Mediation 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.
Mediation is a voluntary, confidential process in which a neutral mediator helps the parties reach their own agreement. The mediator facilitates; he or she does not decide. You can commit to mediation in advance with a clause in a contract, or after a dispute arises with a stand-alone agreement. This article provides model clauses for both situations and a stand-alone agreement, and explains the provisions of the Mediation Act, 2023 that they rely on.
A mediation agreement must be in writing (section 4(1) of the Mediation Act, 2023). It may be a clause in a contract or a separate agreement, and it may cover disputes that have arisen or may arise. The parties may agree on the name of the mediator and the procedure for appointment; if they do not agree, the party seeking mediation applies to a mediation service provider, which must appoint within seven days (section 8). Settlement is never compelled: the parties can withdraw at any time.
When you need a mediation agreement or clause
Add a mediation clause to a contract when you want disputes to go to mediation before arbitration or court. Use a stand-alone agreement when a dispute has arisen and the parties want to engage a mediator on agreed terms. Pre-litigation mediation, before a civil or commercial suit or proceeding is filed, is something the parties may voluntarily undertake with mutual consent whether or not a mediation agreement exists (section 5), subject to the requirement that pre-litigation mediation in commercial disputes of the specified value follows the Commercial Courts Act, 2015 and its rules.
If you want mediation built into your contract set, or a mediator engaged for a live dispute, our mediation services team can help. For the sister processes, see the conciliation clause and agreement and the mediated settlement agreement.
Model mediation clauses and stand-alone agreement
MODEL CLAUSE 1: MEDIATOR OR INSTITUTION ALREADY IDENTIFIED If a dispute arises between the parties in connection with this Agreement, the parties shall participate in mediation under the mediation procedures of before pursuing other remedies. The mediation shall be administered by . The mediator will facilitate discussions and negotiations but will not give an independent opinion or judgment, has no power to decide the dispute and cannot compel an agreement. The costs of mediation, other than each party's own costs of representation, shall be shared . MODEL CLAUSE 2: MEDIATOR NOT IDENTIFIED IN ADVANCE If a dispute arises out of or in relation to this Agreement and is not resolved by negotiation within , the parties shall submit it to mediation, and participation in mediation is a condition to either party pursuing any other remedy on that dispute. (a) Either party may give written notice to the other of its wish to begin mediation, and a mediation session shall be held within of the notice. (b) The parties shall jointly appoint a mediator acceptable to both. If they cannot agree within of the notice, the party seeking mediation shall apply to for the appointment of a mediator. (c) The costs of mediation, other than each party's own costs of representation, shall be shared . (d) Nothing in this clause prevents a party from seeking urgent interim relief from a court. STAND-ALONE MEDIATION AGREEMENT This Mediation Agreement is made on at BETWEEN , (the First Party) AND , (the Second Party) AND , (the Mediator). RECITALS A. The First Party and the Second Party are parties to dated (the Contract). B. A dispute has arisen concerning (the Dispute), and the parties wish to attempt to resolve it by mediation under the Mediation Act, 2023 (the Act). THE PARTIES AND THE MEDIATOR AGREE AS FOLLOWS: 1. Mediation agreement. This Agreement is a mediation agreement in writing under the Act. 2. Appointment. The parties appoint the Mediator to assist them in resolving the Dispute. The Mediator has disclosed in writing all circumstances that may affect independence or impartiality, and the parties accept the appointment. 3. Nature of mediation. Mediation is a process in which the Mediator assists the parties to reach their own agreement in a collaborative, consensual and informed manner. The Mediator has no power to decide the Dispute, cannot give legal advice to any party and will not arbitrate. Mediation is not a substitute for independent legal advice. 4. Scope. The parties, with the Mediator's concurrence, shall settle the scope of the mediation at the first session. The Dispute includes . 5. Voluntary participation. The parties intend to complete the mediation by agreement but either party may withdraw or suspend participation at any time. The Mediator may suspend or terminate the mediation if no useful result seems possible or the Mediator can no longer perform the facilitative role effectively. 6. Confidentiality. The Mediator, the parties and everyone who takes part shall keep confidential all matters relating to the mediation as the Act provides and shall not rely on them in other proceedings, except as the Act allows. 7. Place, time and mode. Sessions shall be held at or online on , for up to . 8. Fees and costs. The Mediator's fee is and shall be shared . Each party bears its own costs of representation. 9. Outcome. If the parties reach a settlement, they shall record it in a written agreement signed by them and submitted to the Mediator for authentication. If no settlement is reached, the Mediator shall prepare a non-settlement report that does not disclose the cause of non-settlement. IN WITNESS WHEREOF the parties and the Mediator have signed this Agreement on the date first written above. Witnesses: 1. 2.
Clause-by-clause explanation
| Part | What it does | Drafting tip |
|---|---|---|
| Clause 1: named institution | Commits to a known procedure | Check the institution's current rules and that it will act |
| Clause 2: no mediator named | Provides notice, session, appointment and fall-back | Mirror the statutory route in section 8 |
| Condition before other remedies | Makes mediation a first step | Keep a carve-out for urgent interim relief |
| Stand-alone agreement: recitals | Records the contract and the dispute | Describe the dispute neutrally |
| Appointment and disclosure | Names the mediator and records disclosure | Obtain the disclosure before signing |
| Nature of mediation | States that the mediator facilitates only | Prevents later claims that the mediator advised or decided |
| Scope | Sets the issues | Allow the parties to settle it early in the process |
| Voluntary participation | Preserves the right to withdraw | Mediation cannot be forced to an outcome |
| Confidentiality | Protects the process | Refers to the Act |
| Fees and costs | Shares cost | State the fee basis |
| Outcome | Settlement or non-settlement report | Settlement is signed by the parties and authenticated by the mediator |
The law behind it
Section 4. A mediation agreement shall be in writing, by or between parties and anyone claiming through them, to submit to mediation all or certain disputes which have arisen or may arise. It may be a mediation clause in a contract or a separate agreement. It is in writing if contained in a document signed by the parties, an exchange of communications or letters including electronic form, or pleadings in a proceeding where one party alleges it and the other does not deny it. A reference in an agreement to a document containing a mediation clause makes that clause part of the agreement if the agreement is in writing and the reference is such as to make the clause part of it. The parties may submit to mediation disputes arising under an agreement, whether it was entered into before the dispute arose or after. See section 4, mediation agreement.
Section 5. Whether or not a mediation agreement exists, the parties may voluntarily and with mutual consent try pre-litigation mediation before filing a civil or commercial suit or proceeding, under the Act; pre-litigation mediation in commercial disputes of Specified Value follows section 12A of the Commercial Courts Act, 2015 and its rules. Unless the parties agree otherwise, the mediator for pre-litigation mediation is one registered with the Council, or empanelled by a court-annexed mediation centre, a Legal Services Authority or a recognised mediation service provider. See section 5, pre-litigation mediation.
Section 8. Unless the parties agree otherwise, a person of any nationality may be appointed as a mediator, but a foreign national must have the qualification, experience and accreditation specified. The parties may agree on the name of the mediator and the procedure of appointment. If they do not, the party seeking initiation of mediation applies to a mediation service provider, which within seven days appoints either the agreed mediator or, if the parties cannot agree or the agreed person refuses, a mediator from its panel, with his consent; the person appointed communicates willingness within seven days. See section 8, appointment of mediators.
Stamp duty, registration and execution
A mediation clause forms part of the contract and carries its duty. A stand-alone mediation agreement is an agreement in writing; any duty is as per the Stamp Act and Schedule of the State where it is executed, and no amount is given here. See the State-wise overview. It is not ordinarily registered. Execution: parties and mediator sign, the mediator's disclosure is annexed, each keeps an original.
Common mistakes
- Using "mediation" for a process that is really arbitration, with a binding decision.
- No method of appointing the mediator if the parties disagree.
- Making mediation a condition without any time limit.
- Forgetting a carve-out for urgent interim relief.
- Not stating who bears the mediator's fees.
- Not recording that either party may withdraw.
- Omitting confidentiality.
- Not deciding in advance how a settlement will be recorded and authenticated.
Need help with mediation documents?
A mediation clause should say who the mediator is, how to appoint one and what happens if mediation fails. Our mediation services team prepares clauses and agreements and supports parties through the process.
Key takeaways
- A mediation agreement must be in writing and may be a clause or a separate agreement.
- Parties choose the mediator and the procedure; if they do not, a mediation service provider appoints.
- Pre-litigation mediation is voluntary, subject to the commercial disputes rule.
- Mediation facilitates; it does not decide.
- State law fixes any stamp duty; no amount is given here.
Read next
- Mediated settlement agreement: format
- Conciliation clause and agreement to conciliate: format
- Section 4: mediation agreement
- Section 8: appointment of mediators
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.