Posted on 18th November 2016

Resolving conflicts through a third neutral party has been prevalent in India since ancient times. Ancient times witnessed the concept of Panchayat in villages whereby intellectual and respected elderly headed the system of resolving disputes between two parties by the process of discussion and settlement. Even today the concept of Panchayat is  prevalent in many villages wherein the elderly sit as decision makers to resolve disputes between two parties so that amicable settlement is reached between them without any further quarrel. 

Even today’s mediation bears a striking resemblance, in some respects, to the ancient dispute resolution processes. In mediation the parties are encouraged to participate directly in the process and discuss their grievances with the mediator who is a neutral party. In a voluntary effort, the mediator facilitates communication between the parties and encourages settlement. There is considerable power vested with the mediator during mediation as he can privately discuss the merits of a dispute with each party individually and then encourage proposals and counter proposals in order to arrive at some kind of consensus.

Globally mediation is now understood as a method which encourages the parties to voluntarily reach an agreement that meets the need of all the parties. In India the concept of mediation is really helpful in resolving personal disputes of husband and wife, property cases between family members and relatives and various other issues wherein even commercial transactions are involved. 

In fact of late, mediation has proved to be a much-favored method of alternate dispute resolution, specifically amongst various foreign entities, inter alia, due to its informal methods and reduced costs (compared to other forms of dispute resolution). More often than not, a trusted third party is appointed as a mediator between the disputing parties. Mediation is often used as the first step to resolve any dispute and failing any resolution under mediation, parties agree that disputes will be referred to arbitration or to the courts. Thus most commercial contracts nowadays tend to provide for mediation as a mechanism for dispute resolution, prior to proceeding for arbitration or to the courts.


Legal Recognition to Mediation in India


The concept of Mediation or we can even say conciliation as at times both the words have been used interchangeably has been  formulated in various enactments in India. The Enactments which discusses the role of Mediation / Conciliation are postulated herein -  


Industrial Disputes Act, 1947

The Industrial Disputes Act, 1947 encourages resolving of disputes by the process of conciliation as per section 4(1) of the Act. Section 4(1) of the Act stipulates that the appropriate government may, by notification in the Official Gazette, appoint such number of persons, as it thinks fit to be conciliation officers, charged with the duty of mediating in and promoting the settlement of industrial disputes.

This section provides discretion on the part of the appropriate government to appoint conciliation officers. If the government decides to make appointment of conciliation officers, it shall notify the appointment of the officer in the Official Gazette. The government again has the discretion to appoint any number of persons to be conciliation officers as it thinks fit. The duty of the conciliation officers is to mediate and  promote settlement of industrial disputes.


Arbitration and Conciliation Act,1996

The word “Mediation” was formerly introduced into India by the Arbitration and Conciliation Act, 1996. Section 30 of the Act specifically encourages parties to seek mediation and conciliation even when arbitral proceedings are underway. The Act, however, does not draw up the rules for mediation as it does for conciliation, thus rendering the provisions ambiguous.

After the enactment of the Arbitration & Conciliation Act, 1996, even though mediation was given statutory recognition for the first time in India, the awareness of such an option was very limited to lawyers and litigants as the lawyers and litigants were not aware of the procedure and process to initiate mediation between the disputing parties. So although the term was incorporated in the Act but it remained dormant due to lack awareness of the process and procedure and the way in which the entire process can be executed by a trained mediator.  


Code of Civil Procedure

In 1999, the Government enacted the Code of Civil Procedure (Amendment) Act, 1999 (CPC Amendment Act) where a new Section 89 was introduced into the Code of Civil Procedure. The new Section introduced the concept of what is known as `judicial mediation', as opposed to `voluntary mediation'. In view of the introduction of section 89 in the Code of Civil Procedure the court can identify cases where an amicable settlement is possible and refer the dispute to a trained mediator attached with the court for the purpose of settlement of case between the parties. The entire process is watched and supervised by the court which encourages mediation and the process is executed in a more organized manner as it has the supervision of the court.

In fact with the introduction of section 89 of the Code of Civil Procedure many courts have established mediation centres within the court premises so that a large number of pending matters can be resolved through mediation.

The Tamil Nadu Mediation and Conciliation Centre was the first of its kind in India established within the Madras High Court premises. The Delhi High Court has followed the trend and has established a Delhi High Court mediation centre wherein matters are being referred for the purpose of settlement. In fact these mediation centres which are attached with the court are empanelled with senior lawyers who act as mediators thereby making it a more effective mechanism.

Even the Supreme Court of India has the mediation centre where disputes are referred for the purpose of settlement. With the success of establishment of Delhi High Court Mediation Centre more and more states are moving towards this mechanism of settlement of pending disputes before court through the process of mediation.  


Advantages of Mediation


The procedure and mechanism of mediation has its own set of benefits and advantages and some of them are enumerated herein below -

  • Mediation offers a more flexible and informal procedure for resolution of disputes as it is an entirely voluntary process.
  • In mediation proceedings, the parties are free to withdraw from mediation, without prejudice to their legal position, at any stage of the proceedings.
  • Parties are directly engaged in negotiating a settlement.
  • The Trained Mediator acting as a neutral third party can view the dispute objectively and can assist the parties in exploring alternatives which they might not have been considered by the parties on their own.
  • Mediation is cost effective as parties generally save money by cutting back on unproductive costs such as traveling to court, legal costs of retaining counsels and litigation.
  • Mediation enhances the likelihood of the parties continuing their relationship during and after the proceedings.
  • Confidentiality is maintained throughout the proceedings with respect to information exchanged, the offers and counter offers of solutions made and the settlement arrived at between the parties.
  • The procedure of mediation is simple and flexible. It can be modified as per the demand of each case.  



The success of mediation always depends on the eagerness and willingness of both the parties to resolve disputes. Its voluntary and informal nature allows parties to evaluate the progress made in resolving their dispute and offers them the option to even exit at any point of time in case the chances of settlement are nil or bleak. Such kind of freedom is not available to those involved in litigation or arbitration.

With the emerging trend of mediation more and more parties are inclined to get their disputes referred to mediation proceedings. With the introduction of mediation attached with court there has been a steep rise in the matters being referred to mediation by the courts as well. In fact the matters which are referred to mediation by courts have more inclination to be settled as the court acts as a supervisory body to the mediation proceedings and advises not only the counsels but the parties as well to settle the case amicably. A word of caution to both the parties by the courts that the litigation is an endless process wherein one party will lose and one party will whereas mediation is a win-win situation for both the parties tends to encourage parties to shift their disputes to mediation proceedings. More and more rise in court attached mediation in various states can provide a compassionate assistance to the litigants for negotiated settlements and resulting in the parties going home with greater satisfaction. With such mechanism being encouraged the parties will become partners in the solutions rather than partners in problems. Growth of the court annexed mediation is expected to solve problem of delay in civil and commercial litigation and thereby contribute towards economic, commercial and financial growth and development in the country while providing satisfaction to the litigants.