Section 27 of the Mediation Act 2023: Enforcement of Mediated Settlement Agreement

Section 27 sets out the statutory mechanism contemplated for enforcement of a mediated settlement agreement signed by the parties and authenticated by the mediator.

Current commencement status: Section 27 has been enacted but has not yet been brought into force. Notification S.O. 4384(E), dated 9 October 2023, commenced only Sections 1, 3, 26, 31 to 38, 45 to 47, 50 to 54 and 56 to 57. Accordingly, the enforcement mechanism described below is the enacted scheme of Section 27 and becomes operative when Section 27 is notified into force.

Section 27 - Enforcement of mediated settlement agreement

Sub-section (1): A mediated settlement agreement resulting from mediation, signed by the parties and authenticated by the mediator, is stated to be final and binding on the parties and persons claiming under them respectively, and enforceable in accordance with sub-section (2).

Sub-section (2): Subject to Section 28, the agreement is to be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a judgment or decree passed by a court. It may also be relied upon by a party or a person claiming through a party by way of defence, set-off or otherwise in legal proceedings.

Meaning of mediated settlement agreement

Section 3(n) of the Mediation Act, 2023 defines a "mediated settlement agreement" as a mediated settlement agreement referred to in Section 19. Section 3 is among the provisions brought into force on 9 October 2023.

Under the enacted Section 19 framework, a mediated settlement agreement records some or all disputes settled between the parties as a result of mediation and is required to satisfy the statutory requirements concerning signatures and authentication. Section 19 itself has not yet been brought into force.

Final and binding effect contemplated by Section 27(1)

Once Section 27 becomes operative, sub-section (1) provides that a qualifying mediated settlement agreement will be final and binding not only on the parties but also on persons claiming under them. The statutory enforceability is expressly linked to sub-section (2).

Enforcement under the Code of Civil Procedure 1908

Section 27(2) provides that, subject to Section 28, a mediated settlement agreement is to be enforced in accordance with the Code of Civil Procedure, 1908 in the same manner as if it were a judgment or decree passed by a court.

The expression decree is defined in Section 2(2) of the Code of Civil Procedure, 1908. Execution of decrees and orders is principally governed by Sections 36 to 74 and Order XXI of the Code, subject to the nature of the decree, jurisdiction and other applicable procedural requirements.

Defence, set-off or other reliance in legal proceedings

Section 27(2) also contemplates that a mediated settlement agreement may be relied upon by a party, or a person claiming through a party, by way of defence, set-off or otherwise in a legal proceeding. This is distinct from using the agreement affirmatively for execution.

Section 27 is subject to Section 28

The enforcement provision expressly operates subject to Section 28. Section 28 contains the enacted framework for challenging a mediated settlement agreement before the competent court or tribunal on the grounds specified by that section. Section 28 has also not yet been brought into force.

Why commencement status is important

Enactment and commencement are different: Parliament enacted Section 27 as part of the Mediation Act, 2023, but Section 1(3) permits different provisions to commence on dates appointed by Central Government notification.
Notification S.O. 4384(E): The notification dated 9 October 2023 did not include Section 27 or Section 28 among the provisions brought into force.
Practical consequence: Section 27 should not presently be described as an operative statutory execution route merely because its text appears in the enacted Act.
Other legal routes: The legal effect and enforceability of a particular settlement may depend on the forum, the nature of the proceeding, other applicable statutes, court orders and the facts of the case.

Related provisions

For a complete reading of the enacted scheme, Section 27 should be read with Section 28 on challenge to a mediated settlement agreement, as well as the provisions concerning mediated settlement agreements and their registration.

It follows Section 26 concerning Lok Adalat and Permanent Lok Adalat proceedings and is followed by Section 28.

Legal reference: Mediation Act, 2023, Sections 1(3), 3(n), 19, 27 and 28; Notification S.O. 4384(E), dated 9 October 2023; Code of Civil Procedure, 1908.