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CS Professional · Arbitration, Mediation and Conciliation · Various Modes and Scope of Mediation including Role of Mediation in other ADR Domains

Meridian Textiles Pvt Ltd and Kavya Exports Ltd referred a commercial dispute to mediation under the Mediation Act, 2023. Their mediation agreement says nothing about who pays the mediator's fees or the mediation service provider's charges. How will these costs be borne?

The costs are shared equally. Under Section 25(2) of the Mediation Act, 2023, unless the parties agree otherwise, all mediation costs, including the mediator's fees and the service provider's charges, are borne equally by the parties. Silence in the agreement means the equal-sharing default applies.

  1. AEntirely by the party who initiated the mediation
  2. BEqually by both partiesCorrect
  3. CIn proportion to the amount claimed by each party
  4. DBy the mediator from his own resources, to be recovered from the losing party

Explanation

Section 25(2) provides that, unless the parties have agreed otherwise, all costs of mediation, including the mediator's fees and the mediation service provider's charges, are borne equally by the parties. Since the agreement is silent, the default rule of equal sharing applies. Proportion to claim or initiator-pays is not the statutory default.

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