The Evolution of Mediation Law in India

Introduction

India's shift toward institutionalised mediation is not the product of a single statute but of a two-decade process that began almost incidentally with a procedural amendment to the Code of Civil Procedure, and has culminated — still incompletely — in a dedicated Mediation Act. This note traces that arc: the insertion of Section 89, CPC; its near-decade of judicial dormancy; the constitutional challenge that forced the Supreme Court to give it teeth; the committee structure that grew out of that challenge; the parallel underperformance of conciliation under the Arbitration and Conciliation Act, 1996; the international pressure of the Singapore Convention on Mediation; and the resulting Mediation Act, 2023, including a candid account of how much of that Act is actually in force today.

The Genesis: Section 89, CPC (1999–2002)

Section 89 was inserted into the Code of Civil Procedure, 1908 by the CPC (Amendment) Act, 1999, and brought into force — together with the CPC (Amendment) Act, 2002, which corrected drafting issues in the 1999 amendment — with effect from 1 July 2002. The provision drew on recommendations of the Law Commission of India for court-referred settlement of civil disputes.

As enacted, Section 89 obliges a court to formulate terms of a possible settlement wherever it appears that elements of one exist, and to refer the parties to one of four modes: arbitration, conciliation, judicial settlement (including through a Lok Adalat), or mediation. A drafting error — the descriptions of these modes in Section 89(2)(a)–(d) were, on a plain reading, transposed with the procedural cross-references in Order X, Rules 1A to 1C — went uncorrected for years and was only judicially resolved later.

For roughly the first three to four years of its existence, Section 89 was, in practical terms, a dead letter. Courts had no panel of trained neutrals, no rules of procedure for a reference, and no infrastructure — mediation centres, accreditation, case-management protocols — to actually operationalise a reference out of litigation.

The Constitutional Challenge: Salem Advocate Bar Association v. Union of India

A bar association in Tamil Nadu filed a writ petition before the Supreme Court challenging the constitutional validity of the entire batch of 1999/2002 CPC amendments, including Section 89, as an unconstitutional interference with the ordinary trial process.

Salem I — (2003) 1 SCC 49

The Supreme Court upheld the constitutional validity of the amendments but recognised serious implementation difficulties. Notably, when the petitioners sought to withdraw the petition once satisfied that no further judgment was needed, the Court declined — treating the questions raised as matters of public importance requiring resolution. To work out the practical modalities of Section 89, the Court constituted an expert committee chaired by Justice M. Jagannadha Rao, a former Supreme Court judge and then-Chairman of the Law Commission.

Salem II — (2005) 6 SCC 344

Acting on the Rao Committee's report, the Court approved model ADR and mediation rules for adoption by the High Courts and gave directions on how Section 89 references were to work procedurally. The transposition between Section 89(2) and Order X Rules 1A–1C was subsequently addressed by the Court in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co., (2010) 8 SCC 24, which read the two provisions harmoniously and held that party consent is a precondition for a reference to arbitration or conciliation, but not for reference to mediation, judicial settlement, or the Lok Adalat.

Institutionalisation: The Mediation and Conciliation Project Committee

Following the Salem judgments, the then Chief Justice of India, Justice R.C. Lahoti, constituted the Mediation and Conciliation Project Committee ("MCPC") by administrative order on 9 April 2005, initially chaired by Justice N. Santosh Hegde, a sitting Supreme Court judge, with other senior judges as members.

MCPC was tasked with framing model Mediation and Conciliation Rules, training mediators, accrediting trainers, and encouraging High Courts to establish court-annexed mediation centres. High Courts adopted these model rules, with local variations, from 2005–06 onward — the Delhi High Court Mediation and Conciliation Rules, for instance, were brought into effect on 11 August 2005. MCPC remains, to this day, the principal body running training and accreditation for court-annexed mediators across India.

Why Arbitration Fell Short of Its Promise

The Arbitration and Conciliation Act, 1996 is organised in four parts: Part I (domestic arbitration), Part II (enforcement of foreign awards), Part III (conciliation, ss.61–81), and Part IV (supplementary provisions). Parts I and II are heavily litigated and used; Part III has remained largely dormant — parties rarely invoke statutory conciliation, gravitating instead toward informal settlement or private mediation.

Arbitration's promise of finality has been substantially eroded in practice by Section 34, which permits an award to be challenged in court on limited but frequently-invoked grounds (and by the further appeal under Section 37). A very large proportion of awards — especially in government and public-sector arbitrations — end up back in court, defeating the object of a quick, final resolution, and arbitrator fees (particularly where retired judges sit as arbitrators) are often criticised as disproportionately high relative to the relief in dispute. This combination — challengeable awards plus heavy costs — is what pushed policy attention toward mediation as a genuinely final alternative.

“Ninety per cent of arbitration awards are challenged again in court — the fees are heavy, the relief is delayed, and finality never arrives.”

On the conciliator/mediator distinction: under Section 67(4) of the 1996 Act, a conciliator may actively propose terms of settlement. A mediator, under the pre-2023 Indian model built on the MCPC framework, is understood as a purely facilitative role that does not offer substantive suggestions. The Mediation Act, 2023 begins to blur this line, as discussed in Part VI.

The International Trigger: The Singapore Convention on Mediation, 2019

India signed the United Nations Convention on International Settlement Agreements Resulting from Mediation ("the Singapore Convention") on 7 August 2019, among its earliest signatories. Signature — short of ratification — nonetheless created domestic and international expectation that India would build a dedicated mediation statute and supporting infrastructure, since a signatory is expected to move toward a framework compatible with the Convention.

Notably, India has still not ratified the Convention as of 2026. When the Mediation Act, 2023 was finally enacted, Parliament chose not to import the Convention's cross-border enforcement mechanism: the Act enforces domestic mediated settlement agreements but does not provide a mechanism for direct enforcement of foreign-mediated settlement agreements. This was an express, considered departure — explained in Parliament on the basis that the Convention had only recently entered into force internationally and India preferred to observe wider state practice before ratifying and importing its enforcement regime.

The Mediation Act, 2023

The Mediation Bill was first introduced in 2021, revised following Select Committee recommendations, passed by Parliament, and received Presidential assent on 14 September 2023 as the Mediation Act, 2023 (Act No. 32 of 2023) — 11 Chapters, roughly 65 sections, and 10 Schedules.

The "12A" borrowing from the US model

Section 12A of the Commercial Courts Act, 2015 (inserted in 2018) made pre-institution mediation compulsory for commercial suits not seeking urgent interim relief — conceptually modelled on mandatory pre-suit ADR and early-neutral-evaluation devices used in various US state and federal court systems. The Mediation Act, 2023 originally sought to generalise this compulsion to all civil and commercial disputes through its own Section 5. During passage, however, this was diluted: Section 5, as enacted, makes pre-litigation mediation voluntary rather than mandatory for general civil disputes. Only commercial disputes above the prescribed pecuniary threshold remain subject to compulsory pre-institution mediation — and that obligation continues to rest on the older, separate Section 12A of the Commercial Courts Act, 2015, not on the new Act. The Supreme Court, in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1, held Section 12A mandatory and non-waivable, with non-compliance resulting in rejection of the plaint, applying the ruling prospectively from 20 August 2022; a later carve-out was recognised for suits genuinely requiring urgent interim relief, including certain IP suits.

Conciliation folded into mediation

The Act's Schedules amend multiple other statutes — including the Legal Services Authorities Act, 1987, the Companies Act, and the Commercial Courts Act — to substitute the word "conciliation" with "mediation." The practical effect, once these amendments are notified, is that the statutory conciliator's role is absorbed into the mediator's role, and a Council-regulated mediator may in defined circumstances also act evaluatively — narrowing, though not yet erasing, the classical conciliator/mediator distinction.

Binding effect and the enforcement "gray area"

Sections 27–28 of the Act are intended to make a registered mediated settlement agreement final, binding and enforceable in the same manner as a decree of a civil court. Unlike a conciliation settlement under Sections 73–74 of the 1996 Act — binding the moment it is signed, by statutory deeming fiction — a mediated settlement's enforceability under the new Act is contemplated to run through registration with the relevant authority, not automatic effect on signature. As Part VII shows, these very sections are among those still awaiting notification, so this distinction is not yet even operative in law.

Where the Act Stands Today (July 2026)

The Mediation Act, 2023 has been in force, in part, since 9 October 2023. But "in force" and "in practice" are two different things for this statute, and the gap between the two is the single most important fact about its current status.

Two consequences follow directly from this notification pattern:

• The Mediation Council of India ("MCI"), though its establishing sections (31–38) have been "in force" since October 2023, has still not actually been constituted. The Central Government told Parliament in March 2025 that steps toward establishing it were "underway." Without the Council, there is no body to accredit mediators, recognise Mediation Service Providers, or frame the rules that Sections 27–30 would need to operate.
• The "compulsory mediation filter" for civil litigation generally — a certificate that mediation was attempted and failed, as a precondition to filing suit — has not materialised as a general rule. Section 5, the provision that would have created it, was enacted as voluntary. The only place compulsory pre-suit mediation genuinely operates in India today remains Section 12A of the separate, older Commercial Courts Act, 2015, confined to commercial disputes above the specified value.

What is actually in practice

Day-to-day mediation activity in Indian courts continues to run on the twenty-year-old framework: Section 89, CPC as interpreted in Afcons, MCPC's Model Mediation Rules, and court-annexed mediation centres accredited through MCPC. The Mediation Act, 2023 has, so far, added a Council-formation shell and a definitional harmonisation (the conciliation-to-mediation substitutions in other statutes) without activating its own central operative machinery — mediator qualification and conduct, the settlement-agreement enforcement chain, and the community/online mediation chapters remain dormant. Part III of the 1996 Act (statutory conciliation) also remains as underused as ever; the Schedule amendments that would formally fold it into "mediation" are themselves tied to sections not yet notified.

Practitioner's Observations

Several observations made in the underlying discussion this note grew out of hold up well against the record and are worth stating explicitly, since they capture the practical reality better than the bare text of the Act:

• The characterisation of the Act as "mostly not notified" is accurate and, if anything, understates the gap: the sections that are in force are almost entirely administrative (Council formation, funds, definitions) rather than operative (mediator conduct, settlement enforcement, pre-litigation mediation).
• The link drawn to US pre-suit mediation practice is directionally correct, though the mechanism sits in the older Commercial Courts Act's Section 12A rather than in the new Act's own Section 5 — which was in fact watered down from mandatory to voluntary during passage, a retreat worth flagging in any client-facing note.
• The distinction drawn between a mediated settlement (binding only once judicially authenticated) and a conciliation agreement (binding on signature, deemed an award) remains correct today, and is in fact sharper than it may have seemed at the time: because Sections 27–30 of the Mediation Act are not yet notified, that "gray area" has not been resolved by the new law at all — mediated settlements are, for now, enforced exactly as they were before the Act, i.e., once accepted as a decree or consent order by the referral court.
• The prediction that "conciliation will become mediation" everywhere the word appears in other statutes is correct as enacted, but premature as a description of current practice — the harmonising Schedule provisions are tied to sections not yet notified, so the two labels continue to operate side by side across most other enactments for now.

Comparative Note: Mediation and Tort/Civil Litigation in the United States

The United States has no single federal "Mediation Act." Its use of mediation in tort and general civil litigation is built procedurally, district by district and state by state, rather than through one centralised statute — the opposite architecture from India's approach. The starting point is the 1983 amendment to Rule 16 of the Federal Rules of Civil Procedure, which empowered judges to raise settlement and "extrajudicial procedures" at pre-trial conferences, followed by the Alternative Dispute Resolution Act, 1998 (28 U.S.C. §§651–658), which required every federal district court to authorise at least one ADR process — mediation chief among them — under its own local rules. States layered their own regimes on top: Florida mandates mediation in most civil cases under Rule 1.700; California runs court-connected mediation under CCP §1775 et seq.; and a number of states, including Washington and the District of Columbia, impose sector-specific mandatory pre-suit mediation for medical malpractice and other health-care torts.

Several features distinguish this from the Indian model. First, US referral is typically mid-litigation — after a suit is filed, often after initial discovery has clarified what the case is actually worth — whereas India's principal mandatory mechanism, Section 12A of the Commercial Courts Act, operates pre-suit, as a gate before the case ever reaches a docket. Second, US mandatory ADR is usually "presumptively mandatory": cases of a defined type are automatically routed to mediation, but a party can typically apply to opt out; India's Section 12A, by contrast, is an absolute bar on filing (subject only to a narrow urgent-relief exception), with no general opt-out. Third, and perhaps most significant structurally, American tort litigation carries strong organic pressure toward settlement that has nothing to do with any mediation mandate: a contingency-fee plaintiffs' bar wants cash quickly rather than a possible jury verdict years away, and the threat of punitive damages and unpredictable jury awards makes both sides risk-averse. India has neither lever — contingency fees remain prohibited under the Bar Council of India Rules, and Indian civil damages are compensatory rather than punitive — so Indian mediation policy has comparatively little organic settlement pressure to lean on, and the statute has to do correspondingly more work on its own.

Finally, the two systems converge on one important point and diverge on another. They converge on confidentiality: mediation communications are privileged and without-prejudice in both systems. They diverge on institutional design: the US has no national mediation authority — each district and state administers its own panel and rules — while India has legislated a single national regulator, the Mediation Council of India, whose absence, as Part VII shows, is presently the chief obstacle to the Mediation Act, 2023 becoming operative.

Reinforcing India's Mediation Law and Reducing Pendency Through Pre-Trial Mandatory Mediation

As of June 2026, more than 56 million cases are pending across Indian courts, of which roughly 49 million — over 85% — sit in the district courts alone; more than 180,000 cases have been pending for over thirty years. Against that backdrop, the evidence that mediation, once cases actually reach it, works in India is strong.

The bottleneck is not whether mediation works — it demonstrably does — but that too few of the 56 million pending matters are ever routed into it, and the statute meant to force that routing is not yet switched on. The following recommendations follow from that diagnosis.

• Notify the operative core of the Act without further delay. Sections 4–25 and 27–30 — mediator qualification and conduct, the 180-day timeline, and the settlement-enforcement chain — are the provisions that actually make mediation work as a system. Every recommendation below depends on the Mediation Council of India being constituted and these sections being switched on; this is the precondition, not one option among several.
• Adopt a phased, category-based mandate rather than a single horizontal one. NJDG data shows the backlog is concentrated in a small number of high-volume, low-complexity categories — cheque-dishonour complaints under Section 138 of the Negotiable Instruments Act, motor accident compensation claims, matrimonial and family disputes, landlord-tenant matters, and small-value money suits. Mirroring the US pattern of case-type-specific local rules, India should prioritise pre-trial mandatory mediation for these categories first, rather than attempting a single across-the-board rule for all civil litigation.
• Prefer a presumptive-mandatory-with-opt-out design over an absolute filing bar for general civil disputes. The US experience shows that automatic routing to mediation, coupled with a narrow, judge-supervised opt-out, achieves high compliance without the due-process friction of an outright bar on access to court. Section 5, as enacted, went too far toward voluntary; a presumptive referral model would recover most of the caseload-diversion benefit while remaining easier to defend under Article 21.
• Fix the enforcement "gray area" as a matter of priority. Litigants and lawyers have limited incentive to embrace mediation seriously so long as a mediated settlement needs a separate court authentication step to become binding, while a conciliation agreement is binding on signature. Notifying Sections 27–30 so a registered mediated settlement is self-executing removes this disincentive and is likely to move the needle on voluntary uptake as much as any mandate.
• Scale mediator capacity and mediation centres to the size of the backlog. A 56-million-case pendency cannot be absorbed by the current MCPC-trained mediator pool; the Mediation Council of India, once constituted, should treat accreditation throughput as its first-year priority, with fast-track training partnerships across the district judiciary and law schools.
• Fast-track the online mediation provisions (Sections 39–44). India's e-Courts infrastructure already supports video-conferencing at scale; online mediation is the only realistic way to route a caseload in the tens of millions through mediation without a proportionate increase in physical infrastructure.
• Build in cost consequences for unreasonable refusal to mediate. Once the enforcement and infrastructure pieces above are in place, courts could be empowered to penalise a party who unreasonably refuses a court-ordered mediation reference, sharpening the incentive to engage seriously.
• Extend the Section 12A model, calibrated by sector, beyond commercial disputes. Motor accident claims tribunals and consumer fora absorb enormous caseloads that are highly settlement-amenable; a sector-specific pre-institution mediation gate, tuned to each forum's typical dispute value and urgency profile, would extend the one part of India's framework already shown to work into the sectors most likely to benefit.
• Address the weak organic settlement pressure structurally, not by importing contingency fees. Since Indian lawyers lack the American plaintiff bar's economic incentive to settle early, professional training (CLE-style mediation advocacy modules through the Bar Councils and MCPC) and modest court-fee refund incentives for pre-litigation settlement should be standardised nationally to build a settlement-oriented litigation culture over time.

Conclusion

As of July 2026, India has a comprehensive mediation statute on the books that is, in substance, more promise than practice. Its constitutional and institutional lineage — Section 89 CPC, the Salem Advocate Bar Association litigation, the Rao Committee, MCPC, and two decades of court-annexed mediation — remains the framework actually governing mediation on the ground. The Mediation Act, 2023 has assembled the Council-level architecture and signalled the direction of travel — mandatory pre-litigation mediation, unified mediator/conciliator practice, direct enforceability of settlement agreements — but has not yet switched on the provisions that would make any of that binding on litigants generally. Until the Mediation Council of India is constituted and Sections 4–25 and 27–30 are notified, the 2023 Act functions as a framework in waiting rather than an operative code. The comparison with the United States is instructive precisely because it shows mediation succeeding there without any single national statute, on the strength of procedural mandate plus organic economic pressure to settle; India has legislated the former but activated almost none of it, and lacks much of the latter — which is exactly why notification, not further drafting, is now the binding constraint. Until then, practitioners should continue to rely on Section 89 CPC, the MCPC Rules, and — for commercial disputes — Section 12A of the Commercial Courts Act, 2015 as the operative law of mediation in India.

Frequently Asked Questions

Is mediation mandatory in India?

Not for general civil disputes. Section 5 of the Mediation Act, 2023 — the provision meant to make pre-litigation mediation compulsory across the board — was enacted as voluntary, not mandatory. The only place compulsory pre-suit mediation genuinely operates today is Section 12A of the Commercial Courts Act, 2015, which the Supreme Court held mandatory and non-waivable in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1 — and even that applies only to commercial disputes above the prescribed pecuniary value.

Is the Mediation Act, 2023 fully in force?

No. Only its administrative provisions are notified — Council formation, funds, definitions, and conciliation-to-mediation word substitutions in other statutes. The operative core (Sections 4–25 on mediator qualification, conduct, and confidentiality, and Sections 27–30 on settlement-agreement enforcement) remains un-notified as of July 2026, and the Mediation Council of India itself has still not been constituted.

What is the difference between conciliation and mediation under Indian law?

Under Section 67(4) of the Arbitration and Conciliation Act, 1996, a conciliator may actively propose settlement terms. A mediator, under the pre-2023 MCPC framework, plays a purely facilitative role and does not suggest terms. The Mediation Act, 2023 begins to blur this line by allowing a Council-regulated mediator to act evaluatively in defined circumstances, and its Schedules substitute “conciliation” with “mediation” across several statutes — but those Schedule amendments are themselves tied to sections not yet notified.

Is a mediated settlement agreement enforceable as a decree in India?

Sections 27–28 of the Mediation Act, 2023 intend to make a registered mediated settlement agreement final, binding, and enforceable exactly like a civil court decree. However, since these sections are not yet notified, a mediated settlement today is enforced the way it always has been — through authentication or a consent order from the referral court — not through the Act's own registration mechanism.

Has India ratified the Singapore Convention on Mediation?

No. India signed the Singapore Convention on 7 August 2019, among its earliest signatories, but has not ratified it as of 2026. When Parliament enacted the Mediation Act, 2023, it deliberately chose not to import the Convention's cross-border enforcement mechanism for foreign-mediated settlement agreements, preferring to observe wider international state practice first.

What is Section 12A of the Commercial Courts Act, and why does it matter?

Section 12A, inserted into the Commercial Courts Act, 2015 in 2018, makes pre-institution mediation compulsory for commercial suits that do not seek urgent interim relief. It remains, in practice, the single strongest operative mediation mandate in Indian law — stronger than anything in the Mediation Act, 2023 itself, whose own general-mediation mandate under Section 5 was diluted to voluntary during passage.