The Mediation Act, 2023: Essential Guide

 Overview and Purpose

The Mediation Act, 2023 promotes institutional mediation for dispute resolution, both commercial and civil, with emphasis on cost-effective and accessible processes. The Act came into force on October 9, 2023.

Key Features to Remember

1. Pre-litigation Mediation (Section 5)

·       Mandatory consideration before filing civil/commercial suits

·       Parties can voluntarily undertake mediation with mutual consent

·       For commercial disputes of specified value, follows Commercial Courts Act provisions

·       Motor vehicle accident claims must be referred to mediation if initial settlement fails

2. Disputes NOT Fit for Mediation (Section 6)

Remember the "CRIMINAL-TAX-REGULATORY" formula:

·       Criminal prosecutions

·       Tax disputes (direct/indirect taxes, penalties)

·       Regulatory proceedings (professional misconduct, competition law)

·       Third party rights (except matrimonial with child interests)

·       Government title declarations

·       Minors and persons with disabilities

3. Court's Power to Refer (Section 7)

·       Courts can refer parties to mediation at any stage

·       Can pass interim orders to protect party interests

·       No obligation to reach settlement

Mediation Process Framework

Time Limits (Section 18)

·       Primary period: 120 days from first appearance

·       Extension: Maximum 60 additional days with party consent

·       Total maximum: 180 days

Territorial Jurisdiction (Section 13)

·       Must be within competent court's jurisdiction

·       Exception: Mutual consent allows mediation anywhere or online

·       Enforcement deemed within original jurisdiction

Confidentiality Rules (Section 22)

·       No audio/video recording allowed

·       Mediation communications not admissible in court proceedings

·       Exceptions: Threats of crime, domestic violence, child abuse, public safety threats

Settlement and Enforcement

Mediated Settlement Agreement (Section 19)

·       Must be in writing and signed by parties

·       Authenticated by mediator

·       Final and binding on parties

Enforcement (Section 27)

·       Enforced like court judgment/decree

·       Use Civil Procedure Code provisions

·       Can be used as defense, set-off in legal proceedings

Challenging Settlement (Section 28)

"FCII" Formula for grounds:

·       Fraud

·       Corruption

·       Impersonation

·       Inappropriate disputes (not fit for mediation)

Time limit: 90 days from receiving settlement copy (extendable by another 90 days for sufficient cause)

Online Mediation (Section 30)

·       Permitted with written consent

·       Must maintain integrity and confidentiality

·       Can use encrypted email, secure chat, video/audio conferencing

Community Mediation (Section 43-44)

·       For local peace and harmony disputes

·       Panel of three mediators

·       Settlement not enforceable as court decree

·       Focus on maintaining tranquility

Government Disputes (Section 49)

·       Requires prior written consent of competent authority

·       Applies to Central/State Government and their entities

Practical Points

Limitation Benefit (Section 29)

·       Mediation period excluded from limitation calculation

·       Runs from commencement until settlement/termination report

Registration (Section 20)

·       Optional registration with Legal Services Authority

·       180-day window for registration

·       Late registration possible with additional fee

Cost Sharing (Section 25)

·       Equal sharing between parties unless agreed otherwise

·       Excludes community mediation

Quick Memory Tips

"MEDIATION" Acronym:

·       Mandatory consideration pre-litigation

·       Enforceable like court decree

·       Disputes have exceptions (criminal, tax, regulatory)

·       Interim orders possible during referral

·       Authentication by mediator required

·       Time limit: 120+60 days maximum

·       Informal proceedings (no CPC/Evidence Act)

·       Online mediation with consent

·       Non-settlement reports when no agreement

        

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