### Court Cannot Mandate Consensual Mediation Under the Mediation Act, 2023 Without the Consent of All Parties

In brief

The question

1. Whether the Court can refer parties to mediation under Section 89 of the CPC and the Mediation Act, 2023, when one party does not consent to the process.

The court held

The Court answered the issue in the negative, holding that under the CPC and the Mediation Act, 2023, mediation is a consensual process and cannot be mandated over the objection of a party when no element of settlement is apparent.

It also directed

The Court found that there was no possibility of settlement through mediation based on the parties' conduct and history, therefore the Plaintiffs’ request to refer the matter to mediation was rejected, and the Court directed the matter to proceed on the merits of the Interim Application.

01Facts

The Plaintiffs (Defendant No. 1’s sister and her husband) filed a suit for specific performance of a 1994 family arrangement regarding various assets.

¶ 1

Defendant No. 1 filed an Interim Application under Order VII Rule 11 of the CPC seeking rejection of the plaint.

¶ 1

Given the close familial relationship, the High Court suggested mediation.

¶ 2

Defendant No. 1 refused to consent, citing failed past mediation attempts (including one by the Supreme Court involving senior mediator Shriram Panchu), ongoing litigation in Pune, and concerns over news leaks intended to pressure investors.

¶ 5, 12

The Plaintiffs insisted that the Court could refer the matter to mediation even without the consent of all parties.

¶ 6

02Issues

i.1. Whether the Court can refer parties to mediation under Section 89 of the CPC and the Mediation Act, 2023, when one party does not consent to the process.

¶ 0, 7

ii.2. Whether, on the facts of the case, there exists a sufficient "element of settlement" to justify a referral to mediation.

¶ 7, 17

03Law Applied

Section 89 of the CPC (as amended in 2023), which allows referral to ADR where it appears "elements of settlement... may be acceptable to the parties".

¶ 8.5

Section 5 of the Mediation Act, 2023, noting the legislative intent that mediation be "voluntary and with mutual consent".

¶ 8.2-8.3

The Supreme Court precedent in Rupa and Co. Ltd. v. Firhad Hakim, which held that "mediation cannot be thrusted upon either of the parties".

¶ 13(i)

Afcons Infrastructure Ltd. v. Cherian Varkey, which warned against using ADR as a tool to drag out proceedings.

¶ 13(ii)

Provisions in the judgment · 27 · Linked ones open on LawLens

Code of Civil Procedure, 1908 Section 89 Section 7 Section 10

Mediation Act, 2023 22 provisions

Section 1 Section 3 Section 5 Section 23 Section 31 Section 32 Section 33 Section 34 Section 35 Section 36 Section 37 Section 38 Section 45 Section 46 Section 47 Section 50 Section 51 Section 52 Section 53 Section 54 Section 56 Section 57

Legal Services Authorities Act, 1987 Section 20

Arbitration and Conciliation Act, 1996 Section 30

04Reasoning

The Court reasoned that unlike commercial disputes under Section 12-A of the Commercial Courts Act, general civil suits under Section 89 of the CPC require the Court to first be satisfied that a "possibility of settlement" exists.

¶ 7, 10

The Court observed that the parties had a history of failed mediations, including a previous attempt directed by the Supreme Court that yielded no results despite being conducted by a renowned mediator.

¶ 12

The Judge noted that the legislative shift in the Mediation Act, 2023, emphasizes voluntariness.

¶ 8.3

In this case, the lack of a concrete settlement proposal from the Plaintiffs during the adjournment period, combined with the active hostility regarding local news publications and ongoing litigations in other forums, indicated that there was no "bridgeable gap" or "element of settlement" currently available.

¶ 14-16

Consequently, forcing a party into mediation against their express will would be "untenable".

¶ 13(i)