Mediation Act 2023, Objectives, Features, Role, and Functions

The Mediation Act, 2023 is a key reform aimed at promoting voluntary, time-bound, and cost-effective resolution of civil and commercial disputes in India. It establishes a legal framework for institutional mediation, ensures the enforceability of mediated settlement agreements, and encourages parties to resolve conflicts outside traditional courts.

The Act seeks to reduce the burden on the judiciary and make dispute resolution more efficient, transparent, and accessible.

Mediation Act, 2023 Objectives

The Mediation Act, 2023 was introduced with the purpose of strengthening the culture of alternative dispute resolution in India. Its major objectives include:

• Promote mediation as the first step in dispute resolution to reduce unnecessary litigation.
• Ensure time-bound mediation, generally completing the process within 120 days, extendable by another 60 days.
• Provide legal recognition to mediated settlement agreements, making them legally enforceable.
• Encourage institutional mediation through accredited institutions and the Mediation Council of India.
• Ensure confidentiality, transparency, and ethical standards during the mediation process.
• Promote online mediation to widen access and reduce costs.

Mediation Act, 2023 Features

• The Mediation Act, 2023 creates a strong and uniform law for mediation in India, making the entire process clear, structured, and easy to use.
• It makes pre-litigation mediation mandatory for many civil and commercial disputes, so people must try settling the matter before going to court.
• The Act sets up the Mediation Council of India, which will regulate mediators, register mediation institutions, set standards, and promote mediation across the country.
• It allows online mediation, community mediation, and institutional mediation, giving people many options to resolve disputes quickly and conveniently.
• The Act ensures confidentiality. Anything said or shared during mediation cannot be used later in court.
• Mediated Settlement Agreements (MSAs) now have the same power as a court order, making them legally enforceable without delay.
• The Act provides very limited grounds for challenging an MSA. Challenges are allowed only for serious issues such as:
  • fraud
  • corruption
  • impersonation
  • coercion
  • major procedural defects
• Any challenge to an MSA must be made within a strict timeline of 90 days, which can be extended by another 90 days only if the court finds valid reasons.
• The Act gives a broad definition of mediation, bringing different methods like mediation, conciliation, online mediation, and community mediation under one single legal category. 

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Role and Functions of the Mediation Council of India

• Registers and regulates mediation service providers, such as mediation centres and institutions.
• Accredits mediators and sets standards for their training, qualifications, and professional conduct.
• Maintains a national panel/list of qualified mediators, ensuring transparency and public access.
• Frames rules, regulations, and guidelines for mediation procedures across the country.
• Promotes awareness about mediation through campaigns, workshops, and educational programs.
• Ensures ethical conduct of mediators and addresses complaints or misconduct cases.
• Monitors the quality of mediation services and ensures institutions follow the standards set under the Act.
• Develops training modules and certification programs to improve mediator skills and professionalism.
• Encourages research and innovation in mediation and alternative dispute resolution (ADR).
• Supports the growth of online mediation by issuing guidelines for technology use and digital processes.

Disputes Excluded from the Purview of the Mediation Act

• Criminal offences that are non-compoundable, such as serious crimes involving violence or major public harm.
• Disputes involving minors, persons of unsound mind, or individuals requiring legal guardianship, where court supervision is necessary.
• Cases affecting the rights of third parties who are not part of the mediation process.
• Tax matters, including income tax, GST, customs, and other fiscal disputes connected to government revenue.
• Matters involving the sovereign functions of the government, such as defence, foreign affairs, atomic energy, and national security.
• Public interest issues, including cases where the outcome affects society at large and cannot be negotiated privately.
• Disputes under specific special laws that explicitly prohibit mediation.
• Cases involving allegations of serious fraud, fabrications, or actions that require formal court investigation.
• Matters requiring urgent court intervention, such as emergency injunctions or orders to prevent immediate harm.
• Any dispute the Central Government notifies as non-mediable in the interest of public order or policy.

Challenges and Concerns Related to the Act

Shortage of trained mediators

• India currently has fewer than 10,000 professionally trained mediators, which is insufficient for a population of over 140 crore.
• Rapid expansion of mandatory pre-litigation mediation may face practical hurdles.

Possible delays due to mandatory pre-litigation mediation

• Although the Act aims for quick resolution, mandatory mediation may add an extra 120–180 days before parties can approach courts.
• In time-sensitive cases, this may increase, not decrease, delays.

Low awareness and acceptance among citizens

• Surveys by NITI Aayog show that over 65% of litigants are unaware of mediation as an option.
• Many people still prefer court litigation over negotiation.

Digital divide affecting online mediation

• Around 49% of rural households lack regular internet access (NFHS-5 data).
• Online mediation may become inaccessible for rural and low-income participants.

Implementation capacity varies across states

• States with limited mediation centres or trained staff may struggle to meet the Act’s requirements.
• Urban areas may benefit more than rural/remote regions.

Comparison with Global Mediation Frameworks

U.S. Model of Mediation

• The U.S. follows a highly decentralized mediation system, where each state has its own mediation rules and programs.
  Court-annexed mediation is common. Many U.S. courts require parties to attempt mediation before trial.
• The U.S. promotes private mediation through trained professionals and specialised mediation firms.
• Mediation is widely used in family disputes, workplace conflicts, commercial matters, and community cases.
• The system encourages settlement by allowing courts to penalize parties who refuse mediation without valid reasons.

U.K. Model of Mediation

• The U.K. strongly encourages mediation as part of its civil justice system, especially after the Woolf Reforms (1999).
• Courts can impose cost penalties on parties who refuse to consider mediation during disputes.
• The U.K. uses Mediation Information and Assessment Meetings (MIAMs) for family cases, making pre-mediation consultation mandatory.
• There is a mature network of accredited mediators regulated by bodies like the Civil Mediation Council.
• Mediation is promoted by the government as an effective way to reduce litigation pressure on courts.
• Businesses widely use mediation for commercial disputes, supported by trusted institutions like CEDR (Centre for Effective Dispute Resolution).

Singapore Model of Mediation

• Singapore is considered a global leader in mediation due to its strong legal framework and international focus.
• The country has established world-class institutions like the Singapore International Mediation Centre (SIMC) and Singapore Mediation Centre (SMC).
• Singapore offers a hybrid dispute resolution model, combining mediation with arbitration (called Arb-Med-Arb model), used widely in commercial disputes.
• The Singapore Convention on Mediation (2019) allows international mediated settlements to be enforced across signatory countries.
• Mediation is supported by efficient court processes, including mandatory mediation for certain cases.

Impact of the Mediation Act on Indian Judicial System

Reduces Court Backlog

• India has over 4.4 crore pending cases (National Judicial Data Grid, 2025).
• Diverting civil and commercial disputes to mediation can significantly lighten the load on courts.

Faster Resolution of Disputes

• Mediation is time-bound: 120 days, extendable by 60 days.
• Provides quicker settlements compared to traditional litigation, which can take 5–10 years in some courts.

Cost-Effective Justice

• Avoids high court fees and lengthy lawyer expenses.
• Beneficial for individuals and MSMEs, making justice more affordable.

Enhances Commercial Confidence

• Confidential and speedy dispute resolution strengthens business relationships.
• Supports India’s ease of doing business rankings by providing a reliable ADR mechanism.

Promotes Collaborative Culture and ADR

• Encourages amicable settlements rather than adversarial litigation.
• Helps preserve family, community, and business relationships while reducing dependence on courts.