Online Mediation Under the Mediation Act, 2023: What Indian Businesses Should Know

On 14 September 2023, India's Mediation Act received the President's assent and became Act No. 32 of 2023. Most of the coverage at the time focused on pre-litigation mediation and the new Mediation Council of India. One short section got far less attention. But for businesses that handle a steady stream of customer, vendor or payment disputes, it may turn out to be one of the most useful parts of the law.

That section is Section 30, and it deals with online mediation.

What Does Section 30 Actually Say?

The provision allows online mediation, including pre-litigation mediation, to be conducted at any stage of the process, as long as the parties give their written consent. It then lists the kinds of tools that can be used, such as encrypted email, secure chat rooms and audio or video conferencing. It also places a duty on the mediator to protect the integrity and confidentiality of the proceedings. The exact manner of conducting online mediation is to be specified separately.

In plain terms, a mediation does not become second class just because nobody travelled to attend it. The law treats it as a mediation under the Act, with the same expectation of confidentiality.

Why Should a Business Care?

Think about how a typical commercial dispute moves in India. A notice goes out, a reply comes back, and then the matter either stalls or heads to court. Court timelines are long and hard to predict, and the cost of lawyers and appearances can easily exceed the value of a small claim. So many companies simply write off small claims. Others keep chasing them for months.

Mediation offers a middle path. The parties sit with a neutral third person, talk through the issue and try to reach a settlement both of them can live with. Nobody is forced into an outcome. When it works, the relationship with the customer or vendor often survives, which rarely happens after a lawsuit.

Doing this online removes most of the friction that kept mediation from scaling. The parties do not have to be in the same city. Documents can be shared and reviewed on screen. And a business dealing with hundreds of similar disputes can run them in parallel instead of booking rooms and matching diaries for each one.

What the Law Does Not Do

Mediation has limits, and it helps to be upfront about them. It is voluntary. If the other side refuses to engage, or engages and then walks away, there is no settlement to enforce. Section 30 also requires written consent before a mediation can move online, so you cannot pull an unwilling party onto a video call. For disputes where one side has no interest in settling, arbitration or litigation may still be the right route.

Getting Started With Online Mediation

Start with your contracts. Add a clause that commits both parties to attempt mediation before going to court, and state that the mediation may be conducted online. That one clause settles the consent question before any dispute arises.

Next, sort your disputes by type and value. High-volume, low-value matters such as payment defaults, refund claims and service complaints are usually the best fit for online mediation.

Then choose a provider of online dispute resolution services that handles the process from end to end, covering notices, case filing, scheduling, document sharing and the recording of the settlement. Ask how it protects data, because Section 30 puts confidentiality at the centre of online mediation.

Lastly, prepare your internal team. A mediation goes better when the person representing your business has the facts ready and the authority to settle.

We hope the next dispute that lands on your desk ends with a settlement agreed over a video call, rather than a long string of court dates.

About The Author

Aditya Aryan is a lawyer and mediator. He is currently building marketing at Sama, India’s leading online dispute resolution company.