Mediation Council of India Notified: What Lies Ahead

SUMMARY OF THE ARTICLE:

The establishment of the Mediation Council of India marks an important institutional moment in India’s attempt to move mediation from a largely court-dependent ADR mechanism to a nationally regulated dispute-resolution system. Yet the notification is only the beginning: several substantive provisions of the Mediation Act, 2023 remain outside the operational framework, leaving the success of the reform dependent on appointments, regulations, professional standards and actual institutional capacity.

BACKGROUND:

The Central Government has finally notified the establishment of the Mediation Council of India (MCI), nearly three years after Parliament enacted the Mediation Act, 2023. By notification dated August 27, 2026, issued as S.O. 4781(E), the Ministry of Law and Justice exercised its power under Section 31(1) of the Act to establish the Council and designated Delhi as its head office. The notification is brief, but its institutional significance is considerable. Section 31 was designed to create a permanent statutory body capable of giving coherence to India's otherwise fragmented mediation ecosystem. The notification, therefore, represents not merely the creation of another government body, but the first concrete step towards constructing a national regulatory architecture for mediation.

The importance of the development becomes clearer when viewed against the legislative history of the Mediation Act, 2023. The legislation was enacted on September 14, 2023, with the stated objective of promoting and facilitating mediation, particularly institutional mediation, enforcing mediated settlement agreements, creating a framework for registration of mediators, encouraging community mediation and making online mediation an acceptable and cost-effective mode of dispute resolution. The Government itself has described the legislation as an attempt to establish a comprehensive statutory ecosystem for mediation rather than leaving the subject scattered across court-annexed centres, institutional practices and provisions such as Section 89 of the Code of Civil Procedure.

Yet the journey from legislation to implementation has been unusually slow. When the Act was brought into force on October 9, 2023, only selected provisions were notified. These included Sections 31 to 38 dealing with the Mediation Council, Sections 45 to 47 concerning the Mediation Fund and certain miscellaneous and transitional provisions. Crucially, many of the provisions that govern the actual conduct and consequences of mediation were left outside the operational framework. A recent judicial examination of the Act noted that only 21 of its 65 sections had been brought into force through the October 2023 notification.

WHAT WILL MCI DO?

This creates an important distinction between the legal existence of the Council and its functional existence. Section 31 makes the Council a statutory body corporate with perpetual succession, the power to hold property and enter into contracts, and the capacity to sue and be sued. Section 32, meanwhile, contemplates a seven-member institutional structure comprising a Chairperson, two expert members, three ex officio members and a part-time representative of a recognised commerce and industry body. Section 37 further envisages a Chief Executive Officer and a dedicated Secretariat. Thus, Parliament did not design the MCI merely as an advisory committee; it was conceived as the central institutional regulator of India's mediation ecosystem.

The significance of the August 27 notification is therefore tempered by a crucial question: who will actually run the Council, and when? In February 2026, the Government told the Lok Sabha that although certain MCI-related rules had already been notified in 2024, the Chairperson and other members of the Council had yet to be appointed. The same parliamentary answer acknowledged that provisions concerning mediation service providers, mediation institutes, community mediation and online mediation had not been notified and that the Council had not yet been established. The August notification changes the latter position—it formally establishes the Council—but it does not, by itself, answer the remaining questions concerning appointments, staffing and operational regulations.

That distinction matters because the Council's statutory functions are extraordinarily broad. Under Section 38, the MCI is expected to promote domestic and international mediation in India; develop India as a centre for domestic and international mediation; prescribe standards for education, certification and assessment of mediators; regulate the registration of mediators; establish professional and ethical standards; recognise mediation institutes and mediation service providers; maintain an electronic repository of mediated settlement agreements; conduct training and research; and collaborate with domestic and international institutions. In other words, the MCI is intended to supply the quality-control infrastructure without which the rapid expansion of mediation could itself create serious problems of inconsistent standards, untrained mediators and uneven institutional practices.

This is particularly important because mediation is fundamentally different from adjudication. A judge derives authority from the State to determine a dispute; an arbitrator derives authority from the parties' agreement and the arbitral framework; a mediator, by contrast, does not decide the dispute at all. The mediator facilitates voluntary settlement while preserving the parties' autonomy. The Act expressly requires the mediator to protect voluntariness, confidentiality and self-determination, and prohibits the mediator from imposing a settlement. The credibility of the entire system, therefore, depends heavily on the competence, neutrality and ethical standards of the individuals and institutions facilitating the process.

The Act's treatment of confidentiality demonstrates why institutional regulation matters. Section 22 protects mediation communications, including proposals, admissions, apologies, documents prepared for mediation and other mediation communications. It also prohibits audio or video recording of mediation proceedings and restricts the use of mediation communications as evidence in subsequent adjudicatory proceedings. Section 23 extends the protection by preventing mediators and participants from being compelled to disclose mediation communications, subject to carefully defined exceptions such as threats of criminal conduct, domestic violence or child abuse. These safeguards are essential because mediation can function only when parties can negotiate candidly without fearing that concessions made in the room will later be used against them in court.

HOW THE MCI CAN REFORM THE MEDIATION PROCEEDINGS IN INDIA:

At the same time, the Act attempts to give mediation something that informal negotiation often lacks: legal finality. Section 19 provides the statutory framework for mediated settlement agreements, while Section 27 makes a duly authenticated mediated settlement agreement final and binding and enforceable in the same manner as a judgment or decree under the Code of Civil Procedure. Section 28 nevertheless permits a challenge on specified statutory grounds. This balance—finality without eliminating judicial supervision—is central to making mediation attractive to commercial parties. A settlement that is easy to reach but difficult to enforce would not meaningfully reduce litigation.

The notification must also be understood against India's existing mediation landscape. Mediation did not begin with the 2023 Act. Courts have long encouraged settlement through Section 89 of the CPC, and the Supreme Court in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. identified categories of civil disputes particularly suitable for ADR. The Supreme Court has continued to emphasise mediation in appropriate disputes, including relationship-based and family disputes. More recently, the Supreme Court's 2026 Samadhan Samaroh demonstrated that mediation and consensual settlement are increasingly being treated as components of participative justice rather than merely as mechanisms for reducing judicial workload.

The commercial context makes the reform even more consequential. India already has mandatory pre-institution mediation for specified commercial disputes under Section 12A of the Commercial Courts Act, subject to the statutory exception where urgent interim relief is contemplated. Government data, however, shows the limitations of relying on mediation merely as a procedural gateway. Between July 2018 and September 2025, tens of thousands of applications were made under the commercial pre-institution mediation framework, but a substantial proportion were recorded as “non-starter” matters. The figures suggest that the challenge is not simply to create a legal obligation to attempt mediation; it is to create a culture in which parties and lawyers genuinely use mediation as a dispute-resolution process rather than treating it as a formality before litigation.

This concern has already been articulated from the Bench. In April 2026, Supreme Court Justice B.V. Nagarathna described the Mediation Act as an important legislative step but cautioned that it had yet to “take off” in practice because several provisions remained unnotified and the Mediation Council had not been constituted. She also criticised the tendency to treat mandatory pre-litigation mediation under the Commercial Courts Act as a mere procedural formality, with lawyers sometimes approaching mediation while already preparing to file the plaint. That observation captures the central challenge before the newly notified Council: institutionalising mediation is not the same as creating a mediation culture.

There is also an important misconception that should be avoided. The Mediation Act, as presently structured, does not make every civil or commercial dispute subject to compulsory mediation before a litigant can approach a court. Section 5, which deals with pre-litigation mediation, states that parties “may voluntarily and with mutual consent” undertake mediation; moreover, Section 5 itself has not yet been brought into force. The mandatory pre-litigation regime applicable to specified commercial disputes comes principally from Section 12A of the Commercial Courts Act. The distinction is legally significant because mediation rests on party autonomy, and converting it into a universal compulsory gateway would fundamentally alter the philosophy of the process.

WHAT IS THE FUTURE OF MEDIATION IN INDIA:

The next phase must therefore focus on implementation rather than symbolism. The Government will need to complete the appointments contemplated by Section 32, operationalise the Secretariat and CEO under Section 37, frame the necessary regulations, establish transparent criteria for recognising mediation service providers and institutes, and develop credible systems for mediator registration, training, certification and disciplinary oversight. The Council must also confront the digital dimension of dispute resolution. Section 30 permits online mediation, but its operational framework depends substantially on regulations concerning procedure, integrity and confidentiality. Without robust standards, online mediation could expand access while simultaneously creating new concerns relating to identity verification, cybersecurity, informed consent and confidentiality.

The stakes extend beyond reducing the number of cases appearing on judicial dockets. A successful mediation framework can preserve commercial relationships, reduce transaction costs, protect family relationships from adversarial litigation, provide faster resolution of neighbourhood and community disputes, and make India more attractive as a venue for international dispute resolution. The Act's proposed community mediation framework is particularly significant because it recognises that not every dispute requires the formal machinery of a court. Yet community settlements under the Act are designed primarily to preserve peace, harmony and tranquillity and are not enforceable as civil-court judgments in the same manner as ordinary mediated settlement agreements. This illustrates the Act's attempt to accommodate different forms of dispute resolution rather than imposing one model on every conflict.

CONCLUSION:

Ultimately, the August 27 notification should therefore be understood neither as the completion of India's mediation reform nor as a mere administrative formality. It is the institutional starting point of a project that Parliament announced in 2023 but which has remained only partially operational. The Mediation Council now has a statutory existence and a Delhi headquarters. What remains is considerably harder: transforming statutory powers into functioning institutions, institutional standards into professional practice, and mediation from a procedural alternative into a genuine first choice for resolving disputes.

India's courts have spent decades encouraging parties to settle. The Mediation Act attempted to give that aspiration a national statutory architecture. The notification of the Mediation Council finally supplies the central institution around which that architecture can be built. But the measure of success will not be whether the Council exists on paper. It will be whether, years from now, parties enter a mediation room believing that settlement is not merely a cheaper escape from litigation, but a legitimate, professionally administered and legally certain form of justice.