Mediation and CPC: A Study of Section 89 and the Increasing Role of ADR

Author – Adya Mishra (The ICFAI University, Dehradun)

Abstract

Section 89 of the Code of Civil Procedure (CPC) marks a pivotal legislative shift towards integrating Alternative Dispute Resolution (ADR), especially mediation, within India’s civil justice framework. This article examines the historical evolution, judicial interpretations, and operationalization of Section 89, highlighting its role in facilitating amicable settlements and reducing court backlogs. Emphasis is placed on the distinct features of mediation, its procedural implementation, and the recent legislative advancements under the Mediation Act, 2023. The study analyzes empirical outcomes demonstrating mediation’s growing effectiveness in expediting dispute resolution, preserving relationships, and enhancing access to justice. It also addresses challenges such as procedural ambiguities, mediator quality, and public awareness. Concluding with policy recommendations, the paper underscores the transformative potential of ADR under Section 89 CPC to create a more efficient, equitable, and participatory justice system in India.

Historical Genesis of Section 89 and ADR

The historical genesis of Alternative Dispute Resolution (ADR) in India reflects a journey from traditional dispute management practices to a formalized, legislative framework tailored to modern judicial needs.

Ancient Roots and Traditional Practices

India’s ADR roots are deeply embedded in its social and cultural fabric. Historically, communities relied on elders, village assemblies, or community councils to resolve disputes through negotiations, arbitration, and reconciliation. These informal mechanisms emphasized restorative justice, social harmony, and relational preservation, often in familial, agrarian, or community contexts. Such traditional practices prioritized consensus over adversarial litigation, reflecting a collective ethos that valued social cohesion.​

Post-Independence Legal Developments

Following independence, the Indian legal system primarily modeled after colonial laws inherited an adversarial framework that prioritized formal litigation. Despite some recognition of the need for alternative methods, legislative efforts to embed ADR were minimal initially. Discontent with the protracted judicial processes and backlog bottlenecks prompted gradual recognition of alternative methods.

Legislative and Policy Initiatives

The formalization of ADR gained momentum with the enactment of specific statutes:

• The Legal Services Authorities Act, 1987, established Lok Adalats as forums for conciliatory settlement of disputes, emphasizing access to justice for marginalized and rural populations.
• The Arbitration and Conciliation Act, 1996, aligned with UNCITRAL Model Law, formalized arbitration and conciliation, especially for commercial disputes, with a focus on enforceability and procedural clarity.​

Constitutional and Judicial Support

The judiciary played a decisive role, emphasizing the importance of ADR. Landmark judgments, such as Salem Advocate Bar Association v. Union of India (2005), upheld the constitutional validity of ADR mechanisms and mandated courts to facilitate settlement processes. Judicial initiatives, including the establishment of court-annexed mediation centers, further advanced ADR’s role.​

Legislative Enhancement via the CPC, 1999

A significant milestone was the 1999 amendment to the Civil Procedure Code (CPC), introducing Section 89, which mandated courts to explore settlement options. This provision explicitly recognized arbitration, conciliation, judicial settlement, and mediation as formal ADR mechanisms, creating a statutory framework to guide courts in refering disputes for amicable resolution.​

Modernization and Institutionalization

Recent developments include the Mediation and Conciliation Bill, 2020 (later consolidated into the Mediation Act, 2023), which establishes regulatory bodies, standards, and procedures, fostering quality and consistency. Digital and online dispute resolution (ODR) platforms also emerged, reflecting technological adaptation.

Pre-Amendment Issues and the Legislative Solution

Before the Amendment Act of 1999, ADR was limited in scope, with few court initiatives for settlement outside the adversarial process. Growing backlogs and party dissatisfaction pushed Parliament to legislate a solution. Section 89 CPC was thus introduced to:

• Create statutory obligation on courts to explore settlements at the earliest stage
• Provide a range of ADR methods, recognizing differences among mediation, conciliation, arbitration, and judicial settlement​
• Frame court procedures to give parties opportunity for negotiated compromise

The amendment also clarified “judicial settlement” as distinct from ADR and included Lok Adalat under Section 89(2) as a statutory solution.​

Text, Structure, and Objectives of Section 89 CPC

Section 89 CPC reads:

“Where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations…”​

Courts can refer the case for settlement by:

1. Arbitration
2. Conciliation
3. Judicial settlement (including Lok Adalat)
4. Mediation​

For arbitration and conciliation, the Arbitration and Conciliation Act, 1996 applies; for judicial settlement, the Legal Services Authorities Act, 1987 applies as if the dispute was referred to Lok Adalat; and for mediation, courts “shall effect a compromise between the parties and shall follow such procedure as may be prescribed”.​

The core goal is reduction of backlog, expedient and satisfactory justice, and encouraging party-driven compromise versus imposed resolutions.​

Judicial Interpretation and Implementation: Salem Advocate Bar Association and Afcons Infrastructure

Post-enactment, ambiguities in Section 89’s wording caused confusion. Most notable was the requirement for courts to “formulate the terms of settlement” a process many deemed impractical and potentially undermining party autonomy.

In Salem Advocate Bar Assn. v. Union of India (2005), the Supreme Court upheld the constitutional validity of Section 89 and issued rules for mediation and other ADR, clarifying procedural ambiguities. However, lingering confusion over mediation versus conciliation persisted.​

Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (2010) became a landmark, clarifying:

• Consent is not mandatory for referral to mediation, Lok Adalat, or judicial settlement; it is for arbitration/conciliation.
• Mediation is most suited for family/matrimonial, partnership, and commercial disputes, not those involving serious allegations or public law.
• Formulating “terms of settlement” is not meant to be a comprehensive scheme but a preliminary gesture to initiate ADR.

Afcons Infrastructure also led to widespread court-annexed mediation centers, setting new standards for referral and practice.​

The Role and Nature of Mediation

Defining Mediation

Mediation is a voluntary, structured process where a neutral mediator facilitates discussion between parties to help reach a mutually accepted solution. The mediator does not impose decisions; instead, parties exercise complete autonomy, and binding effects only arise from voluntarily signed settlement agreements.​

Distinction from Other ADR Mechanisms

Arbitration is adjudicatory and binding, conciliation has statutory backing and partial adjudicatory features, but mediation stands apart for its informality, flexibility, and party-centeredness. Section 89 sometimes confuses terminology but the Mediation Act, 2023 clarifies that mediation requires an amicable, non-binding process unless parties willingly bind themselves.​

Judicial Settlement and Lok Adalat

Judicial settlement involves referral to a suitable institution/person, deemed a Lok Adalat, governed by Legal Services Authorities Act, 1987. Here, compromise is generally facilitated under quasi-judicial auspices, different from pure mediation.

The Mediation Act, 2023: A Modern Legislative Milestone

Key Provisions

The Mediation Act, 2023 institutionalizes mediation, establishing a Mediation Council of India to regulate training, accreditation, service providers, and processes. Notable provisions include:

• Mandatory pre-litigation mediation for a broad category of civil disputes
• Detailed rules on appointment, conduct, confidentiality, and enforcement of mediated settlement agreements
• Settlement agreements authenticated by the mediator are final and binding, enforceable like a judgment​

Impact – Legal Practice and Justice Delivery

• Decreasing Court Backlogs

Section 89 and mediation reduce load on courts by diverting suitable cases to quicker settlement routes. Statistics reveal significant disposal rates through mediation, especially in family and commercial disputes.​

• Enhancing Access to Justice

Mediation increases access by being less formal, less costly, and more flexible than litigation—factors critical for litigants from marginalized or lower-income groups.​

• Relationship Preservation

Mediation’s consensual nature particularly benefits disputes involving ongoing relationships (family, business) by reducing hostility and fostering mutual understanding.​

• Digital and Online Mediation Expansion

The pandemic accelerated ODR (Online Dispute Resolution), allowing remote mediation. Courts have integrated digital platforms under Section 89 regimes, extending accessibility and efficiency.

Mediation Process: Practical Steps

Typical mediation under Section 89 and the Mediation Act, 2023 proceeds as follows:

1. Referral by Court: On identifying elements of settlement, the court refers parties to mediation, either to a court-annexed center, external mediator, or service provider as per parties’ option.​
2. Appointment: Mediation service providers appoint or parties themselves agree on a mediator within stipulated timeline.​
3. Sessions: Mediator conducts confidential, structured sessions to explore settlement options and help parties articulate positions and interests.
4. Agreement: Successful mediation concludes with a signed settlement agreement, authenticated by the mediator and enforceable.​
5. Failure: If mediation fails, parties return to trial without prejudice.

The Act allows extension of session periods but limits total mediation duration to a pragmatic threshold to ensure timely outcome.​

Challenges and Criticisms

Despite progress, challenges remain:

• Procedural Uncertainty: Distinction among mediation, conciliation, and judicial settlement can blur and may complicate reference and procedures.​
• Voluntariness: Unanimously agreed settlements remain rare in high-conflict disputes. Mandatory mediation must be carefully balanced with party autonomy.
• Awareness and Training: Wide gaps persist in mediator training, infrastructure, and public awareness, especially in rural and small-town courts.​
• Quality and Consistency: While the Mediation Council sets standards, uneven practices remain; quality control and consistent application is needed.

Comparative and International Perspectives

Global models such as Singapore, UK, and Australia reveal mandatory pre-litigation mediation can resolve over 40% of cases outside court, saving time and cost. India’s adaptation is nuanced mandatory pre-litigation mediation for commercial disputes, voluntary referral for others. The Indian experience increasingly aligns with best practices but continues to evolve.​

Recommendations And Future Directions

1. Expand training and accreditation for mediators, especially outside metropolitan hubs.
2. Strengthen awareness programs for legal professionals and public, especially rural communities.
3. Foster integration of ODR with physical centers, leveraging India’s digital infrastructure.
4. Encourage proactive judicial encouragement of mediation, not just passive referral.
5. Monitor and reform procedural rules to ensure clarity, party autonomy, and fairness.

Conclusion

Section 89 CPC has significantly reshaped India’s civil justice system by embedding ADR mechanisms, particularly mediation, as integral to dispute resolution. Recent judicial pronouncements and the Mediation Act, 2023 have consolidated mediation’s institutional role, enhancing access, efficiency, and satisfaction. While challenges in implementation and awareness remain, the evolution under Section 89 offers promising avenues for reducing backlog, preserving relationships, and delivering justice collaboratively. Effective policy measures and continued judicial activism will be key to realizing ADR’s full potential as envisioned within the CPC framework.

Bibliography

Statutes & Acts:

• Code of Civil Procedure, 1908. Section 89. Government of India.
• Arbitration and Conciliation Act, 1996. Government of India.
• Legal Services Authorities Act, 1987. Government of India.
• The Mediation Act, 2023. Government of India.
• Commercial Courts Act, 2015. Government of India.

Case Law:

• Salem Advocate Bar Association v. Union of India, (2005) 6 SCC 344.
• Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co., (2010) 8 SCC 24.
• Perry Kansagra v. Smriti Madan Kansagra, 2019 SCC OnLine SC 367.

Books & Commentaries:

• Ashwin Desai, Alternative Dispute Resolution in India (LexisNexis, 2021).
• Dr. Avtar Singh, Law of Arbitration and Conciliation (Eastern Book Company, 2024).
• S.K. Verma, Mediation and Conciliation under Indian Laws (Universal Law Publishing, 2023).

Judicial and Government Reports:

• Supreme Court of India, Manual on Court-Annexed Mediation (2018).
• National Legal Services Authority (NALSA), Annual Report on ADR Progress (2024).
• Ministry of Law and Justice, Government of India, Report on Mediation and ADR (2023).

Journal Articles:

• Sharma, R., “The Role of Mediation in Reducing Judicial Backlog in India,” Indian Journal of Legal Studies, Vol. 18, Issue 2 (2024), pp. 45-67.
• Mehta, S., “Section 89 CPC and its Impact on ADR Mechanisms,” Journal of Indian Law and Society, Vol. 9, No. 1 (2025), pp. 89-113.
• Kumar, A., “Judicial Settlement and Mediation: Contemporary Challenges,” Law and Policy Review, Vol. 6, Issue 3 (2023), pp. 23-41.

Online Resources:

• Supreme Court of India, The Evolution of Section 89 CPC, scconline.com, accessed November 2025.
• Doon Law Mentor, Alternate Dispute Resolution under Section 89 CPC: A 2025 Perspective, doonlawmentor.com, accessed November 2025.
• Legal Affairs Government of India, The Mediation Act, 2023, legalaffairs.gov.in, accessed November 2025.