This article has been written by Arati G pursuing Certificate Course in Content Strategy and Article-Writing and has been edited by Oishika Banerji (Team Lawsikho). 

This article has been published by Sneha Mahawar.


“Discourage litigation. Persuade your neighbour to compromise whenever you can. As a peacemaker, the lawyer has a superior opportunity of being a good man. There will still be enough business.”

Download Now

-Abraham Lincoln

In June 2021, the Chief Justice of India, Shri. Nuthalapati Venkata Ramana, during the inaugural address of India-Singapore Mediation Summit, “Making Mediation Mainstream: Reflections from India and Singapore”, gave a clarion call in his keynote address, which, in the process of promoting mediation, prescribed it as a mandatory first step for resolution of every allowable dispute. This call also extended to other forms of Alternative Dispute Resolution (“ADR”) such as conciliation. The above clearly reflects the importance that ADR has been given for dispute resolution in various jurisdictions across the world which is struggling to give justice to all its citizens. The ADR system refers to various kinds of processes instituted by the judiciary systems across the world, to help settle disputes in an effective, amicable, and quicker way between the opposing parties, outside the traditional courtroom. The territory of ADR encompasses familial, civil, commercial, industrial, and other disputes that can be settled peacefully, and the opposing parties can have the opportunity to shake hands and depart harmoniously and congenitally from their dispute. This mechanism involves a mediator, who acts as a neutral facilitator and mediates between the two opposing parties to help negotiate and arrive at a mutually acceptable settlement.  In India, there are different kinds of ADR mechanisms such as mediation, arbitration, conciliation, mediation-arbitration, mini-trial, private judging, final offer arbitration, court-annexed ADR, Lok Adaalats or people’s courts, and summary jury trial. In other countries, such as the United States of America, we can find other techniques in this mechanism, such as settlement conferences and neutral evaluation. This article explores and analyses the concepts of mandatory as well as voluntary mediation of the ADR processes in the world. It also seeks to understand the pros and cons of the two systems and tries to find solutions from the learnings.

Mandatory ADR in commercial cases

Mediation as an alternative dispute resolution mechanism in commercial transactions, has gained increased significance, both within India and at a global level, as global commercial transactions have increased manifold along with disputes related to it. Mandatory arbitration/mediation, in any country, is that which makes it mandatory, by a court order or law, for the litigants to sincerely attempt a dispute settlement through arbitration or mediation, out of the court. It is only when this attempt fails, that the litigants can proceed towards the court, asking the respected judges to settle the disputes.

In India, for example, in the Patil Automation Private Limited v. Raheja Engineers Private Limited (2022) case, the Supreme Court has confirmed that pre-litigation mediation is mandatory under Section 12A of the Commercial Courts Act, 2015, to the extent that a suit cannot be filed before a commercial court by the opposing parties until they exhausted exploring the chances of resolution of their dispute through a mediation process.

In other words, a suit cannot be filed before a Commercial Court unless the parties have already attempted to resolve the dispute via mediation. Further, failure to do so would also attract pecuniary jurisdiction which is currently INR 3 lakhs. The main intention for setting up this process was to:

  1. Facilitate ‘ease of doing business’ to attract foreign capital into the Indian economy.
  1. To relieve courts from the burden of overwhelming court cases pertaining to commercial disputes in the era of “docket explosion”.
  2. To secure greater compliance with the agreement arising from the mediation process, given the process’s inherent capacity to foster a mutually beneficial outcome. It basically provides a sense of a ‘win-win situation’ for both the parties involved.

Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 : an insight

To bring clarity to the process and to set a timeframe to settle the disputes in mandatory ADR, the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, were developed in the year 2018. Its goal is to define the stepwise process on how to go about the process of pre-institution mediation and most importantly, it clearly defines the time frame within which the exploration of pre-institutional mediation and settlement is to be completed. 

These Rules define as to how the mediation process is to be initiated, the venue, the time frame within which the process should be completed (it is typically within three months and can be extended depending on the circumstances at the time), role of the mediator, how the parties can or are to be represented, procedures for the mediation, the attitude and ethics that the litigant parties should have and display while appearing for this process, the confidentiality of facts that may come to light during the mediation process, the fee for the process, ethics to be followed by the mediator and it also contains the forms to be filled by the litigants to initiate the mandatory ADR process.

Example of mandatory ADR in a commercial case

Section 12A of the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018, makes it mandatory for litigants to exhaust all remedies of pre-institution mediation before they can file a suit. In the lawsuit of Ganga Taro Vazirani  v.  Deepak Raheja (Ganga Taro) (2021), in the Bombay High Court in the year 2021, a single judge, while interpreting this section, held that there is no absolute prohibition against filing a suit before the parties attempt pre-institution i.e mandatory mediation. The single judge contended that this provision is only procedural and not mandatory if it seems that one of the parties has a compelling case against the other. 

Later, based on an appeal filed by the defendant before a divisional bench of the same court against the order of the single Judge, the verdict of the latter was reversed. The divisional bench contended that the provision for exploring mandatory pre-institutional remedies was mandatory when urgent interim relief was not seen to be asked in the original suit.

Mandatory ADR in Indian Family Law

The modern family in India is witnessing increasing disputes of a commercial and matrimonial nature. Marriage Relationship Counselling is now a specialised area and is being increasingly used to save families from new generation problems such as forced marriages, matrimonial disputes, matrimonial divorce cases, adoptions, inter-country adoptions, complications arising from surrogacy, etc. These problems could not be even imagined or comprehended in the initial stages of framing of family-laws in our country.

As our courts are already burdened with large numbers of pending cases with new ones being added, it has become imperative to try out new out-of-court settlements / pre-institutional mediation to settle these disputes so that the litigants get a speedy and satisfactory solution to their grievances.

Example of mandatory ADR in family disputes

  1. In the example of the divorce case of Jagraj Singh vs. Birpal Kaur (2007), the Supreme Court of India, in its judgement, contends that matrimonial matters are much above rituals. The disputes in such cases can be and must be tried to be repaired by sewing and patchwork. The court has given the highest importance to human relationships and bonding and says the same should be given a chance through settlement and prefers not to see them being litigated in courts.
  2. In the mutual consent divorce case of Amardeep Singh vs. Harveen Kaur (2017), we find the following fundamental grounds that are mandatory for settling the same:
  • The couple needs to live separately and independently from each other for one year and six months before initiating the divorce petition. This is mandatory under Section 13B (I) of the Hindu Marriage Act, 1955.
  • All disputes concerning child custody, alimony, shared property, and other issues have been amicably settled.
  • The couple should have attempted alternative ways of resolving their conflicts and only after they failed to reach an amicable solution and do not foresee living together again as spouses.
  • If the above-mentioned requirements are met, the court may waive the waiting period at its discretion.

Mandatory ADR on the global stage

The United States of America (USA)

In the United States, legal professionals such as lawyers, local, federal, and American Bar Associations, and other judicial organisations have been very enthusiastic in adopting and promoting the process of mandatory mediation. They were all of the singular opinion that this process would reduce the strain on the judicial system which was at the point of collapse and in turn, could be misused by litigants. Although ADR was introduced in the USA in the late 1960s as an after-effect of civil rights movements and legal reforms. 

Thereafter, it became thoroughly professionalised by the mid-1980s, when their lawyers and State Bar Associations developed and set into motion mediator training standards, provided training in mediation to their legal professionals, prescribed ethical standards to be followed by the lawyer, and advocated in their role as mediators. This, in turn, made mediation a part of their general law practice. As this practice was institutionalised by the judicial institution, the lawyers rightfully did not fear losing business to mediation and this helped the widespread use of the mediation process. 

Thus, the United States of America has today, the world’s most robust and advanced successful systems for settlement of disputes outside the formal legal system through mechanisms of mediation and arbitration. While there is no consistent nationwide policy on mediation in the USA, various courts and federal agencies in the country have implemented mandatory mediation programs.

The European Union

The European Union’s general stand basically questions the process of the effectiveness of mandatory ADR. The European Mediation Directive underscores that voluntariness is essential for any mediation process and it should allow parties and mediators to terminate the process at any time. At the same time, it grants its member states the discretion to introduce and practise compulsory mediation at their convenience, provided they continue with the current guarantee to allow access to justice.

The member states of the European Union exhibit varying stances on mandatory mediation. The English-speaking countries prefer the model being followed by the United States of America, where mediation has been made mandatory along with cost allocations for the same. The other European countries have been cautious with their approach to the subject and have seen very limited instances of mandatory mediation.

However, the case of Italy in this regard is worth studying. Its hard-earned success in this respect is being hailed across the world today. Their difficult journey started approximately in the year 1990 and until the year 2016, they experimented with quite a few different models of voluntary and mandatory mediation and ultimately, they settled for their current ‘opt-out’ model. In the year 2015, when Italy saw a drastic fall in the number of mediations (including voluntary mediations), the country introduced mandatory ADR by an Act of Parliament. In the same year, when there were 17,48,384 new cases lodged in their courts, 8% of them were subject to mandatory mediation, and the remaining 92% were allowed voluntary mediation. The country thus saw a total of 19,624,714 mediations. There were 81.6% mandatory mediation cases which saw a success rate of 44% whereas 8.3% were voluntary meditations which saw a success rate of 60%.

This success was actually facilitated by the ‘opt-out mediation model’. Under this law, in certain types of cases pertaining to banking contracts, medical, real estate, and some other specified cases, the plaintiff, even before he or she files a suit in the court of law, is first required to convene the defendant in front of a registered mediation organisation which also should be accredited by the Ministry of Justice. In case the plaintiff fails to do so, the court action will stop. In case the defendant refuses to attend this first mediation session, he/she will have to face negative consequences along with financial penalties. It is important to note that this first meeting is not just an information session or a formality. It is the start of the actual mediation itself. It is also pertinent to note that either of the parties can ‘opt-out’ of this process in case it is not to their liking or convenience without any negative fallout at the court trial.

Thus, we see that this Italian experience re-imposes the claim that introducing an easy ‘opt-out’ model of mandatory mediation is likely to substantially increase the number of both mandatory and voluntary mediations and would highly reduce the burden on the traditional judiciary system. This is what the entire world and more importantly, the Indian judicial institutions desperately need.


The journey of mandatory ADR in Australia has been similar to that of the United States of America wherein, it was introduced in the thought process and experimentation started in the 1980s. Legislation to this effect was introduced in the mid-1990s in cases pertaining to small businesses, building disputes, residential and retail tenancies, franchising, farm debts, etc. They were widely accepted by the stakeholders in the judiciary system viz the lawyers, advocates, and judges as it helped them in dealing with the large number of pending cases, as is the usual case all over the world. The data on the success of this process is not available in Australia due to its complex federal polity, where the process is more decentralised. It is however noted that mandatory ADR in retail tenancy disputes saw a success rate of 80%. Thus, we see that the experiences of Italy and Australia are different due to different political systems and domestic factors.

A critical analysis of mandatory alternative dispute resolution process

Advantages of mandatory ADR

  1. They are successful in reducing the number of cases pending in the court, thus lessening the burden on the judiciary which is already reeling with short staff and judicial stakeholders.
  2. It is cost-effective i.e. less expensive than a normal court trial. Long pending court cases have proven to be a drain on the litigants. This has had an effect on the general public who often get discouraged from going to court with their grievances and compromise without gain in their situation.
  3. ADR gives faster justice to the opposing parties or litigants and ensures that the right to justice as given to all citizens of this country and similar rights in the rest of the world, is being upheld. A slow pace of justice is equal to justice denied. Mandatory ADR helps the country uphold this right of its citizens.
  4. Quick and effective justice ensures social-economic-political trust and faith of the citizens in their country’s institutions.
  5. Quick and effective justice ensures more confidence in foreign institutions encouraging their involvement with the country in various fields of commerce, etc.
  6. Mandatory ADR helps overcome the ‘first-to-blink’ syndrome – especially in a country like India, where ‘not-fighting-it-out-in-court’ is seen as a sign of weakness both by the opposing parties and the lawyers.
  7. It gives a chance to the opposing parties to cooperate and determine the terms on which their disputes can be resolved, and this often ends in a less hostile and amicable manner.

Disadvantages of mandatory ADR

  1. There is an absence of a robust cadre of professional mediators in India and many other countries, unlike the USA, who can take up the role of mediation effectively when the same is mandatory.
  2. Mandatory mediation or ADR does not fit all situations even if they look alike from the surface. Not all opposing parties in all cases are willing to sit and talk with a mediator in between as they feel they might lose control of their narrative of the situation. Some of the parties come with the desire to punish the other party through litigation. 
  3. Involvement of a pecuniary cost for not attending mandatory ADR sessions, in situations where the litigants do not want mediation, may result in grievance against the judicial system itself. 
  4. The lawyers suggesting these methods may lose clients who are unwilling to go for such mediation. This fear is what prevents lawyers from suggesting this process to their clients in the first place. 
  5. The power balance or equation of the two opposing parties may be different and this may lead to the less powerful party feeling disadvantaged and thus, the outcome may not be to his/her satisfaction. These cases may give the impression that the legal system has failed the litigant and has the potential to erode public confidence in the system.

Voluntary ADR

Voluntary arbitration involves two opposing parties who voluntarily agree to settle their disputes outside of the traditional court or judicial system through a third-party mediation. This process is mostly utilised by contracting parties where a clause for settlement of disputes by mediation is added to the contract (mostly seen in commercial contracts) in its initial stages itself. However, the parties can also agree and accept to settle any arising dispute through a third-party mediation after the contract is signed, where any kind of initial clause pertaining to dispute settlement is absent. 

The reason for preference of voluntary arbitration or mediation is that it is less costly, primarily aims to reduce bitterness between the two parties and makes the atmosphere more conducive for peaceful dialogue, the confidentiality of the process, faster than the traditional judiciary process, and lastly, the final solution is not binding on either of the parties and the latter is still free to approach the traditional judicial institutions for final settlement of the dispute.

Mediation bills 

There are specific mediation bills passed in India that we need to consider while we discuss Voluntary mediation. Voluntary ADR in India can be cited in the following Acts:

  1. The Arbitration and Conciliation Act, 1996 – This Act aims to cover all domestic and international commercial arbitrations and conciliations. It makes provision for fair, efficient, and effective arbitral procedures. It permits the utilisation of mediation, conciliation, or other non-traditional judicial procedures through an arbitral tribunal to encourage settlements of disputes. These settlements can however be enforced in the way as if they were awarded by the traditional judiciary courts.
  2. The Mediation Act, 2018 – This Act, which came into force on January 1st, 2018, established a legal framework for handling civil dispute proceedings. It allows for settlement of disputes through mediation, provided the litigants voluntarily accept the mediation. The mediator can only facilitate the negotiations, but the final decision on the settlement of the dispute or even foregoing the mediation is left to the opposing parties.
  1. The Mediation Bill, 2021– Made pre-litigation mediation mandatory. The bills suggested a timeline of 180 days to complete the mediation process and an extension of an additional 180 days was allowed in case the mediation was proposed to be extended by both the parties.

However, the requirement of mandatory or compulsory mediation became a point of concern as it goes against the very nature of mediation – i.e. voluntariness. This is against the principles of free consent.

“Making pre-litigation mediation mandatory was akin to taking the horse to the water. It did not necessarily lead the horse to drinking the water.” – Vijayendra Pratap Singh, Partner, AZB and Partners.

Hence, The Mediation Bill, 2023 came into effect.

  1. The Mediation Bill, 2023 – This bill was built upon the preceding bill The Mediation Bill, 2021, where pre-litigation mediation was made mandatory. In The Mediation Bill, 2023, the core principles of mediation viz voluntariness in all aspects of the process and confidentiality were safeguarded. It allows for mediation to be provided either free or at a minimal cost. Moreover, the time limit for completing the mediation process has been reduced to 180 days (120 days for the first instance and allowing for a 60-day extension of the same) unlike 360 days (180 days for the first instance and allowing for another 180 days extension of the same as envisaged in The Mediation Bill, 2021. It further extended mediation to the virtual world i.e. online digital platform which has proved to be more cost-effective. This has thus, helped in giving access to more of its citizens to exercise their right of access to justice.

A marked feature of this bill, as compared to The Mediation Bill, 2021, is that it talks about the establishment of the Indian Mediation Council. The role of the Council is to recognize and register mediators and mediation service providers as well as the creation of a robust panel of mediators through training and certifications. 

Example of voluntary arbitration in a commercial case

  1. In the case of Vinod Bhaiyalal Jain & Ors. vs. Wadhwani Parmeshwari Cold Storage Pvt. Ltd (2019), the appellant, Vinod Bhaiyalal Jain & Ors was unhappy with the reward of the arbitrator as it came to light that the arbitrator had already acted as a lawyer to the respondent Wadhwani Parmeshwari Cold Storage Pvt. Ltd in a previous case. The appellant refused to abide by the reward and fought his case in the High Court and Supreme Court which upheld the contention of the appellant. Hence, this case shows that the parties can challenge the arbitration process at any time of its performance and that it is not binding on them.
  2. In the case of  Moti Ram TR LRS And Anr vs. Ashok Kumar And Anr (2010), the court while deciding on confidentiality of information in the mediation process, said in one of its statement: “In the case of court referred mediation under Section 89 of the CPC, the court can refer disputes for mediation and if, even after that, the dispute has not been resolved the matter will return to the court where it will be adjudicated upon. Kindly note that Section 89 of the CPC itself emphasises on the voluntariness of the parties to take part in mediation. It clearly says: “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 and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for…..”

As most of the kinds of Alternative Dispute Resolution systems are voluntary by the system’s very core nature and principle, almost all arbitration, mediation, and other kinds of pre-dispute and post-dispute agreements are voluntary in nature and can be contested in courts if any of the litigants or the opposing party is not happy with the process at any part of its performance.

A critical analysis of voluntary ADR process

Advantages of voluntary ADR

  1. The first principle of free consent in mediation /conciliation/negotiation and similar ADR systems is met when they are accepted voluntarily by the opposing parties.
  2. It is non-coercive and hence, the litigants can sit across the table and negotiate from a position of strength knowing fully well that they are free to disagree with any part of the negotiation. This leads to less bitterness in the negotiating atmosphere.
  3. It is cost-effective as the parties do not have to hire advocates and any third-party mediator can be appointed with a minimal fee for the mediation process.
  4. It ensures justice in a faster way (similar to an extent to Mandatory ADR).
  5. It leads to a lessening of the burden of caseloads on the courts as seen in Mandatory ADR.
  6. The opposing parties, if they wish so, are free to opt-out of this process and knock on traditional judiciary institutions any time after that.

 Disadvantages of voluntary ADR

  1. The parties are not bound to accept such a mechanism and hence, it will be very difficult for the judicial stakeholders to convince the parties to consider the process and lessen the burden on the judiciary.
  2. As seen in mandatory ADR, the absence of a well-trained professional workforce in mediation hampers the process of any kind of ADR, including voluntary ones. Hence, the quality of arbitration may suffer resulting in dissatisfaction and ultimately failure of the arbitration process.


ADR mechanisms have been proposed to provide quick and congenial justice to the citizens of all countries of the world. However, the absence of infrastructure that can take the concept forward is seen as the first challenging factor to its success.

The second challenge it seems to face is the acceptance of this system by the general populace, which has entrenched beliefs regarding ‘honour’, ‘unmanliness/weakness’, and the like when it comes to fighting court cases out of the traditional judicial systems. This has become problematic for the judiciary which is doing its best to deal with the huge number of pending cases (approximately 5.02 crores in all high courts, district and subordinate courts in India, with approximately 70,000 cases in Supreme Court of India, as on the 1st of July 2023) along with the exponential number of new cases being filed every day.

Hence, the following recommendations can be looked into, for effective implementation and success of ADR leading to upholding of  Article 14, Article 21 & Article 39A of the Indian Constitution which gives every person equality before law in the Indian territory and the Right to Access to justice.

  1. It is, first and foremost, extremely important to build a strong system of well-organised institutions that help in implementing any form of ADR. This includes well-trained professionals, mediator organisations, NGOs, and other kinds of manpower, who can attain expertise in mediation and are willing to take up mediation as a lifetime profession/career. 
  2. The parties or litigants should be properly educated and made aware of the existence of this mechanism and how they would be helping themselves by helping the judiciary by agreeing to ADR.
  3. The costs of availing the ADR should be low to ensure that the right to free, fair, and equal access to justice, as per the constitution is upheld. 
  4. ADR should be tailored as per the country, society, and community’s needs (ensuring it adheres to the constitution at the same time).

A gradual embrace of these recommendations, coupled with continuous monitoring, checks, and upgrades, would contribute to the development of a more egalitarian and harmonious system that facilitates access to justice for the citizenry.  This system should be designed to adapt automatically to the evolving dynamics of our changing environment especially in this era of accelerating globalisation.



Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.

LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join:

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.


Please enter your comment!
Please enter your name here