Mediation Act, 2023: A Step Towards a Robust Mediation Ecosystem?

Author: Gorantla Bhargav Gandhi, 5th-year B.B.A. LL.B. (Hons.) student at CHRIST (Deemed to be a university) Bangalore

INTRODUCTION

In recent years, the Indian legal system has been under enormous strain – crores of cases pending across all levels of judiciary, litigants waiting for years, and a system struggling to meet the needs of a growing, complex economy. In this context, the Mediation Act, 2023 comes as a timely intervention, offering a structured legal framework to promote mediation as a serious, institutionalized, and reliable alternative to court battles.

But does this Act actually bring us closer to a robust mediation ecosystem? Let’s analyze that question by examining three core aspects:

The structural changes introduced by the Act
The enforceability of mediated settlements
The challenges and gaps that still remain

BRINGING STRUCTURE TO A PREVIOUSLY SCATTERED LANDSCAPE

Before this Act, mediation in India was like an optional – an alternative used sparingly, encouraged softly, and mostly dependent on goodwill. Sure, Section 89 of the Civil Procedure Code suggested courts refer disputes to mediation. Various High Courts also had mediation centers. But there was no comprehensive law that laid down the comprehensive framework of mediation law in India.

The Mediation Act, 2023 changes that.

It clearly defines what mediation is, who can mediate, how mediation should proceed, and what happens once a settlement is reached. By making this process transparent and codified, the Act does two important things:

It builds public confidence. People are more likely to engage in mediation when the law recognizes it fully and gives it legitimacy.
It brings institutional support. The Act allows for the setting up of Mediation Service Providers—recognized bodies that train mediators, maintain panels, and provide administrative support.

This is a big substantial shift. Earlier, mediation was mostly ad hoc – dependent on individuals or informal networks. Now we have a professionalized mediation environment, much like what we see in arbitration.

Another major shift is the inclusion of online mediation. Post-COVID, virtual interactions have become normalized, and this Act sensibly recognizes that. By allowing mediation to happen online, the Act expands access particularly helpful for parties in different cities or even countries.

But it’s not just about access. By formalizing procedures and bringing in timelines (120 days with a possible 60-day extension), the Act prevents mediation from becoming yet another drawn-out process. It envisions time-bound resolution something India’s court system badly needs.

MAKING SETTLEMENTS COUNT: ENFORCEABILITY OF MEDIATED AGREEMENTS

One of the bottlenecks in the mediation process was the hesitation of the general public – what if the other party does not comply with its obligations?

Before the Mediation Act, the answer was not so clear. You could go to court again, ask for execution but there was not a straightforward process. That uncertainty made people prefer court judgments or arbitral awards. They were enforceable decrees.

Now, under the Mediation Act, this problem is addressed head-on.

The law says that once a mediation ends successfully, the Mediated Settlement Agreement (MSA) can be submitted to the court and treated as if it were a court decree. That means it is fully enforceable. Parties do not need to initiate fresh legal proceedings to enforce it.

This one change is a game-changer. Why?

Because now people can trust the process. Businesses, especially, are far more likely to agree to mediated outcomes if they know it holds legal weight.

Under the Act, parties can challenge an MSA only under limited grounds – fraud, impersonation, or disputes not legally fit for mediation (like criminal cases or matters involving minors or persons of unsound mind). This limitation means that once parties agree and sign, they are estopped from challenging MSA’s legal enforceability. It reduces frivolous litigation and makes mediation a meaningful endpoint.

However, this enforceability comes with one caveat. Only those mediators who are either accredited or appointed under recognized Mediation Service Providers can help create such enforceable MSAs. This helps maintain quality but also creates a kind of gatekeeping.

CHALLENGES

No law is perfect, and the Mediation Act, 2023 is no exception. While it lays down an impressive framework, there are three areas where challenges remain and they must be addressed if India truly wants a robust mediation culture.

A. Is “Voluntary” Really Voluntary?

Although the final version of the Act dropped the earlier clause mandating pre-litigation mediation, there is still a strong push toward it. Section 5 encourages parties to try mediation before approaching courts. This sounds ideal on paper, but in reality, some disputes especially those involving urgent relief may not be suitable for mediation.

For instance, a company facing breach of contract may need an interim injunction. Forcing them to first undergo a mediation even if non-binding, could delay necessary action. Courts will have to interpret and balance this carefully.

B. Power imbalances can distort mediation

Unlike courts, where procedures are rigid and judges are in control, mediation relies on consent and discussion. This is good for speed and flexibility but opens the door to coercion especially in family matters, landlord-tenant disputes, or small business cases.

Imagine a landlord pressuring an elderly tenant into a “consensual” settlement, or a powerful corporation pushing a vendor to accept unfair terms. The law tries to prevent this by ensuring all mediators are qualified and by giving limited grounds to challenge MSAs. But unless mediators are well-trained in handling power dynamics, this problem will persist.

This is where the Mediation Council of India (MCI) must play a crucial role. It must not just set standards but also conduct regular audits, ensure accountability, and provide grievance redress mechanisms. The effectiveness of the Council could make or break this ecosystem.

C. The Rural and Digital Gap

Online mediation is a smart move but India still has a digital divide. In rural or tribal areas, people may not have internet access, smartphones, or digital literacy. If the institutional mediation model focuses only on cities and elite clients, it will miss the population that could benefit most from non-adversarial dispute resolution.

Community mediation also introduced under the Act is a step in the right direction, but the structure (three mediators in a panel) may be too complex for small disputes in villages. Simpler, locally trained mediators with basic dispute-handling skills might be more effective. Legal Services Authorities and NGOs must be brought into this loop to train grassroots mediators and increase reach.

AFCONS INFRASTRUCTURE LTD. V. CHERIAN VARKEY CONSTRUCTION CO. (P) LTD.

Key Holding:

The Supreme Court laid down clear guidelines on when courts should refer matters to mediation under Section 89 of the Civil Procedure Code. It emphasized that non-adjudicatory forms of dispute resolution like mediation and conciliation should be prioritized wherever possible.

Relevance:
This case highlighted the lack of a uniform legal framework for mediation and became a judicial push for a statutory law fulfilled by the Mediation Act, 2023.

ENFORCEABILITY OF MEDIATED SETTLEMENT AGREEMENTS (MSAS)

One of the most critical features of the Mediation Act, 2023, is that it grants legal sanctity to mediated settlements by making them enforceable as a court decree. This transforms mediation from an informal, good-faith negotiation tool into a legally reliable dispute resolution mechanism.

Under Section 20 of the Act, once parties reach a settlement through a qualified mediator, the resulting Mediated Settlement Agreement (MSA) can be submitted to the relevant court or authority. It is then treated as equivalent to a judicial order, meaning, if one party defaults, the other can directly enforce it, without starting a new case.

This single change builds trust and certainty in mediation, which was previously lacking. It assures parties, especially businesses and institutions that a mediated outcome is not just symbolic, but binding, final, and actionable.

CONCLUSION

The Mediation Act, 2023 marks a defining moment in India’s legal reform journey. For the first time, mediation is not just a good practice or judicial suggestion it is a codified, enforceable, and institutionally supported method of resolving disputes. With clear procedures, the backing of law, and a system for enforcement through court-decree status, the Act aims to shift the mindset of litigants from confrontation to collaboration.

However, a law no matter how well-drafted is only as good as its implementation. The real success of this Act will depend on the quality of mediators trained, the independence and effectiveness of the Mediation Council of India, and the ability of the system to reach not just boardrooms in metros but grassroots in rural areas. It must remain accessible, affordable, and sensitive to power dynamics.

If these challenges are met with sincerity and continuous adaptation, the Mediation Act, 2023 could do more than reduce case backlogs it could transform India’s dispute resolution culture, making it more humane, efficient, and future-ready. In a country where justice delayed has often meant justice denied, this legislation offers a real hope for timely, fair, and peaceful conflict resolution. And that alone is worth calling for a step if not a leap towards a truly robust mediation ecosystem.