Section 30 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 30 deals with settlement during an arbitration. A tribunal may encourage settlement, and may use mediation, conciliation or other procedures with the parties' agreement. If the parties settle, the tribunal terminates the proceedings and, if requested, records the settlement as an arbitral award on agreed terms, which has the same status and effect as any other award on the substance.
It is not incompatible with an arbitration agreement for the tribunal to encourage settlement, and, with the agreement of the parties, it may use mediation, conciliation or other procedures at any time. If the parties settle during the proceedings, the tribunal terminates the proceedings and, if requested by the parties and not objected to by the tribunal, records the settlement as an arbitral award on agreed terms. Such an award is made in accordance with section 31, states that it is an arbitral award, and has the same status and effect as any other arbitral award on the substance of the dispute. This is as per the India Code consolidated text consulted.
Settlement inside arbitration
Many commercial disputes settle after the arbitration has begun, when both sides see the cost and the evidence. Section 30 lets that happen without losing the benefit of the arbitral process. It sits just before section 31 on the form of the award; see section 31.
In the India Code consolidated text, section 30 stands in Chapter VI of Part I, "Making of arbitral award and termination of proceedings", and has no footnote of amendment. Conciliation as a separate process is the subject of Part III, which has its own articles and is not explained here; section 74 in that Part refers back to an award on agreed terms under section 30, for which see our article on sections 72 to 74. If you are close to a settlement in a live arbitration, mediation services can help you structure the talks and the terms, and your advisers can plan the consent award.
Sub-section (1): encouraging settlement
"It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement."
Two layers:
| Layer | Condition |
|---|---|
| The tribunal encourages settlement | No condition stated; it is "not incompatible" with the arbitration agreement |
| The tribunal uses mediation, conciliation or other procedures | Only "with the agreement of the parties", and at any time during the arbitral proceedings |
So a tribunal may invite the parties to talk, but it needs their agreement before it runs a mediation or conciliation process. For the mediation side, see our overview of the Mediation Act, 2023 for commercial and trade disputes, and our note on arbitration, litigation and mediation compared.
Sub-section (2): termination and the consent award
"If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms."
Three conditions work together.
- The parties settle during the arbitral proceedings.
- The tribunal terminates the proceedings: "shall", with no discretion.
- Recording as an award happens only if requested by the parties and not objected to by the tribunal.
If the parties do not ask for a consent award, the proceedings are terminated but the settlement is not recorded as an award. A party who wants a settlement that can be enforced as an award should ask in writing, jointly, before the proceedings end. Section 32(1) to (3) deals with termination of proceedings generally; see sections 32, 33 and 35.
Sub-section (3): the form
"An arbitral award on agreed terms shall be made in accordance with section 31 and shall state that it is an arbitral award." So it must be in writing, signed as section 31(1) and (2) require, dated, and delivered to the parties. Section 31(3)(b) says reasons need not be stated for an award on agreed terms under section 30. The award must say on its face that it is an arbitral award.
Sub-section (4): status
"An arbitral award on agreed terms shall have the same status and effect as any other arbitral award on the substance of the dispute."
This is the practical benefit. The consent award is not merely a contract between the parties. It is treated as an award, which affects how it is enforced. Enforcement is in section 36; see section 36. Challenge to an award is in section 34; see our post on section 34. The text consulted does not say how a section 34 challenge applies to a consent award, and we add nothing.
A worked example
Kumar Chemicals and Dhillon Plastics are in arbitration over a supply shortfall. Both agree that the tribunal may try mediation, and the tribunal holds a joint session. The parties settle: Dhillon will pay an agreed sum in three instalments. They jointly request the tribunal to record the settlement. The tribunal does not object, terminates the proceedings under sub-section (2), and issues an award on agreed terms that states it is an arbitral award, as sub-section (3) requires. Under sub-section (4), it has the same status and effect as any other award on the merits, so if Dhillon misses an instalment, Kumar relies on the enforcement provisions for awards.
The Mediation Act, 2023 and this section
Four points from the Mediation Act, 2023 touch this section. The Mediation Act comes into force by notification, and the date is not in the sources consulted, so this article does not say whether any of them is in force.
- Conciliation under this Act. The Mediation Act's Sixth Schedule provides that sections 61 to 81 of this Act are substituted by two new sections: one treating conciliation under this Act and under the Code of Civil Procedure, 1908 as mediation under the Mediation Act, and one saving conciliation proceedings begun before that Act's commencement. Section 30(1) mentions "conciliation"; see our Mediation Act cluster article on the amendments to the Contract Act, Code, Legal Services Act and Arbitration Act. For Part III as the India Code text prints it, see our article on sections 61 and 62 and our overview post on conciliation under the Act, sections 61 to 81.
- Pre-litigation settlement in commercial suits. Section 12A of the Commercial Courts Act, 2015 as it stood before that substitution says a settlement under it "shall have the same status and effect as if it is an arbitral award on agreed terms under sub-section (4) of section 30" of this Act. The Mediation Act's Ninth Schedule substitutes section 12A so that the substituted sub-section (5) says the mediated settlement agreement "shall be dealt with in accordance with the provisions of sections 27 and 28 of the Mediation Act, 2023", and the reference to section 30(4) of this Act no longer appears in it. See the Commercial Courts cluster article on section 12A.
- Confidentiality. Section 22(3) of the Mediation Act provides that no party to a mediation shall, in any proceeding before a court or tribunal including an arbitral tribunal, rely on or introduce as evidence the information or communications listed in section 22(1)(i) to (iv).
- Mediator and arbitrator. Section 17 of the Mediation Act provides that a mediator shall not act as an arbitrator in respect of a dispute that is the subject matter of the mediation.
For a tribunal using mediation under section 30(1), points 3 and 4 are worth noting before you agree a process: talk to your advisers about who will mediate and what may later be put before the tribunal.
Practical steps
- Agree in writing whether the tribunal may run a mediation or conciliation process.
- If you settle, record the terms clearly, with payment dates and consequences of default.
- Make a joint request to the tribunal to record the settlement as an award on agreed terms.
- Check that the award states it is an arbitral award, is signed and dated, and is delivered to each party; see section 31.
- Keep the consent award safe, since it is the document to enforce.
- For a pre-suit settlement under the Commercial Courts Act, follow the section 12A article rather than this one.
Need help settling a pending arbitration?
A settlement reached inside an arbitration is well captured in a consent award. Our mediation services team can help you run a structured negotiation and prepare the settlement terms and joint request.
Key takeaways
- A tribunal may encourage settlement; using mediation, conciliation or other procedures needs the parties' agreement.
- On settlement, the tribunal terminates the proceedings and, if requested and not objected to, records the settlement as an award on agreed terms.
- The consent award follows section 31 and states that it is an arbitral award.
- It has the same status and effect as any other award on the substance of the dispute.
- Mediation Act pointers: commencement by notification, date not in the sources consulted.
Read next
- Section 31: form and contents of the award, and interest
- Sections 32, 33 and 35: termination, correction and finality
- Mediation Act, 2023: amendments to the Arbitration Act and other laws
- Section 12A of the Commercial Courts Act, 2015
Disclaimer: Based on the India Code consolidated text of the Arbitration and Conciliation Act, 1996, whose footnotes show amendments up to Act 3 of 2021 and a latest date of 12 October 2023, as consulted on 2 October 2026. Rules, regulations and notifications under the Act, later amendments and the commencement of the Mediation Act, 2023 should be checked. This article is general information, not legal advice; check the official text before acting.