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

Sunrise Pharma Ltd and Deccan Distributors Pvt Ltd mediate a dispute. The parties' agreement is silent on costs. Mediator fees are Rs 60,000 and the mediation service provider's charges are Rs 20,000. Sunrise Pharma wins a favourable settlement and says Deccan should pay all Rs 80,000 because Sunrise's claim was substantially accepted. Which is correct?

Each party pays Rs 40,000. Section 25(2) of the Mediation Act, 2023 makes all costs, including the mediator's fees and provider's charges, equally borne unless parties agreed otherwise. The total is Rs 80,000, and the favourable outcome for one side does not change the equal split.

  1. ADeccan pays Rs 80,000 because the settlement favoured Sunrise
  2. BEach pays Rs 40,000, as the outcome does not alter the default of equal sharingCorrect
  3. CSunrise pays Rs 60,000 and Deccan Rs 20,000, matching the mediator and provider split
  4. DEach pays Rs 30,000 for the mediator's fees and the provider's charges are borne by the mediator

Explanation

Total costs are 60,000 + 20,000 = Rs 80,000. Section 25(2) makes all costs, including mediator fees and provider charges, equally borne unless otherwise agreed. Nothing in it ties allocation to the outcome, so each pays 80,000 / 2 = Rs 40,000.

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