Settlement
Section 30 of the Arbitration and Conciliation Act, 1996 deals with settlement. It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement. The Act came into force on 22 Aug 1996.
(1) It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement.
(2) If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms.
(3) An arbitral award on agreed terms shall be made in accordance with section 31 and shall state that it is an arbitral award.
(4) An arbitral award on agreed terms shall have the same status and effect as any other arbitral award on the substance of the dispute.
Section 30, The Arbitration and Conciliation Act, 1996 (Act 26 of 1996).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Afcons Infra. Ltd. vs Cherian Varkey Constn Co. P. LTD
Court's Decision & Legal Precedent
A civil court cannot refer a suit to arbitration under Section 89 of the Code of Civil Procedure unless all parties to the suit agree to such reference. Even though Section 89 mandates courts to refer pending suits to alternative dispute resolution processes, reference to arbitration specifically requires mutual consent of all parties, as arbitration is governed by the Arbitration and Conciliation Act, 1996 which contemplates the existence of an arbitration agreement. While non-adjudicatory ADR processes (Lok Adalat, mediation, judicial settlement) can be imposed by court discretion after identifying suitable cases, adjudicatory arbitration process cannot be imposed without party consent. The proper procedure requires courts to invoke Section 89 suo moto after completion of pleadings and before framing issues, consider whether the case falls under excluded categories, and only for suitable cases, explain the five ADR options to parties and ascertain their preferences, with arbitration and conciliation requiring mutual consent.
On this section: Makes settlement agreement in arbitration binding and executable as if court decree
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Narayan Prasad Lohia vs Nikunj Kumar Lohia
Court's Decision & Legal Precedent
Where an appellate court has considered only some of the grounds on which a lower court invalidated an award or order, and other substantial grounds remain unexplored, the Supreme Court will remit the matter to the appellate court for full consideration of all grounds in the interest of justice, rather than deciding the remaining grounds without the benefit of the appellate court's reasoning and findings. Additionally, where parties fail to raise statutory objections within prescribed procedures, they waive their right to challenge on those grounds subsequently.
On this section: Court analyzed whether award constituted a settlement; held that if it were merely a settlement, arbitrators would not have rejected claims as they purported to do
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… Further, if the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties to the dispute and the mediator. The settlement arrived shall have the same status and effect as if it is an arbitral award on agreed terms under Section 30(4) of the Arbitration and Conciliation Act, 1996. This is another remarkable feature of the mediation regime ushered in by the Amending Act which, by deeming the mediated settlement at par with an arbitral award, provides strong legal backing to the mediation process and ensures that the enforceability of the same …
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… (5) The settlement arrived at under this section shall have the same status and effect as if it is an arbitral award on agreed terms under sub-section (4) of section 30 of the Arbitration and Conciliation Act, 1996 (26 of 1996).]" Applying the golden principle of interpretation, the provisions may be read in its most simple and unambiguous manner. So read, it is apparent that the legislative intent is not to empower a litigant to supplant the process envisaged in Section 12A of …
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… (5) The settlement arrived at under this section shall have the same status and effect as if it is an arbitral award on agreed terms under sub-section (4) of section 30 of the Arbitration and Conciliation Act, 1996 (26 of 1996). 25. It is manifestly clear that the legislation has given an opportunity to the litigants to settle their disputes according to their satisfaction and to bring peace and harmony in the society. 26. Reverting to the facts of the present case, it is an …
Questions about Section 30
What have the courts held on Section 30 of the Arbitration and Conciliation Act?
Afcons Infra. Ltd. vs Cherian Varkey Constn Co. P. LTD (26 Jul 2010) is the leading judgment on this section among those set out below: Makes settlement agreement in arbitration binding and executable as if court decree. Another 1 judgment on this section is set out below, all of them from the Supreme Court. They run from 2003 to 2010.
How do I find court cases under Section 30 of the Arbitration and Conciliation Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Arbitration Act 30, section 30 Arbitration Act, section 30 of the Arbitration and Conciliation Act. People searching for it also type arbitration act s 30. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with Afcons Infra. Ltd. vs Cherian Varkey Constn Co. P. LTD (26 Jul 2010).
What should I read with Section 30 of the Arbitration and Conciliation Act, and has it changed?
Its own text turns on section 31 (Form and contents of arbitral award), so none of them can safely be read on its own. 5 other provisions in this corpus refer back to it.
When did Section 30 of the Arbitration and Conciliation Act come into force?
Section 30 of the Arbitration and Conciliation Act, cited as Arbitration Act 30, came into force on 22 Aug 1996, having been enacted on 16 Aug 1996. It is in force as at the date shown on this page.
Other sections of this Act
- 8. Power to refer parties to arbitration where there is an arbitration agreement1029 words
- 11. Appointment of arbitrators1027 words
- 34. Application for setting aside arbitral awards861 words
- 2. Definitions732 words
- 29A. Time limit for arbitral award635 words
- 57. Conditions for enforcement of foreign awards519 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.