• The Mediation Act encourages the process of mediation by institutionalising mediation centres, and registering mediators for resolving commercial disputes.
• India had 464 Alternative Dispute Resolution (ADR) centres (397 functional), 570 mediation centres, and 16,565 mediators.
• About 53,000 cases were settled through mediation in 2021-22. (National Legal Services Authority)

Alternative Dispute Resolution (ADR):

• Alternative Dispute Resolution (ADR) refers to the mechanisms that enable disputing parties to resolve their differences, without the intervention of courts.
• It is significant in India considering delays in Indian court proceedings and high cost of litigation.
• In India, modes of ADR include arbitration, negotiation, mediation, and Lok Adalats.
• Mediation is a voluntary process (not obligatory) in which parties try to settle disputes with the assistance of an independent third person (the mediator).
• They are largely focussed on arbitration or conciliation of disputes under the Arbitration and Conciliation Act, 1996 (A&C Act).

The Mediation Act, 2023:

• The Mediation Act aims to promote and facilitate the process of mediation between the parties in commercial disputes to encourage ADR.
• It will encourage parties to take steps to resolve their dispute through pre-litigation mediation before approaching a court.
• It seeks to codify, institutionalise and promote mediation, by establishing the Mediation Council of India, recognising mediation service providers, and registration of mediators.
• It bridges mediation and arbitration of commercial disputes, thus reducing the burden on the courts.
• Courts and relevant institutions also maintain a panel of mediators.
• For dispute settlement, India encourages courts to refer the disputing parties to ADR procedures.
• It will not completely remove the role of courts. In exceptional cases, a party may reach a court before the commencement or during the continuation of mediation.

What is Mediation?

• Mediation is the effort between conflicting parties to solve their differences and make compromises to resolve business disputes.
• It is a confidential process and must be completed within 180 days.
• It may be extended by 180 days by the parties.
• A party may withdraw from mediation after two sessions. 
• Court-annexed mediation must be conducted as per the rules framed by the Supreme Court or High Courts.
• It will require the mediation to be conducted by a neutral and expert mediator.
• The mediator puts forth workable solutions that can be agreeable to both parties.

• Mediation in India may be:
• Court referred (Under the Code of Civil Procedure, 1908),
• Private (Under a contract having a mediation clause), or
• Under a specific statute (such as the Commercial Courts Act, 2015, the Consumer Protection Act, 2019, or the Companies Act, 2013)

Benefits of Mediation:

• Reduce the filing of non-serious claims before courts.
• Mitigate the risk of deterioration of the parties’ relationship due to a publicly fought dispute.
• Flexible and confidential process.
• Faster and cost-effective.
• Lesser burden of cases on courts.
• Encourages the parties to focus more on their commercial dealings than their disputes.

What is arbitration?

• Arbitration is an alternate method of litigation for settling disputes without either party going to court.
• It involves a neutral third party who receives evidence, hears the arguments, and passes an order known as an award.
• The award is final, impartial, and has to be enforced under the Code of Civil Procedure, 1908.
• In India, arbitration is backed by the Arbitration and Conciliation Act, 1996 which was amended by the Arbitration and Conciliation (Amendment) Act, 2015.
• The Act mandates arbitration proceedings to be completed within twelve months and can be extended further by six months.

Mediation and Arbitration:

Similarities:

• These are two different methods of dispute settlement that are broadly placed under alternate dispute resolution (ADR) methods.
• Both involve out-of-court settlements to avoid unnecessary litigation and receive quick settlement.

Differences:

• Mediation is when a neutral third party aims to assist the parties in arriving at a mutually agreeable solution whereas arbitration is like litigation outside the court and which results in an award like an order.
• Mediation is not binding on the parties whereas arbitration is.
• Mediation is more collaborative, and arbitration is more adversarial.
• The mediation process is more informal than arbitration.
• The outcome in mediation is controlled by the parties whereas in arbitration it is controlled by the arbitrator.
• In mediation, the dispute may or may not be resolved whereas in arbitration it is always settled in either party’s favour.

Mediation Council of India:

• It will register mediators, provide effective mediation, and recognise mediation service providers and institutes.
• It is a neutral third party.
• It makes the process a time-bound mechanism which saves time and money of parties.

Mediation Service Providers:

• They are synonymous with arbitration institutions.
• They provide the services, facilities, secretarial assistance, and infrastructure for the efficient conduct of mediation under the A&C Act.

   The Mediation Act is a welcome step towards transforming the landscape of dispute resolution by effective and efficient ways to resolve conflicts voluntarily and without any form of adjudication. It can foster a culture of ADR in India.