Conciliation and Mediation in India: A Practical Guide

Conciliation and mediation in India are two voluntary, confidential ways to settle a dispute without a full court trial, with a neutral third party helping the sides reach their own agreement. The key practical point most people want first: a properly signed settlement reached through either route is designed to be enforced like a court decree. For conciliation that is Section 73 read with Section 74 of the Arbitration and Conciliation Act, 1996. For mediation that is Section 27 of the Mediation Act, 2023, subject to one commencement caveat we deal with below. This guide explains what each process is, how it runs step by step, where they differ, what it costs, and what makes the final document binding.

Part of the arbitration and dispute resolution practice at S Jain & Attorneys, Bangalore.

If you are weighing these options for a commercial or family dispute, our alternate dispute resolution practice page sets out how the firm approaches ADR; this guide is the background reading.

What conciliation and mediation mean in India

Both are forms of Alternative Dispute Resolution (ADR), methods that sit alongside litigation and arbitration. In each, the parties keep control of the outcome. The neutral does not impose a decision the way a judge or an arbitrator does. That single feature drives everything else: the process is faster, cheaper, private, and it can produce commercially sensible outcomes a court could never order, such as a revised supply schedule, an apology, a phased payment, or a fresh contract.

• Conciliation is governed by Part III (Sections 61 to 81) of the Arbitration and Conciliation Act, 1996. A conciliator actively assists the parties, may make proposals for settlement at any stage of the proceedings, and helps draft the terms.
• Mediation is governed by the Mediation Act, 2023 (Act No. 32 of 2023, dated 14 September 2023), India's first dedicated statute on the subject. A mediator facilitates discussion but, as a rule, does not impose or dictate a solution. The parties craft their own.

In everyday Indian practice the two labels are used loosely and overlap heavily. Section 55 of the Mediation Act, 2023 gives that Act overriding effect on mediation or conciliation contained in other laws, which tells you Parliament intended the newer statute to become the general framework. Conciliation under Part III of the 1996 Act nonetheless continues to exist as a distinct, named mechanism, and it is the mechanism that is unambiguously in force today.

Two statutes govern the two routes, and only one of them is unambiguously in force today.

Conciliation under Part III of the Arbitration and Conciliation Act, 1996

Conciliation is the older, fully operational, statute-backed route. Its architecture is compact and worth knowing section by section, because most disputes about a conciliation are really disputes about whether one of these steps was followed.

• How it starts (Section 62): one party sends a written invitation to conciliate, briefly identifying the subject of the dispute. Proceedings commence only when the other side accepts in writing. If the other party rejects, there is no conciliation. If no reply arrives within thirty days of the invitation, or within any other period stated in the invitation, the initiating party may elect to treat the silence as a rejection and must inform the other side in writing.
• The conciliator (Sections 63 and 64): there is one conciliator unless the parties agree on two or three. The parties may ask an institution or person to recommend or appoint the conciliator.
• Conduct (Sections 65 to 67): each side files a brief statement of its case. The conciliator is not bound by the Code of Civil Procedure, 1908 or by the law of evidence. The conciliator may meet the parties together or separately and may make proposals for settlement at any stage, with or without reasons.
• Confidentiality (Section 75): the conciliator and the parties must keep all matters relating to the proceedings confidential, including the settlement agreement itself, except where disclosure is needed to implement or enforce it.
• The settlement (Sections 73 and 74): when the parties reach agreement, the settlement is drawn up in writing, signed by the parties, and authenticated by the conciliator.
• Termination (Section 76): conciliation ends on signature of the settlement, or on a written declaration by the conciliator that further efforts are no longer justified, or by written declaration of the parties, or by one party declaring in writing to the other and to the conciliator that the process is over.

Why the settlement matters: Section 73 and Section 74

This is the part clients care about most. Under Section 74, a signed conciliation settlement agreement has the same status and effect as an arbitral award on agreed terms rendered under Section 30. An arbitral award is in turn enforceable in the same manner as a decree of the court under Section 36. In short, a conciliation settlement is final and binding and can be taken straight to execution. You do not have to re-litigate the dispute to make the other side comply.

Key takeaway. A conciliation settlement is not a letter of intent or a gentleman's understanding. Once it is signed by the parties and authenticated by the conciliator, Section 74 gives it the force of an arbitral award on agreed terms, and Section 36 makes that enforceable as a decree. Sign it only when you can actually perform every clause in it.

The protections that make people speak freely

Three provisions do the quiet work that makes candid negotiation possible. Section 77 bars the parties from starting arbitral or judicial proceedings on the same subject matter while the conciliation is running, except where a party genuinely needs to move to preserve its rights, for example to stop limitation running or to obtain urgent interim protection. Section 80 stops the conciliator from later acting as arbitrator, or as counsel or representative for a party in the same dispute, and stops the parties presenting the conciliator as a witness. Section 81 makes the negotiating material inadmissible later: views expressed or suggestions made by the other side, admissions made during the conciliation, proposals made by the conciliator, and the fact that a party had indicated willingness to accept a proposal.

Who pays for it

Section 78 requires the conciliator to fix the costs on termination and give the parties written notice. Costs mean the conciliator's fee and expenses, the cost of any expert advice or administrative assistance requested, and other expenses connected with the proceedings and the settlement. Costs are borne equally unless the settlement agreement apportions them differently, and each party bears its own other expenses, such as its lawyer's fee. Section 79 allows the conciliator to call for equal advance deposits, and if the deposits are not paid in full by both parties within thirty days the conciliator may suspend or terminate the proceedings.

Mediation under the Mediation Act, 2023

The Mediation Act, 2023 consolidated and modernised mediation law and created an institutional spine that India previously lacked. Its main features are these.

• Pre-litigation mediation (Section 5): whether or not a mediation agreement exists, parties may voluntarily and by mutual consent try to settle a civil or commercial dispute by pre-litigation mediation before filing suit. The proviso preserves the separate mandatory regime for commercial disputes of Specified Value under Section 12A of the Commercial Courts Act, 2015.
• Disputes that cannot be mediated (Section 6 and the First Schedule): the indicative list excludes, among others, claims against minors and persons of unsound mind, suits for declaration of title against Government, disputes involving prosecution for criminal offences, professional disciplinary proceedings, matters within the National Green Tribunal's jurisdiction, and disputes about levy or collection of direct or indirect taxes. A court may still refer compoundable offences, including compoundable matrimonial offences, to mediation.
• Court referral (Section 7): a court or tribunal may refer parties to mediation at any stage of a proceeding and may pass interim orders to protect a party's interest meanwhile.
• Time discipline (Section 18): mediation must be completed within 120 days from the date fixed for the first appearance before the mediator, extendable by agreement by up to a further 60 days.
• The settlement (Section 19): a mediated settlement agreement is in writing, signed by the parties and authenticated by the mediator, and its terms may extend beyond the disputes referred.
• Registration (Section 20): registration is optional, with an Authority under the Legal Services Authorities Act, 1987 or a notified body, within 180 days of receiving the authenticated copy, and produces a unique registration number.
• Confidentiality and privilege (Sections 22 and 23): mediation communications are confidential and are protected from disclosure in later proceedings.
• Limitation (Section 29): the period from commencement of mediation to the non-settlement report or termination is excluded when computing limitation, notwithstanding the Limitation Act, 1963.
• Online and community mediation (Sections 30, 43 and 44): the Act expressly recognises online mediation by encrypted email, secure chat or video, and creates a community mediation route for local disputes.
• Mediation Council of India (Sections 31 to 38): a statutory body to register and regulate mediators, mediation service providers and mediation institutes.

Enforceability and challenge: Sections 27, 28 and 29

Section 27 provides that a mediated settlement agreement signed by the parties and authenticated by the mediator is final and binding, and is to be enforced in accordance with the Code of Civil Procedure, 1908 in the same manner as if it were a judgment or decree passed by a court. It may also be relied on by way of defence or set off in other proceedings. Section 28 permits a challenge on four grounds only: fraud, corruption, impersonation, or that the mediation was conducted in a dispute not fit for mediation under Section 6. The application must be filed within ninety days of receiving the copy of the agreement, with a further ninety days available if the court is satisfied there was sufficient cause for the delay.

Deadline warning. The challenge window under Section 28(3) is ninety days from receipt of the mediated settlement agreement, with at most another ninety days for sufficient cause. Under Section 20 the optional registration window is 180 days from receipt of the authenticated copy. Both clocks start on receipt, not on the date you eventually read the document, so diarise the date the copy reaches you.

The commencement point you must check

The Mediation Act came into force under Section 1(3) on such dates as the Central Government appoints, and different dates may be appointed for different provisions. The commencement notification recorded on India Code, S.O. 4384(E) dated 9 October 2023, brought into force Sections 1, 3 and 26, Sections 31 to 38, Sections 45 to 47, Sections 50 to 54, and Sections 56 to 57. The version of the Act published on India Code as on 6 October 2025 records no further commencement notification. That means the chapters dealing with the mediation process itself, and with enforcement and challenge, should not be assumed to be operative simply because they appear in the bare Act. Before you rely on Section 27 in a live matter, confirm the current commencement position for that section.

Common mistake. Drafting a dispute resolution clause that says "the settlement shall be enforceable under Section 27 of the Mediation Act, 2023" and stopping there. If that section is not yet notified for your matter, you have written a promise with no engine behind it. The safer commercial clause routes the dispute either to conciliation under Part III of the 1996 Act, which is fully in force, or to mediation with an express fallback that any settlement will be recorded as a consent decree, a Lok Adalat award, or an arbitral award on agreed terms.

Where the law actually sends you first

Three other provisions decide, in practice, whether you end up in mediation at all.

Section 89 of the Code of Civil Procedure, 1908. Where the court sees elements of a settlement acceptable to the parties, it formulates the terms, takes the parties' observations, may reformulate them, and then refers the matter to arbitration, conciliation, judicial settlement including settlement through Lok Adalat, or mediation. This is the source of court-annexed mediation across India.

Section 12A of the Commercial Courts Act, 2015. A suit that does not contemplate urgent interim relief cannot be instituted unless the plaintiff has exhausted pre-institution mediation. The Authority must complete the process within three months of the plaintiff's application, extendable by two months with consent, and that period is excluded for limitation. Under Section 12A(5) a settlement reached there has the same status and effect as an arbitral award on agreed terms under Section 30(4) of the Arbitration and Conciliation Act, 1996. In M/s Patil Automation Private Limited v. Rakheja Engineers Private Limited, decided on 17 August 2022, the Supreme Court declared Section 12A mandatory and held that a suit filed in breach must be rejected under Order VII Rule 11 of the CPC, including on the court's own motion, with the declaration made effective from 20 August 2022.

Section 21 of the Legal Services Authorities Act, 1987. Every award of a Lok Adalat is deemed to be a decree of a civil court, is final and binding on all parties, and no appeal lies against it. Court fee paid in a case settled at a Lok Adalat is refundable. For low-value and family matters this remains the cheapest enforceable settlement route in the country.

The process step by step

People searching for the process want a clear sequence. Here is the typical flow for each.

Conciliation process under the 1996 Act

1. One party sends a written invitation to conciliate, identifying the subject of the dispute (Section 62(1)).
2. The other party accepts in writing, at which point the proceedings commence. Silence for thirty days may be treated as rejection (Section 62(2) and 62(4)).
3. The parties appoint the conciliator or conciliators and agree fees, venue and timetable (Sections 63 and 64).
4. Each side files a brief written statement of its case and the documents it relies on (Section 65).
5. The conciliator holds joint sessions and private meetings, tests each side's position, and may put settlement proposals (Sections 67 and 69).
6. Advance deposits towards costs are paid in equal shares if the conciliator directs (Section 79).
7. If agreement is reached, the conciliator draws up the settlement, the parties sign it, and the conciliator authenticates it (Section 73).
8. The signed settlement takes effect as an arbitral award on agreed terms and can be executed like a decree (Sections 74 and 36).
9. If no agreement is reached, the process terminates under Section 76 and the parties are free to arbitrate or litigate.

Mediation process under the Mediation Act, 2023

1. The parties agree to mediate under a mediation agreement, apply for pre-litigation mediation, or are referred by a court or tribunal (Sections 4, 5 and 7).
2. Check the First Schedule to confirm the dispute is one that may be mediated at all (Section 6).
3. A mediator is appointed, either a registered mediator or one empanelled by a court-annexed centre, a Legal Services Authority, or a recognised service provider (Sections 5(3) and 8).
4. The mediator discloses any conflict of interest before accepting the assignment (Section 10).
5. Opening session: the mediator explains the process, the confidentiality regime and the timetable.
6. Joint and private sessions to surface the real commercial or personal interests behind the stated positions.
7. Negotiation and option building, facilitated by the mediator, within the 120 day limit plus any agreed extension of up to 60 days (Section 18).
8. If the matter settles, the mediated settlement agreement is drawn up, signed by the parties and authenticated by the mediator (Section 19).
9. The parties may register it within 180 days and obtain a unique registration number (Section 20).
10. If it does not settle, the mediator prepares a non-settlement report and the excluded period is discounted for limitation (Sections 21 and 29).

Conciliation, mediation, arbitration and litigation compared

What it costs and how long it takes

Figures vary widely by city, forum and value, so treat these as indicative ranges rather than quotations. Court-annexed mediation and Lok Adalat referrals through a Legal Services Authority are ordinarily free or nominal, and Lok Adalat settlement carries a refund of court fee under Section 21 of the 1987 Act. Pre-institution mediation under Section 12A of the Commercial Courts Act carries a modest prescribed fee. Private mediators and conciliators in Bengaluru typically charge a sessional or daily fee shared equally between the parties, and institutional mediation centres publish fee schedules keyed to the amount in dispute. Add your own advocate's fee, which each side bears itself unless the settlement says otherwise.

On timelines, a straightforward two party commercial mediation is often done in two to four sessions across four to eight weeks. Section 12A pre-institution mediation runs to a statutory three months, extendable by two. The Mediation Act sets 120 days plus 60. Conciliation under the 1996 Act has no statutory outer limit, which is a reason to fix one by agreement at the outset. Compare that with a contested civil suit, where a first instance decree in most Indian district courts is a multi-year proposition before any appeal.

Mistakes people make

• Treating the invitation as a formality. Under Section 62 there is no conciliation at all until the other side accepts in writing. Proceeding on an oral nod leaves you with nothing enforceable.
• Letting limitation run. Section 29 of the Mediation Act and the second proviso to Section 12A(3) of the Commercial Courts Act exclude the mediation period, but conciliation under the 1996 Act has no equivalent exclusion. If you are conciliating a claim that is close to limitation, protect the claim first.
• Sending someone without authority. The single most common cause of a failed mediation is that the person in the room cannot approve the number. Send a decision maker or a written authority with a defined ceiling.
• Vague settlement terms. A settlement enforced as a decree is enforced as written. Fix amounts, dates, bank details, the consequence of default, and who withdraws which case.
• Forgetting the linked proceedings. A settlement that does not deal with the pending suit, the cheque bouncing complaint, or the arbitration invocation leaves the fight alive on another front.
• Assuming everything is mediable. The First Schedule to the Mediation Act rules out several categories, and Section 28 allows a settlement to be set aside if the subject matter was not fit for mediation.

A note on statutory numbering after the 2023 reforms

The criminal codes were overhauled in 2023 and brought into force on 1 July 2024. The Code of Criminal Procedure, 1973 was replaced by the Bharatiya Nagarik Suraksha Sanhita, 2023, the Indian Penal Code, 1860 by the Bharatiya Nyaya Sanhita, 2023, and the Indian Evidence Act, 1872 by the Bharatiya Sakshya Adhiniyam, 2023. Conciliation and mediation are civil and commercial mechanisms and are not governed by those codes. But if a precedent, a contract or an older article you are reading cross-refers to CrPC or IPC sections, treat the numbering as potentially outdated and confirm the current equivalent, for example the inherent powers of the High Court once found in Section 482 CrPC, now Section 528 BNSS, or quashing on the strength of a compromise. The Arbitration and Conciliation Act, 1996 and the Mediation Act, 2023 were not renumbered by those reforms.

How this connects to your other legal matters

ADR is not just for big contracts. Founders, brand owners and individuals run into it across practice areas. If your dispute touches a brand, our guides on trademark classes in India and IP protection for startups are useful companions, because an infringement claim of Specified Value is a commercial dispute and will hit Section 12A before it reaches a Commercial Court. Readers sometimes confuse ADR with criminal relief; our explainer on regular bail vs anticipatory bail sets out where the criminal process sits instead, and note that the First Schedule to the Mediation Act excludes disputes involving prosecution for criminal offences. You can read the bare statute, the Arbitration and Conciliation Act, 1996, on the Government of India's official India Code portal.

Frequently Asked Questions

This article is for general informational purposes only and does not constitute legal advice. Laws change and every situation is different; please consult a qualified advocate about your specific matter.

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