Genome Limited (Referred as 'G Ltd.'), a pharmaceutical company, had a contractual dispute with Hitro Traders Private Limited (Referred as 'Hitro Traders') regarding supply quality. The parties agreed to resolve the disp

CS Professional · Arbitration, Mediation and Conciliation · PYQS · June 2026
Genome Limited (Referred as 'G Ltd.'), a pharmaceutical company, had a contractual dispute with Hitro Traders Private Limited (Referred as 'Hitro Traders') regarding supply quality. The parties agreed to resolve the dispute through mediation at a recognized Mediation Centre. During mediation, Hitro Traders admitted that some goods supplied were defective but requested time to compensate the loss. However, the mediation failed and the matter later proceeded to Court litigation. During the Court proceedings, G Ltd. attempted to produce statements made by Hitro Traders during mediation as evidence of liability. Hitro Traders objected and argued that discussions made during mediation are confidential and cannot be disclosed before the Court. At this backdrop: Whether statements made during mediation can be used as evidence in subsequent Court proceedings? Explain with reference to relevant provisions and judicial precedents.

Answer & Explanation:

Issue: Whether statements made during mediation can be used as evidence in subsequent court proceedings. Under Section 75 of the Arbitration and Conciliation Act, 1996, confidentiality is recognised in conciliation. Judicial Precedents: In Moti Ram (D) Tr. LRs v. Ashok Kumar , the Supreme Court held that statements made during mediation are confidential and cannot be relied upon in subsequent litigation. In Salem Advocate Bar Association v. Union of India , the Court emphasised that confidentiality is essential for effective mediation. Application to the Case: The admission by Hitro Traders regarding defective goods was made during mediation proceedings. Such communication is protected by confidentiality. Therefore, G Ltd. cannot produce or rely upon such statements as evidence in court. The objection raised by Hitro Traders is valid in law. Conclusion: The admission allegedly made by Hitro Traders during mediation proceedings is protected and cannot ordinarily be relied upon as evidence in subsequent court proceedings. Consequently, the objection raised by Hitro Traders is legally sustainable and G Ltd. cannot use such mediation communications as evidence against it.

Topics: Mediation Principles

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