Law relating to Arbitration, Mediation and Conciliation: formula sheet

Key formulas

Meaning of ADR

ADR = resolving disputes outside court trial (negotiation, mediation, conciliation, arbitration)

In mediation and conciliation the neutral helps; in arbitration the tribunal decides.

Applicability (section 2)

Mediation conducted in India AND any one of: (i) parties reside/incorporated/business in India; (ii) agreement chooses the Act; (iii) international mediation; (iv) Government party + commercial dispute; (v) notified other dispute with Government party

Mediation must be conducted in India. Then any one limb is enough.

Overriding effect (section 55(1))

Mediation Act prevails over inconsistent law on mediation/conciliation, subject to the Second Schedule

It covers any other law in force and any instrument having force of law.

Amending the Second Schedule (section 55(2))

Central Government may amend the Second Schedule by notification if satisfied it is necessary or expedient

The Second Schedule is amended by notification, not by a new Act.

Government schemes (section 48)

Central/State Government or entity may frame schemes or guidelines where it is a party; mediation may follow them

Subject to the provisions of the Mediation Act.

Settlement during arbitration (Arbitration Act, section 30)

Tribunal may encourage settlement; agreed settlement can be recorded as an award on agreed terms

Such an award has the same status and effect as any other award on the substance of the dispute.

Voluntary pre-litigation mediation

Section 5(1): parties may, voluntarily and with mutual consent, mediate before filing a civil or commercial suit

Applies whether or not a mediation agreement exists. Commercial disputes of Specified Value follow Section 12A of the Commercial Courts Act, 2015.

Who conducts pre-litigation mediation

Section 5(3): mediator registered with the Council, or empanelled by a court-annexed centre, a Legal Services Authority, or a recognised mediation service provider

Subject to the parties agreeing otherwise.

Commencement of mediation

Section 14(a): existing mediation agreement - date a party receives notice from the initiating party. Section 14(b)(i): mediator of choice - date the mediator consents. Section 14(b)(ii): application to a service provider - date of appointment of the mediator

Choose the limb by how the mediation began.

Appointment of mediator

Section 8: parties choose the name and procedure; failing agreement, the initiating party applies to a mediation service provider, which appoints within 7 days

A person appointed on the parties' choice must communicate willingness within 7 days of receiving the communication (Section 8(5)).

Time limit

Section 18: complete within 120 days from the date fixed for first appearance before the mediator; extendable by agreement of parties by not more than 60 days

Maximum is therefore 180 days counted from the first appearance date.

Termination

Section 24: signing and authentication of settlement agreement; mediator's written declaration that further efforts are not justified; a party's written opt-out; expiry of the Section 18 time limit

Four modes.

Appointment of mediator (Section 8)

Parties agree on the name and procedure; failing agreement, apply to a mediation service provider; provider appoints within 7 days

The provider appoints either the mediator agreed by the parties or a mediator from its panel, with his consent. The agreed person must communicate willingness within 7 days of receiving the communication of appointment.

Nationality of mediator (Section 8(1))

Any nationality, unless parties agree otherwise; foreign national must have specified qualification, experience and accreditation

Do not say that only Indians can be mediators.

Mediation service provider (Section 40)

Council-recognised body, Legal Services Authority, court-annexed mediation centre, or any body notified by the Central Government

The last three are deemed recognised by the Council.

Functions of a provider (Section 41)

Accredit mediators and maintain a panel; provide mediators; provide facilities and secretarial assistance; promote ethical conduct; facilitate registration of settlement agreements under Section 20; other specified functions

Six functions, (a) to (f).

Establishment of Council (Section 31)

Mediation Council of India; body corporate; perpetual succession; common seal; head office at Delhi or as notified

Established by the Central Government by notification. It may set up offices in India and abroad in consultation with the Central Government.

Composition of Council (Section 32)

Chairperson + 2 appointed Members + Secretary, Legal Affairs (or representative not below Joint Secretary) + Secretary, Expenditure (same) + CEO as Member-Secretary + 1 part-time industry representative

The two Secretaries and the CEO are ex officio. Term of other members is four years with eligibility for re-appointment. Age limit is 70 years for the Chairperson and 67 years for other Members.

Validity of Council acts (Section 33)

No act is invalid merely because of a vacancy, a defect in constitution or appointment, or a procedural irregularity not affecting the merits

Learn the three grounds.

Other Council provisions

Experts and committees (Section 36); CEO and Secretariat (Section 37); Mediation Fund (Section 45); regulations (Section 52)

The CEO is responsible for day-to-day administration and implementing the Council's decisions.

Finality and enforcement (section 27)

Signed by parties + authenticated by mediator = final, binding, enforced under CPC as if a judgment or decree

Enforcement is subject to section 28. The agreement can also be used as defence or set off.

Registration (section 20)

Optional; within 180 days of receiving the authenticated copy; later with a fee

Done with a Legal Services Authority or a body notified by the Central Government. A unique registration number is issued. For record only.

Grounds of challenge (section 28(2))

Fraud | Corruption | Impersonation | Dispute not fit for mediation under section 6

These four grounds only. Application goes to the court or tribunal of competent jurisdiction.

Limitation for challenge (section 28(3))

90 days from receipt of the copy under section 19(3); extendable by a further 90 days for sufficient cause

The extension is allowed only if the applicant shows sufficient cause for the delay.

Confidentiality (section 22)

Mediation communications are confidential and cannot be relied on as evidence; no audio or video recording

Exception: the settlement agreement where disclosure is needed for registration, enforcement and challenge. The mediator may share general information for research, reporting or training if no party or dispute is identifiable.

Territorial position (section 13)

Mediation within the territorial jurisdiction of the competent court or tribunal; outside it or online by mutual consent

Even then, for enforcement, challenge and registration, it is deemed undertaken within that jurisdiction.

Community mediation panel

Community mediation = panel of 3 community mediators (section 44(1))

The panel devises its own suitable procedure. It refers to the panel under section 43(3).

Community mediation settlement

Settlement = written + signed by parties + authenticated by community mediators; not enforceable as a civil court judgment or decree (section 44(3) and (4))

Purpose is peace, harmony and tranquillity among residents or families of a locality. Registration follows section 20 mutatis mutandis.

No settlement in community mediation

Non-settlement report to the Authority or the District Magistrate or the Sub-Divisional Magistrate, and to the parties (section 44(3))

Written as 'may be submitted' in the text.

Online mediation

Written consent of parties + any stage + integrity and confidentiality maintained (section 30)

Includes pre-litigation mediation. Tools include encrypted email, secure chat rooms, video or audio conferencing.

Amendment of the 1996 Act

Mediation Act, 2023, section 61: Arbitration and Conciliation Act, 1996 amended as specified in the Sixth Schedule

Do not mix with section 61 of the 1996 Act, which is about application and scope of conciliation.

Overriding effect

Mediation Act prevails for mediation or conciliation, subject to the Second Schedule enactments (section 55(1))

The Central Government may amend the Second Schedule by notification (section 55(2)).

Quick revision

• Mediation covers any process where a third person helps parties settle without power to impose a settlement.
• The 2023 Act treats conciliation as mediation if the process fits the definition.
• A mediator can be appointed by the parties or by a mediation service provider.
• Court-annexed mediation includes pre-litigation mediation at centres established by a court or tribunal.
• Institutional mediation is conducted under the aegis of a mediation service provider.
• International mediation relates to a commercial dispute where at least one party is foreign in the manner the Act lists.
• Section 8 of the 1996 Act: application must be made no later than submitting the first statement on the substance of the dispute.
• Under section 8, the judicial authority must refer parties unless prima facie no valid arbitration agreement exists.
• Section 8 application needs the original agreement or a certified copy, with a proviso if the other party holds it.
• Arbitration may begin or continue even while a section 8 application is pending.
• The Mediation Council of India is established under section 31 of the 2023 Act.
• Mediation communication includes anything said, done, any document or information provided in the course of mediation.

Common mistakes

• Saying ADR and arbitration mean the same thing. Fix: Treat ADR as the umbrella. Arbitration is one method, where the tribunal decides. Mediation and conciliation are facilitative.
• Forgetting that mediation must be conducted in India for section 2 to apply. Fix: Begin every applicability answer with the condition that mediation is conducted in India, then apply the limbs.
• Saying pre-litigation mediation is compulsory for all civil disputes. Fix: Section 5(1) says parties may take it voluntarily and with mutual consent. Mention Section 12A only for commercial disputes of Specified Value.
• Counting the 120 days from the date of the agreement or application. Fix: Section 18 counts from the date fixed for the first appearance before the mediator.
• Saying only an Indian citizen can be a mediator. Fix: Section 8(1) allows a person of any nationality unless parties agree otherwise. A foreign national must meet the specified qualification, experience and accreditation.
• Stating the wrong time limit for appointment. Fix: Under Section 8, the provider appoints within seven days of the application, and the agreed person communicates willingness within seven days of receiving the communication.
• Saying registration is compulsory for enforcement. Fix: Section 20 says registration is at the option of the parties and is for record. Enforcement under section 27 does not depend on it.
• Listing grounds of challenge such as coercion or mistake. Fix: Section 28(2) allows only fraud, corruption, impersonation and disputes not fit for mediation under section 6.
• Confusing section 61 of the Mediation Act, 2023 with section 61 of the Arbitration and Conciliation Act, 1996. Fix: Remember that the Mediation Act section 61 amends the 1996 Act through the Sixth Schedule. The 1996 Act section 61 deals with application and scope of conciliation.
• Saying a community mediation settlement can be enforced like a decree. Fix: Section 44(4) says a settlement under community mediation is for maintaining peace and harmony and is not enforceable as a judgment or decree of a civil court.

Exam tips

• Write the section number with each point. Section 2 for applicability, section 55 for overriding effect, section 48 for Government schemes.
• For case-based questions, use the structure: provision, facts, conclusion.
• Learn the five limbs of section 2 in order so you can name the limb that fits the facts.
• Never forget the words 'subject to the Second Schedule' when writing on section 55.
• Keep a short comparison ready: arbitration decides, mediation and conciliation facilitate.
• Learn the section numbers with their one-line headings: 5, 8, 14, 15, 18, 24, 30. Examiners reward a correct section citation.
• In date-based questions, write the starting date, the counting rule and the end date as separate lines.
• In case-study questions, first check whether the dispute is a commercial dispute of Specified Value or a motor accident claim, since these have special rules.