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

Under a Section 12A pre-institution mediation, Sundaram Steels and Orbit Fabricators reached an agreement on payment terms. It was written down and signed by both parties and the mediator. What is its legal status?

The signed settlement has the same status and effect as an arbitral award on agreed terms under section 30(4) of the Arbitration and Conciliation Act, 1996. Section 12A(5) says so, provided it was reduced to writing and signed by the parties and the mediator under Section 12A(4).

  1. AIt has the same status and effect as an arbitral award on agreed terms under sub-section (4) of section 30 of the Arbitration and Conciliation Act, 1996Correct
  2. BIt is an ordinary contract enforceable only by filing a fresh suit
  3. CIt has effect only after confirmation by the Central Government
  4. DIt has the status of a conciliation agreement requiring a court decree

Explanation

Section 12A(4) requires the settlement to be in writing and signed by the parties and the mediator. Section 12A(5) then gives it the same status and effect as an arbitral award on agreed terms under section 30(4) of the Arbitration and Conciliation Act, 1996. It is therefore not a mere contract needing a fresh suit.

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