Archive · 1 Oct 2025
PSUs Shift to Mediation for Quicker Dispute Resolution
Imagine businesses run by the government sometimes have arguments they need to settle.
Instead of going to court, they're now using a new way called mediation.
It's like having a friendly helper who helps both sides agree on a solution.
It's faster and cheaper than the old way, and it makes everyone happier.
The government is also making new rules to help this new way of settling disagreements work even better, making sure everything is fair and speedy.
PSUs are increasingly adopting mediation for dispute resolution.
NHAI and other infrastructure agencies are incorporating mediation clauses.
A June 2024 Finance Ministry advisory supports mediation.
Mediation offers a faster, less expensive, and amicable alternative to arbitration.
The Mediation Act of 2023 provides a framework for mediation processes.
- Who
- PSUs, government bodies, and disputing parties
- What
- Shift from arbitration to mediation for dispute resolution
- When
- Ongoing, following a June 2024 advisory
- Where
- Contracts involving PSUs and infrastructure agencies in India
- Why
- To achieve quicker, cost-effective, and more amicable dispute resolution
Traditional Arbitration Practices
Mediation as a Preferred Method
Speed and Cost
Traditional Arbitration Practices
Arbitration is often slow and costly.
Mediation as a Preferred Method
Mediation offers faster and more cost-effective resolution.
Outcome
Traditional Arbitration Practices
Arbitration is adversarial (winner takes all).
Mediation as a Preferred Method
Mediation encourages compromise and consensus, making both sides satisfied.
Government Officials' Approach
Traditional Arbitration Practices
Officials might be unwilling to concede disputes.
Mediation as a Preferred Method
With mediation, the officials have more protection.
- Key Shift
- PSUs are using mediation clauses in contracts instead of arbitration
- Agencies Involved
- NHAI and other infrastructure agencies
- Financial Ministry Advisory
- June 2024, advising government bodies to use mediation
- Mediation Act
- 2023, establishes mediation framework
- MCI
- Mediation Council of India being formed
- Benefits of Mediation
- Faster, less expensive, and more amicable resolution
