Yes, the Mediation Act, 2023 is fundamentally different from the Arbitration and Conciliation Act, 1996, though they both belong to the family of Alternative Dispute Resolution (ADR).
As of 2026, the Mediation Act has effectively subsumed Part III (Conciliation) of the Arbitration Act. This means “Conciliation” as a legal term is being phased out in favor of “Mediation” to align with global standards like the Singapore Convention.
1. Core Differences: At a Glance
| Feature |
Arbitration (1996 Act) |
Mediation (2023 Act) |
| Nature |
Adjudicatory: The arbitrator acts like a private judge. |
Facilitative: The mediator helps parties reach their own settlement. |
| Decision Maker |
The Arbitrator decides who wins/loses. |
The Parties decide the outcome themselves. |
| Final Document |
Arbitral Award (Binding on its own). |
Mediated Settlement Agreement (MSA). |
| Voluntary? |
Mandatory once an agreement is signed. |
Voluntary; parties can withdraw after two sessions. |
| Intervention |
Arbitrator can impose a solution. |
Mediator cannot impose a solution. |
2. The Relationship: How they Interact
The 2023 Act didn’t just create a new law; it amended the Arbitration Act to ensure they work together smoothly.
- Section 89 CPC: Courts can now refer parties to either arbitration or mediation under the new specialized Act.
- Pre-Litigation Mediation: Unlike arbitration (which requires a prior contract), the Mediation Act allows parties to try mediation even if there is no prior agreement, specifically before filing a commercial suit.
- Enforcement: A key similarity is that a Mediated Settlement Agreement (MSA) is now enforceable just like a court decree, exactly like an Arbitral Award under Section 36 of the Arbitration Act.
3. What happened to “Conciliation”?
This is the biggest change for legal practitioners in 2026.
- The “Otiose” Rule: The Mediation Act has rendered Part III (Sections 61–81) of the Arbitration Act largely redundant.
- The Name Change: Any reference to “Conciliation” in other Indian laws is now legally interpreted as a reference to “Mediation” under the 2023 Act.
- Savings Clause: Only conciliation proceedings that started before the notification of the Mediation Act will continue under the old 1996 rules. All new “amicable settlements” now follow the 2023 framework.
4. Why use one over the other?
- Use Arbitration when: You need a guaranteed final decision because the parties are too hostile to agree on anything, and you need a “winner.”
- Use Mediation when: You want to preserve a business relationship, keep costs extremely low, and want control over the final terms of the deal.
The Mediation Act, 2023 provides a specific list of “excluded” disputes in its First Schedule. These are matters that are considered “non-mediable” because they involve public interest, criminal liability, or the rights of third parties who are not part of the discussion.
As of 2026, if you settle any of the following matters through mediation, the agreement will likely be declared null and void by a court.
1. Criminal Offences
- General Rule: Any dispute involving the prosecution for a criminal offence is off-limits.
- The Exception: A Court can still refer compoundable offences (lesser crimes where the law allows a settlement, like some matrimonial disputes or minor brawls) to mediation. However, the final “Seal of Approval” must come from the Judge, not just the mediator.
2. Disputes Involving Protected Persons
- Claims against minors (below 18).
- Claims involving deities (common in Indian temple property litigation).
- Claims against persons with intellectual disabilities or those with “high support needs” under the Rights of Persons with Disabilities Act, 2016.
3. Third-Party Rights
- Any dispute where the outcome would affect the legal rights of someone who is not present in the mediation.
- Exception: Matrimonial disputes where the interest of a child is involved (the child doesn’t need to be a party).
4. Tax and Statutory Levies
- You cannot mediate with the Government over the levy or collection of taxes (Direct or Indirect), customs duties, or tax refunds. These are sovereign functions that cannot be “negotiated” away.
5. Regulatory & Special Tribunal Matters
The Act excludes matters falling under the jurisdiction of specific specialized bodies:
- Securities (SEBI): Proceedings before the Securities and Exchange Board of India or the SAT.
- Competition (CCI): Any investigation or inquiry under the Competition Act, 2002.
- Telecom (TRAI/TDSAT): Proceedings regarding telecom regulations.
- Electricity: Proceedings before the Electricity Commissions or the Appellate Tribunal (APTEL).
- Environment (NGT): Any matter falling under the National Green Tribunal’s jurisdiction.
6. Land Acquisition
- Disputes regarding the acquisition of land by the Government or the determination of compensation under land acquisition laws.
7. Professional Misconduct
- Proceedings against professionals (Lawyers, Doctors, CAs, Architects) regarding disciplinary action or misconduct cannot be mediated; these require formal adjudication by their respective bar/medical councils.
| Matter |
Can you Mediate? |
Can you Arbitrate? |
| Criminal Offences |
No (Except Compoundable) |
No |
| Tax Disputes |
No |
No |
| Matrimonial/Divorce |
Yes (Very Common) |
No (Only maintenance/property) |
| Insolvency (IBC) |
No |
No |
| Intellectual Property |
Yes (Commercial) |
Yes (Commercial) |
Why does this list exist?
The philosophy in 2026 is that “Private Peace cannot override Public Justice.” For example, if two companies mediate a price-fixing deal (Competition law), it might be good for them but bad for the public. Therefore, the law forces such cases into the public court system.