UNIT-1

CONCEPT AND NEED

Village Panchayats: One of the earliest systems of dispute resolution in India involved councils of
village elders called Panchas, who made binding decisions through negotiation and consensus.
The focus was on restoring peace, maintaining social harmony, and ensuring quick and
accessible justice at the community level.**In India, one of the important modes of Alternative
Dispute Resolution (ADR) is arbitration, which is governed by the Arbitration and Conciliation
Act, 1996. This Act regulates arbitral proceedings in India.**The first formal legislation on
arbitration in India was the Indian Arbitration Act, 1899, which applied only to the Presidency
towns of Madras, Bombay, and Calcutta. Later, the Code of Civil Procedure, 1908 included
arbitration provisions in its Second Schedule. These were replaced by the Arbitration Act, 1940,
based largely on the English Arbitration Act, 1934, which governed domestic arbitration in India
for over fifty years. Enforcement of foreign awards was dealt with separately through the
Arbitration (Protocol and Convention) Act, 1937 and the Foreign Awards (Recognition and
Enforcement) Act, 1961. With the adoption of the UNCITRAL Model Law on International
Commercial Arbitration, 1985, India enacted the Arbitration and Conciliation Act, 1996, which
currently governs arbitration proceedings in [Link] for ADR-Reduce Court Burden: ADR
helps reduce the huge backlog of cases in courts*Cost and Time Efficiency: ADR processes are
generally quicker and less expensive than litigation.*Faster Resolution: Methods like arbitration
and adjudication can provide quicker decisions.*Better Outcomes: Mediation allows parties to
reach mutually beneficial solutions instead of a strict court judgment.*Preserve Relationships:
Informal and cooperative procedures help maintain business or personal relationships.*Access
to Justice: ADR provides affordable and accessible justice and supports the principle of equal
justice under Article 39A of the Constitution of India.*Confidentiality: ADR proceedings are
private unlike public court trials.*Specialized Expertise: Parties can choose arbitrators or
mediators with expertise in specific fields such as commerce or construction.

Different methods of ADR

Arbitration-Arbitration is the most formal method of ADR. In this process, parties choose one or
more neutral persons called arbitrators to decide their dispute. The arbitrator hears both sides
and gives a decision called an arbitral award, which is binding and enforceable like a court
decree. In India, arbitration is governed by the Arbitration and Conciliation Act, 1996. It is
commonly used in commercial and business disputes and allows parties to choose experts,
though it may sometimes become [Link] of Arbitration in India-Ad-hoc Arbitration -
Institutional Arbitration –Domestic Arbitration -International Commercial Arbitration -Fast Track
Arbitration2)Conciliation-Conciliation is a process where a neutral third person called a
conciliator helps the parties reach a settlement. The conciliator communicates with both
parties, suggests solutions, and facilitates agreement but does not impose a decision. If the
parties agree, the settlement has the same legal effect as an arbitral award. Conciliation is
governed by the Arbitration and Conciliation Act, 1996 and is flexible and [Link] of
Conciliator*Proposes solutions*Facilitates dialogue*Does not impose a decision*Settlement
Agreement-If parties agree, the settlement has the status of an arbitral award (Section 74).
Negotiation-Negotiation is the simplest and most informal method of dispute resolution where
parties directly communicate to resolve their dispute without a third party. It saves time,
money, and effort and gives parties full control over the outcome. However, there is no legal
structure, and the stronger party may dominate the weaker one. Agreements have no legal
value unless formally [Link]-Mediation is a people-friendly ADR method
where a neutral mediator helps parties reach a mutually acceptable settlement. It promotes
cooperation and preserves relationships. Mediation is confidential, cost-effective, and time-
saving, and courts encourage it in civil and family disputes. In Afcons Infrastructure Ltd. v.
Cherian Varkey Construction Co., the Court clarified which cases are suitable for mediation. If
mediation fails, parties must approach the court [Link] Adalat-Lok Adalat provides free and
speedy justice and reduces the burden on courts. It ensures access to justice for weaker
sections. The award of Lok Adalat is final and binding and is treated as a civil court decree with
no appeal. In State of Punjab v. Jalour Singh, the Supreme Court held that Lok Adalat has no
adjudicatory power and can pass awards only on the basis of [Link] (Online Dispute
Resolution)Online Dispute Resolution uses digital platforms to resolve disputes through
negotiation, mediation, or arbitration. It is particularly useful in consumer and e-commerce
disputes and allows parties to resolve issues from different locations.

Section 89 of cpc

The Arbitration and Conciliation Act, 1996 provides the legal framework for arbitration and
conciliation in India. Section 89 CPC promotes settlement of disputes outside courts through
Alternative Dispute Resolution (ADR) mechanisms such as arbitration, conciliation, mediation,
and Lok Adalat. Together, they encourage speedy and amicable settlement of disputes.

Section 89 CPC

Section 89 CPC empowers courts to refer disputes for:

1. Arbitration

2. Conciliation

3. Mediation

4. Judicial settlement including Lok Adalat

If a matter is referred to arbitration or conciliation, the provisions of the Arbitration and
Conciliation Act, 1996 apply.

Significance of the Arbitration and Conciliation Act with Section 89 CPC

1. Promotes Alternative Dispute Resolution (ADR)

The Act gives legal recognition to ADR methods and Section 89 CPC enables courts to actively
refer suitable disputes for settlement outside court.

2. Reduces Burden on Courts

India faces huge judicial backlog. Section 89 CPC helps reduce pendency by diverting disputes to
arbitration and conciliation, ensuring faster disposal of cases.

3. Speedy and Cost-Effective Justice

Arbitration and conciliation are less formal, quicker, and often cheaper than regular court
proceedings. This saves time and litigation expenses for parties.

4. Party Autonomy

The Act allows parties to choose arbitrators, procedures, venue, and rules of arbitration, giving
flexibility in dispute resolution.

5. Enforceability of Awards

Arbitral awards under the Act are enforceable like court decrees under Section 36 of the Act,
making ADR outcomes legally binding and effective.

6. Encourages Amicable Settlement

Conciliation and mediation focus on mutual agreement and preserving relationships, especially
in commercial and family disputes.

7. International Standards

The 1996 Act is based on the UNCITRAL Model Law, making Indian arbitration more compatible
with international commercial practices.

UNIT-2
ARBITRATION and kinds

Arbitration is the most traditional form of private dispute resolution. Arbitration is a binding
procedure. It is often “administered” by a private organization that maintains lists of available
arbitrators and provide rules under which the arbitration will be conducted. Such organizations
can also manage the arbitration in whole or in part. Parties often select arbitrators on the basis
of substantive expertise.*Arbitration is adjudicatory, as opposed to advisory, because of the fact
that the arbitrator (usually a retired judge or attorney) renders a decision at the end of an
arbitration hearing, and that decision is final and binding, subject only to a very limited court
review1)Domestic Arbitration-Arbitration conducted within India between Indian parties and
governed by Part I of the Act..Example: A dispute between two Indian construction companies
resolved in Delhi. [Link] Commercial Arbitration (ICA)-Arbitration where at least one
party is foreign. It may be seated in India or outside India.: Section 2(1)(f) defines
ICA.*Includes:Foreign nationals*Foreign companies*Foreign associations or bodies controlled
abroad*Foreign [Link] Arbitration-Arbitration conducted under the
supervision of an arbitral institution which provides rules, appoints arbitrators, and administers
[Link]: International Chamber of Commerce (ICC), Mumbai Centre for
International Arbitration (MCIA).Provisions: Sec. 2(6), 2(8), 11(6), 11(13), 29A.4 Ad Hoc
ArbitrationArbitration conducted without any institutional supervision, where parties
themselves decide the procedure, appointment of arbitrators, and place of
[Link]: Sec. 2(6), 2(8), 10, 11, 19, 20, 23.5 Contractual Arbitration-Arbitration
that arises from an arbitration clause in a contract, where parties agree that disputes will be
resolved through arbitration instead of [Link]: Section 7 – Arbitration
[Link] Track Arbitration-A simplified and speedy arbitration procedure designed to
resolve disputes quickly with minimal [Link]: Section 29B.*Usually decided by a
sole arbitrator*Based mainly on written pleadings and documents*Oral hearing only if
necessary*Award must be made within six months.

ARBITRATION AGREEMENT

 [Link] agreement.—(1) In this Part, “arbitration agreement” means an agreement

by the parties to submit to arbitration all or certain disputes which have arisen or which
may arise between them in respect of a defined legal relationship, whether contractual
or not.(2) An arbitration agreement may be in the form of an arbitration clause in a
contract or in the form of a separate agreement.(3) An arbitration agreement shall be in
writing.(4) An arbitration agreement is in writing if it is contained in—(a) a document
signed by the parties;(b) an exchange of letters, telex, telegrams or other means of
telecommunication 1[including communication through electronic means] which
 provide a record of the agreement.Essentials1. Agreement Between the Parties
There must be a mutual agreement between the parties.*Consent should be free,
voluntary, and not obtained by coercion, fraud, or misrepresentation.*The agreement
reflects the intention of the parties to submit disputes to arbitration2. Intention to Refer
Disputes to Arbitration-The parties must clearly show an intention to resolve disputes
through arbitration.*Mere reference to an arbitrator is not enough; the clause must
exclude ordinary civil courts.*Words like “shall be referred to arbitration” indicate
mandatory intent.3)Disputes Must Be Defined or Definable-The agreement should
specify:*Existing disputes or Future disputes arising out of a defined legal relationship
(contractual or otherwise).*Vague or uncertain disputes may invalidate the agreement
4)Arbitration Agreement Must Be in Writing-Mandatory requirement under Section 7.
It may be:A clause in a contract, or A separate agreement.*Writing includes: Exchange of
letters, emails, or electronic communication*Statements of claim and defence where
existence of agreement is not denied [Link] Relationship Between Parties-Disputes
must arise from a legal relationship, whether contractual or non-contractual.
[Link] Subject Matter-The dispute must be capable of settlement by arbitration.
*Matters such as criminal offences, matrimonial disputes, insolvency, matters are
generally non-arbitrable.

Appointment of Arbitrator

Section 11 – Appointment of Arbitrators*Basic Rules-*Parties may agree on the

appointment procedure.*If the tribunal has three arbitrators:Each party appoints one
arbitrator*The two arbitrators appoint the third (presiding arbitrator).*If parties fail to
appoint*Supreme Court appoints arbitrator in International Commercial Arbitration.*High
Court appoints arbitrator in Domestic Arbitration.*Courts may also designate arbitral
institutions to make [Link] Provisions Related to Arbitrators-Section
13 – Challenge Procedure*Procedure to challenge the appointment of an arbitrator.
*Section 14 – Failure or Impossibility to Act-Mandate of an arbitrator terminates if:He
becomes unable to perform functions, orWithdraws from [Link] 15 – Termination
and Substitution-If mandate ends, a substitute arbitrator is appointed according to the
same [Link] 16 – Competence of Tribunal-Arbitral tribunal has power to rule on
its own jurisdiction Qualification of Arbitrator-The Act does not prescribe strict professional
qualifications, but requires independence and [Link] Provisions*Sec10 –
Parties are free to decide the number of arbitrators (must not be an even number).Sec 11 –
Deals with appointment of arbitrators.Sec12(1) – Arbitrator must disclose circumstances
that may give rise to justifiable doubts regarding independence or [Link] 2021
Amendment-No fixed statutory qualification list exists.*Greater flexibility in appointing
arbitrators, including foreign [Link] of Arbitrator-Sec 12(3)An
arbitrator may be challenged if:Circumstances give rise to justifiable doubts about
independence or impartiality, or*The arbitrator does not possess qualifications agreed by
[Link] 12(5)-A person is ineligible to be appointed as arbitrator if he falls within the
relationships mentioned in the Seventh Schedule, such as:Employee or consultant of a
party*Advisor to a party*Having business or financial relationship with a party*However,
parties can waive this disqualification after the dispute arises by express written agreement.

UNIT-3

Scope and Jurisdiction of Arbitral Tribunal

An arbitral tribunal is a private adjudicatory body constituted under the Arbitration and
Conciliation Act, 1996 to resolve disputes through arbitration instead of courts. Its
jurisdiction and powers mainly arise from the arbitration agreement between the parties.

Scope of Arbitral Tribunal

The scope refers to the powers and functions exercised by the arbitral tribunal during
arbitration proceedings.

1. Adjudication of Disputes

The tribunal has the authority to hear and decide disputes referred to it by the parties
according to the arbitration agreement.

2. Interpretation of Contract

The tribunal can interpret contractual terms and determine the rights and liabilities of
parties.

3. Grant of Relief

The tribunal may grant:

 Damages

 Compensation

 Specific performance (in certain matters)

 Interest and costs

4. Interim Measures
Under Section 17 of the Act, the tribunal may order interim measures such as:

 Preservation of property

 Securing disputed amounts

 Injunctions

5. Procedural Flexibility

The tribunal can determine:

 Procedure of arbitration

 Place and language of arbitration

 Rules regarding evidence and hearings

6. Power to Decide Own Jurisdiction

Under Section 16 (Doctrine of Kompetenz-Kompetenz), the tribunal can rule on objections

relating to:

 Existence of arbitration agreement

 Validity of arbitration agreement

 Extent of its own jurisdiction

7. Settlement and Conciliation

The tribunal may encourage settlement between parties and record it as an arbitral award
on agreed terms under Section 30.

Jurisdiction of Arbitral Tribunal

Jurisdiction means the legal authority of the tribunal to decide a dispute.

Types of Jurisdiction

1. Subject-Matter Jurisdiction

The tribunal can decide only disputes covered by the arbitration agreement and capable of
settlement by arbitration.

Example:

 Commercial disputes → Arbitrable

 Criminal offences, matrimonial disputes, insolvency matters → Generally non-arbitrable

2. Territorial Jurisdiction

Jurisdiction depends on the seat/place of arbitration agreed by parties.

3. Personal Jurisdiction

The tribunal has authority only over parties bound by the arbitration agreement.

4. Pecuniary Jurisdiction

Unlike courts, arbitral tribunals generally do not have strict monetary limits unless specified
by agreement.

Important Principle: Kompetenz-Kompetenz

Section 16 recognizes the principle that the arbitral tribunal can decide challenges regarding
its own [Link] minimizes unnecessary court interference and strengthens arbitral
independence.

Composition of Arbitral Tribunal

The arbitral tribunal refers to the body of arbitrator(s) appointed to resolve disputes through
arbitration under the Arbitration and Conciliation Act, 1996.

1. Number of Arbitrators – Section 10

 Parties are free to decide the number of arbitrators.

 The number must not be an even number.

 Usually, there may be:

o Sole arbitrator, or

o Panel of three arbitrators.

 If parties fail to decide, the tribunal consists of a sole arbitrator.

2. Appointment of Arbitrators – Section 11

 Parties may mutually appoint arbitrator(s).

 In case of failure to appoint:

o The Supreme Court or High Court may appoint arbitrators.

3. Sole Arbitrator

 When parties agree to appoint only one arbitrator, he alone constitutes the arbitral
tribunal.

 Suitable for simple and less expensive disputes.

4. Three-Member Tribunal

 Each party appoints one arbitrator.

 The two appointed arbitrators appoint the third arbitrator, who acts as the presiding
arbitrator.

5. Qualifications of Arbitrators

 Arbitrators should be independent, impartial, and competent.

 Parties may decide qualifications by agreement.

6. Independence and Impartiality – Section 12

 Arbitrators must disclose any circumstances likely to create doubts regarding neutrality
or independence.

7. Challenge to Arbitrator – Sections 12 & 13

 A party may challenge an arbitrator if there are doubts regarding impartiality,

independence, or qualifications.

8. Termination and Substitution – Sections 14 & 15

 Mandate of arbitrator may terminate due to incapacity, withdrawal, or inability to

perform functions.

 A substitute arbitrator may then be appointed according to original appointment

procedure.

Arbitral Award

An arbitral award is the final decision given by an arbitral tribunal under the Arbitration and
Conciliation Act, 1996. It determines the rights and liabilities of the parties in an arbitration

dispute and is binding like a court decree. It may be a final award or an interim award.
Essentials of a Valid Arbitral Award
Under Section 31, an arbitral award must:

1. Be in writing

2. Be signed by the arbitrators

3. State reasons for the decision (unless parties agree otherwise)

4. Mention the date and place of arbitration

5. Be delivered to each party

If these conditions are not fulfilled, the award may be challenged before the court.

Procedure of Making an Arbitral Award

1. Submission of Claims and Defences – Parties present their claims, documents, evidence,
and arguments before the tribunal.

2. Hearings and Examination – The tribunal conducts hearings, examines witnesses and
evidence, and hears both parties.

3. Deliberation by Tribunal – Arbitrators analyze facts, contractual terms, and applicable

law to reach a decision.

4. Preparation of Award – Under Section 31, the award must be in writing, signed by the
arbitrators, and contain reasons for the decision unless parties agree otherwise.

5. Mention of Date and Place – The award must state the date and place of arbitration.

6. Delivery to Parties – Signed copies of the award are delivered to each party, making it
effective and enforceable.

Analysis / Importance of Arbitral Award

 Final and Binding Nature – Under Section 35, the award is final and binding on the
parties.

 Enforceability – Section 36 provides that an arbitral award is enforceable as a decree of a

civil court.

 Speedy Resolution – Arbitration ensures quicker disposal of disputes compared to

ordinary litigation.

 Confidentiality – Proceedings remain private, protecting commercial interests and

reputation.
  Limited Court Interference – Courts can interfere only on limited grounds under Section
34.

 Party Autonomy – Parties can choose arbitrators, procedures, and rules according to
their convenience.

Termination of Arbitration Proceedings

Under Section 32, arbitration proceedings terminate in the following ways:

1. Final Arbitral Award – Proceedings end when the final award is made.

2. Settlement Between Parties – If parties settle the dispute mutually, proceedings

terminate.

3. Withdrawal of Claim – If the claimant withdraws the claim and respondent has no
objection.

4. Impossibility or Unnecessariness – Tribunal may terminate proceedings if continuation

becomes unnecessary or impossible.

UNIT-4

Conciliation and its Types

Meaning of Conciliation

Conciliation is a method of Alternative Dispute Resolution (ADR) in which a neutral third person
called a conciliator helps the disputing parties to settle their dispute amicably. It is governed by
Part III of the Arbitration and Conciliation Act, 1996.

The conciliator does not impose a decision like a judge or arbitrator but assists the parties in
reaching a mutually acceptable settlement.

Features of Conciliation-*Voluntary process *Flexible and informal procedure *Confidential in

nature *Promotes amicable settlement *Saves time and cost *Settlement agreement is binding
on parties

1. Facilitative Conciliation

Facilitative conciliation is the traditional and most commonly used form of conciliation. In this
method, the conciliator acts mainly as a facilitator of communication between the parties. The
conciliator does not impose decisions or provide legal opinions but helps parties identify issues,
improve communication, and explore possible solutions.

The conciliator encourages negotiation and assists the parties in understanding each other’s
interests and concerns. The ultimate decision remains entirely with the parties themselves.

2. Evaluative Conciliation

In evaluative conciliation, the conciliator takes a more active role. The conciliator evaluates the
strengths and weaknesses of the parties’ claims and may suggest possible solutions or likely
legal outcomes.

The conciliator may provide expert opinions, legal guidance, or recommendations for
settlement. However, the final decision still depends on the consent of the parties.

3. Court-Annexed Conciliation

Court-annexed conciliation is linked with the judicial system. Under Section 89 of the Code of
Civil Procedure, 1908, courts may refer pending disputes to conciliation if there is a possibility of
settlement.

The purpose of court-annexed conciliation is to reduce the burden on courts and encourage
speedy disposal of cases through amicable settlement.

4. Voluntary Conciliation

Voluntary conciliation takes place when parties willingly agree to settle their dispute through
conciliation without any legal compulsion. The process begins only with the consent of both
parties.

Parties have full freedom to appoint conciliators, decide procedure, and continue or withdraw
from the process.

5. Compulsory Conciliation

In compulsory conciliation, parties are legally required to attempt conciliation before

approaching courts or tribunals. Certain labour and industrial laws mandate conciliation as a
pre-condition to litigation or strikes.

The objective is to promote industrial peace and reduce unnecessary legal disputes.

Procedure of Conciliation
The procedure of conciliation is provided under Part III of the Arbitration and Conciliation Act,
1996. Conciliation is a flexible and informal process in which a conciliator assists parties in
reaching an amicable settlement of disputes.

1. Invitation to Conciliate

The conciliation process begins when one party sends a written invitation to the other party
requesting settlement of the dispute through conciliation.

If the other party accepts the invitation in writing, conciliation proceedings commence. If there
is no reply or the invitation is rejected, conciliation does not start.

2. Appointment of Conciliator

The parties appoint conciliators by mutual agreement.

 There may be:

o One conciliator, or

o Two conciliators, or

o Three conciliators

In case of three conciliators, one acts as the presiding conciliator.

The conciliator must be impartial and independent.

3. Submission of Statements

Each party submits:

 Facts of the dispute

 Nature of claims and issues

 Relevant documents and evidence

The conciliator may ask for additional information whenever necessary.

4. Role of Conciliator
The conciliator assists parties in an independent and impartial manner. The conciliator:

 Encourages communication between parties

 Identifies issues in dispute

 Suggests possible solutions and settlement terms

 Helps parties reach a mutually acceptable agreement

The conciliator is not bound by strict procedural or evidentiary rules.

5. Meetings and Negotiations

The conciliator may conduct:

 Joint meetings with both parties, or

 Separate meetings with each party

Discussions during conciliation remain confidential.

6. Settlement Agreement

When parties reach an agreement, the conciliator prepares and authenticates a written
settlement agreement.

The agreement is signed by the parties and becomes final and binding. Under the Act, the
settlement agreement has the same status and effect as an arbitral award on agreed terms.

7. Termination of Conciliation Proceedings

Conciliation proceedings terminate:

1. When a settlement agreement is signed, or

2. When the conciliator declares that further efforts are no longer justified, or

3. When parties jointly declare termination, or

4. When a party sends written declaration withdrawing from conciliation.

Features of Conciliation Procedure

  Voluntary and flexible

 Informal process

 Confidential in nature

 Saves time and cost

 Encourages amicable settlement

Role,qualities,duties of Conciliator

1. Facilitator of Communication

The conciliator helps parties communicate effectively and reduce misunderstanding between
them.

2. Promotes Settlement

He encourages negotiation and compromise to achieve amicable settlement of disputes.

3. Suggests Solutions

The conciliator may propose possible terms of settlement and help parties identify practical
solutions.

4. Maintains Neutrality

He acts impartially and fairly without favouring any party.

5. Conducts Proceedings

The conciliator organizes meetings, discussions, and guides the conciliation process smoothly.

6. Prepares Settlement Agreement

If settlement is reached, the conciliator prepares or assists in drafting the settlement

agreement.

Qualities of a Conciliator

1. Impartiality

Must remain neutral and unbiased between parties.

2. Good Communication Skills

Should effectively listen, explain, and encourage discussion.

3. Patience

Must handle disputes calmly and patiently.

4. Integrity and Honesty

Should act fairly and ethically throughout proceedings.

5. Problem-Solving Ability

Must identify issues and help parties find practical solutions.

6. Confidentiality

Should maintain secrecy of all conciliation proceedings.

Duties of a Conciliator

1. Act Independently and Impartially

The conciliator must treat both parties equally and fairly.

2. Maintain Confidentiality

Information disclosed during conciliation should not be revealed to outsiders.

3. Assist Parties in Settlement

He should guide parties towards voluntary and peaceful settlement.

4. Follow Fair Procedure

The conciliator must ensure proper and fair conduct of proceedings.

5. Avoid Conflict of Interest

He must disclose any circumstances affecting his neutrality or independence.

6. Encourage Mutual Understanding

The conciliator should reduce hostility and improve cooperation between parties.

UNIT-5
Meaning of Mediation

Mediation is a voluntary process in which a neutral third person called a mediator assists
disputing parties in resolving their dispute through communication and negotiation. The
mediator does not impose a decision but helps parties reach a mutually acceptable settlement.

The Mediation Act, 2023 was enacted to promote institutional and structured mediation in
India and to make mediation an effective mechanism for dispute resolution.

Scope of Mediation

A. Application of Act

 Section 2 defines the applicability of the Mediation Act, 2023.

 The Act applies to domestic disputes, international mediation, and disputes involving
government authorities.

 It gives mediation a wide scope as an ADR mechanism for peaceful settlement of

disputes.

B. Pre-Litigation Mediation

 Section 5 provides for pre-litigation mediation before filing a suit in court.

 Parties are encouraged to first attempt settlement through mediation.

 It helps reduce litigation, saves time and cost, and promotes amicable settlement.

C. Court-Annexed Mediation

 Section 7 allows courts and tribunals to refer pending disputes to mediation.

 If settlement appears possible, parties may be sent for mediation.

 This helps in speedy disposal of cases and reduces court burden.

D. Disputes Not Fit for Mediation

 Section 6 lists non-mediable disputes.

 Serious criminal offences, matters involving public rights, and certain constitutional or
tax disputes cannot be mediated.

 Such disputes require adjudication by courts.

Features of Mediation
1. Flexibility in Procedure

 Section 15 provides that mediation is informal and flexible.

 Parties are not bound by strict procedural or evidentiary rules of courts.

 This makes mediation simple and convenient.

2. Neutral Facilitation

 Section 16 states that the mediator acts as a neutral third party.

 The mediator facilitates communication and negotiation between parties.

 He cannot impose a decision like a judge or arbitrator.

3. Time-Bound Process

 Section 18 states that mediation must generally be completed within 180 days
(extendable by consent).

 It ensures speedy settlement and reduces delay.

4. Binding Settlement

 Sections 19 and 27 provide that the settlement agreement is legally binding and
enforceable.

 It gives finality and legal certainty to the dispute resolution process.

Essential Characteristics of Mediation

1. Voluntary

 Reflected in Sections 5 and 14 of the Mediation Act, 2023.

 Parties enter mediation by free consent and may withdraw if settlement is not possible.

 Mediation is based on willingness and mutual participation.

2. Collaborative

 Reflected in Section 15 (Conduct of Mediation).

 The process encourages cooperation, communication, and mutual understanding

between parties.

 Focus is on problem-solving rather than adversarial litigation.

3. Controlled / Party Autonomy

 Parties themselves control the process and final outcome of mediation.

 The settlement is reached only through mutual agreement of parties.

 Reflected in Section 19 (Settlement Agreement).

4. Confidential

 Section 22 provides confidentiality of mediation proceedings.

 Section 23 protects admissibility of mediation communications in court proceedings.

 Statements made during mediation cannot generally be disclosed before courts.

5. Informal

 Section 15 allows a flexible and informal procedure.

 Parties are not bound by strict procedural and evidentiary rules followed in courts.

 This makes mediation simple and convenient.

6. Impartial and Neutral

 Section 10 requires disclosure of any conflict of interest by the mediator.

 The mediator must act fairly, independently, and impartially between parties.

7. Self-Responsible

 Parties themselves decide the terms of settlement and are responsible for the outcome.

 The mediator only facilitates discussion and cannot impose a decision.

Difference Between Mediation and Negotiation

1. Meaning

Mediation is a dispute resolution process where a neutral third party helps parties settle
disputes.
Negotiation is a direct discussion between parties to reach an agreement without third-party
involvement.

2. Third Party Involvement

Mediation involves a neutral mediator who facilitates settlement.
Negotiation does not involve any third person.

3. Role of Mediator/Parties

In mediation, the mediator guides communication but cannot impose a decision.

In negotiation, parties themselves conduct discussions and bargaining.

4. Nature of Process

Mediation is comparatively structured and organized.

Negotiation is informal and flexible.

5. Legal Framework

Mediation is governed by the Mediation Act, 2023 and Section 89 CPC.

Negotiation has no separate comprehensive statute and is mainly based on mutual agreement.

6. Confidentiality

Mediation proceedings are confidential under Sections 22 and 23 of the Mediation Act, 2023.
Negotiation generally does not have statutory confidentiality protection.

7. Objective

Mediation focuses on amicable settlement and preserving relationships.

Negotiation mainly focuses on bargaining and protecting interests.

8. Suitability

Mediation is useful where communication has broken down between parties.

Negotiation is suitable where parties can communicate directly and effectively.

9. Enforceability

A mediated settlement agreement becomes legally binding under Sections 19 and 27 of the
Mediation Act, 2023.
A negotiated agreement is enforceable only if it forms a valid contract.

10. Cost and Time

Mediation is faster and cheaper than litigation but may involve mediator’s fees.
Negotiation is usually the quickest and least expensive method of dispute resolution.