Code
1[89. Settlement of disputes outisde the Court.–(1) Where it appears to the Court that there exist
elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of
settlement and give them to the parties for their observations and after receiving the observations of the
parties, the Court may reformulate the terms of a possible settlement and refer the same for:–(a) arbitration;(b) conciliation;(c) judicial settlement including settlement through Lok Adalat: or(d) mediation.(2) Were a dispute has been referred–(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26
of 1996) shall apply as if the proceedings for arbitration or conciliation were referred for settlement
under the provisions of that Act;(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of
sub-section (1) of section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and all other
provisions of that Act shall .apply in respect of the dispute so referred to the Lok Adalat;(c) for judicial settlement, the Court shall refer the same to a suitable institution or person and such
institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services
Authority Act, 1987 (39 of 1987) shall apply as if the dispute were referred to a Lok Adalat under the
provisions of that Act;(d) for mediation, the Court shall effect a compromise between the parties and shall follow such
procedure as may be prescribed.]
