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

Sundaram Textiles Ltd and Kaveri Dyes Pvt Ltd agree to mediate a supply dispute. Their mediation agreement says nothing about who pays the mediator's fees or the mediation service provider's charges. Under Section 25 of the Mediation Act, 2023, how will these costs be borne?

The costs are shared equally. Section 25(2) makes equal sharing the default, covering mediator fees and service provider charges, unless the parties agree otherwise. Since the agreement is silent, neither the initiating party nor the party with the larger claim bears more.

  1. AEqually by the two partiesCorrect
  2. BBy the party who initiated the mediation
  3. CBy the party with the higher claim value
  4. DBy the mediator out of a fixed government grant

Explanation

Section 25(2) provides that, unless the parties have agreed otherwise, all costs of mediation, including the mediator's fees and the service provider's charges, are borne equally by the parties. Because the agreement is silent, the default applies. The initiator-pays option has no basis in the section.

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