Introduction

ADR has gained greater significance in recent times in India due to delays in conventional litigation and the growing requirement for expedient, inexpensive, and secret dispute settlement mechanisms. Among the several ADR techniques, arbitration and mediation are the ones which are in common use and apparently enjoy strong statutory support. Even though they aim to settle disputes outside the courtroom, they differ in structure, enforceability, the role of parties involved, legal functioning, and results. India has framed a detailed legal regime for both mechanisms, especially after adopting best global practices. This article aims to present a comparative analysis of arbitration and mediation in India with respect to their statutory provisions, procedural aspects, enforceability, and present trends.

What is Arbitration and Mediation?

Arbitration involves the third-party arbitrator serving as a neutral judge who makes binding determinations regarding disputes with characteristics akin to those of conventional court decisions.

Conciliation: This is a process where a neutral third party-the conciliator-assists the parties in the settlement of a dispute by proposing solutions, although the decision to be accepted lies solely with the parties.

Mediation: The process, voluntary in nature, relies on the employment of neutral third-party mediators who guide the parties through their communication to reach solutions acceptable to them, without making any proposals themselves.

Legal Framework in India (Expanded)

India has strengthened its Alternative Dispute Resolution legal framework gradually, emphasizing the aspects of arbitration and mediation to reduce court congestion and conform to international best practices. The growth of the legal framework shows a trend toward moving away from a court-centered approach to dispute resolution towards a more efficient and party-centric system. The legal framework for both arbitration and mediation is defined by a number of statutes, judicial precedents, and guidelines at the institutional level.

1. Legal Framework governing Arbitration in India

The main statute that regulates arbitration in India is the Arbitration and Conciliation Act, 1996. The Act is to a great extent modeled after the UNCITRAL Model Law on International Commercial Arbitration, 1985, and is compatible internationally.

Key legislative milestones and provisions include:

• Arbitration and Conciliation Act, 1996

Defines both judicial and non-judicial arbitral procedures.

Establishes party autonomy in selection of arbitrators and procedures.

Divided into four parts: Domestic Arbitration, Conciliation, International Arbitration, and Supplemental Provisions.

• 2015 Amendment

Introduced fast-track arbitration.

Restricted judicial intervention.

Allowed courts to grant interim measures before appointment of arbitrators.

• 2019 Amendment

Established the Arbitration Council of India, to regulate professional standards, arbitrator accreditation, and institutional arbitration.

Promoted institutional arbitration over ad-hoc arbitration.

• 2021 Amendment

Improved controls against fraud and corruption.

Conditional stay allowed on awards; of particular importance in cases based on fraud.

Section 36 deals with the enforcement of arbitral awards and makes the awards executable as civil decrees. Foreign arbitral awards are also enforceable under the New York Convention and Geneva Convention, thereby giving India recognition in global arbitration.

The courts also exercise a supervisory role under Sections 9 (interim relief), 11 (appointment of arbitrators), 34 (setting aside awards), and 37 (appeals). However, the overall approach is still minimum court interference, as per international arbitration standards.

2. Legal Framework for Mediation in India

While arbitration in India had a unified statute, mediation developed through judicial directions and procedural rules. Very recently, the Mediation Act, 2023 has been enacted, thereby giving it structured statutory recognition.

Key sources of mediation law include:

• Section 89 of the Civil Procedure Code, 1908

First statutory acknowledgement of mediation.

Courts empowered to refer suitable disputes to mediation.

•  Arbitration and Conciliation Act, 1996 (Part III)

Recognizes conciliation, which shares principles with mediation.

Settlement agreements under conciliation are enforceable like arbitral awards.

• Mediation Act, 2023

The Act is a milestone in Indian ADR and encompasses:

• Pre-litigation mediation
  Mandatory for civil and commercial disputes before a lawsuit can be filed.

• Voluntary and Confidential Process
  Sessions are private, and statements cannot be used in future litigation.

• Mediation Settlement Agreement (MSA)
  Legally enforceable and treated as a binding contract.

• Institutional Mediation Framework
  Establishment of mediation service providers and standards for mediators.

• Mediation Council of India
  Functions include training, mediator certification, maintaining a national registry, and setting ethical and procedural guidelines.

Judicial Support

Indian courts have always been strong proponents of ADR. Landmark judgments such as:

Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (2010) – explained court-referred mediation processes.

Salem Advocate Bar Association v. Union of India (2003) – Section 89 CPC was upheld and mediation was encouraged.

Swiss Timing Ltd. v. Organizing Committee, CWG (2014) – Strengthened pro-arbitration approach.

These decisions express judicial support in promoting arbitration and mediation as primary over litigation.

Conclusion

Both arbitration and mediation play crucial roles in modern conflict resolution in India. Arbitration provides a structured, enforceable, and court-like approach suitable for complex commercial disputes, while mediation promotes negotiation, cooperation, and restoration of relationships. With recent legal reforms like the Mediation Act, 2023 and amendments to arbitration law, India is moving toward a more robust and efficient ADR framework. The choice between arbitration and mediation ultimately depends on the nature of the dispute, urgency, cost considerations, and whether parties seek a binding decision or a collaborative solution.