This article is written by Sirin Sabana of 3rd Year of BALLB of Heritage Law College, an intern under Legal Vidhiya
Abstract
Mandatory Pre-litigation Mediation has emerged as an important and significant role in judicial innovation in India’s commercial dispute framework, which is primarily under Section 12A of the Commercial Courts Act, 2015. The Supreme Court of India leads the Indian Judiciary and has been consistently interpreted under Section 12A as mandatory in nature, where the parties continue to pursue pre-institution mediation before filing a commercial suit, except where the plaint contemplates that urgent interim relief is required.
Judicial reasoning underscores that where the mandatory mediation aims to decongest courts, reduce litigation costs, and promote amicable dispute resolution, aligning with the legislative intent behind Section 12A. The Courts have now carefully ensured that exceptions such as the urgent relief, which are genuinely made out and not misused to circumvent the mediation requirement.
Keywords
Mandatory pre-litigation Mediation, Judicial Approach, Pre-institution Mediation, Supreme Court of India, Court Rejection of Plaint, Urgent Interim Relief Exception, Commercial Disputes, Delhi High Court, Alternative Dispute Resolution (ADR)
Introduction
One of the significant branches of India is the judiciary. It is in charge of resolving conflicts and applying the law in particular situations. As the judges render their decisions in various situations, they understand the exact meaning of the law. The judiciary itself plays an important role in government because of its role as defender and protector of the constitution and the people’s fundamental rights. It is also the source of courage and confidence for the citizens of India from all states, and is essential because it has only a limited opportunity to do the work and enjoy life. So if we see about the recent legal developments and commentaries their we will observe what the courts have held and put into effect.
Statutory Mandate for Commercial Suits:
One of the greatest problems that the Indian judiciary is facing is that an immense number of cases are left unsolved, and there is a backlog of cases. If we look at the issues of pending cases, there are over 4,31,30,195 cases pending across the Indian Jurisdiction, according to recent surveys from 8th November,2022. To resolve the burden of cases on the Indian Court System, is with the help of ADR. In ADR, the term ‘Mediation’ plays an important role, which acts as a third party between two parties with a view to reconciling them to settle disputes, including the cases of family matters, labour law and other commercial disputes. In the current situation, mediation may be ordered from the court under Section 89 of the CrPC (Khastgir, n.d.) or through mechanisms stipulated under Section 37 of the Consumer Protection Act, 2019 and Section 442 of Company Act. Apart from this Commercial Courts Act, 2015 has different proceedings of mediation to resolve the disputes and Section 12A of the Commercial Courts Act, 2015 makes an attempt to solve the disputes outside the court.
Pre-Litigation Mediation under the Mediation Bill of 2021 states that under Section 2(r) of the bill, the process is for the settlement of disputes before filing a suit of civil or commercial nature. According to Section 6 of the Bill, it has made it mandatory to agree, and the party may take steps to settle the disputes before filing a proceeding of civil or commercial nature under any court or tribunal in India. Under Section 20 of the Bill, it also defined that it would only be mandatory for the parties to attend the first two sessions under this Bill, after which they must withdraw from the process of mediation. And if any party fails to comply with any cause after attending both sessions, the power goes into the hands of the court, which will now give subsequent litigation on the same subject matter between both parties under Section 20(2).
In the landmark case of Patil Automation Pvt. Ltd. V. Rakheja Engineers Pvt. Ltd. (2022), the Faridabad of the Supreme Court declared under Section 12A of the Commercial Court Act, 2015, that the mandatory requirement for commercial disputes. At first, the plaintiff (Patil Automation) filed a suit without undergoing the pre-institution process of mediation proceedings under this Section. Secondly, the M/s. Rakheja Engineers Pvt. Ltd., A company in Faridabad, filed a suit for the recovery of the amount 1,00,40,291 against M/s. Patil Automation Pvt. Ltd., which was a money recovery suit given to the plaintiff. The defendant also had sent notice to the plaintiff and responded by raising preliminary objections under the Civil Procedure Code of Order VII Rule 10 and 11, and Sections 9&20 CPC were invoked, asking for a trial to dismiss the suit. Dissatisfied with the trial court’s refusal to accept the preliminary objections, the defendant filed a revision petition under Article 227 of the Constitution, but ultimately, as there was no merit in the petition, the trial court order was supported by reasoned analysis and did not display any illegality or interference; hence, the revision suit was also dismissed.
Preliminary Objections on jurisdiction and limitation are not always good reasons to close the door to trial if factual disputes exist, but the compliance with statutory pre-institution processes is important. But alleged non-compliance does not always result in automatic dismissal, the court will look at the statutory language, policy behind mediation and the factual position.
On Form, Location and Substance of Mediation:
India Courts have reaffirmed the mandatory requirement of pre-institution mediation in Patil Automation Pvt. Ltd. V. Rakheja Engineers, the Supreme Court categorically established Section 12A. Likewise, in Ganga Taro Vazirani v. Deepak Raheja. The Bombay High Court emphasised the necessity for efficient dispute resolution and judicial backlog reduction, underlining the importance of pre-litigation mediation.
In the case of Ganga Taro Vazirani v. Deepak Raheja, Section 12A provided the crucial guidance on territorial scope. The case was a commercial suit that was filed without any urgent relief, raising the question of whether mediation had to occur within the same jurisdiction as the suit. The court noticed that when both parties had already made genuine attempts to resolve their dispute, it would be futile to compel the parties to engage in pre-institution mediation again.
United Kingdom: In England and Wales, there was no equivalent statutory mandate requiring mediation before a civil commercial suit. Instead, CPR and court practice encourage ADR through pre-action protocols and cost sanctions. A leading case is Halsey v Milton Keynes General NHS Trust, which established that courts cannot compel unwilling parties to mediate. So the process of mediation can result in ADR, a de facto expected step in the litigation process. Thus, English practice sidesteps territorial disputes by focusing on compliance in substance. If the parties have reasonably engaged with mediation or other ADR, the courts are satisfied, regardless of where or how the mediation took place.
United States: The approach to pre-litigation mediation varies widely depending on jurisdiction and subject matter. Many states have their own rules mandating ADR in a specific context. Likewise, Florida requires pre-suit mediation for certain disputes involving some associations.
What Judiciary & Commentators Point Out:
Is India really ready for mandatory mediation? According to recent records, the answer is no, the courts have to refer litigants to refer disputes for mediation. Recently, the Hon’ble Karnataka High Court observed that under Section 89 of the CPC(Code of Civil Procedure), any court exercising powers under this section, which refers the pending dispute to mediation, need to consent of the parties for the reference. On the other hand, it is being said that involvement in pre-litigation mediation is not mandatory. So, before delving into the same, it is important to understand the mediation process.
India is a country where the burden of caseload is ever-growing has turned to ADR mechanisms to alleviate the pressure on courts. One significant milestone was introducing mandatory pre-institution mediation, despite the potential initiative’s the development has faced many challenges which includes the involvement of low participation, a lack of trained mediators, etc. Although the pre-litigation mediation has demonstrated considerable potential, in further situations, infrastructure development is required to unlock its full potential.
In the 117th Report of the Mediation Bill 2021, the Standing Committee of the Parliament has astutely noted that the policymaker* must have studied the challenges faced during implementing the pre-litigation mediation provisions in the 2015 Act before expanding the scopes for other categories of civil matters. Section 12A has been greatly diluted* due to the carve-out provided in its language, whereby in cases of urgent interim relief, the parties may bypass the pre-litigation mediation and directly file a suit in the courts. And as a result, an unnecessary wrinkle in timely and cost-effective dispute resolution has been made in such cases.
Recent Developments & Outlooks:
Calcutta High Court clarifies the requirement of urgency under Section 12A, which holds the plaintiff’s pleading for bypassing Pre-Litigation Mediation. Under Section 12A of the Commercial Court Act, 2015, Justice Aniruddha Roy rejected an application which was filed by GPHP Holdings Pvt Ltd, which attempted to revoke the immediate relief for the outcome of the application. The suit held 1.01 crore, which was also a money recovery suit filed by Berger Paints India Limited against the GPHP Holdings Pvt Ltd, a manufacturing company. The court emphasised that the legislative intent was to make mandatory only when there is no urgent interim relief to be completed.
Thus, the Judgement served a robust precedent for the commercial law practitioners, and for the plaintiff, it clarified the ruling highlights the importance of meticulously pleading the fact give rise to contemplation of urgency, which creates a clear narrative in plaint’s link to the defendant’s action to immediate the need for judicial protection. Therefore, the decision given by Justice Aniruddha Roy was effective because it effectively protects a plaintiff’s strategic prerogative to seek immediate relief, ensuring the mandatory mediation process under Section 12A.
Allahabad High Court States that the Pre-Litigation Mediation is essential, Urgent Relief and no exception – Section 12A of the Commercial Court Act, 2015, exclaims that the parties should first attempt the pre-litigation mediation to resolve the disputes before filing a lawsuit. Relying on precedents from high courts and the Supreme Court, Justice Shekar B. Saraf ruled that invoking urgent relief should not be a pretext to circumvent the Act. The court also deemed that Section 12A’s pre-litigation mechanism is a “gatekeeper” that drives disputes from overburdened court dockets to quicker resolution processes. As such, we can cite the precedent set in Patil Automation Pvt. Ltd. and Others v. Rakheja Engineers Pvt. Ltd, the court emphasised that Section 12A of the Act makes it mandatory for pre-litigation mediation for commercial disputes. Therefore, failure to comply with the requirement, as highlighted in the Supreme Court ruling the result was rejected under Order VII Rule 11 of the CPC, 1908. Recognising non-compliance with Section 12A of the Commercial Court Act, the Court overturned the lower court’s dismissal of the complaint.
The concept of mandatory pre-litigation mediation with the dilemma for the tenancy dispute is such that they are already being arbitrable and are considered as subjective rights in-personam, that arise from rights in rem. Except when the specific rent control laws that allow exclusive jurisdiction to particular forums. The decision was taken in 2017 after the Supreme Court in Himangi Enterprises v. Kamaljeet Singh Ahluwalia, a case that ruled when the Transfer of Property Act was applicable, then the dispute was not arbitrable.
In common law jurisdiction the use of mediation is totally dependent on court’s discretion. In Australia, the Retail Leases Act, 1994 under section 68(1) states that a tenancy dispute is not to be subject of a proceeding till the registrar has certified that the mediation has failed or if the dispute is rejected. This allow judges that if still the mediation is necessary to decide the discretion, making the party autonomy a secondary priority despite party autonomy being an essential part. It is absolutely new in India that as a part of dispute resolution the mediation is used which has raised several platforms that advocate for the private that advocate for private resolution of dispute through mediation is being made such as Sama and JustAct, that dose not requires any consideration from the court under the Section 89 of CPC as it mediate to settle the agreement that could be treated as arbitral award.
Conclusion
Commercial Court Act, 2015, under Section 12A mandates the pre-institution mediation for commercial disputes that are barred cases involving urgent interim relief. In the judgment of M/s. Patil Automation Pvt. Ltd. V. Rakheja Engineers Pvt. Ltd. provided a detailed discussion on legislative history and intent behind the insertion of Section 12A into the Commercial Court Act, 2015. The Court quoted Section 12A in its entirety to analyse its language and implications, which is mandatory for pre-litigation mediation under Section 12A(1). The above-mentioned provision allows plaintiffs to bypass mediation in case the suit involves an urgent need for interim relief. Therefore, any settlement reached through this process has the same effect as the arbitrary award under Section 30(4) of the Arbitration and Conciliation Act, 1996.
The recent judgement passed by the Bombay High Court by a Division Bench in Deepak Raheja(Supra), which was under Section 12A of the Act, analysed in detail the purpose and objective. This judgement, as well as the view adopted by the Calcutta High Court in Laxmi Polyfab (supra), and Dredging and Destillation Company Pvt. Ltd. (supra) and Allahabad High Court in Awasthi Motors (supra), reflected a clear pro-mediation approach. There is at a view that the Bombay High Court, as well as Calcutta and Allahabad High Courts, interpreted the point in the right direction. However, sending both parties to compulsory mediation is not necessary, as the parties can always approach the court if the mediation process fails. Considering these different views adopted by High Courts, it seems that the issue would finally have been examined and settled by the Supreme Court.
However, the effectiveness of implementing the suit in India under the Commercial Court Act, 2015 remains a challenge, – as the commentators note that to make a mandatory mediation workable, there must be an adequate infrastructure, skilled and trained mediator, and an enforceable regulatory framework, which can safeguard against any misuse (e.g. undue delay, bad-faith mediation, power imbalance).
References
- Pre-Litigation Mediation Model in India, https://share.google/MDjMvyOGqF9MASxOF (last visited Dec. 8, 2025).
- Rohan Satija, EXPLORING THE CONCEPT OF MANDATORY PRE-LITIGATION MEDIATION IN THE INDIAN JURISDICTION, Maadhyam International Council for Conflict Resolution (Date of Access – Dec. 8, 2025, 11:44 PM), https://www.maadhyaminternational.com/articles/rohan-satija-exploring-the-concept-of-mandatory-pre-litigation-mediation-in-the-indian-jurisdiction
- PATIL AUTOMATION PRIVATE LTD. OFFICE AND OTHERS V. RAKHEJA ENGINEERS PRIVATE LIMITED AND ANOTHER, CR-1853-2021(O&M)
- The Corporate & Commercial Law Society Blog, HNLU, https://hnluccls.in/2025/04/20/section-12a-of-commercial-courts-act-resolving-territorial-ambiguity-in-pre-litigation-mediation (last visited Dec 8, 2025).
- Is India ready for ‘mandatory mediation’?, https://latest.sundayguardianlive.com/legally-speaking/india-ready-mandatory-mediation?utm_source (last visited Dec 9, 2025)
- Sanjeev Sanyal Apurv Kumar Mishra, Why Commercial Mediation Should be Voluntary, REV.1, 5 (2023), https://eacpm.gov.in/wp-content/uploads/2023/10/EACPM-WP25-Why-Commercial-Mediation-Should-be-Voluntary.pdf
- Allahabad High Court Clarifies: Pre-Litigation Mediation Essential, Urgent Relief No Exception, https://www.legaleraonline.com/from-the-courts/allahabad-high-court-clarifies-pre-litigation-mediation-essential-urgent-relief-no-exception-892957 (last visited Dec 10, 2025).
- Mandatory Nature of Pre-Litigation Mediation Under Section 12A of the Commercial Courts Act, 2015, https://www.legalserviceindia.com/legal/article-19660-mandatory-nature-of-pre-litigation-mediation-under-section-12a-of-the-commercial-courts-act-2015.html (last visited – Dec 11, 2025)
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