What If the Other Side Refuses to Take Part?

Generally no. Mediation is voluntary and needs both parties to participate for it to work. However, a court can refer a pending case to mediation under Section 89 of the Code of Civil Procedure, and many parties who initially refuse change position once they understand mediation is faster and cheaper for them too.

You can apply under Section 8 of the Arbitration and Conciliation Act, 1996 for the court to refer the parties to arbitration. Where a valid arbitration agreement covers the dispute, the judicial authority must refer the parties to arbitration rather than hear the suit.

Source: Arbitration and Conciliation Act, 1996, Section 8

The Act provides a fallback so that one party cannot stall the process. Where the parties or their appointees fail to agree, an application can be made under Section 11 for appointment. Since the 2019 amendment, designated arbitral institutions can make the appointment, which is quicker than a court route.

Source: Arbitration and Conciliation Act, 1996, Section 11

Yes. Where a party fails to participate despite proper notice, the tribunal can continue and make an award. This is not a defect in the process — it is the mechanism that prevents unilateral obstruction. The resulting award is enforceable in the usual way.

Without a clause you cannot compel arbitration, so litigation becomes the remaining route. Note that a court can still refer the matter to mediation once proceedings begin, and many disputes settle after filing precisely because the cost and delay of litigation become concrete.

It does not carry an automatic penalty in India, but it is rarely a costless choice. A party who refuses a reasonable settlement route usually ends up in litigation that is slower and more expensive for both sides, and courts increasingly encourage parties to attempt settlement.