Mediated Settlement Agreement explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A mediated settlement agreement records the terms on which parties settle a dispute after mediation. It is the document that turns a successful mediation into rights and obligations that can be enforced. This article gives a specimen, explains how the Mediation Act, 2023 treats the agreement and shows what to check before you sign.
The agreement is in writing, signed by the parties and authenticated by the mediator. It states the dispute, the terms of settlement, the payment or performance schedule, that nothing is an admission of fact, and what happens to pending proceedings. Once signed by the parties and authenticated by the mediator, it is final and binding on them and persons claiming under them, and is enforceable as if it were a judgment or decree of a court (section 27). It can be challenged only on the limited grounds in section 28 and within the time the section allows.
When you need a mediated settlement agreement
You need one at the end of a mediation in which the parties have settled some or all of the disputes. It is used for commercial disputes over payment, supply or services, for settlement of pending suits and appeals, and for disputes handled before filing. The agreement may settle some or all of the disputes between some or all of the parties, and its terms may go beyond the disputes referred to mediation. If you need the settlement drafted, reviewed or taken through registration or enforcement, our mediation services team can help. For the earlier steps, see our mediation agreement and clause format.
Specimen mediated settlement agreement
MEDIATED SETTLEMENT AGREEMENT This Mediated Settlement Agreement is made on at BETWEEN , (the First Party) AND , (the Second Party). RECITALS A. By an agreement dated (the Contract), disputes arose between the parties concerning (the Disputes). B. The parties agreed, by ], to attempt settlement by mediation. C. (the Mediator) was appointed as mediator ], and mediation sessions were held on . D. As a result of the mediation, the parties have settled the Disputes on the terms below. THE PARTIES AGREE AS FOLLOWS: 1. Full and final settlement. The parties accept the terms of this Agreement as full and final settlement of the claims made by the First Party against the Second Party concerning the Disputes. Nothing in this Agreement is an admission of any fact or liability by either party. 2. Payment. The Second Party shall pay the First Party (the Settlement Amount) / in instalments as follows: on ; on ]. 3. Other obligations. for from , and the Second Party shall give by .] 4. Mode of payment. Payment shall be made by electronic transfer to the account of the First Party, details of which are , or by account payee cheque in the name of . 5. Discharge. The First Party's obligations under this Agreement are discharged on the payment of the Settlement Amount in full by the date in clause 2, and the Second Party's obligations are discharged on performance of clause 3. 6. Delay. Any amount not paid by the due date shall bear interest from the due date until payment at per annum, ]. 7. Existing liabilities. The Settlement Amount is inclusive of all amounts payable by the Second Party in respect of , and no other amount shall be payable on those items except interest for delay and . 8. No further claim. The parties shall have no further claim, penalty or demand against each other on the Disputes. 9. Pending proceedings. The parties shall, within of this Agreement, , and shall file this Agreement or the terms of it in those proceedings as needed. 10. Confidentiality. The parties shall keep the terms of this Agreement and the mediation confidential, except where disclosure is necessary to implement or enforce it or is required by law. 11. Costs. Each party shall bear its own costs. The Mediator's fees shall be ]. 12. Governing law. This Agreement is governed by the laws of India. The courts at have jurisdiction to enforce it. IN WITNESS WHEREOF the parties have signed this Agreement on the date first written above. Authenticated by the Mediator: Witnesses: 1. 2.
Clause-by-clause explanation
| Clause | What it does | Drafting tip |
|---|---|---|
| Recitals | Record the contract, disputes, mediation and mediator | Cite dates of sessions and the mediation agreement |
| 1 Full and final | Closes the disputes without admission | Keep the "no admission" sentence |
| 2 Payment | Fixes amount and timing | State instalment dates in the schedule |
| 3 Other obligations | Non-monetary terms | Make each term specific and measurable |
| 4 Mode of payment | Avoids disputes on how to pay | Give account details or annex them |
| 5 Discharge | Ties discharge to performance | Say exactly what completes each side's duty |
| 6 Delay | Interest on late payment | Fill the rate agreed; avoid vagueness on compounding |
| 7 Existing liabilities | Prevents later claims on items already covered | List them by document and date |
| 8 No further claim | Finality | Match it with clause 1 |
| 9 Pending proceedings | Aligns the settlement with the court record | Name the case numbers |
| 10 Confidentiality | Protects the process | Carve out enforcement |
| 11 Costs | Allocates fees | Say who pays the mediator |
| Authentication | Mediator authenticates | Required for the statutory effect |
The law behind it
Section 19. A mediated settlement agreement includes an agreement in writing between some or all of the parties resulting from mediation, settling some or all of the disputes, and authenticated by the mediator; its terms may extend beyond the disputes referred to mediation. A settlement agreement that is void under the Indian Contract Act, 1872 is not a lawful mediated settlement agreement. It must be reduced to writing and signed by the parties. In institutional mediation, it is submitted to the mediator, who authenticates it and forwards it with a covering letter signed by him to the mediation service provider and gives a copy to the parties; in other cases the mediator authenticates it and gives a copy to all parties. Settlements from online mediation are included. See section 19, mediated settlement agreement.
Section 20 (registration). For the purposes of record, a mediated settlement agreement (other than one arrived at in a court or tribunal referred mediation, or a Lok Adalat award or final award of a Permanent Lok Adalat) may, at the option of the parties, be registered with an Authority constituted under the Legal Services Authorities Act, 1987 or another body notified by the Central Government, which issues a unique registration number. Registration may be made by the parties or the mediation service provider within one hundred and eighty days from the date of receipt of the authenticated copy, and later on payment of the specified fee. Registration does not affect the right to enforce under section 27 or to challenge under section 28. See section 20, registration.
Section 27 (enforcement). A settlement signed by the parties and authenticated by the mediator is final and binding on them and persons claiming under them, and is enforced in accordance with the Code of Civil Procedure, 1908 as if it were a judgment or decree of a court; it may also be relied on by way of defence, set off or otherwise in any legal proceeding. See section 27, enforcement.
Section 28 (challenge). A party may apply to the court or tribunal of competent jurisdiction, only on the grounds of fraud, corruption, impersonation, or that the mediation was conducted in disputes or matters not fit for mediation under section 6. The application must be made within ninety days of receipt of the copy under section 19(3), extendable by a further ninety days for sufficient cause. See section 28, challenge.
Stamp duty, registration and execution
A settlement agreement is an agreement in writing; whether duty applies, and in what amount, depends on its terms and the Stamp Act and Schedule of the State where it is executed, so check it before signing. See the State-wise overview. No amount is stated here. Registration with the Authority under section 20 is optional and "for the purposes of record". If the settlement transfers immovable property, the Registration Act, 1908 may separately require registration of that transfer; see documents compulsorily registrable under section 17. Execution: both parties sign, the mediator authenticates, each party receives a copy, and the parties keep proof of the date on which the copy was received because the challenge period runs from it.
Common mistakes
- No mediator authentication, so the agreement lacks the statutory effect.
- A settlement that is void under the Contract Act, such as one with an unlawful object.
- Describing the disputes loosely so that the "no further claim" clause is argued over.
- No payment schedule, mode or interest for delay.
- Omitting the no-admission sentence.
- Failing to deal with the pending suit or appeal.
- Not noting the date of receipt of the authenticated copy.
- Confusing optional registration under section 20 with the registration of a property transfer.
Need help with a mediated settlement?
A settlement lasts only if its terms are clear, lawful and properly authenticated. Our mediation services team drafts settlement agreements, coordinates with the mediator and takes the next steps on registration and enforcement.
Key takeaways
- A mediated settlement agreement is in writing, signed by the parties and authenticated by the mediator.
- It is final, binding and enforceable as a decree (section 27).
- Registration under section 20 is optional, for record.
- Challenge is limited to fraud, corruption, impersonation or unfit disputes, within ninety days of receiving the copy.
- Include a no-admission clause and a clear payment schedule.
Read next
- Mediation agreement and mediation clause: format
- Conciliation clause and agreement to conciliate: format
- Section 27: enforcement of mediated settlement agreement
- Section 28: challenge to mediated settlement agreement
Disclaimer: This specimen is a general model for information. Every document must be adapted to its facts and to the law, rules and forms in force when it is signed or filed; stamp duty, registration and court fees depend on the State and the forum. This article is general information, not legal advice; check the official text before acting.