Mediation is an efficient and effective form of alternative dispute resolution. Under mediation, parties who have a dispute approach an impartial third party called “mediator” who assists them in reaching a settlement or conclusion. The person appointed tries to ease and conduct voluntary resolution of disputes by the parties and help them in identifying issues as well areas of adjustments and clearly assert that the parties have free will to agree or have a way out to other options. It is an informal way of conducting and settling the matter especially in cases where the parties are closely related and would prefer if the matter remains private. The impartial third party in the mediation process called the mediator is selected mutually by the parties or through appointment by the court.

Mediation is a prominent opportunity for parties who share a past relationship before the dispute emerged. The relationship might be on the basis of marriage, family issues or dependent on agreement, however legally binding contracts generally end up in suit or litigation. Another probability where the individuals are keen on indulging themselves in mediation is on the grounds that they are more affordable, less burdensome and they  have a significant part in directing the terms and conditions of the settlement. 

Since the disputed parties agree to terms and conditions, there are more possibilities that the settlement would not be challenged  at a later stage when the matter is indicted. The settlement is concurred only if both the parties are satisfied by the settlement agreement, so in the mediation process parties are at a win-win situation. On the off chance if the parties can’t agree upon a settlement agreement then they can always have an alternative to take their disputes to the courts.


Currently, there is no Codified Act passed by the Legislature in India but, The High Court as per the power granted by the Code of Civil Procedure, 1908 under Section 89(2)(d), Part X has provided the following rules. The rules are drafted by Mr. M Jagannadha Rao. These rules are arranged and mounted by the Law Commission is compressive and covers all the important and needful aspects of Mediation and Arbitration. The State High Courts might draft and publish rules and regulations for Mediation.

Basically, these rules cover particular information regarding the duties/role of mediator, who is eligible to be a mediator, the settlement process and its binding effect, cases that can or can’t be referred to mediation process. There are also some important features that have been stated in the Rule i.e. remuneration/moral and ethics of a mediator like there should not be any sort of video/audio or stenographic recordings of the mediation process and clauses regarding the disclosure/ confidentiality agreement, time span of mediation process. 

The rule X also particularly mentions about the mediation proceeding i.e. 60 days are given to the parties and mediator to complete the process from the date of first appearance of the disputed parties and it also talks about the extension of the proceedings i.e. for 30 days if needed.

In 2015, an act was drafted by the legislature focusing mainly on adjudicating matters which are generally commercial in nature. A dispute which is between the business entities and defines with the exchange between vendors, merchants, financers, traders and so on is known as Commercial dispute. Under this, legislature has also covered the matters which are related to agreements, intellectual property, contracts, partnership, insurance etc. in 2018 through amendment this act has brought a specific clarity and all the matters which are esteemed more than 3,00,000 are now governed by the provision of this act. 

Until and unless no significant relief is needed such as an injunction has been made obligatory for the parties to settle down the matter through the mediation process after the act, concerned authorities can conduct the mediation process as per the legal service authorities at, 1987 and should complete it within a period of 3 months and may extend for another 2 months if needed according to the act.

 Institutions such as IIAM, FDCR and CAMP also conduct the mediation process. These private institutions benefits when disputing parties are in need of an even handed and an unbiased third party and are in need of someone who expertise in dealing with these specialized disputes as a mediator, by recapitulating the terms of settlement in an agreement or consent award these settlement can be made enforceable in nature in the eyes of law.


On 1st July, 2002 the code of civil procedure, 1908 came into effect as an act in India after the amendment in 1999, section 89 was repealed after the enactment of Arbitration Act, 1940. However, soon after the proposal of Malimath Committee and law commission of India the same was resuscitated with the clause not only for arbitration but also for mediation, judicial settlement and conciliation. If in the persuasion of the court, the same has been made mandatory for the court to refer the parties for alternative dispute mechanisms for setting up the dispute after the amendment.

A literal reading of the section would interpret that, the court in a matter filed for further litigation first perceives any possible sort of elements regarding the settlement after that it formulates the terms of settlement. The formulated terms are then given to the disputed parties for deliberation or consideration for that matter. Subsequently, hearing the sentiments of the parties on the terms, the court finds that the parties are intentionally volunteering themselves to settle then court might refer the same to the mediation or any other dispute mechanism. 

The main motive behind enacting and framing this section is to reduce the burden of work on courts and to ease alternative dispute mechanisms for settling up the disputes between the parties. If the court has to do all the spadework then this would amount to additional pack of work instead of diminishing the burden. Hence, this flaw has been rectified and rule of interpretation had been observed and thus, the objective for enacting the section has been fulfilled. The authority to interpret and review lies with the court.

Where in code of civil procedure , 1908 is section 89 is referred to as substantive provision, order X rule 1(A,B,C) are enabling provisions of the act which are used for referring a matter to Alternative dispute Resolution mechanisms.

Rule 1A gives power to the court to decide the date of process after assisting with the parties and Rule 2B states that parties are supposed to present themselves before the concerned authority if the suit is referred to mediation or any dispute resolution mechanisms. Rule 3 C gives power to the presiding officer of the process to send the case back to the court for further court trials if parties are not satisfied.


Settlement of disputes through dispute mechanism is provided under section 89 of the CPC, 1908. However, there are some sorts of cases which cannot be referred to an mediation under section 89 of the code. 

  1. All the cases which have involvement of public or interests of public at large and thus are not parties to the disputed matter before the court should not be referred to ADR.
  2. Suits which are under Order 1 rule 8 of the CPC, 1908 are not supposed to be referred under section 89 of the code.
  3. Suits in which there is involvement of granting relief like in rem, probate or any letter related to administration or dispute related to public offices elections.
  4. Undue influence, coercion, fraud, fabrication, forgery related cases can’t be referred to ADR mechanisms.
  5. Suit in which there is involvement of deities, mentally challenged party, declaration of title in case of government are not supposed to be settle outside the court and hence cant b referred to mediation under section 89.


Generally, other cases and suits which are civil I nature can be referred and are suited for mediation process.

  1. Suits which are related to trade, contracts, money claims and disputes related to banking, insurance and tenancy issues are best suited for mediation process and can be referred to mediation under section 89 of the code.
  2. Disputes arising out of social issues and matters in relation to marriage, maintenance, partition problems are referred to the mediation mechanism and thus objective of speedy trail is also achieved.
  3. Cases in which there is involvement of easementry rights, associations, house/apartment owners, and nuisances are best settled when solve through mediation and thus are suitable cases to refer to the same.
  4. Suits in relation to accident/claims and the cases which are in context of tortuous liability could be solved outside the court and hence are referable matters for mediation.
  5. Disputes in which reputation are priority of the disputed parties and cases which touched the concept of consumer issues like problem with trades, service centers/providers, suppliers are best solved when settled outside the court and thus court time is saved and the purpose of enacting the section in the code is also fulfilled i.e. to reduce the extra burden on the courts.



In Afcon’s case the judges interpret and gave the list of all the matters that can be referred and settled through mediation process under section 89 of code of civil procedure 1908, the listicle consists of the cases like family matters, trade related matters and matters in context of law of tort and even consumer related suits. Further, the court had also observed the problems in section 89 of the code and mentioned the cases which are not meant and referred to dispute mechanisms. 


In this case the Supreme Court urges government to review and amend the motor vehicle act and issued many directions for government to look and reform the motor vehicle accident claim system. The court also plead to Motor Accidents Mediation Authority  to make necessary reforms in area of motor vehicle act and also asked National Legal Services Authority to make a cell named Motor Accident Mediation Cell which has power to operate independently for betterment of mediation process in areas of  Motor vehicle accident suits. 



Lack of general specifications might cause serious problems in case of power misappropriation because CPC, 1908 does not provide particular guidelines for the process of mediation and mediators in regards of maintenance of proper participation and opportunities while conducting the dispute resolution process.

No definite provisions with respect to reviewing the contract/agreement arrived by mediators is also a weakness to this section of the code.

Incorporating the mediation process on a pre-trail further add this provision of the code to a weaker or a problematic section because as per after the amendment in the year 2012 that referring the suit to mediation process is mandatory by the courts if suitable. However, most of the time parties are not present before the concerned authority or if parties shows up then the advocates don’t show up before the mediators which results in the court postponing the dates of mediation process which results into delay of judgments.

Generally, some parties intentionally do not appear for the mediation process or if they do appear they don’t want to settle down and unreasonably pull back the process.  As section 89 of the code does not provide for any penal action for the parties who do so and thus the purpose of mediation is not solved.

At times it has been noted that advocates purposely don’t let their clients/parties to settle down their matter through mediation process just to add some more numbers in their fees structure.


Mediation is the process of alternate dispute resolution mechanism which has been followed since aeons ago and thus resulted in the adaptation of the rules by people and to live in a decorous society. Disputes are something which can’t be ignored by choice but can be settled by choice, saving of lot of energy, hard-earned money, time, efforts and hence mediation has played a vital role in saving them all and providing faster and favorable outcomes as it is a win-win situation at the same time. Mediation clause in the code has been made to customize the results as per the individual needs and then come to a conclusion instead of following the rigid rules and regulations and therefore will created a win-win situation for all the disputed parties.

Where there is a suitable condition or scope for that matter then section 89 of the code is the both effective and efficient way to resolve the matter amongst the parties. The objective behind including section 89 in the code has served as it was framed to reduce the over-burden suits of courts and to give faster judgments and after implementing the section there is an increase of justice without compromising on quality.

However, section 89 of the code also faces some oddities which have resulted in depleting its efficaciousness and thus hinders judgments and delays justice. The 238th law commission had observed the same and had recommended that the section had to be amended. Insufficiency of legal understanding amongst the people and inefficiency of legal aspects resulted in non-fulfillment of the objective. Section 89 of code of civil procedure, 1908 is an effective way of solving the case but its motive is  overthrown because of faulty drafting, inaccuracy, lack of knowledge amongst the citizens and of course  legal complexities and hoping for larger compensation, due to these issues one is choosing court trail or litigation instead of mediation or other alternative dispute resolution in  spite of knowing that mediation are more cost-effective and a quicker way to get the justice.