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page.png 43 The Mediation Gap: Where India Stands and How Far It Must Go

Tara Ollapally

Annapurna Sreehari

Shruthi Ramakrishnan



The introduction of Section 89 of the Code of Civil Procedure, 1908 gave the Indian judicial system the impetus to use several alternative modes for dispute resolution. One of them is mediation. In this chapter, the authors introduce readers to the mediation process, discuss the Indian legal landscape and frameworks with respect to mediation, and examine the practice of mediation in India through a discussion of court-annexed mediation programmes as well as nascent private mediation programmes. The authors recommend steps that need to be taken to develop an ecosystem that is conducive to mediation becoming an accepted and effective dispute resolution process in the Indian legal system.

. . . . .

If you really want to see something, look at something else.

If you want to say what something is, inspect something that it is not.— Howard Nemerov, Pulitzer Prize Winner, Poet

Mediation is the ‘something else’ to litigation, arbitration, and conciliation as a structured dispute resolution process for resolving conflicts. It is a collaborative manner of resolving disputes where the parties make the ultimate decision on the terms at which they settle their disputes. It is a completely voluntary process, which means that the parties can opt out of the process anytime they feel it is not working for them. Mediation is confidential, anything that the parties may have discussed page.png 44 with the mediator or the other side, any documents exchanged, any proposals made during mediation will remain confidential even after the process has concluded, and neither party is permitted to use any information gathered in mediation in any judicial or quasi-judicial forum.

The mediator facilitates negotiation and communication between the parties while uncovering their underlying interests and identifies overlapping interests that can result in a zone of possible agreement. The mediator coaches the parties to negotiate effectively, by unhinging them from their positional bargaining style and using a problem-solving manner. It is important for a mediator to remain, and be perceived as being, neutral in the process.

In 2002, the Code of Civil Procedure (CPC), 1908 was amended to introduce Section 89. The amendment was instrumental in promoting alternative dispute resolution (ADR) processes in India, including mediation. Yet, there are certain difficulties and impediments in the acceptance of mediation as a form of dispute resolution and its integration with the country’s civil justice dispensation framework.1 In order for the process of mediation to take root in the country, there is a strong need to examine the landscape of the Indian legal and dispute resolution context, the active players and their mindset towards mediation, the supporting institutions and framework that need to be established and nurtured to facilitate the increased use and acceptance of this process.

In the following section, we explore the legal developments affecting mediation in India, such as policy guidelines in the older Law Commission of India reports, case laws, and statutes. The next section explores the implementation of mediation through court-annexed and private mediation institutions. We conclude by discussing next steps on increasing viability for mediation in India.


In 1988, the 129th Law Commission Report on Urban Litigation and Mediation as Alternative to Adjudication (129th Report) observed that the enormous amount of congestion in courts and unnecessary delays had led to an explosion of cases in urban litigation. The backlog was so severe that the average time taken to dispose of a case in Bombay Small Causes Court was seven years from the date of institution of the suit.2 The 129th Report pressed for the need to look outside the then extant system for remedies and suggested several alternative ways of dispute resolution, including the setting up of a conciliation court where the judge attempts to bring about an amicable settlement between the parties, failing which the matter could be routed to the courts.3 Around the same time, the Arrears Committee4 (also known as the Malimath Committee) was constituted by the government of India in order to look into the grave concern of arrears in courts and make suitable recommendations in this regard. The Arrears Committee gave its report in 1990, with several recommendations, including the introduction of conciliation courts as recommended by the 129th Report.5

Despite the staggering pendency of cases in the country, use of mediation in India was given a significant impetus only in 2002 via the amendment to the CPC,6 which introduced Section 89, permitting the court to refer a dispute to an ADR forum when it deemed that elements of a settlement existed.

While the introduction of Section 89 was a landmark step, it quickly became apparent that the poor and hurried drafting of the provision was resulting in more problems than solving any. The constitutional validity of the amendment was raised and page.png 45 several questions regarding the manner of referral by courts needed to be clarified. The Supreme Court referred to the provision as ‘a trial judge’s nightmare’.7

In Salem Advocate Bar Assn. v. Union of India8 (Salem I), the Supreme Court held that Section 89 was constitutionally valid and established a committee (Salem I Committee) to, inter alia, draft rules on mediation and create a report on effective case management to reduce the burden on courts. Justice Jagannadha Rao was elected as the chairman. The Salem I Committee published detailed reports which contained a guideline to the courts on the manner of referring cases to mediation titled the Civil Procedure Alternative Dispute Resolution (CPADR) Rules, 2003. The CPADR Rules, 2003 also required various High Courts to provide necessary training to its mediators. The Salem I Committee also drafted the Mediation Rules, 2003, to be adopted by various High Courts.

On 9 April 2005, the then Chief Justice of India, Justice R.C. Lahoti, gave further impetus to mediation in India by ordering the establishment of the Mediation and Conciliation Project Committee (MCPC).9 The purpose of the MCPC was to establish court-annexed pilot mediation centres in several states, and ensure that the mediation rules to be adopted in various court-annexed mediation centres were uniform, that training imparted to mediators were consistent, and that mediation was implemented at a national level.10 The MCPC was involved in training district judges in mediation, who started judicial mediation by the end of August 2005.11 The training was subsequently extended to lawyers rendering mediation services at court-annexed mediation centres.

Around the same time, the Salem I Committee filed its reports on the issues identified in Salem I. Another Supreme Court Bench, comprising Justice Y.K. Sabharwal, Justice D.M. Dharmadhikari, and Justice Tarun Chatterjee, extensively reviewed the reports in Salem Advocate Bar Assn. (2) v. Union of India12 (Salem 2). In Salem 2, the Supreme Court directed the High Courts, the central government, and state governments to file a progress report with respect to adoption of the rules developed in the Salem I Committee reports, within four months of the date of the judgment.

Gradually, several High Courts adopted versions of the Mediation Rules, 2003 and established court-annexed mediation centres as pilot programmes, which were governed by the aforesaid rules.

In 2010, another important development occurred in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., where the Court highlighted the unclear drafting of Section 89 and its several ambiguities, although it lauded the purpose behind the introduction of the provision.13 The case attempted to provide the procedure to be followed by the court while referring cases to an ADR forum. In particular, the judgment elucidated the following:

1. The appropriate stage for referring a matter to mediation.

2. The court must explain the different ADR modes available to enable the parties to make a choice.

3. If mediation facility or service is not available, the parties can opt for the guidance of a judge to arrive at a settlement. In such cases, the court can refer the matter to another judge for this purpose.14

If the ADR process fails, the court may proceed to hear the matter after receiving a report from the forum in which ADR was attempted.15

page.png 46 In recent years, mediation has been given further impetus by the inclusion of a provision in the Companies Act, 2013, which makes it mandatory for the central government to maintain a mediation and conciliation panel, comprising experts for mediating commercial disputes between the parties.16 Further, tribunals under the Companies Act or the central government may also refer a dispute to mediation where it deems it appropriate. The maximum time to conclude a mediation is three months.17 Similarly, the Consumer Protection Bill (Consumer Bill), 2015 provides for mediating disputes at the first instance of admission of a complaint before any consumer disputes redressal agency.18 Chapter V of the Consumer Bill envisages the establishment of consumer mediation cells at the national, state, and district levels, to whom the consumer disputes redressal agencies shall refer their cases.19 The Real Estate (Regulation and Development) (RERA) Act, 2016 also encourages amicable conciliation of disputes between promoters and allottees through dispute settlement forums established by consumer or promoter forums.20


Court-annexed Mediation in India

Mediation has formally been introduced into our legal system only since 2005. Available data on implementation of mediation in India is therefore scanty. Studies undertaken by the Vidhi Centre for Legal Policy on mediation in Delhi and Bengaluru reveal that although mediation has received the kick-start that was needed, much still needs to be done to attract disputants away from litigation.

For instance, in 2011, only 2.79 per cent of all cases were referred for mediation by the High Court of Karnataka21 and by the year 2015, this figure rose only marginally to 4.83 per cent.22 The situation in Delhi is not that different and it is seen that only 2.86 per cent of cases instituted were referred to mediation by the High Court of Delhi in 2011, which gradually dropped to 2.31 per cent of cases in 2015.23

Between 2011 and 2015, in Bengaluru, amongst the cases that were mediated, 66 per cent of the cases were settled through mediation.24 It is important to note, however, that not all cases referred for mediation actually proceed. In 17 per cent of cases, mediation was terminated even prior to commencing.25 The reasons were that the case was not fit for mediation, one or more parties never appeared or were not present for follow-up, one or more parties appeared but refused to participate, etc. The non-appearance of parties for follow-up mediation was the foremost reason for termination, amounting to nearly 45.51 per cent of such cases.26 In comparison, in Delhi, 56 per cent of the mediated cases were settled, while 15 per cent of cases referred were terminated prior to mediation commencing.27

As to types of cases, it is seen that mediation is most popular in matrimonial and family law disputes, such as divorce, partition, and restitution of conjugal rights, protection of women from domestic violence, and dowry prohibition cases, contributing to nearly 80 per cent of the mediation docket in Bengaluru.28 Cases concerning property disputes amount to around 11 per cent of the total number of cases referred to mediation in Bengaluru.29

Table 1 contains statistics on referral of cases to mediation and their disposal rates in some of the cities and states. The figures below are only intended to give a general idea of the functioning of mediation centres in India. The referral and settlement rates in court-annexed mediation require to be studied in depth to gain any insight on the effectiveness of these centres.

page.png 47 Table 1. City and State-Wise Referral of Cases to Mediation and Disposal Rates



Number of cases referred

Settlement rate (in percentage)









Tamil Nadu32












West Bengal35




Chandigarh (referred by High Court of Punjab and Haryana)36




Private Mediation in India

The establishment of court-annexed mediation programmes has gradually led the path for the establishment of private mediation institutions throughout the country — such as the Indian Institute of Arbitration and Mediation (IIAM), Centre for Advanced Mediation Practice (CAMP), and Foundation for Comprehensive Dispute Resolution (FCDR).

At CAMP, for example, disputing parties are provided access to private mediation services on a pre-litigation basis. CAMP has a panel of mediators and provides private mediation services, following its own institutional rules. Mediations at private mediation institutions are quick and successful. For example, CAMP records a settlement rate of 80–90 per cent, with cases being settled in one or two sessions lasting a full day each.

Disputes pending in courts are brought to private mediation institutions when parties seek the ambience and expertise of specialised mediators. The need for confidentiality and resolving disputes without tarnishing reputations, the requirement of an efficient process and most importantly, the desire to resolve disputes without destroying relationships are some of the reasons that keep parties away from courts. Some cases that were mediated at CAMP are:

1. A start-up company came in for mediation but did not want to use the word ‘mediation’ in their settlement agreement for restructuring the ownership pattern, as even a hint of a dispute could jeopardise their international contracts. They instead preferred to call it ‘facilitated discussion’.

2. An 18-year-old dispute between a developer and a property owner, who was emotionally fragile and had been refusing to resolve the conflict, because he wanted to avoid courts.

3. A family settlement between the parents of a disabled child who could not agree on the terms of a family settlement they wanted to draw up to secure the interest of their child.

The extensive convening and follow-up practised by skilled mediators in private institutions enable a very high percentage of settlement. This is also the experience of skilled mediators internationally.

As legislation is not currently available to provide enforceability to a settlement at mediation, parties have the option to: (a) enter into a fresh contract, (b) file the settlement in court for a decree, if the case has come from the court, or (c) in case of pre-litigation mediation, name the mediation process as a ‘conciliation’.

The Supreme Court in the Afcons judgment held that mediation and conciliation are synonymous. Themediated settlement agreement is termed a ‘conciliator’s settlement agreement’, which is equivalent page.png 48 to an arbitrator’s award under Section 74 of the Arbitration and Conciliation Act, 1996.

Private mediation institutions are necessary to create the ecosystem for mediation in many ways, such as, to: (a) encourage resolution of disputes on a pre-litigation basis, (b) encourage mediation of commercial disputes, (c) provide parties access to mediators with subject matter expertise, and (d) enhance the standards for mediation.


Mediation is at a nascent stage in our legal system. In order for mediation to truly take root, numerous steps must be taken. These are not only essential for a better understanding of mediation but also to create an ecosystem for mediation, thereby integrating it into mainstream Indian legal society. Some of our recommendations are as follows:

1. Standalone legislation for mediation: After the 2002 amendment to the CPC, there have not been substantial changes in the legislative framework of the country, which can support increased traction for mediation in India. The 2015 amendment to the Arbitration and Conciliation Act, 1996 made significant changes to the way arbitration and conciliation was practised in the country, however, the same does not have an impact on the mediation process.

There is an urgent need for an overarching mediation legislation that consistently governs all types of mediation in the country. A standalone legislation can address the enforceability of settlement agreements, accreditation and standards of practice, confidentiality, privilege, conflict of interests, voluntariness, self-determination, and other ethical concerns that would inevitably arise from mediation practice, thereby granting increased legitimacy to mediation. Such a legislation needs to be drafted with utmost concern and care, without affecting the creativity and flexibility of the process.

It is pertinent to note that the recent report of the High-Level Committee to Review the Institutionalisation of Arbitration Mechanisms in India chaired by Justice B.N. Srikrishna has also recommended a standalone mediation law for India to promote dispute resolution using the ADR mechanism.

2. Training judges in mediation: Mediation needs the patronage of the judiciary to be accepted by the community as an effective dispute resolution mechanism. Moreover, considering the overwhelming backlog of cases in the system, it becomes more important for judges to familiarise themselves with the process and refer parties to mediation. Parties referred by a judge are known to participate effectively and successfully in mediation. It is therefore critical for judges to be trained to identify appropriate cases for mediation and actively refer them to mediation. The parties can choose if they would like to adopt the court-annexed or private mediation institutions for settlement.

3. Modifying law school curriculum to include mediation studies and training: In order for the process to get recognition, mediation should be included in law school curriculum, so that the emerging generation of lawyers are familiar with the process and therefore use the process more frequently and effectively. At the recent Global Pound Conference, page.png 49 India that was held in Chandigarh in May 2017, familiarity with the dispute resolution process was identified as the biggest influencer when lawyers make recommendations to parties about procedural options for resolving commercial disputes.37 Training of law students and lawyers is therefore essential to build needed familiarity and therefore increased usage. In that regard, the Ministry of Law and Justice is taking steps to include ADR practices and techniques in law school curriculum. According to an official in the ministry, ‘Lack of awareness at the student level translates into lack of conviction in mediation as an advocate, which must be addressed.’38

4. Nurturing mediators with passion and commitment: Mediation is an experience-driven process. The perceived success or failure of it, irrespective of reaching a settlement, is determined by the manner in which it is conducted. For that very reason, it becomes important that mediators are carefully nurtured so that they are potential leaders, brand ambassadors, and earnest service providers. Mediators must be given high-quality mediation training and encouraged to regularly attend advanced training programmes to constantly hone and develop their skills to provide high-quality mediation services.

Additionally, high-performing mediators must be recognised and encouraged. At Bangalore Mediation Centre, for example, one mediator, over the last six years, singly mediated 1,934 cases and resolved 72 per cent of them. These settlements are final and non-appealable. Currently, it is free for the parties. It comes at a minimal cost for the administration of justice. These are mediators who work tirelessly and relentlessly, earning only an honorarium. It is time to ask if these heroes are being adequately rewarded. Are we sustaining the motivation of our mediators?

5. Creating a physical space that honours the practice: Mindsets are being changed about mediation. The space must be conducive for active listening, sharing confidential information, and making decisions in a comfortable and calm environment. In court-annexed programmes, adequate attention must be paid to appropriate infrastructure. This lends credibility to mediation in the minds of the litigant, especially when the judge has put pressure on them to participate.

6. Funding for support court-annexed mediation programmes: The liberal budgetary allocation for mediation by 13th Finance Planning Commission is commendable. However, the allocation by the central government was under the head ‘mediation awareness’. This restricted using of funds only for ‘awareness purposes’ preventing investment in other key areas such as infrastructure and training.

The 14th Finance Planning Commission further aggravated the problem. The union government changed its approach to budgetary allocation for mediation programmes and urged the state governments to raise funds for mediation. Unfortunately, since 2015, state governments have been unable to release sufficient funds, leaving court-annexed mediation programmes starved of funds. Funds are urgently needed for better mediation rooms, payment to mediators who have rendered pro bono service for many years, ongoing training for mediators, training for judges to refer suitable cases to mediation, and training for staff to maintain the spirit of mediation and others.

7. Building private institutions and mediation centres that serve as platforms for mediators to page.png 50 practice in the country: In order for mediation to take the next step in our country, private mediation institutions are essential. Private mediation will: (a) allow access to mediation on a pre-litigation basis, (b) allow parties to have a choice as to their mediator, resulting in improved quality of mediators, (c) allow the development of mediation as a profession, and (d) provide a better incentive for commercial clients to try mediation. Private mediation institutions are, unfortunately, very few and struggling. Intervention by the government and judiciary is needed to support these fledgling institutions to sustain themselves in providing quality mediation services, especially on a pre-litigation basis.

8. Creating strong leadership to promote awareness to mediation and manage its growth and development: A new process is being developed in our country. Its growth must be organised and planned in order for it to be a truly effective option in our legal system. Mediation suffers from ignorance and misconception. Awareness must be created at the commercial, personal, and community levels in a structured and organised manner to support a thriving culture of mediation. Widespread use of mediation cannot take place without a fundamental change in the perception of dispute resolution — such a change can be efficiently brought about through effective and inspiring leadership.

For further development of the fledgling state of mediation in India, the above recommendations would be first good steps. However, implementation would be the challenge and would require considerable tenacity and perseverance from all stakeholders concerned.


1. Alok Prasanna Kumar, Ameen Jauhar, Kritika Vohra, and Ishana Tripathi. 2016. Strengthening Mediation in India: Interim Report on Court Annexed Mediations. New Delhi: Vidhi Centre for Legal Policy. Available online at https://vidhilegalpolicy.in/reports-1/2016/7/25/strengthening-mediation-in-india-an-interim-report-on-court-annexed-mediations (accessed on 5 October 2017).

2. Kumar et al., Strengthening Mediation, p. 31.

3. Kumar et al., Strengthening Mediation, p. 46.

4. Arrears Committee. 1990. Report of the Arrears Committee 1989–1990. New Delhi: Government of India, p. 135. Available online at dakshindia.org/wp-content/uploads/2016/08/Malimath-89-90.pdf (accessed on 5 October 2017).

5. Arrears Committee, Report of the Arrears Committee, p. 135.

6. The Code of Civil Procedure (Amendment) Act, 1999.

7. Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., (2010) 8 SCC 24 (Afcons), para 7.

8. (2003) 1 SCC 49 : 2002 Supp (3) SCR 353.

9. Mediation and Conciliation Project Committee. Mediation Training Manual for Referral Judges. New Delhi: Supreme Court of India, p. 8. Available online at http://www.sci.gov.in/pdf/mediation/Mediation%20Training%20Manual%20for%20Referral%20Judges.pdf (accessed on 5 October 2017).

10. Mediation and Conciliation Project Committee, Mediation Training Manual, p. 3.

11. Delhi Mediation Centre. 2015. ‘History’, available online at http://delhimediationcentre.gov.in/history.htm (accessed on 5 October 2017).

12. (2005) 6 SCC 344.

13. Afcons, para 7.

14. Afcons, para 43(g).

15. Afcons, para 43(h).

16. Section 442, Companies Act, 2013.

17. Section 442(3), Companies Act, 2013.

18. Clause 34, Consumer Protection Bill, 2015, available online at http://www.prsindia.org/uploads/media/Consumer/Consumer%20Protection%20bill,%202015.pdf (accessed on 5 October 2017).

19. Clause 63, Consumer Protection Bill, 2015, available online at http://www.prsindia.org/uploads/media/Consumer/Consumer%20Protection%20bill,%202015.pdf (accessed on 5 October 2017).

20. page.png 51  Section 32(g), RERA, 2016, available online at http://www.indiacode.nic.in/acts-in-pdf/2016/201616.pdf (accessed on 5 October 2017).

21. Kumar et al., Strengthening Mediation, Table 5, p. 38.

22. Kumar et al., Strengthening Mediation, Table 5, p. 38.

23. Kumar et al., Strengthening Mediation, Table 27, p. 60.

24. Kumar et al., Strengthening Mediation, Table 8, p. 40.

25. Kumar et al., Strengthening Mediation, Table 9, p. 40.

26. Kumar et al., Strengthening Mediation, Table 10, p. 41.

27. Kumar et al., Strengthening Mediation, Table 28, p. 61.

28. Kumar et al., Strengthening Mediation, Table 14, p. 44.

29. Kumar et al., Strengthening Mediation, Table 16, p. 45.

30. Delhi Mediation Centre. 2016. ‘District Courts of Delhi: General Statistical Report (2005–2016)’, available online at http://www.delhimediationcentre.gov.in/statistical.htm (accessed on 5 October 2017).

31. Bangalore Mediation Centre. 2017. ‘General Statistical Report (2007–2017)’, available online at http://nyayadegula.kar.nic.in/statistics.html (accessed on 5 October 2017).

32. High Court of Judicature at Madras. 2015. Madras High Court: Annual Report 2015. Madras: High Court of Judicature at Madras, p. 99. Available online at http://www.hcmadras.tn.nic.in/hcreport2015.pdf (accessed on 5 October 2017).

33. A statement of the High Court of Gujarat showing the details of the matters sent to all ADR/Mediation centres in the state as of 31 March 2017 is available online at http://gujarathighcourt.nic.in/hccms/sites/default/files/Mediation_data%20_31.03.2017.pdf (accessed on 5 October 2017).

34. Kerala State Mediation and Conciliation Centre. 2015. ‘Statistics: 2009–2015’, available online at http://keralamediation.gov.in/Statistics (accessed on 5 October 2017).

35. West Bengal State Legal Services Authority. 2016. ‘Statistical Information on Mediation: 2012–2016’, available online at http://www.wbslsa.org/mediation.html (accessed on 5 October 2017).

36. Mediation and Conciliation Centre. 2017. ‘Consolidated Updated Work Statement as of March 2017 of the Mediation and Conciliation Centre’, Punjab and Haryana High Court, available online at http://mediationcentrephhc.gov.in/pdf/Performance%20Chart.pdf (accessed on 5 October 2017).

37. Proceedings of the Global Pound Conference, Chandigarh held on 12 May 2017, available online at http://globalpound.org/wp-content/uploads/2017/07/GPC-Series-Chandigarh-2017-Voting-Results.pdf (accessed on 5 October 2017).

38. Kanu Sarda. 2017. ‘Mediation, Arbitration to Enter Law School Curriculum’, New Indian Express, 19 August, available online at http://www.newindianexpress.com/thesundaystandard/2017/aug/19/mediation-arbitration-to-enter-law-school-curriculum-1645476.html (accessed on 5 October 2017).