Section 4 of the Mediation Act 2023 - Mediation Agreement

Section 4 of the Mediation Act, 2023 sets out what constitutes a mediation agreement. It recognises an agreement to mediate existing or future disputes, permits the agreement to appear as a clause in a contract or as a separate agreement, and specifies when the requirement that the agreement be in writing is satisfied.

Commencement status: The Mediation Act, 2023 permits different provisions to be brought into force on different dates. The Central Government notification dated 9 October 2023 brought specified provisions into force, but Section 4 was not included in that commencement notification. Accordingly, the text below explains the enacted provision; its operative status must be checked against the latest commencement notification before relying on it in a proceeding or transaction.

What is a mediation agreement?

Under Section 3(j), a "mediation agreement" means a mediation agreement referred to in Section 4(1). Section 4 describes both the substance of that agreement and the forms in which the statutory requirement of writing may be fulfilled.

Must be in writingThe agreement must be recorded in a form recognised by Section 4.

Existing or future disputesParties may agree to mediate disputes that have already arisen or disputes that may arise later.

Clause or separate agreementA mediation clause in a contract and a separate mediation agreement are both contemplated.

Electronic communicationsAn exchange of communications or letters, including electronic form under the Information Technology Act, 2000, may satisfy the writing requirement.

Section 4 - Mediation agreement

Section 4(1)

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 which may arise between the parties.

Section 4(2)

A mediation agreement may be in the form of a mediation clause in a contract or in the form of a separate agreement.

Section 4(3)

A mediation agreement is in writing if it is contained in or recorded as:

(a) any document signed by the parties;

(b) an exchange of communications or letters, including through electronic form as provided under the Information Technology Act, 2000; or

(c) pleadings in a suit or any other proceeding in which the existence of a mediation agreement is alleged by one party and not denied by the other.

Section 4(4)

A reference in any agreement containing a mediation clause shall constitute a mediation agreement if the agreement is in writing and the reference is such as to make the mediation clause part of the agreement.

Section 4(5)

The parties may agree to submit to mediation any dispute arising between them under an agreement, whether the mediation agreement is entered into before the dispute arises or after it has arisen.

Section 4(6)

In the case of international mediation, a mediation agreement shall refer to an agreement for resolution in matters of commercial disputes referred to in Section 3(a).

Legal effect of the writing requirement

Section 4 adopts a broad concept of a written mediation agreement. A formally signed document is one method, but the enacted provision also recognises exchanges of communications, including electronic communications, and an admission through pleadings where one party alleges the existence of the mediation agreement and the other party does not deny it.

Mediation clause in a contract

Section 4(2) expressly allows the parties to place their mediation agreement within the principal contract. A separate standalone document is therefore not essential where the contract itself contains the mediation clause.

Electronic mediation agreements

Section 4(3)(b) expressly refers to communications or letters in electronic form as provided under the Information Technology Act, 2000. The provision therefore recognises electronic records as a possible means of recording the mediation agreement, subject to the applicable statutory requirements.

Agreement through pleadings

Section 4(3)(c) addresses a situation in which the existence of a mediation agreement is asserted in pleadings in a suit or other proceeding and the other party does not deny it. In such circumstances, the enacted provision treats the agreement as being in writing.

Incorporation by reference

Section 4(4) recognises incorporation by reference where a written agreement refers to a mediation clause in a manner that makes that clause part of the agreement. Whether a particular reference has this effect depends on the language and structure of the relevant agreement.

International mediation

For international mediation, Section 4(6) connects the mediation agreement to "commercial disputes" as defined through Section 3(a). Section 3(a), in turn, adopts the definition of "commercial dispute" in Section 2(1)(c) of the Commercial Courts Act, 2015.

Official legal sources

Mediation Act 2023 - India Code official text

Department of Legal Affairs - Mediation Act and commencement notification

e-Gazette of India