Sections 1-2 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.
Section 1 gives the Act its name, extends it to the whole of India and leaves its start date to a Central Government notification. Section 2 then says when the Act applies to a mediation: where the mediation is conducted in India and one of five conditions is met. This article reads both sections line by line.
The Act extends to the whole of India, and comes into force on the date or dates notified by the Central Government, with different dates possible for different provisions. Under section 2 the Act applies where mediation is conducted in India and either the parties are Indian by residence, incorporation or place of business, or the mediation agreement picks the Act, or the mediation is international, or a Government body is a party to a commercial dispute, or the Government has notified another kind of dispute. The notification dates themselves are not in the text consulted.
Section 1: title, extent and commencement
Section 1(1) says the Act may be called the Mediation Act, 2023. The long title in the gazette adds the purposes: to promote and facilitate mediation, especially institutional mediation, for resolution of disputes, commercial or otherwise; to enforce mediated settlement agreements; to provide for a body for registration of mediators; to encourage community mediation; and to make online mediation an acceptable and cost effective process.
Section 1(2) says the Act "shall extend to the whole of India". There is no carve-out printed in the section.
Section 1(3) is the commencement clause. The Act comes into force on such date as the Central Government may, by notification, appoint. Two further points sit in the same sub-section:
- different dates may be appointed for different provisions of the Act; and
- any reference in a provision to "the commencement of this Act" is to be read as a reference to the coming into force of that provision.
The Act was assented to on 14 September 2023 and published in the Gazette of India on 15 September 2023. Commencement is by notification, and the notification dates are not in the text consulted for this article. Anyone relying on a particular provision should check the Official Gazette for the notification that brings it into force; our mediation services team can help you map a dispute to the Act. This article describes what the Act provides and does not say whether any section has started to operate.
Section 2: when the Act applies
Section 2 opens with a condition that applies to every limb: the Act applies "where mediation is conducted in India". On top of that, one of the following must be present.
| Clause | Trigger as printed | What it means in practice |
|---|---|---|
| (i) | All or both parties habitually reside in, are incorporated in, or have their place of business in India | A domestic dispute between Indian residents or Indian companies |
| (ii) | The mediation agreement provides that any dispute shall be resolved under the provisions of this Act | Parties can bring a mediation under the Act by saying so in their agreement |
| (iii) | There is an international mediation | A mediation meeting the definition in section 3(g) |
| (iv) | One party is the Central Government, a State Government or their agencies, public bodies, corporations and local bodies, including entities controlled or owned by such Government, and the matter pertains to a commercial dispute | Public sector and Government-linked parties in business disputes |
| (v) | Any other kind of dispute, if deemed appropriate and notified by the Central Government or a State Government for resolution through mediation under the Act, where such a Government body is a party | Disputes outside clause (iv) that a Government chooses to notify |
The clauses are joined by "or", so meeting any one of them is enough.
Reading clauses (i) to (iii)
Clause (i) uses the words "all or both parties". It covers parties who habitually reside in India, are incorporated in India or have a place of business in India. "Place of business" is defined in section 3(t) to include the place where business is ordinarily carried on (with a warehouse or godown where goods are stored), a place where books of account are maintained, and a place where a party does business through an agent. A supplier whose books are kept in an Indian office therefore has an Indian place of business even if its factory is elsewhere.
Clause (ii) lets the parties opt in. If the mediation agreement says any dispute shall be resolved in accordance with the provisions of the Act, the Act applies, provided the mediation is conducted in India. A well drafted clause in a contract should therefore name the Act expressly. Our guide on common concepts in drafting, including mediation clauses covers clause placement, and section 4 of the Act (see the mediation agreement article) says what counts as a written mediation agreement.
Clause (iii) brings in "international mediation". Section 3(g) defines it as mediation under the Act relating to a commercial dispute where at least one party is a foreign national or habitual foreign resident, a body corporate with its place of business outside India, an association of individuals with its place of business outside India, or the Government of a foreign country. The definitions are walked through in the section 3 article.
If you are drawing up a contract with a foreign counterparty and want the mediation step to sit properly within the Act, our team can look at the clause with you before it is signed.
Reading clauses (iv) and (v): Government as a party
Clause (iv) covers a long list of public entities: the Central Government, a State Government, agencies, public bodies, corporations and local bodies, and entities controlled or owned by such a Government. The Act applies only where the matter pertains to a commercial dispute. Section 3(a) borrows the meaning of "commercial dispute" from section 2(1)(c) of the Commercial Courts Act, 2015, which is the subject of our explainer on commercial disputes.
Clause (v) is wider in subject but narrower in route. It reaches "any other kind of dispute" where a Government body is a party, but only if it is "deemed appropriate and notified" by the Central Government or a State Government, from time to time, for resolution through mediation under the Act. No notification of that kind is in the text consulted, so this article lists none.
Separately, sections 48 to 50 of the Act deal with Government disputes, schemes and the consent needed before a settlement is signed; those are covered in the article on mediation where the Government is a party.
What section 2 does not say
Section 2 sets out when the Act applies. It does not by itself list the disputes that cannot be mediated under the Act; section 6 and the First Schedule do that. It also does not fix a fee, a venue or a procedure. Where later sections refer to matters "as may be prescribed" or "as may be specified", the detail is left to rules of the Central Government or regulations of the Mediation Council of India, and none is in the text consulted.
Need help with applying the Mediation Act to your dispute?
If you are not sure whether your contract or dispute falls within section 2, a short review of the agreement and the parties usually settles it. Talk to us about mediation services before you serve a notice or sign a mediation clause.
Key takeaways
- The Act extends to the whole of India (section 1(2)).
- It comes into force on dates notified by the Central Government, and different dates may be set for different provisions; the notification dates are not in the text consulted.
- Section 2 requires mediation conducted in India plus one of five triggers, joined by "or".
- Parties can bring the Act in by a clause saying disputes shall be resolved under its provisions.
- Government bodies fall in for commercial disputes under clause (iv), and for other disputes only if notified under clause (v).
Read next
- Section 3 of the Mediation Act, 2023: definitions
- Section 4 of the Mediation Act, 2023: the mediation agreement
- The Mediation Act 2023 for commercial and trade disputes
- Arbitration vs litigation vs mediation: a comparison
Disclaimer: Based on the Mediation Act, 2023 as enacted and published in the Gazette of India on 15 September 2023, as consulted on 2 October 2026. The Act comes into force by notification; the commencement of each provision, the rules and the regulations should be checked. This article is general information, not legal advice; check the official text before acting.