Court backlog, rising costs push business families to mediation tables

By Admin

17 Apr, 2025

Introduction: A Shift Towards Alternative Dispute Resolution
As courtrooms across India continue to grapple with rising backlogs and skyrocketing legal expenses, mediation is quietly gaining ground as the preferred method for resolving disputes—especially among India’s business families. In a landscape where preserving wealth, reputation, and relationships is vital, mediation offers a path that avoids the emotional and financial toll of prolonged litigation.

High-Profile Settlements Mark the Trend
The recent settlement between brothers Abhishek and Abhinandan Lodha—prominent figures in India's real estate sector—exemplifies this growing shift. The two scions amicably resolved a contentious issue over the use of the family brand ‘Lodha’ without stepping into a courtroom. Similarly, in January, veteran Bollywood filmmaker Ramesh Sippy and his nephew, along with other stakeholders, chose mediation to resolve a complex property dispute involving a prime South Mumbai asset.

Preserving Relationships and Reputation
According to Anand Desai, managing partner at DSK Legal, mediation has gained popularity among business families because it allows them to protect both their brand and reputation. “Mediation is private, which helps because once in the public domain, egos of the parties can easily get hurt by statements made by each side, resulting in hardening stands on each party’s part, as also ‘advisors’ start giving ‘advice’,” Desai said.

Confidentiality plays a crucial role in this preference, especially in today's social media-driven era where even minor issues can quickly spiral into major public controversies. With litigation not only being time-consuming but also financially draining, families are increasingly opting for the discretion and efficiency of mediation.

Faster and Emotionally Sensitive Resolutions
Tanu Mehta, advocate and chairperson of the Committee for Mediation and Conciliation (CMC) at the Bombay Chamber of Commerce, emphasized that mediation is particularly well-suited for family businesses. “In an environment where businesses are getting reinvented every four to five years, promoters are seeking faster resolution, where mediation is the most effective,” she noted.

Unlike litigation and arbitration, which rely heavily on facts and evidence, mediation is better equipped to handle the emotional undercurrents often present in family disputes. Issues rooted in past grievances or interpersonal tensions can be addressed more effectively through this informal and empathetic process.

Real-Life Cases Highlight the Practical Appeal
In one instance, a Mumbai-based business family involved in commodity trading and real estate turned to mediation before considering litigation. The outcome was a peaceful division of assets: one part of the family retained the trading business and certain properties, while the other took over the real estate venture.

In another case, a veteran banker was brought in as a mediator to oversee a dispute regarding asset division. According to a Mumbai-based lawyer who was familiar with both cases (and requested anonymity), the confidentiality of the process was key to its success.

A Logical and Pragmatic Choice
Ketan Dalal, founder of Katalyst Advisors, sums it up well: “Mediation is a very logical method of resolving disputes, as opposed to endless internecine battles.” He added that this method works best when parties are pragmatic and recognize the pitfalls of dragging disputes through the courts.

Conclusion: Mediation Is More Than a Trend
What began as a less-traveled path is fast becoming the go-to strategy for India’s elite families facing disputes. Mediation offers not only privacy and speed but also a way to preserve what matters most—relationships, business continuity, and legacy. In an increasingly dynamic business environment, this shift is not just practical—it’s inevitable.