud, corruption, and impersonation
  • The bill proposes establishment of a Mediation Council of India to promote rules and regulations of domestic and international mediation. The members of the council can be retired judges of high court or supreme court and eminent persons and academicians in the field of mediation, and key government officials.
  • Section 23(1)(iii) of the bill makes mediation an effective tool of privacy as the documents produced during the mediation will not be admissible in the courts or tribunals
  • Chapter 10 of the Bill recognises community mediation as a resolution mechanism for community-related disputes that are likely to affect the peace and harmony among families or people of any area or locality. A three-mediator panel can be constituted and notified by the concerned authority, which can include persons of high integrity and standing in the community or representatives of welfare associations.
  • The bill also proposes to amend certain key legislations, including the Indian contract act, to streamline the implementation of mediation.
  • Chapter 7 of the bill regulates online mediation, which include pre-litigation mediation conducted via a computer/cell phone network. All the mediations that take place online will be governed by the provisions of the Information Technology Act, 2000 (IT act, 2000)
  • Section 44 of the bill aims to settle disputes which may affect peace and harmony of a family or a community, through community mediation.
  • Section 20 of the bill stipulates a time period of 90 day for the completion of the mediation between the aggrieved parties, from the start. Addition time period of 90 day may be granted with the consent of all the parties.
  • Section 21 of the bill defines ‘Mediation Settlement Agreement’. It means an agreement or interim agreement between either all the parties or some of the parties that solves either all the disputes or at least, some of it existing disputes, which is authenticated by the mediator
  • Part I and Part III of the bill has incorporated provisions for both domestic and international mediations respectively. Moreover, section 28 and section 50 of the bill have recognised a Mediation Settlement Agreement for both domestic and international mediation, as final binding between the aggrieved parties i.e. The dispute between the aggrieved parties would be considered finished after the Mediation Settlement Agreement has been singed by all the parties and has been authenticated by the mediator.
  • The Draft Bill provides that a Mediated Settlement Agreement can be enforced in accordance with the provisions of the Code of Civil Procedure, 1908. For an international Mediation Settlement Agreement, as per Section 51 of the Draft Bill, the parties applying for enforcement shall approach the respective High Court with the Settlement Agreement or an attested copy of the same along with any other evidence that may be required to prove that the Settlement Agreement is covered under the Singapore Convention.
  • Section 29(2) of the bill lays down 4 grounds to challenge domestic Mediated Settlement Agreement
    • Fraud
    • Corruption
    • Gross Impropriety
    • Impersonation
  • Section 52(2) of the bill lays down the grounds for challenging an internationally Mediated Settlement Agreement
    • It is in violation of public policy of India
    • The subject matter of the dispute is not capable of being handled under the Mediation law of India
    • The Mediation Settlement Agreement was inducted by fraud or corruption

Need for the Mediation Bill

Mediation bill would help the India judicial system in more than one way. The government has been looking for a way to strengthen Alternative Dispute Resolution (ADR) that would help in resolving the disputes in an expedited manner and to take away some burden of the overworked courts of the Indian judiciary. Mediation is already a part of some of the India law such as the Industrial dispute act, the consumer protection act and such, all have different rules and regulations regarding mediation. Thus, it was necessary to ascertain the present statutory framework on mediation. Moreover, India is already a signatory of the Singapore convention (The Singapore Convention ultimately aims to facilitate international trade by rendering mediation an efficient and entrusted method for resolving disputes, alongside arbitration and litigation) So, it is expected from India to enact a law regarding mediation to keep up with the standards of mediation at an international level.

Advantage of the Mediation bill

  • Mediation is a faster process than the traditional litigation. Mediation use a neutral third party that settles the disputes between the aggrieved parties through negotiations and settlements.
  • Mediation finds legitimacy in specific laws like consumer protection law, civil procedure code etc. However, mediation has been proven helpful in these fields, over the years, the government has realised the need for mediation to have standalone law in the book of the Indian constitution.
  • Pre-litigation provided in the bill is a remarkable feature as parties can settle the disputes without having the need to go to the courts. And the parties can decide about the continuation of the mediation anytime.
  • The present backlog of cases in Chennai stands at 1,64,912, as per the National Judicial Data Grid (NJDG). Reports also show that mediation has reduced the pendency of the cases, significantly. From April 2005 to July 2021 more than 25% of the case total cases, that were send for mediation, have been settled.
  • The bill also provides relief to parties of commercial mediation settlements arrived through international mediation as they can be enforced in India since, India is also a part of the Singapore convention now.

Disadvantages of the Mediation bill

While the Mediation bill is certainly a step forward in the right direction in terms of recognising mediation as a viable option for alternative dispute remedy, there surely are some loopholes/ disadvantages that still need to be addressed.

  • The bill does not talk about the minimum required criteria for one to become a mediator.
  • Mandatory per-litigation mediation might disturb the essence of mediation if the parties are not willing to mediate at all.
  • The Draft Bill provides that a domestic mediated settlement agreement may be challenged on the ground of ‘gross impropriety’, without defining the term properly.
  • The penalties of non-compliance of a Mediated Settlement Agreement have not been mentioned under the Draft Bill.
  • The requirement in Section 18 of the Draft Bill that the mediator shall communicate ‘the view of each party to the other to the extent agreed to by them’ could give rise to possible conflict of interest, besides striking at the root of the requirement of confidentiality of the mediation process.
  • The draft does not mention the provisions that would govern the international mediation that takes place in India but relates to non-commercial disputes that have arisen under a foreign law, such mediation not being covered by either Part I or Part III of the bill.
  • Community mediation, which is mentioned in the bill, might not be a geat idea as the parties might become a victim of caste and gender discrimination by the village panchayats.
  • The Bill has failed to recognize the layers attached to confidentiality in mediation and has thereby omitted to include some of the important points mentioned (points related to confidentiality) under the Civil Procedure Mediation Rules.


Until now, the government had made minimal attempts in strengthening the Alternative Dispute Resolution (ADRs). By making a standalone law on mediation, the government is finally recognising the effectiveness of mediation is resolving a dispute.

According to the National Judicial Data Grid (NJDG) more than 4 crore cases (civil and criminal) are pending in the Indian courts. Out of which about 77% of the cases are more than a year old. The backlog of cases in the courts are slowly damaging the integrity of our judicial system.

 By giving mediation a standalone law, the government is encouraging people to try to settle their disputes outside of the courts and to only seek help of the courts when no resolution can be made between the aggrieved parties. This will greatly benefit the courts in reducing the backlogging of the court cases and will help the courts function much more efficiently and quickly.

The bill, at large, is a step in the right direction. However, there are some aspects of the bill that need more clarity and some provision that need to be added in the bill to make is more viable to people. The government also needs to clarify on which entities will be recognized by the Council as mediation service providers. The bill will help sever people better after some minor adjustments and will surely help is delivering justice in an efficient manner.

Author: Shashank Roy, NMIMS SOL, Bangalore

Editor: Kanishka VaishSenior Editor, LexLife India

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s