Mediation Act 2023: India's New ADR Framework — Complete Guide (2026)

India's courts have 5 crore+ pending cases. The Mediation Act 2023 — India's first standalone mediation legislation — aims to divert millions of disputes away from courts through structured, enforceable mediation. For practitioners, this creates a new practice area and a mandatory pre-litigation step in many commercial and civil disputes. NyayaVeda AI provides instant citation-verified research on the Mediation Act 2023 framework, settlement enforceability, and ADR procedure.

The Mediation Act, 2023 is India's first standalone legislation governing structured dispute resolution through a neutral third-party mediator. Settlements reached under the Act have the force of a court decree under Section 27, are directly executable without a separate suit, and can only be challenged on grounds of fraud or corruption under Section 28. The Act mandates a 120-day mediation timeline extendable to 180 days, with full confidentiality for all communications under Section 22.

Courts SHALL refer parties to mediation before trial if:

• The dispute is civil or commercial in nature
• Both parties are present and the court considers mediation appropriate
• Exception: Not mandatory for urgent interim relief, criminal matters, or disputes involving fraud

If the contract contains a mediation clause — parties MUST attempt mediation before filing suit. Non-compliance can result in the court staying proceedings until mediation is attempted.

This is the Act's most powerful provision. A settlement reached in mediation:

• Is binding on both parties
• Has the force of a court decree (Section 27)
• Is directly executable — no need to file a suit to enforce
• Can be challenged ONLY on grounds of fraud, corruption, or impersonation (Section 28)

The Act explicitly recognises online mediation:

• Video conferencing is a valid medium
• Electronic signatures on mediation agreement are valid
• Parties can participate from different locations / countries
• Institutional MSPs can conduct entirely online mediations

The Mediation Act creates a new revenue stream:

1. 2
   Represent clients in mediation — advocacy skills translate directly
2. 4
   Become a certified mediator — training + registration with Mediation Council
3. 6
   Draft mediation clauses in commercial contracts — standard practice going forward
4. 8
   Institutional mediation — join or establish a Mediation Service Provider

Only if a settlement is reached. The mediation process itself is voluntary — either party can walk away. But once a mediation agreement is signed, it has the force of a court decree and is directly enforceable (Section 27).

Only on very narrow grounds — fraud, corruption, or impersonation (Section 28). The normal appeal process does not apply. This makes mediation settlements far more final than court judgments.

The court can refer parties to mediation before trial (Section 5). If the contract has a mediation clause, parties must attempt mediation first. However, for urgent matters requiring interim relief, mediation is not a mandatory prerequisite.

Maximum 120 days, extendable to 180 days with consent. Most commercial mediations conclude in 2-4 sessions over 30-60 days. This is dramatically faster than litigation (3-10 years) or arbitration (12-18 months).

Costs are typically shared equally — unless parties agree otherwise. Institutional mediation fees range from Rs 10,000 to Rs 5 lakhs depending on the dispute value and institution. Far cheaper than litigation. NyayaVeda AI provides instant citation-verified research on the Mediation Act 2023 and ADR frameworks.

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Disclaimer: This article is for informational and educational purposes only. It does not constitute legal advice. For specific legal matters, consult a qualified advocate registered with the Bar Council of India.

Last Updated: August 2026 | Author: NyayaVeda Legal Research Team