What it says: The Act is called the Mediation Act, 2023. It extends to the whole of India. It comes into force on the date the Central Government notifies, and different dates may be appointed for different provisions.

• Short title — "Mediation Act, 2023".
• Extent — whole of India.
• Commencement — by Central Government notification; provisions can start on different dates.

What it says: The Act applies where mediation is conducted in India and any of these is true:

• all or both parties habitually reside / are incorporated / have their place of business in India; or
• the mediation agreement says the dispute will be resolved under this Act; or
• it is an international mediation; or
• one party is the Central/State Government or its agencies, bodies, corporations or local bodies (including entities controlled or owned by them) and the matter is a commercial dispute; or
• any other dispute notified by Government where such Government/agency is a party.

Section 3 is the dictionary of the Act. The most exam-relevant definitions:

• Mediation [3(h)] — a process (including pre-litigation, online, community mediation or conciliation) where parties try to reach an amicable settlement with the help of a third person (the mediator) who cannot impose a settlement.
• Mediator [3(i)] — a person appointed by the parties or a service provider, including one registered with the Council.
• Mediation agreement [3(j)] — refers to S.4(1).
• Mediated settlement agreement [3(n)] — refers to S.19(1).
• Institutional mediation [3(f)] — mediation under the aegis of a mediation service provider.
• International mediation [3(g)] — a commercial dispute where at least one party is foreign (foreign national/habitual resident, body corporate/LLP with place of business abroad, foreign association, or a foreign Government).
• Online mediation [3(q)] — refers to S.30.
• Mediation service provider [3(m)] — refers to S.40(1); mediation institute [3(l)] — body that trains, educates and certifies mediators.
• Council [3(c)] — Mediation Council of India under S.31.
• Pre-litigation mediation [3(u)] — refers to S.5; court-annexed mediation [3(e)] — mediation (including pre-litigation) at court/tribunal mediation centres.

What it says: A mediation agreement must be in writing. It may be a clause inside a contract or a separate agreement. It is "in writing" if it is in a signed document, an exchange of communications/letters (including electronic form under the IT Act, 2000), or pleadings where its existence is alleged by one party and not denied by the other.

• Parties may agree to mediate disputes that have already arisen or may arise in future.
• A reference in an agreement that incorporates a mediation clause counts as a mediation agreement (if in writing).
• In international mediation, the agreement relates to commercial disputes.

What it says: Whether or not a mediation agreement exists, parties, before filing a civil or commercial suit, may voluntarily and with mutual consent take steps to settle through pre-litigation mediation under this Act.

• For commercial disputes of Specified Value, pre-litigation mediation follows S.12A of the Commercial Courts Act, 2015.
• Pre-litigation mediation is conducted by a mediator registered with the Council, or empanelled by a court-annexed centre, a Legal Services Authority, or a recognised service provider.
• Special rule for motor-accident claims: if settlement under S.149 of the Motor Vehicles Act is not reached, the Claims Tribunal shall refer parties to mediation.

What it says: Mediation cannot be conducted for disputes in the indicative list in the First Schedule. However, a court may, if appropriate, refer compoundable offences (including compoundable matrimonial offences) to mediation — but the outcome is not a court judgment/decree and is further considered by the court. The Central Government may amend the First Schedule by notification.

What it says: Even if a dispute was not settled at the pre-litigation stage, a court or tribunal may, at any stage of a proceeding, refer the parties to mediation. It may pass a suitable interim order to protect a party's interest. Parties are not obliged to reach a settlement after such a reference.

What it says: A person of any nationality may be a mediator (a foreign national needs specified qualification, experience and accreditation). Parties are free to agree on the mediator's name and the appointment procedure. If they cannot agree, the party seeking mediation applies to a mediation service provider, which must appoint a mediator within 7 days. The appointed mediator must communicate willingness within 7 days.

What it says: When picking a mediator from its panel, the service provider must consider the mediator's suitability and the preference of the parties.

What it says: Before starting, the mediator must disclose in writing any circumstance (personal, professional, financial or otherwise) that may create a conflict of interest or raise justifiable doubts about independence/impartiality. New conflicts arising during mediation must also be disclosed without delay. Parties may waive the objection in writing (this is treated as consent). If a party still wants to replace the mediator: in institutional mediation, apply to the service provider; in other mediation, terminate the mediator's mandate directly.

What it says: A service provider may terminate a mediator's mandate on a party's application, on information about a conflict, or on the mediator's withdrawal. Termination on conflict grounds happens only after hearing the mediator and finding justifiable doubt about independence/impartiality.

What it says: After the mandate ends, a replacement is appointed within 7 days — by the parties (non-institutional mediation under S.10(4)(ii)) or by the service provider from its panel (under S.11).

Mediation is normally undertaken within the territorial jurisdiction of the competent court/tribunal. By mutual consent, it may be conducted outside that jurisdiction or online; for enforcement, challenge and registration it is then deemed to have happened within that jurisdiction.

Mediation is deemed to commence: if an agreement to mediate already exists, on the date a party receives the notice to refer the dispute; otherwise, on the date the chosen mediator consents, or the date a mediator is appointed by the service provider.

The mediator assists the parties in an independent, neutral and impartial manner, guided by objectivity and fairness, protecting voluntariness, confidentiality and self-determination. The mediator may meet parties jointly or separately. Importantly, the mediator is not bound by the CPC, 1908 or the Indian Evidence Act, 1872, and decides the language with the parties' consent.

The mediator only facilitates — helps parties identify issues, understand each other and explore options. He must expressly tell the parties that he cannot impose a settlement and gives no assurance of one.

The mediator cannot act as an arbitrator, representative or counsel in any arbitral/judicial proceeding on the same dispute, and cannot be made a witness in such proceedings.

Mediation must be completed within 120 days from the date fixed for the first appearance before the mediator. This may be extended by a further period as agreed, not exceeding 60 days (so 120 + 60 = 180 days maximum).

An MSA is a written agreement from mediation settling some or all disputes, signed by the parties and authenticated by the mediator. Its terms may extend beyond the disputes referred. An agreement that is void under the Contract Act, 1872 is not a lawful MSA. In institutional mediation, the mediator authenticates and forwards it to the service provider (copy to parties); in other cases, the mediator authenticates and gives copies to parties. An MSA includes one from online mediation.

For record purposes, an MSA (other than one from court/tribunal-referred mediation or a Lok Adalat / Permanent Lok Adalat award) may, at the option of the parties, be registered with a Legal Services Authority or notified body, which issues a unique registration number. Registration should be within 180 days of receiving the authenticated copy (later registration allowed on payment of fee).

If no settlement is reached within the time limit, or the mediator thinks settlement is not possible, he prepares a non-settlement report — to the service provider (institutional) or signed copies to the parties (other cases). The report must not disclose the cause of non-settlement or the parties' conduct.

Everyone involved must keep mediation matters confidential — admissions, proposals, apologies, documents prepared for mediation and all mediation communication. No audio or video recording is allowed (in person or online). Such material cannot be used as evidence, and a court/tribunal shall not take cognizance of it. A mediator may use anonymised general information for research/training. Confidentiality does not block disclosure needed for registration, enforcement or challenge.

No mediator or participant can be compelled to disclose mediation communications in any court/tribunal. Exceptions (no privilege): (a) a threat or plan to commit an offence; (b) information about domestic violence or child abuse; (c) statements showing a significant imminent threat to public health or safety. Also, privilege does not protect information needed to prove/disprove a complaint of the mediator's professional misconduct or malpractice.

Mediation terminates on: signing/authentication of the MSA; the mediator's written declaration that further efforts are not justified; a party's written communication opting out; or expiry of the S.18 time limit.

The cost of mediation (other than community mediation) is as specified. Unless the parties agree otherwise, costs are borne equally, including the mediator's fee and the service provider's charges.

This Act does not apply to proceedings conducted by Lok Adalat and Permanent Lok Adalat under the Legal Services Authorities Act, 1987.

An MSA signed by the parties and authenticated by the mediator is final and binding and enforceable under the CPC, 1908, as if it were a judgment or decree of a court. It can be relied on by way of defence, set-off or otherwise.

An MSA can be challenged before a competent court/tribunal on only these grounds: (i) fraud; (ii) corruption; (iii) impersonation; (iv) the mediation was conducted in matters not fit for mediation under S.6. The application must be made within 90 days of receiving the copy under S.19(3); a further 90 days is allowed for sufficient cause.

Despite the Limitation Act, 1963, the time from the commencement of mediation (S.14) up to the submission of a non-settlement report (S.21) or termination (S.24) is excluded when computing the limitation period for related proceedings.

Online mediation (including pre-litigation) may be conducted at any stage with the written consent of the parties — using electronic form or computer networks such as encrypted email, secure chat rooms, or video/audio conferencing. The process is as specified, and the mediator must ensure the integrity and confidentiality of the proceedings.

The Central Government, by notification, establishes the Mediation Council of India. It is a body corporate with perpetual succession and a common seal, can hold property, contract, and sue or be sued. Head office at Delhi (or as notified); it may set up offices in India and abroad.

The Council has a Chairperson; a Member with law/ADR experience; an eminent Member from research/teaching in mediation/ADR; the Secretary (Dept. of Legal Affairs) ex officio; the Secretary (Dept. of Expenditure) ex officio; the CEO as Member-Secretary ex officio; and one Part-Time Member from a recognised body of commerce and industry. Non-ex-officio Members hold office for 4 years (reappointment allowed); age limit 70 (Chairperson) / 67 (others).

No act of the Council is invalid merely because of a vacancy, a defect in constitution/appointment, or an irregularity not affecting the merits.

A Member may resign in writing to the Central Government but continues until 3 months pass, or a successor takes over, or the term ends — whichever is earliest.

The Central Government may remove a Member who is insolvent, takes paid employment without permission, is convicted of an offence involving moral turpitude, acquires a prejudicial interest, abuses his position, or becomes incapable. The Member must be given a hearing.

The Council may appoint experts and constitute committees of experts as needed.

There is a CEO responsible for day-to-day administration, plus a Secretariat. Until regulations are made, the Central Government provides the necessary officers and staff.

Key functions: promote domestic and international mediation; develop India as a robust mediation hub; lay down guidelines for education, certification and assessment of mediators; provide for conduct of mediation and standards of professional/ethical conduct; register mediators (and renew/withdraw/suspend/cancel registration); recognise mediation institutes and service providers; hold trainings; enter MoUs; maintain an electronic depository of MSAs; and publish data and research.

The Council prepares an annual report on implementation for the Central Government, which may take additional measures for effective implementation.

A "mediation service provider" includes a body recognised by the Council, a Legal Services Authority, a court-annexed mediation centre, or any notified body. The Authority, court-annexed centre and notified bodies are deemed to be recognised by the Council.

They accredit mediators and maintain a panel, provide mediators and facilities, promote professional/ethical conduct, and facilitate registration of MSAs under S.20.

The Council recognises mediation institutes (which train, educate and certify mediators) to perform specified functions.

Any dispute likely to affect peace, harmony and tranquillity among residents or families of an area may be settled by community mediation with the prior mutual consent of the parties. An application is made to the Legal Services Authority, or to the District Magistrate / Sub-Divisional Magistrate where no Authority exists, which constitutes a panel of three community mediators from a notified permanent panel. Representation of women may be considered.

The panel of three devises a suitable procedure and tries to resolve the dispute amicably. A settlement is written, signed by the parties and authenticated by the mediators. Importantly, a community-mediation settlement is for maintaining peace/harmony and is NOT enforceable as a judgment or decree of a civil court. Section 20 (registration) applies mutatis mutandis.

S.45: A "Mediation Fund," administered by the Council, promotes and facilitates mediation; it receives Government money, fees, donations and grants and pays Council salaries and expenses. S.46: The Council maintains accounts audited by the Comptroller and Auditor-General of India; audited accounts are laid before Parliament.

S.47: The Council is bound by Central Government policy directions (its views are considered first; the Government's decision on what is a policy question is final). S.48: Government may frame schemes/guidelines for resolving disputes through mediation where it is a party.

S.49: Where Government or its agency is a party, the settlement is signed only after prior written consent of the competent authority. S.50: No suit or prosecution lies for anything done in good faith under the Act.

S.51: Central Government may make rules. S.52: The Council, with Central Government approval, may make regulations. S.53: Notifications/rules/regulations are laid before Parliament. S.54: Power to remove difficulties (only within 5 years of commencement).

S.55: Subject to the Second Schedule, the Act has overriding effect on mediation/conciliation in other laws. S.56: The Act does not apply to mediation/conciliation commenced before it came into force. S.57: Existing court-annexed mediation rules continue until regulations under S.15(1) are made.

The Act amends eight statutes through Schedules: S.58 Indian Contract Act, 1872 (Third Sch — saving of contracts to refer to arbitration/mediation); S.59 CPC, 1908 (Fourth Sch — new S.89); S.60 Legal Services Authorities Act, 1987 (Fifth Sch); S.61 Arbitration & Conciliation Act, 1996 (Sixth Sch — conciliation now read as mediation); S.62 MSMED Act, 2006 (Seventh Sch); S.63 Companies Act, 2013 (Eighth Sch — S.442); S.64 Commercial Courts Act, 2015 (Ninth Sch — S.12A); S.65 Consumer Protection Act, 2019 (Tenth Sch).