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Bridging the Gap: Enforcing Mediation Settlements as Consent Awards

Updated: Aug 11, 2023


Mediation is a popular and effective method of alternative dispute resolution that can help parties find a mutually satisfactory settlement without resorting to litigation. However, one of the challenges of mediation is how to ensure the enforceability of the settlement agreement in case of non-compliance by one of the parties. One possible solution is to convert the mediation settlement agreement into an arbitral award on agreed terms, enforceable under the Arbitration and Conciliation Act, 1996 [hereinafter “the Act”]. However, this option raises several legal and practical issues that need to be addressed. In this article, we examine whether mediated settlements should be considered as awards on agreed terms under Sections 30 and 74 of the Act. We will analyze the arguments for and against this proposition and compare the Indian position with the international and comparative perspective. We will also discuss the implications of this option for the parties, the mediators, and the courts.

The Case for Including a Mediation Settlement as an Award on Agreed Terms

The Act provides for the enforcement of settlement agreements arising from conciliation proceedings in Section 74. It states that such agreements have the same status and effect as arbitral awards on agreed terms under Section 30. The Act also equates mediation with conciliation [2], as it follows Article 1 of the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation, which uses the terms ‘Mediation’ and ‘Conciliation’ interchangeably. This is consistent with the American judicial system [3] and the Supreme Court of India’s ruling in Afcons Infrastructure Ltd. v. Cherian Varkey Construction. Therefore, Part III of the Act may apply both to mediation and conciliation, and the settlement agreements reached through mediation may be brought under the ambit of Sections 73 and 74. These sections require that the settlement agreements are drawn up, written, and signed by the parties and that they are final and binding.

Some jurisdictions allow parties to convert their settlement agreements into arbitral awards for the purpose of court enforcement. For example, in Italy, under Section 217 of the Mediation Legislation, parties can jointly request the approval of their agreement by a court, which gives it the same effect as a legally binding judgment. In the US, parties can use Article 1 of the New York Convention to enforce their settlement agreements as arbitral awards.

The language used by the parties to express their agreement should be given due respect unless it leads to absurdity as observed in cases like M.O.H. Uduman and Abhijith Paul. ADR is a process that empowers the parties to resolve their disputes outside the court, by choice. The court should not interfere with the legislative intent of promoting ADR on technical grounds and should uphold the enforceability of the agreements that the parties have freely consented to.

Both arbitration and mediation in real life are very similar. In private arbitration, the parties themselves appoint an arbitrator, and every procedural step is guided by party autonomy. Arbitral proceedings can even happen in a park, outside the rigors of regular procedural codes and laws. Both arbitration and mediation also share the feature of confidentiality, which protects the parties’ privacy and reputation.

By recognizing mediated settlements as consent awards, the court would enable the parties to enjoy the benefits of enforceability and finality as arbitration, which would enhance access to justice, encourage the use of ADR methods, and reduce the burden on the judiciary.

The Case Against Including a Mediation Settlement as an Award on Agreed Terms

While making such a stretched argument, it is pertinent to remember the challenges of such a recognition. Firstly, an issue with such recognition would be the circumvention of the procedure stipulated under the Act for Conciliation. Section 62 focuses on the commencement of conciliation proceedings. It explicitly stipulates that a written invitation to conciliate must be sent by the conciliating party to another and the conciliation proceedings shall commence when the other party accepts the invitation in writing. The Delhi HC dealing with this problem in Shri Ravi Aggarwal v. Shri Anil Jagota held that to cover a settlement agreement under Part III of the Act, settlement agreements had to be drawn with mutual consent by duly constituted conciliation proceedings. The Code of the Act covers consent awards only through the slightly more formal procedures of conciliation.

Secondly, as per Section 30, the arbitral tribunal may use mediation, conciliation, or other procedures at any time during the arbitral proceedings to encourage settlement. This settlement shall be recorded in the form of an arbitral award in agreed terms that shall have the same status and effect as any other arbitral award on the issues of dispute. But here it appears that the constitution of an arbitral tribunal first is sine qua non.

Third is the issue of formality. Private mediation is not governed by any statute or legal standards whereas conciliation is regulated by the Act. Settlement agreements cannot be interpreted as arbitral awards if the parties have chosen private mediation, whether through a mediation clause or otherwise. They are enforced only as agreements between parties. The US Court of Appeals in Castro v. Tri Marine Fish Co. LLC declined to regard a mediated settlement as an arbitral award due to the absence of formality essential for a procedure to become arbitration. The main issue here would be the probability of misuse of such recognition by parties in whose favor the balance of power tilts.

Finally, anything contained in the Act applies to parties only if there is a valid arbitration clause or agreement. Mediation clauses cannot be construed to be Arbitration clauses. In the Act, conciliation as a process is present in the same act as that for arbitration as a secondary option, which can be utilized by parties going for arbitration itself, as enunciated in Section 30. Therefore, any attempt to circumvent this and bring in mediation within the same ambit might be against the intent of the legislature.

The Need for Enforcement Rather Than Mere Contractual Obligation.

Keeping the technical aspects aside, there is a need to enforce mediated settlements in the current era of fast-moving business. Mediation and Conciliation are both similar in nature insofar as the nature of dispute resolution is concerned. Essentially, the outcome or result of mediation is recorded in an agreement that is enforceable as a contract in the absence of a law regulating mediation. It can be vitiated by any of the elements vitiating a normal contract such as undue influence or fraud. In a consent award, however, there is an adjudication of issues rather than mere settlement of disputes, done by the parties themselves with the help of a conciliator.

When agreements reached out of mediation are already legally enforceable contracts, what is the need to clothe them with enforceability? Let us take an instance where 2 parties are engaged in a dispute over the division of property and they engage in mediation to solve the same. During the course of mediation, the parties agree to give up/ take each other’s property as per their wishes and sign a settlement agreement. In the future, one party fails to give up his property as agreed. Now if the settlement is clothed with enforceability, the aggrieved party can directly go to court and get the award executed just like a normal award passed by an arbitral tribunal. In the absence of the same, the aggrieved party should have to sue the other party for breach of contract or specific performance which is a more tedious and less fruitful path to take. Therefore, recognizing a mediated settlement agreement as an arbitral award on agreed terms can provide much-needed enforceability to day-to-day settlements.


There are both a possibility and various technical challenges for converting mediated settlements into consent awards. On one hand, this option can enhance the enforceability and finality of mediated settlements, encourage the use of alternative dispute resolution methods, and reduce the burden on the judicial system. On the other hand, this option can also raise several legal and practical issues, such as the validity and scope of consent, the role and status of mediators, the compatibility and consistency with the arbitration law and practice, and the impact on the confidentiality and flexibility of mediation.

We have also found that there is no clear and uniform position on this issue in India or internationally. There is a need for the legislature to deal with this issue in the current draft Bill on Mediation.

While there is no one-size-fits-all solution to this issue, in India, there is a need to provide recognition to mediated settlements under the Arbitration and Conciliation Act, until the Mediation Act is passed. However, there should be some safeguards, such as a standard process or institution for mediation, a need for a written agreement between the parties consenting to convert the settlement into an award and so on to ensure fairness and protect the parties’ interests.

We hope that this article has provided some useful insights and perspectives on this complex and evolving issue. We believe that this issue is important and relevant for developing and promoting mediation as an effective alternative dispute resolution method in India.


[1] The authors are currently pursuing B.A LLB (Hons). at National Law University, Jodhpur, and are in their Second Year.

[2] Sriram Panchu, Mediation Practice and Law, The path to successful dispute resolution, Appendix 3, 483, LexisNexis Butterworths Wadhwa, (2011)

[3] Aditi Bhargava, Conciliation: An Effective Mode of Alternative Dispute Resolution System

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