Mediation Settlement

Agreement
A settlement agreement in simple words can be understood as a contract that is reached
by the parties which resolve their disputes. Now, as mediation is a process in which the
parties voluntarily decide to engage in, a mediated settlement agreement can be reached
after mediation by both parties.
In other words, in a mediated settlement agreement whatsoever the parties have decided
mutually is reduced in writing.
It is a document that binds the parties to cohere to the agreed terms and
conditions as an outcome of mediation.
The agreement is then signed by the parties in the presence of the mediators enabling the
mediation and also legal counsels of both parties.

Agreements which are entered into in the course of mediation are acceptable and stand
the greatest chance of being implemented because the outcome of mediation is not
imposed by a third party adjudicator but represents a solution that has been voluntarily
agreed to by mutual agreement.

In 2014, the Supreme Court of India in Vikram Bakshi v Ms. Sonia Khosla pointed out
the advantages of mediation and also how it can provide a conducive environment for the
parties to achieve a win-win situation. Mediation has the significant potential not merely
for reducing the burden of arrears, but more fundamentally for bringing about a qualitative
change in the focus of the legal system from adjudication to the settlement of disputes.
Contents of Mediation Settlement
Agreements
Identifying Identifying the Parties Involved: The agreement must identify the individuals or entities who are parties to the agreement.

Terms of the Resolution: The agreement must outline the specific terms of the resolution, including any actions to be taken, the
Outline responsibilities and obligations of the parties, and any compensation or payments that are part of the settlement.

Date and Signature: The agreement must include the date it was signed and the signature of each party, indicating their agreement to the
Date and Signature terms outlined in the document.

Consideration: The agreement must state that each party is receiving something of value in exchange for the promises made in the
State agreement.

Governing Governing Law: The agreement must specify the jurisdiction whose laws will govern the interpretation and enforcement of the agreement.

Dispute Resolution: The agreement may include provisions for resolving disputes that may arise in the future, such as arbitration or the
Dispute requirement to participate in mediation.

Specify Termination Provisions: The agreement must specify under what circumstances the agreement can be terminated or modified.
Settlement Agreement- Explained
A settlement agreement in simple words can be understood as a contract
that is reached by the parties which resolve their disputes.

As mediation is a process in which the parties voluntarily decide to

engage in, a mediated settlement agreement can be reached after
mediation by both parties

in a mediated settlement agreement whatsoever, the parties have

decided mutually is reduced in writing. It is a document that binds the
parties to cohere to the agreed terms and conditions as an outcome of
mediation.
 After the Mediation Act 2023, most applicable in the context
of commercial mediations are the Code of Civil Procedure
1908, and the Commercial Courts Act 2015. Under Section
89 of the Code of Civil Procedure 1908 which empowers the
court to refer disputes for agreement out of courtroom
doors, which includes mediation.

The problem with Section 89 lies in the fact that it mandates

that where it appears to the court that there exists an
element of settlement which may be acceptable to the
parties, the court shall draft the terms of settlement and
after receiving comments of the parties may reformulate the

Legal Enforceability terms of possible settlement after which parties may be

referred to arbitration, conciliation, judicial settlement or
mediation. In cases of settlements in court-annexed

of Mediation mediations, the settlement is enforced through the courts as

the court passes an order or decree in terms of the written
settlement.

Settlement
The Mediation Act, also declares that all mediated
Agreements in India settlement agreements reached through mediation done
under the Act would be enforceable “in accordance with the
provisions of the Code of Civil Procedure, 1908, in the same
manner as if it were a judgment or decree passed by a court
A settlement reached between parties in a mediation is binding
upon the parties in the same manner as a contract, or as a
decree of a court. Hence, an agreement reached by parties in
negotiation takes a form of a contract like the provisions in the
USA and England and same is enforceable as per the provisions
of Civil Procedure Code.

In Shri Ravi Aggarwal v. Shri Anil Jagota, both the

parties agreed to conduct private mediation and requested
that the agreement is so reached, be implemented in
accordance with Section 30, Section 73, and Section 74 of
the Arbitration And Conciliation Act, 1996. The court
refused because Part III of the Arbitration And Conciliation
Act was only applicable to settlement agreements drawn
with mutual consent by duly constituted conciliation
proceedings.
Challenging Mediation Agreement
A mediation agreement can be challenged before a competent court or a
tribunal of proper jurisdiction. The ground on which a mediation agreement
can be challenged are all or any of the below:
• Fraud;
• Corruption.
• Impersonation;
• If the mediation is conducted for disputes not fit for mediation. As specified under Schedule 1
of the act, which are disputes which are prescribed against mediation by virtue of any law for
the time being, disputes relating to minors, deities; disable person. Matters involving criminal
offences and others included in first schedule.
• An application for challenging the mediated settlement agreement shall not be made after
ninety days have elapsed from the date of from receiving the copy of mediated settlement.
Why Parties back out of Mediation
Settlement Agreement
Malice.

After thought of the practicality of the solution.

Knowledge of certain new facts or information.

Desire for more than what previously agreed to.

Duress during the mediation.

Meet the demands of individuals not present in the mediation session.

Finding other remedy that has better relief.