Case Study: Varenya group, was a well-known group in Kerala dealing in gold, diamond jewellery and related products. The group was founded by Vipul Varenya, who had three children, Vardhan, Viraj and Veena. All his child

Depending upon the nature of mediation, settlement agreement can be enforced as: Contract in Private mediation. Arbitral decree when settlement agreement is entered while using section 30 of the A&C Act, 1996. Arbitral decree when settlement agreement is under section 74 of the Arbitration & Conciliation Act, 1996 (A&C Act) (applicable to conciliation). Decree of civil court in court annexed mediation or compulsory pre-litigation mediation. A settlement agreement in mediation is a legally binding contract, and the parties are obligated to comply with its terms. If either party fails to comply with the terms of the settlement agreement, the other party may be able to enforce the agreement through legal action. The settlement agreement must be signed. Also, the mediation process and the settlement agreement reached through mediation are confidential, and the mediator and the parties are prohibited from disclosing any information about the mediation proceedings or the settlement agreement without the consent of the other party. In the case of a settlement arrived at in a court-annexed mediation, the same should be reduced to writing and presented to the court, which will pass an order or decree on the terms thereof. In mediation settlement agreements arising out of arbitral proceedings, parties may by consent file the same with the arbitrator and request the arbitrator to take the same on record and pass an award in terms thereof or request the Tribunal to just make reference to the mediation settlement agreement and state that as the arbitration is settled in terms of the mediation settlement agreement, the proceedings stand terminated. As regards the court, a similar process may be followed by consent of parties where the court may be informed of and shown the mediation settlement agreement and requested to dispose of the proceedings in terms of the same. Parties may request the court to refer to the same but may not file the same in the court. If filed in the court, a request may be made to the court to place the agreement in a sealed envelope due to the nature of its confidentiality. Section 74 of the Arbitration and Conciliation Act 1996 provides that a settlement agreement has the same effect as an arbitral award on agreed terms. The position in the Commercial Courts Act is also the same as a settlement in a pre-institution mediation proceeding under the Act and is given the same status as that of an arbitral award under the ACA. Such an arbitral award is enforceable as a decree of court as per section 36 of the ACA. The Delhi High Court while interpreting section 74 of the A&C Act 1996 held, "The said provisions fall in Part III of the said Act dealing with conciliation. Conciliation proceedings had to be initiated in terms of Section 62 of the said Act. The settlement agreement envisaged under Section 73 of the said Act has to be one which is in pursuance to a duly constituted conciliation proceedings as per Section 62 of the said Act. If such a settlement comes about then that settlement is enforceable as an arbitral award in terms of Section 74 of the said Act. Therefore, section 74 can't be used to enforce private mediation settlement agreements. For such private mediation settlement agreements to be enforceable they must qualify as a contract as defined in Section 2(h) of the Contract Act, 1872. However, after the enactment of Mediation Act, 2023, as per section 27(1), a mediated settlement agreement resulting from a mediation signed by the parties and authenticated by the mediator shall be final and binding on the parties and persons claiming under them respectively and enforceable as per the provisions of section 27 (2) i.e. 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. It is to be noted that section 27 of Mediation Act, 2023 has not been notified yet.