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

Rohan Steels Ltd and Anand Logistics Pvt Ltd agree in writing before mediation begins that Rohan Steels will bear 70% of all mediation costs and Anand Logistics 30%. Midway, Anand Logistics argues that the Act requires equal sharing. What is the correct position?

The 70:30 agreement prevails. Section 25(2) of the Mediation Act, 2023 makes equal sharing only a default rule that applies unless the parties agree otherwise. Since the parties agreed a different split for all costs, that agreement governs, and no mediator approval is needed.

  1. AEqual sharing is mandatory and the agreement is void to that extent
  2. BThe 70:30 agreement prevails because equal sharing applies only unless the parties agree otherwiseCorrect
  3. CThe agreement is valid only if approved by the mediator
  4. DThe agreement is valid only for the mediator's fees, not for the service provider's charges

Explanation

Section 25(2) opens with 'Unless otherwise agreed by the parties', so equal sharing is only a default. The parties' agreed 70:30 split covers all costs, including mediator's fees and service provider's charges. No approval by the mediator is required.

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