Section 7 of the Mediation Act 2023 - Power of Court or Tribunal to Refer Parties to Mediation

Section 7 of the Mediation Act, 2023 provides that a court or tribunal may refer parties to mediation at any stage of a proceeding despite non-settlement under Section 5(1). It also permits suitable interim protection and confirms that a referral does not compel the parties to reach a settlement.

Commencement status: Section 1(3) of the Mediation Act, 2023 permits different provisions to commence on different dates notified by the Central Government. The official Department of Legal Affairs currently lists the enforcement notification dated 9 October 2023. Section 7 was not among the provisions brought into force by that notification. Accordingly, this article explains the enacted text of Section 7; the latest notification under Section 1(3) should be checked before relying on the provision as operative law.

Referral at any stageThe enacted Section 7(1) authorises a court or tribunal to refer parties to mediation at any stage of the proceeding.

Interim protectionSection 7(2) permits a suitable interim order to protect the interest of a party where the court or tribunal considers it appropriate.

No compulsory settlementSection 7(3) expressly provides that parties referred to mediation are not obliged to reach a settlement.

Section 7 - Statutory provision explained

Section 7(1)

Notwithstanding the non-settlement of a dispute under Section 5(1), the court or tribunal may, at any stage of the proceeding, refer the parties to undertake mediation.

Section 7(2)

If the court or tribunal refers the parties to mediation, it may pass a suitable interim order to protect the interest of any party if it considers such protection appropriate.

Section 7(3)

The parties are not under an obligation to arrive at a settlement merely because mediation takes place pursuant to a reference under Section 7(1).

Meaning of the reference to Section 5(1)

Section 7(1) begins with a non-obstante formulation linked to non-settlement under Section 5(1). Section 5 concerns pre-litigation mediation. In substance, Section 7 preserves the power of a court or tribunal to refer parties to mediation during pending proceedings even where an earlier pre-litigation mediation did not result in settlement.

Meaning and scope of court or tribunal referral

The phrase "at any stage of proceeding" gives the referring court or tribunal a procedural power that is not confined to the beginning of a case. The provision is expressly framed to operate notwithstanding non-settlement under Section 5(1), thereby distinguishing a later judicial or tribunal referral from an earlier attempt at pre-litigation mediation.

Interim orders during mediation

Section 7(2) preserves the ability of the referring court or tribunal to protect the interest of a party through a suitable interim order. The statutory language makes this discretionary: an interim order may be passed where the court or tribunal deems it appropriate.

Mediation does not require settlement

Section 7(3) protects the voluntary character of the settlement decision. A direction to undertake mediation is not a direction to settle. The parties may participate in the mediation process without being legally obliged by Section 7 to conclude a settlement.

Related Consumer Protection Act amendment

The Mediation (Removal of Difficulties) Order, 2023, dated 13 October 2023, amended the Tenth Schedule relating to Section 37 of the Consumer Protection Act, 2019 by substituting the word "may" for the words concerning referral on an application by the parties. The Order states that this change was made to bring the amended provision into consonance with Section 7 of the Mediation Act, 2023.

Official legal sources

India Code - Mediation Act 2023

Mediation Act 2023 - Official Act text

Department of Legal Affairs - Mediation Act notifications and orders

Mediation Removal of Difficulties Order 2023

e-Gazette of India