The Mediation Act 2023: What Changes for Disputes

Is the Mediation Act 2023 in force?

Partly. The Act received the President's assent in September 2023, and section 1(3) lets the Central Government bring different provisions into force on different dates. By a notification of 9 October 2023, sections 1, 3, 26, 31 to 38, 45 to 47, 50 to 54, 56 and 57 came into force. That covered the definitions, court-annexed mediation, the provisions on the Mediation Council of India and certain general provisions. On 27 August 2026 the Central Government notified the establishment of the Mediation Council of India under section 31, with its head office in Delhi.

Several provisions that matter most to people with a dispute, including the pre-litigation mediation framework in section 5, the time limit in section 18, enforcement and challenge of mediated settlements in sections 27 and 28, and online mediation in section 30, were not in the October 2023 notification. Before you rely on any of them, check whether a later notification has brought them into force. We describe them below because they show where Indian mediation law is going, and because courts and mediation centres already follow many of the same practices.

Advocate B.K. Singh's practice when a client asks whether a mediated settlement will be enforceable is to answer two questions separately: which provisions of the Act were in force on the date of the settlement, and in what form the settlement was recorded. A settlement recorded by a court, or reached in section 12A pre-institution mediation, is enforceable today whatever the notification position under the new Act.

The main parts of the Act and where they stand

Status as notified on 9 October 2023, with the Council established in August 2026. Later notifications may have changed this, so verify before acting.

What disputes can be mediated under the Act, and which cannot?

Most civil and commercial disputes can be mediated: money claims, contract disputes, partnership and shareholder disputes, property and tenancy disputes, family and matrimonial disputes, consumer disputes and workplace disputes. Section 6 and the First Schedule list matters that are not fit for mediation. They include disputes involving claims against minors, deities and persons of unsound mind, criminal prosecutions, disputes involving allegations of serious fraud or fabrication of documents, disputes about levy, collection and refund of taxes, proceedings before bodies such as SEBI, TRAI and the Competition Commission, land acquisition and compensation, and disputes that affect the rights of third parties who are not part of the mediation (except matrimonial disputes where a child's interest is involved).

Compoundable offences, including compoundable matrimonial offences, can still be referred to mediation by a court, but the settlement in such a case is not treated as a decree. The court considers it under the law that governs the criminal case. So a settlement in a cruelty or cheque bounce matter reached in mediation goes back to the criminal court, which decides whether to accept the compounding or close the case.

The Central Government can amend the First Schedule by notification, so the list can change. If your dispute is close to one of the excluded categories, for example a commercial claim mixed with an allegation of forged documents, take advice before you invest time in mediation.

The provisions that change the most

Section numbers are as in the Act. Check whether each is in force on the date that matters to you.

Is pre-litigation mediation now compulsory?

No. The Bill introduced in Parliament originally proposed compulsory pre-litigation mediation for civil and commercial disputes, but the Act as passed makes it voluntary: under section 5, parties may try mediation before going to court by mutual consent. Nobody can be forced to settle, and a party can end its participation by written notice.

The one place where pre-suit mediation is mandatory remains the Commercial Courts Act. For a commercial suit of specified value (₹3 lakh and above) where no urgent interim relief is sought, section 12A still requires the plaintiff to apply for pre-institution mediation first, and the Supreme Court has held that a suit filed without it is liable to be rejected. That procedure is covered in our post on pre-institution mediation under section 12A.

Courts also continue to refer pending cases to mediation, and family courts in Delhi routinely send matrimonial disputes to their mediation centres before trial. Those referrals do not need a party's prior agreement to attend, though they still do not compel a settlement.

How long does mediation take under the Act?

Section 18 gives 120 days from the date fixed for the first appearance before the mediator, and the parties can agree to extend it by up to 60 days. Before the Act, private mediations had no statutory time limit, and court-annexed mediations followed whatever schedule the centre and the referring court set. A time limit matters because mediation was often criticised as a stalling device; a fixed period puts an end to that.

Section 29 protects the parties on limitation. The period from the start of mediation until the mediator's non-settlement report or termination of the mediation is excluded when calculating the limitation period for a suit or proceeding. So a party does not lose a claim because it spent three months trying to settle. Diarise both dates anyway, and keep copies of the request for mediation and the non-settlement report, because you will need them to prove the exclusion.

How a mediation runs under the Act, step by step

1. Agreement or request

   Mediation starts either under a mediation clause, by a request from one party that the other accepts, or by a court referral. The Act fixes the date on which the mediation commences (section 14), and that date matters for limitation, so keep proof of when the request was sent and received.

2. Choosing the mediator

   The parties agree on a mediator, or a mediation service provider or court-annexed centre appoints one. The mediator must disclose any circumstances that might raise doubts about independence or impartiality, and a party can ask for replacement on that basis.

3. First appearance

   The mediator fixes the first meeting. The 120-day period runs from this date. At this stage the mediator explains the process, confidentiality and fees, and the parties sign any agreement the mediator or centre requires.

4. Joint and separate sessions

   The mediator holds joint sessions and private sessions with each party. Lawyers may attend and advise. The mediator does not decide anything; the mediator's job is to help the parties find terms both can accept.

5. Settlement or non-settlement

   If the parties settle, the terms are written down, signed by the parties and authenticated by the mediator, and the mediator gives each party a copy. If not, the mediator issues a non-settlement report, without disclosing what was said.

6. Registration and enforcement

   The Act provides for optional registration of the settlement agreement with an authority for record. If a party defaults, the other enforces the settlement under the Code of Civil Procedure as if it were a decree, subject to the challenge window in section 28.

What makes a mediated settlement enforceable?

Under section 27, a mediated settlement agreement signed by the parties and authenticated by the mediator is final and binding on the parties and those claiming under them, and is enforceable as a decree of a civil court. This is the most significant change in the Act. Before it, a settlement reached in a private mediation was only a contract: if one side defaulted, the other had to sue on the settlement, which meant starting litigation over again. Settlements reached in court-referred mediation had to go back to the court to be recorded as a decree, which still applies.

Section 28 limits challenges to four grounds: fraud, corruption, impersonation, or that the mediation was about a dispute that could not be mediated under section 6. The challenge must be filed within 90 days of receiving a copy of the settlement, with a further 90 days possible for sufficient cause. A party cannot challenge a settlement because it now thinks it gave away too much, or because the mediator was not persuasive enough. This narrowness is deliberate: a settlement that can be reopened on the merits is not worth much.

The practical consequence is that settlement terms need the care of a decree. Write down the exact amounts, dates, mode of payment, consequences of default, what each side gives up, and which disputes stay open. Vague terms such as 'all disputes stand resolved' are harder to execute. When Advocate B.K. Singh reviews a draft settlement, he reads it as an executing court would: could a judge, reading only this document, issue a warrant of attachment on default? If not, the draft needs another round.

What changes: before and after the Mediation Act

Online mediation under section 30

Section 30 allows a mediation to be conducted online at any stage, including pre-litigation mediation, with the written consent of the parties. The mediator must take steps to maintain the integrity and confidentiality of the process, which in practice means secure platforms, controlled access, and agreed rules on recording and on who may be present in each room.

Online mediation is already common in Delhi court-annexed centres and in commercial disputes between parties in different cities. The Act's contribution is to remove any doubt about whether an online settlement counts. Our post on online arbitration and mediation for small business disputes covers the practical side: platforms, documents, signatures and the mistakes that make online settlements fail.

Is what you say in mediation confidential?

Yes. The Act requires the mediator, the parties and everyone participating to keep confidential the information exchanged, the proposals and offers made, admissions and the mediator's notes. None of that can be relied on as evidence in any later arbitration or court proceeding, and the mediator cannot be called as a witness about what happened in the mediation. There are narrow exceptions, for example where disclosure is required by law or where a settlement itself must be produced to enforce it.

Confidentiality is what makes mediation work. A business owner can say in a private session, 'we cannot pay ₹40 lakh this year, but we can pay ₹25 lakh by March and the rest in instalments', without that admission turning up in the other side's written statement. Respect it on both sides: do not record sessions without everyone's consent, and do not quote the other side's offers in later pleadings.

Who can be a mediator, and what does the Mediation Council of India do?

Under the Act, a mediator can be anyone the parties choose, of any nationality, subject to the qualifications, experience and accreditation that the Mediation Council of India may prescribe for registration. The Council, established on 27 August 2026 with its head office in Delhi, is meant to register mediators, recognise mediation service providers and mediation institutes that train and certify mediators, set standards of conduct, and maintain an electronic record of mediated settlements.

How the Council will work in day-to-day practice depends on the regulations it frames. For now, most people with a dispute in Delhi NCR will meet mediators through the court-annexed mediation centres (including the Delhi High Court's centre, Samadhan, and the district court centres), the Legal Services Authorities, or arbitral and mediation institutions. Ask any mediator you are considering about their training, whether they are registered or empanelled, and how they handle conflicts of interest.

What happens to conciliation under the Arbitration Act?

The Act amends the Arbitration and Conciliation Act 1996 by replacing its Part III, which dealt with conciliation, with two provisions. References to conciliation in other laws and agreements are to be treated as references to mediation under the new Act, and conciliation proceedings that had already begun before the change continue under the old provisions. In effect, conciliation and mediation become one process.

This matters for old contracts. Many agreements signed before 2023 say disputes will first be referred to conciliation under the Arbitration Act before arbitration. Once the relevant amendments are in force, that step is read as mediation. A clause that makes conciliation a precondition to arbitration should be followed in that form, or the other side may object that arbitration was started too early. Our post on drafting an arbitration clause that works explains how to frame a multi-tier clause under the new law.

What is community mediation?

Sections 43 and 44 provide for community mediation of disputes likely to affect peace and harmony among residents or families in an area. With the consent of the parties, a dispute can be referred by application to the Legal Services Authority, the District Magistrate or the Sub-Divisional Magistrate, and a panel of three community mediators attempts to settle it. Neighbourhood disputes about parking, encroachment on common areas, noise or water supply are the kind of matters this is meant for.

A settlement in community mediation is not enforceable as a decree (section 44(4)). It is a recorded agreement that helps parties keep the peace, and if it breaks down the ordinary civil and criminal remedies remain. For disputes involving a resident welfare association or apartment maintenance, the civil courts, consumer forums or the relevant apartment law usually give a more enforceable result.

Family, cheque bounce and Lok Adalat matters after the Act

Family disputes have been mediated in Delhi's family courts for years, and that continues; our post on mediation in divorce cases at Delhi family courts describes how those sessions run. A matrimonial settlement that involves divorce, custody or maintenance still needs the court's orders: a mediated agreement cannot by itself dissolve a marriage or bind a child.

Cheque bounce cases are compoundable, and courts often refer them to mediation. As explained above, a settlement in a criminal case goes back to the court, which records the compounding. Our post on settling a cheque bounce case covers that. Lok Adalats continue under the Legal Services Authorities Act 1987, and their awards remain final with no appeal; see our post on settling cases in Lok Adalat for when that route is better.

Before you agree to mediate under the Act

• Check that your dispute is not in the First Schedule list of non-mediable matters
• Check which provisions of the Act are in force on the date you will settle
• Agree the mediator, the institution, fees and the online or in-person format in writing
• Note the date of the first appearance and the 120-day deadline
• Note your limitation date and keep proof of when mediation started and ended
• Send a representative with written authority to settle
• Prepare the documents that support your figures, even though no one will rule on them
• Decide in advance how the settlement will be recorded so it can be enforced
• Have the draft settlement checked for amounts, dates and default terms before signing

What the Act means for your dispute

For most people, the Act does not change whether mediation is worth trying; it changes what a successful mediation produces. Once the enforcement provisions are in force, a well-drafted private settlement can be executed like a decree, and only a narrow set of complaints can undo it. That makes the drafting stage, and the choice of mediator, more important than before.

If you have a dispute that you would like to try to settle, or a settlement that the other side is not honouring, our team, including Advocate B.K. Singh, can look at the papers, check the current notification position and tell you how the settlement should be recorded. See our work in arbitration and conciliation, our guide to recovery options for unpaid invoices for money disputes, or write to us through the enquiry page.