Mediation is a structured, voluntary process in which a neutral third party (mediator) facilitates communication between disputing parties to help them reach a mutually acceptable settlement, without adjudicating the dispute or imposing a decision. Under Indian law, mediation received its first comprehensive statutory framework through the Mediation Act, 2023, which received Presidential assent on 15 September 2023, complementing the pre-existing framework of court-referred mediation under Section 89 of the Code of Civil Procedure, 1908.
Legal definition
The Mediation Act, 2023 provides the statutory definition:
Section 3(h): "Mediation" means a process, whether referred to by the expression mediation, pre-litigation mediation, online mediation, community mediation, conciliation or an expression of similar import, whereby parties request a third person referred to as the mediator to assist them in their attempt to reach an amicable settlement of a dispute.
Section 89 of the Code of Civil Procedure, 1908 provides the framework for court-referred mediation:
Section 89(1): Where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for — (a) arbitration; (b) conciliation; (c) judicial settlement including settlement through Lok Adalat; or (d) mediation.
How courts have interpreted this term
Salem Advocate Bar Association v. Union of India (Salem II) [(2005) 6 SCC 344]
The Supreme Court upheld the constitutional validity of Section 89 CPC and framed detailed rules for court-referred mediation. The Court adopted a purposive interpretation to hold that the reference to "formulating terms of settlement" in Section 89 does not require the court to draft settlement terms but merely requires it to identify that elements of settlement exist and refer the matter to mediation. This judgment operationalised court-referred mediation across India.
M.R. Krishna Murthi v. New India Assurance Co. Ltd. [(2019) 18 SCC 223]
The Supreme Court observed that there was a "dire need to enact an Indian Mediation Act" and commended mediation as a preferred mode of dispute resolution. The Court highlighted the advantages of mediation over adversarial litigation: confidentiality, party autonomy, preservation of relationships, and speed.
Why this matters
The enactment of the Mediation Act, 2023 represents a paradigm shift in Indian dispute resolution. For the first time, India has a dedicated statutory framework that regulates mediation independently of court processes, establishes mediation service providers, provides for pre-litigation mediation, and makes mediated settlement agreements enforceable.
For litigants, mediation offers several advantages over court litigation: it is faster (the Act mandates completion within 180 days), confidential (mediation communications are protected), voluntary (no party can be compelled to settle), and preserves relationships (unlike adversarial proceedings). A mediated settlement agreement, once authenticated, has the same status and effect as a court judgment or decree.
For practitioners, the Mediation Act creates new professional opportunities. Mediators must be qualified and registered with recognised mediation service providers. The Act establishes the Mediation Council of India as the regulatory body, which will set standards for mediator training, accreditation, and conduct. Advocates who develop mediation skills can serve as mediators in addition to their litigation practice.
The key limitation of mediation is its voluntary nature. Neither party can be compelled to participate in or settle through mediation. If one party is unwilling to engage in good faith, mediation will not produce results. However, the Act encourages pre-litigation mediation by requiring parties to attempt mediation before filing certain categories of suits, subject to exceptions for urgent relief.
Related terms
Alternative dispute resolution:
Related institutions:
Frequently asked questions
Is mediation mandatory before filing a suit in India?
Under the Mediation Act, 2023, pre-litigation mediation is encouraged but not universally mandatory. The Act provides that parties may attempt mediation before approaching any court or tribunal. However, pre-litigation mediation is not required where urgent interim relief is sought or where the subject matter involves offences that are not compoundable.
Is a mediated settlement agreement enforceable?
Yes. Under the Mediation Act, 2023, a mediated settlement agreement that is duly authenticated is final, binding, and enforceable as a judgment or decree of a court. It can be enforced in the same manner as a court decree under the Code of Civil Procedure.
What is the difference between mediation and arbitration?
Mediation is a facilitative process where the mediator helps parties reach their own settlement — the mediator has no power to impose a decision. Arbitration is an adjudicatory process where the arbitrator hears evidence and arguments and passes a binding award. Mediation is voluntary throughout; arbitration results in a binding determination of rights.
This entry is part of the Veritect Indian Legal Glossary, a comprehensive reference of Indian legal terminology grounded in statutory text and judicial interpretation.
Last updated: 2026-03-27. Veritect provides this content for informational purposes and does not constitute legal advice.