Jurisprudence, Interpretation and General Laws · Law relating to Arbitration, Mediation and Conciliation

Introduction to ADR and the Mediation Act, 2023

Updated 11 October 2026 · Fact-checked

Alternative dispute resolution (ADR) means settling disputes outside regular court trial, through arbitration, conciliation, mediation or negotiation. The Mediation Act, 2023 gives mediation a statutory framework. Section 2 sets when it applies, and section 55 gives it overriding effect over other laws on mediation or conciliation, subject to the Second Schedule.

Understand Introduction to ADR and Mediation Act, 2023

Alternative dispute resolution (ADR) covers ways to settle a dispute without a full court trial. The common methods are negotiation, mediation, conciliation and arbitration. They are usually faster, cheaper and less hostile than litigation. Parties keep more control over the process and the outcome.

The methods differ in who decides. In arbitration, the arbitral tribunal decides and gives an award. In mediation and conciliation, a neutral third person helps the parties reach their own settlement. The neutral does not impose a decision. Under the Arbitration and Conciliation Act, 1996, conciliation is in Part III. The Arbitration and Conciliation Act, 1996 also lets a tribunal encourage settlement during arbitration (section 30), and a settlement can be recorded as an arbitral award on agreed terms.

Before 2023, India had no single law for mediation. Provisions were scattered across statutes and court practice. The Mediation Act, 2023 brings the process under one law. Later topics cover pre-litigation mediation, mediators, the Council and enforceability of settlements. This topic is the foundation: what ADR is, where the Act applies, and how it relates to other laws.

The application of the Act is in section 2. It applies where mediation is conducted in India and any one of these is true:

all or both parties habitually reside in, are incorporated in, or have their place of business in India;
the mediation agreement says disputes will be resolved under this Act;
the mediation is an international mediation;
one party is the Central or a State Government, or its agencies, public bodies, corporations or local bodies (including entities it controls or owns), and the matter is a commercial dispute;
any other kind of dispute, if deemed appropriate and notified by the Central or a State Government, where such Government or its agency or body is a party.

The overriding effect is in section 55(1). Subject to the enactments in the Second Schedule, the Act overrides anything inconsistent in any other law in force, and any instrument having force of law, for the conduct of mediation or conciliation. Under section 55(2), the Central Government may amend the Second Schedule by notification if satisfied that it is necessary or expedient. Section 48 also lets the Central or State Government, or their entities, frame schemes or guidelines for mediation or conciliation where they are a party. Mediation may then follow those schemes, subject to the Act.

Key rules to remember

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.

How to solve Introduction to ADR and Mediation Act, 2023 questions

Use this method for any question on ADR, applicability or overriding effect of the Mediation Act, 2023.

1Identify what is asked: meaning of ADR, applicability, overriding effect, or a case-based problem.
2State the relevant provision first, for example section 2 for applicability or section 55 for overriding effect.
3List the facts that matter: where mediation is conducted, who the parties are, nature of dispute, any agreement choosing the Act.
4Match the facts with each limb of the provision. Note that mediation must be conducted in India and that one limb is enough.
5Check for the Second Schedule exception if the question involves another law on mediation or conciliation.
6Write a clear conclusion in one line, naming the section.

Quickest way: Section 2 limb scan

When to use it: Use for short case-based questions asking whether the Mediation Act, 2023 applies.

Ask first: is the mediation conducted in India? If no, the Act does not apply under section 2.
Scan the five limbs: residence/business, agreement, international, Government commercial, notified.
Stop at the first limb that fits and quote it.
If another law conflicts, apply section 55 unless that law is in the Second Schedule.
Write the conclusion with the section number.

Common mistakes in Introduction to ADR and Mediation Act, 2023

Saying ADR and arbitration mean the same thing.
Arbitration is the most familiar ADR method.
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.
Students focus on the five limbs and skip the opening words.
Fix: Begin every applicability answer with the condition that mediation is conducted in India, then apply the limbs.
Thinking all limbs of section 2 must be satisfied together.
The limbs are listed one after another.
Fix: Remember they are alternatives. Any one limb, with mediation in India, is enough.
Stating that section 55 overrides every law without exception.
Students remember only the words 'overriding effect'.
Fix: Add that it is subject to the enactments in the Second Schedule, which the Central Government can amend by notification.
Mixing up section 55 of the Mediation Act with section 55 of the Arbitration and Conciliation Act, 1996.
Both Acts have a section 55 on different subjects.
Fix: Always name the Act. Mediation Act section 55 is overriding effect. Arbitration Act section 55 is about foreign awards being binding.
Treating Government party cases as always covered by the Act.
Limb (iv) is read loosely.
Fix: Limb (iv) needs a Government or its body as party and a commercial dispute. Other disputes need a notification under limb (v).

Worked examples

Example 1

Aarav Textiles Pvt. Ltd., incorporated in Surat, and Beta Traders, a Mumbai partnership, agree to mediate a supply dispute at Pune. Does the Mediation Act, 2023 apply? Give reasons.

Show the solution

Provision: section 2 applies the Act where mediation is conducted in India and any one listed limb is met.
Facts: the mediation is conducted at Pune, so it is in India.
Limb (i): both parties are incorporated in or have their place of business in India.
One limb is enough, so no further limb needs to be checked.

Answer: Yes. The mediation is conducted in India and both parties are incorporated or have their place of business in India, so section 2(i) is satisfied and the Act applies.

Example 2

A State law provides a mediation procedure for certain disputes that conflicts with the Mediation Act, 2023. Which prevails? Explain with reference to section 55.

Show the solution

Provision: section 55(1) gives the Act overriding effect for conduct of mediation or conciliation, notwithstanding anything inconsistent in any other law in force or any instrument having force of law.
This is subject to the enactments mentioned in the Second Schedule.
Check: if the State law is an enactment in the Second Schedule, it is saved. Otherwise the Mediation Act prevails.
Under section 55(2), the Central Government can amend the Second Schedule by notification if satisfied it is necessary or expedient.

Answer: The Mediation Act, 2023 prevails over the inconsistent provision for the conduct of mediation or conciliation, unless the State law is an enactment mentioned in the Second Schedule. In that case the Schedule saves it.

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.

Practice questions from Law relating to Arbitration, Mediation and Conciliation

Introduction to ADR and Mediation Act, 2023: frequently asked questions

What is the overriding effect under section 55 of the Mediation Act, 2023?

Section 55(1) says the Act prevails over any inconsistent provision in any other law or instrument having force of law, for the conduct of mediation or conciliation. This is subject to the enactments in the Second Schedule. The Central Government can amend that Schedule by notification.

When does the Mediation Act, 2023 apply?

Under section 2, it applies where mediation is conducted in India and any one of the listed conditions is met. These include parties residing or doing business in India, an agreement choosing the Act, an international mediation, or a Government party in a commercial dispute. A notified dispute with a Government party also qualifies.

What is the difference between mediation and arbitration?

In mediation, a neutral person helps the parties reach their own settlement and does not decide the dispute. In arbitration, the arbitral tribunal hears the matter and gives a binding award. Arbitration is governed by the Arbitration and Conciliation Act, 1996.

Can a settlement be reached during arbitration?

Yes. Section 30 of the Arbitration and Conciliation Act, 1996 lets the tribunal encourage settlement, using mediation or conciliation with the parties' agreement. If the parties settle, the tribunal terminates the proceedings and can record the settlement as an award on agreed terms if requested and not objected to.