Mediation as a Mode of Peaceful Settlement of Dispute

Mediation as a Mode of Peaceful Settlement of Dispute

“An ounce of mediation is worth a pound of arbitration and a ton of litigation!”- Joseph Grynbaum. The statement by Joseph Grynbaum is not only hypothetical but also realistic after seeing the real-life international and national exodus. The peaceful and non violent form of settling disputes in international forums includes a continuous and uninterrupted procedure focusing on International Law. As the Courts of Law get more and more number of cases across the country burdened with litigation, the procedure of granting justice for the needy becomes even more time taking. With such an encumbered court system in the world, most of the countries have adopted a uniform approach towards settlements of disputes in order to vitalize the parties to learn and explore the means of Alternative Dispute Resolution, which would save costs, time, and resources with the same expectation of getting an expert’s service. Out of all the Alternative Dispute Resolutions, Mediation has been one of the most preferred options ever since the beginning of the civilized societies. People who are time bounded and want earlier and successful results and especially those who are not wanting to be accountable by arbitral awards and running errands of the typical usual justice system are seeking professional mediators in order to find the best possible terms for a peaceful settlement. 

Understanding the term “Mediation”

As mentioned above, it can easily be presumed that Mediation is one of the finest and easiest forms of Alternative Disputes Resolution (ADR). It is a discretionary procedure via which the parties to the dispute find a reciprocal and courteous solution to their legally aroused dispute. In India, mainly two statutes in specific deal with “Mediation”, namely the Code of Civil Procedure, 1908 and the Arbitration and Conciliation Act, 1996. In a layman’s terms, Mediation can be termed as a negotiation among the parties to a dispute who come up with a mediator for solving their dispute. The parties to the dispute come to a neutral third party I.e., a mediator, who does not have the decision-making ability, unlike Arbitration. The expectations from a mediator are to provide the parties to the dispute with an unbiased view of the dispute, free flow of ideas, suggestions etc., however, it is up to the parties whether they agree with the mediator or not.

The Honorable Apex Court in the case of Afcons Infrastructure Ltd. v. Cherian Varkey Construction Company Pvt. Ltd. has elaborated that mediation is a method of non-binding with the assistance of a neutral third party, who is the arbitrator who tries to come up with a solution to the disputing parties to arrive at a negotiated settlement. Mediation is also a synonym for “Conciliation”.

In 2014, the Apex Court of India, in the case of Vikram Bakshi v. Ms Sonia Khosla specified the advantages of mediation and how it can provide a favorable environment for the parties to gain a win-win situation.

By what means that parties can go to mediation?

Under the Indian Statutes provided, the parties can go to mediation in two possible ways.

Court-referred Mediation

U/s 89 of the Code of Civil Procedure, 1908, the Honorable Court of Law may refer a case pending before the same court for mediation if the court to the truth of its capacity believes that settlement is possible via mediation and the parties to the dispute agree to proceed with settlement.

Voluntary or Private Mediation

Any parties to the dispute, may it be corporate or government or businesses or private individuals, can voluntarily at their discretion come up to the conclusion to solve the disputed matters among them by seeking help from the facilities of a private professional mediator.

What are Mediated Settlement Agreements?

A Mediated Settlement Agreement is more like a contract that is looked forward by the parties who seek to solve their dispute. To make it easier, let’s put it this way- mediation is a voluntary process where the parties to dispute decide to approach a neutral third party whereas a mediation settlement can be reached only after the Mediation among the parties. In layman’s terms, a mediation settlement is what the parties to the dispute have decided mutually is reduced in writing. It is a document that holds the parties accountable or liable to stick to the agreed terms and conditions as a result of the mediation.

Legal Enforceability of Mediated Settlement

As of now, there is not any term mentioned under any statute as “mediation”. Most contents that are applicable to commercial mediation are the Code of Civil Procedure, 1908 (CPC) and the Commercial Courts Act, 2015. U/s 89 of the CPC, it empowers the courts to refer the disputes of agreements outside the courtroom to get a peaceful settlement, which includes mediation. Coming to Section 30 of the Arbitration and Conciliation Act, 1996, which encourages settlements of the dispute is only fruitful when the parties themselves have chosen to the settlement of disputes. In case the parties to the dispute have chosen private mediation on account of the mediation clause, the same cannot be treated as arbitral awards and are rather just and forced as contracts to parties.

Essentials required for a settlement agreement to be enforceable

The Settlement agreement shall include the main body or content of the contract in order to make the contract effective. The basic essential elements for a contract to be successfully constituted are offer, counter offer(if any), acceptance, review, legal capacity of the parties, and legality of the subject. The Arbitration and Conciliation Act stipulates that a written settlement agreement must be signed and drafted u/s 73, and when the settlement agreement is being signed, both the parties to the contract shall affirm it. It is important for the mediator to validate the settlement agreement and provide a copy of the same to both the parties.


With the passage of time, the Indian government distinguishes mediation from arbitration, as a matter of course the eyes of the law will bring them on the same board. In cases where mediation and arbitration are put in a comparative study, without a doubt mediation seems to be the feasible option for Alternative Dispute Resolution. Nonetheless, unless there is a specific special law that focuses solely on mediation and the term being enacted separately the loopholes shall always be interpreted in the Courtroom by respective counsels and the intervention of the Honorable Court of Law would be the need of the hour.