Section 2 in The Alternative Disputes Resolution Rules, 2004 and the Mediation Rules
2. Procedure for directing the parties to opt for alternative modes of settlement.
(a)If after recording admissions and denials at the first hearing of the suit under Order X Rule 1; it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, it shall formulate the terms of settlement and give the same to the parties for their observations. The parties shall furnish their observations to the Court within next fifteen days.(b)On the next date of hearing, which shall be not later than fifteen days fixed for furnishing the observations of the parties, the Court may re-formulate the terms of possible settlement and direct the parties to opt for one of the modes of settlement of dispute out of Court as specified in clauses (a) to (d) of sub-section (1) of Section 89 read with Order X Rule 1-A in the manner stated hereunder:Provided that the Court, in exercise of such power, shall not refer any dispute to arbitration or for settlement through Lok Adalat or judicial settlement under the Legal Services Authorities Act, 1987, as envisaged under clauses (a) and (c) of sub-section (1) of Section 89, without the written consent of all the parties to the suit.
