India Constitutes the Mediation Council, What Businesses Must Know

The constitution of the Mediation Council of India under the Mediation Act 2023 is a milestone moment for anyone involved in commercial disputes in India, because a statutory institution that had existed largely on paper is now being brought to life with genuine regulatory functions. For in-house counsel, litigators and businesses, the Council’s constitution transforms mediation from an aspiration written into legislation into an operational framework for accrediting mediators and mediation service providers. This article explains what the Council is designed to do, how accreditation is expected to work in practice, and how these developments intersect with the pre-institution mediation obligation under Section 12A of the Commercial Courts Act, 2015.

Executive summary, what happened and why it matters

The headline is straightforward but consequential: the Mediation Council of India gives statutory shape to an institution that is intended to regulate the quality, conduct and accreditation of mediation across the country. The Council is positioned to accredit individual mediators and mediation service providers, prescribe training and conduct standards, and exercise oversight and discipline. For commercial parties, the practical significance is that the pre-institution mediation requirement under Section 12A of the Commercial Courts Act, 2015, long criticised as inconsistently resourced, now has the prospect of an institutional backbone to make it meaningful.

The top-line implications are these: mediators will face a new accreditation regime, providers must meet institutional standards, and litigants will increasingly encounter accredited processes before their disputes reach a courtroom. This is information of immediate operational relevance, and the sections below unpack each dimension in detail.

Statutory basis, the Mediation Act 2023 and the official notification

The Mediation Act 2023 received the assent of the President in September 2023 and was enacted to promote and encourage mediation as a mechanism for resolving disputes, particularly commercial disputes, and to provide a comprehensive legislative framework where previously mediation had been governed by a patchwork of rules scattered across procedural codes and court practice. The Act’s purpose is to institutionalise mediation, give confidentiality and enforceability a firm footing, and create a national regulator. The full text of the Act is available through the Legislative Department’s Acts repository.

The Act itself contemplates the creation of the Mediation Council of India as the central regulatory authority under Part V of the Act. Different provisions of the Act have been brought into force by the Central Government through notifications in the Official Gazette. The Gazette of India (eGazette) is the official record of such notifications, and it is the primary source to consult for the exact notification numbers, registration details and any appended rules. The interval between the Act’s enactment and the operationalisation of the Council reflects the practical reality that establishing a national accreditation body, with its appointment processes, rule-making, and governance architecture, takes time.

Key definitions in the Act, mediator, mediation service provider, accreditation

Three concepts anchor the regulatory scheme:

• Mediator. An individual who conducts mediation, whether appointed by the parties, by a mediation service provider, or otherwise. Under the accreditation regime, a mediator’s professional standing will increasingly depend on formal recognition.
• Mediation service provider. An institution or body that administers mediation, supplying panels of mediators, case-management infrastructure, and procedural rules. Providers are regulated at an organisational level rather than as individuals.
• Registration and recognition. The formal process by which a mediator or provider is recognised as meeting prescribed standards of training, conduct and competence. This is what converts the abstract idea of “qualified mediation” into a verifiable standard.

These concepts matter because the operational consequences of the Act, who may be appointed, whose settlements carry the strongest procedural weight, and which providers courts will treat as reliable, all flow from them.

The Mediation Council, constitution, functions and powers

The Council is not designed as a purely advisory body. It is envisaged as a regulator with standard-setting, recognition, and oversight functions. Understanding its constitution and powers is the starting point for any business assessing how the mediation landscape will shift.

Council composition and governance

The Mediation Council of India is structured as a statutory body with a chairperson and members drawn to reflect legal, mediation and administrative expertise. The precise composition, the appointment mechanism, and the terms of office are set out in the Mediation Act 2023. Governance is intended to combine independence, so recognition decisions are credible, with accountability to the Department of Legal Affairs within the Ministry of Law and Justice, which issues official communications and explanatory material relating to the Council.

Good governance is not a cosmetic detail. The credibility of any recognition regime depends on the perceived independence and competence of the body granting it. Commercial parties selecting a mediator will want assurance that recognition reflects genuine standards rather than a rubber stamp, and the Council’s governance framework is the mechanism designed to deliver that assurance.

Regulatory powers and oversight

The Council’s statutory functions are broad. In practical terms, they include:

• Registration and recognition. Recognising individual mediators and mediation service providers who meet prescribed standards.
• Standard-setting. Prescribing training requirements, continuing professional development, and codes of conduct.
• Registration and oversight. Maintaining registers of recognised mediators and providers and monitoring ongoing compliance.
• Complaints and discipline. Receiving complaints against mediators or providers and dealing with them in accordance with the Act and regulations.
• Rule-making. Framing regulations that give operational detail to the Act’s broad provisions.

The oversight dimension is what distinguishes the statutory regime from pre-existing informal mediation practice. Where before a party had limited recourse if a mediator acted improperly, the Council provides a structured route. This matters for commercial disputes, where confidentiality breaches or conflicts of interest can carry serious consequences. The practical effect, industry observers expect, is that recognised mediators will be more careful about disclosures, conflict checks and process discipline precisely because there is a regulator setting standards.

What recognition will require, mediators vs mediation service providers

The most immediate operational question for the profession is what recognition will actually demand. The Act creates the framework; the Council’s regulations will supply the granular criteria. Based on the statutory scheme and comparable international standards, including UNCITRAL’s guidance on mediation practice, the following practical requirements are anticipated. Readers should treat these as the likely shape of recognition and confirm the exact criteria against the Council’s published regulations as they are issued.

Recognition for individual mediators, anticipated checklist

Individual mediators seeking recognition should expect to satisfy requirements across several dimensions:

• Baseline qualification. A recognised professional or academic qualification, or demonstrable relevant experience, forming the entry threshold.
• Recognised training. Completion of a prescribed programme of training delivered by a recognised institution, covering mediation theory, process management and ethics.
• Continuing professional development. Ongoing CPD to maintain and refresh skills, with periodic proof required at renewal.
• Code of conduct. Adherence to a code governing impartiality, neutrality and confidentiality.
• Disclosure obligations. A duty to disclose any circumstances giving rise to a conflict of interest before and during a mediation.
• Accountability. Subjection to the Council’s complaints process for breaches.

Advocates who also act as mediators should note that professional conduct obligations under Bar Council of India norms continue to apply alongside the Council’s requirements. The two regimes overlap, and a lawyer-mediator must satisfy both.

Recognition for mediation service providers, anticipated checklist

Mediation service providers are regulated at an institutional level, and their recognition requirements reflect organisational capacity rather than individual competence:

• Infrastructure. Suitable facilities, whether physical or secure digital platforms, capable of hosting mediations reliably and confidentially.
• Case-management systems. Robust systems for scheduling, record-keeping and tracking of matters.
• Panel management. Onboarding, vetting and training of panel mediators, ensuring the provider draws on recognised individuals.
• Neutrality and conflict policies. Institutional conflict checks and neutrality safeguards to protect the integrity of the process.
• Fee transparency. Clear, published fee structures so parties understand the cost basis.
• Grievance mechanisms. Internal channels for complaints, operating alongside the Council’s oversight.
• Periodic review. Compliance review as a condition of continued recognition.

Comparison table, Recognition: Individual Mediator vs Mediation Service Provider

Interaction with Section 12A of the Commercial Courts Act

Perhaps the most commercially significant consequence of an operational Mediation Council is the way it can energise Section 12A of the Commercial Courts Act, 2015. Section 12A provides that a suit which does not contemplate any urgent interim relief shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with the manner and procedure prescribed by rules. The provision was designed to divert suitable commercial disputes away from crowded court dockets and towards structured settlement.

The difficulty, historically, was that pre-institution mediation depended on the availability of competent, resourced mediation infrastructure. A statutory requirement to mediate is only as effective as the mediators and providers available to conduct that mediation. By recognising mediators and providers, the Council is intended to make the Section 12A obligation genuinely operable: courts and parties will have a recognised pool of accredited neutrals and institutions to whom pre-institution mediation can be entrusted with confidence.

How to comply with Section 12A in practice

For a claimant contemplating a commercial suit, compliance with Section 12A involves a sequence of practical steps:

1. Assess at the outset whether the intended suit contemplates any urgent interim relief. If it genuinely does, the mediation requirement does not bite in the same way.
2. Where the requirement applies, initiate pre-institution mediation through the prescribed channel, engaging a recognised provider or mediator.
3. Participate in the mediation process, observing the applicable timelines for its conduct and conclusion prescribed under the applicable rules.
4. Where mediation fails to produce a settlement, obtain the appropriate record of non-settlement, which then permits the suit to proceed.
5. Where mediation succeeds, ensure the settlement is properly documented, because a settlement arrived at through this process has the status and effect prescribed under the statutory framework.

The practical workflow for counsel now runs: evaluate suit viability, screen for the urgent-interim-relief exception, engage an appropriate mediation route, and only then, if necessary, litigate. Building this sequence into standard case-intake procedure is the sensible response to the current regime.

Exceptions and judicial interpretation

The central statutory exception concerns suits that contemplate urgent interim relief, these are not subject to the same pre-institution mediation gate. This exception has been the subject of considerable judicial attention, because parties have at times invoked it to bypass mediation. In Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. (2022), the Supreme Court of India held that pre-institution mediation under Section 12A is mandatory and that a suit not contemplating urgent interim relief filed in breach of the provision is liable to be rejected. Counsel should track this jurisprudence as it continues to develop, since a genuine and accessible mediation route weakens arguments that mediation would be futile or impractical.

Good faith and the real filter, when pre-institution mediation will (and won’t) work

An important caveat runs through any honest assessment of the reform. A functioning Council does not, by itself, guarantee that pre-institution mediation will resolve disputes. Mediation filters cases effectively only where parties attend in good faith. Where a party treats mediation as a procedural formality to be endured before litigating, the process becomes a tick-box exercise rather than a genuine settlement opportunity.

Bad-faith indicators and judicial responses

Certain conduct signals that a party is not engaging in good faith:

• Attending mediation sessions without any authority to settle, or sending representatives who cannot make decisions.
• Refusing to disclose relevant information or engage with the merits of the dispute.
• Making no counter-proposals and rejecting all overtures without explanation.
• Using the mediation period purely to gather intelligence about the opponent’s position ahead of litigation.

Courts assessing Section 12A compliance are likely to look at substance over form. Mere attendance at a mediation session may not satisfy the requirement if the mediation was, in effect, a sham. The likely judicial approach, consistent with the statutory aim of promoting genuine settlement, is to examine conduct, disclosures and engagement rather than to accept a bare certificate of attendance. Where good faith is absent, courts may consider costs consequences or other procedural responses, and this prospect itself creates an incentive to participate meaningfully.

Risk management for businesses and counsel

The practical lesson is that businesses should treat mediation as a genuine opportunity rather than an obstacle. Two risks arise: first, that a party engages in bad faith and later faces adverse costs or credibility findings; second, that a party under-prepares and squanders a real chance to settle on favourable terms. The response is to prepare for mediation as seriously as for a hearing, with a clear negotiating mandate, a settlement range approved in advance, and the right decision-makers present.

Practical steps for businesses and counsel, checklist and case-flow

Businesses and their advisers should act now to align their dispute-resolution practices with the framework created by the Mediation Act 2023. The following checklists are practical, actionable, and geared to the realities of commercial disputes.

For claimants

• Audit your ADR clauses. Review standard contracts and update dispute-resolution clauses to reference mediation in line with the Mediation Act 2023 framework.
• Screen for the interim-relief exception early. Determine at intake whether the matter genuinely contemplates urgent interim relief before assuming mediation can be bypassed.
• Select recognised providers. Prefer recognised mediators and mediation service providers whose standing signals quality and accountability.
• Prepare mediation-ready evidence. Assemble a concise brief of the key documents and quantified claim so the mediation is substantive from the first session.
• Approve a settlement mandate. Ensure the attending representative has authority to settle within a pre-agreed range.
• Document outcomes properly. Whether the matter settles or not, obtain the correct record, because it governs your next procedural step.

For respondents

• Respond constructively. Engage with mediation notices promptly and in good faith, mindful that dismissive conduct may attract adverse inferences later.
• Run conflict and confidentiality checks. Confirm the mediator’s and provider’s neutrality and understand the confidentiality protections that apply under the Act.
• Preserve evidence. Maintain the integrity of relevant records in case the dispute proceeds to litigation.
• Draft settlements carefully. Where settlement is reached, ensure the mediated settlement agreement is drafted for enforceability, addressing scope, releases and compliance mechanics.
• Consider the economics. Weigh the cost and viability of defending litigation against settlement; where third-party financing is relevant to the calculus, review the options for litigation funding in India.

For both sides, the enforceability of a mediated settlement agreement is a decisive advantage of the statutory regime. Under the Mediation Act 2023, a mediated settlement agreement is enforceable in the same manner as a judgment or decree of a court, subject to the limited grounds of challenge set out in the Act. A properly documented settlement therefore reduces the risk that a resolved dispute re-emerges as fresh litigation. In-house counsel should build a standard settlement template and engagement-letter process to capture this benefit reliably.

Where mediation fits in the commercial dispute resolution toolkit

Mediation is one option within a broader dispute-resolution toolkit that also includes negotiation, arbitration and litigation. A brief comparative note is useful: arbitration produces a binding award through an adjudicative process led by an arbitral tribunal, whereas mediation is facilitative and consensual, with the mediator helping parties reach their own settlement rather than imposing an outcome. Mediation is generally faster and less costly, preserves commercial relationships, and offers confidentiality, but it depends on the parties’ willingness to settle. Arbitration and litigation deliver enforceable determinations even where the parties cannot agree, but often at greater cost in time and money.

Common commercial disputes suited to mediation

Not every dispute is a candidate for mediation, but many commercial disputes are well suited to it, including:

• Contractual payment and supply disputes where an ongoing relationship is worth preserving.
• Distribution, franchise and agency disagreements.
• Shareholder and joint-venture tensions where confidentiality is prized.
• Construction and infrastructure claims involving complex technical facts better resolved by negotiated compromise than binary adjudication.
• Post-acquisition and warranty disputes where quantification is contested.

Choosing a mediation provider: recognition and quality signals

When selecting a mediation service provider, recognition by the Council is expected to become a primary quality signal. Beyond recognition, businesses should assess the provider’s panel of mediators, sector experience, infrastructure, fee transparency and grievance mechanisms. The dispute resolution India landscape rewards diligence in provider selection, because the right provider materially improves the prospect of a durable settlement.

What to watch next, regulations, appointment rules, and early case law

The constitution of the Council is a beginning rather than an end. Three developments deserve close attention. First, the Council’s detailed regulations, the granular criteria for mediators and providers, are expected to be published in stages, and businesses should track each Gazette notification for the exact requirements and timelines. Second, appointment and governance rules will shape how the Council operates and how quickly recognition applications are processed. Third, and most importantly for litigators, evolving case law interpreting Section 12A will clarify how courts treat good-faith participation and the urgent-interim-relief exception. Monitoring judgments of the Supreme Court and High Courts as they emerge will be essential to advising clients accurately.

This article is for information only and does not constitute legal advice. Businesses should seek bespoke advice on their specific circumstances.

Conclusion

The operationalisation of the Mediation Council of India under the Mediation Act 2023 marks a decisive shift in how commercial disputes will be managed. A largely dormant statutory body is becoming an operational regulator with the power to recognise mediators and providers, set standards, and oversee conduct, and in doing so it gives the Section 12A pre-institution mediation requirement the institutional backbone it has often lacked. For businesses and counsel, the message is to act now: audit ADR clauses, engage recognised providers, prepare for mediation as seriously as for a hearing, and participate in good faith.

Those who treat the regime as a genuine settlement opportunity, rather than a procedural hurdle, stand to resolve disputes faster, more cheaply and more durably in the years ahead.

Sources

1. Gazette of India (eGazette)
2. Legislative Department, Acts repository
3. Supreme Court of India
4. Bar Council of India
5. Ministry of Law & Justice, Department of Legal Affairs
6. UNCITRAL, Mediation texts and best practices