In this article author studies history of the institute of mediation formation and development in India. In the process of research author emphasizes that as a consequence of India's rapid economic development, number of disputes that are associated with them inevitably increases. Mediation is one of the popular methods of resolving disputes these days. In conclusion author emphasizes that the place and role of mediation is explained not only by the modern business culture of this country, but also because from a long time the population preferred to resolve conflicts through negotiations and with the participation of mediators. And the fact that the ancient model of peaceful settlement of disputes has survived to this day is due to the high level of poverty, cultural and religious diversity, and the preservation of traditional and community values and norms. It can be stated that the use of mediation, among other things, including traditional forms of alternative dispute resolution, has had a beneficial effect on the Indian judicial system, both in resolving problems with excessive workload on courts, and in delaying the adjudication of disputes.