Pre-litigation Mediation Requirements

Pre-litigation mediation means attempting to resolve a dispute through mediation before formally filing a civil or commercial case in court. In India, the requirement is not identical for every type of dispute. The key distinction is between voluntary pre-litigation mediation under the Mediation Act, 2023 and mandatory pre-institution mediation for specified commercial disputes under Section 12A of the Commercial Courts Act, 2015.

1. Statutory framework

The Mediation Act, 2023 defines pre-litigation mediation as mediation undertaken before filing a suit or proceeding of a civil or commercial nature. Section 5 generally permits parties to voluntarily undertake such mediation, even where there is no prior mediation agreement. However, for commercial disputes of specified value, Section 5 expressly preserves the mandatory procedure under Section 12A of the Commercial Courts Act, 2015.

Under Section 12A, a commercial suit that does not contemplate urgent interim relief cannot ordinarily be instituted until the plaintiff exhausts the prescribed pre-institution mediation procedure. The mediation was originally required to be completed within three months, extendable by two months with consent; the current statutory framework has also been amended to integrate the Mediation Act, 2023.

The Supreme Court has treated this requirement as mandatory for applicable commercial suits. Thus, a plaintiff cannot simply choose to skip mediation merely because litigation appears preferable.

2. When is pre-litigation mediation mandatory?

The principal mandatory situation is a commercial dispute of specified value falling under the Commercial Courts Act where:

• the proposed proceeding is a commercial suit;
• the statutory conditions for Section 12A are satisfied;
• the suit does not genuinely contemplate urgent interim relief; and
• the plaintiff has not exhausted the prescribed pre-institution mediation procedure.

If these conditions exist, mediation must ordinarily be attempted before institution of the suit.

By contrast, the Mediation Act's general pre-litigation mediation mechanism is ordinarily based on voluntary and mutual consent. Therefore, it should not be assumed that every civil or employment dispute in India requires mandatory mediation before litigation.

3. Urgent interim relief exception

Section 12A does not require pre-institution mediation where the suit genuinely contemplates urgent interim relief.

The Supreme Court has clarified that courts can examine the plaint, documents, facts and nature of the dispute to determine whether urgent interim relief is genuinely contemplated. Merely adding a formal prayer for an injunction does not automatically defeat the mediation requirement.

The Supreme Court's approach is therefore substantive rather than purely formal: the urgency must arise from the circumstances of the dispute.

4. Procedure

The usual process involves:

1. Identifying the dispute and the proposed parties.
2. Submitting an application for pre-institution mediation before the appropriate authority or mediation service provider.
3. Notice to the opposite party.
4. If the opposite party participates, a mediator is appointed.
5. The mediator facilitates confidential negotiations.
6. If settlement is reached, the terms are reduced to writing and signed.
7. If settlement is not reached, a non-settlement report is issued.
8. The claimant may then proceed with litigation, subject to the applicable statutory requirements.

Under the Mediation Act, 2023, mediation may be conducted through recognised mediators, court-annexed mediation centres, Legal Services Authorities or recognised mediation service providers.

5. Effect of settlement

A successful mediation can avoid litigation altogether. Under the Mediation Act, a mediated settlement agreement has statutory enforceability, subject to the provisions of the Act.

For commercial disputes under Section 12A, the settlement is reduced to writing and signed by the parties and mediator, with the Mediation Act governing its treatment.

6. Consequences of ignoring mandatory mediation

Failure to comply with Section 12A can have serious procedural consequences.

In Patil Automation, the Supreme Court held that Section 12A is mandatory and that a suit instituted without complying with the requirement, in circumstances where Section 12A applies, can be rejected under Order VII Rule 11 CPC.

The Supreme Court subsequently clarified the temporal application of this rule in Dhanbad Fuels. For suits instituted on or after 20 August 2022, non-compliance can result in rejection under Order VII Rule 11 CPC. Earlier suits are treated differently because of the prospective operation given to the declaration in Patil Automation.

Important Case Laws

1. Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd.

(2022) 10 SCC 1

This is the leading Supreme Court authority on Section 12A of the Commercial Courts Act.

The Supreme Court held that pre-institution mediation under Section 12A is mandatory for applicable commercial suits that do not contemplate urgent interim relief. A suit filed without following the requirement is liable to rejection under Order VII Rule 11 CPC.

The Court also recognised the importance of mediation as a mechanism for reducing unnecessary commercial litigation.

Principle: Mandatory pre-institution mediation is a condition precedent to institution of the relevant commercial suit.

2. Yamini Manohar v. T.K.D. Keerthi

(2024) 5 SCC 815

The Supreme Court considered the relationship between Section 12A and suits claiming urgent interim relief.

The Court explained that the commercial court has a limited role in examining whether the suit genuinely contemplates urgent interim relief. The mere inclusion of an interim-relief prayer cannot automatically be used to bypass pre-institution mediation.

Principle: The urgent-relief exception must be assessed from the substance of the plaint and circumstances, rather than from a merely formal pleading.

3. M/s Dhanbad Fuels Pvt. Ltd. v. Union of India

2025 INSC 696; (2025) 9 SCC 424

This 2025 Supreme Court judgment reaffirmed that Section 12A is mandatory.

It also addressed suits filed before the Supreme Court's decision in Patil Automation. The Court held that the mandatory consequence of rejection applies prospectively to suits instituted on or after 20 August 2022. For certain earlier suits, the court may keep the matter in abeyance and provide an opportunity for mediation rather than automatically rejecting the suit.

Principle: Mandatory mediation and the procedural consequences of non-compliance must be applied according to the temporal framework established by the Supreme Court.

4. Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd.

(2010) 8 SCC 24

The Supreme Court examined Section 89 CPC and the use of alternative dispute-resolution mechanisms.

The Court identified categories of disputes that are particularly suitable for ADR and emphasised that courts should facilitate appropriate alternative methods of dispute resolution where circumstances permit.

Principle: Mediation is an important ADR mechanism, particularly where the nature of the dispute permits a negotiated resolution.

5. Salem Advocate Bar Association, T.N. v. Union of India

(2005) 6 SCC 344

The Supreme Court considered the implementation of Section 89 CPC and the broader role of ADR in the Indian judicial system.

The decision supported the use of mediation, conciliation and other settlement mechanisms to reduce unnecessary litigation and facilitate consensual resolution.

Principle: Courts should encourage appropriate ADR mechanisms as part of effective civil justice administration.

6. Moti Ram (D) Tr. LRs. v. Ashok Kumar

(2018) 17 SCC 462

The Supreme Court dealt with mediation and the importance of encouraging settlement-oriented dispute resolution.

The decision reflects the broader judicial approach that mediation can provide parties with an opportunity to resolve disputes without undergoing the full adversarial process.

Principle: Mediation can be used to promote consensual settlement and reduce the burden and cost associated with prolonged litigation.

7. M/S Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. — subsequent application of the principle

The importance of Patil Automation has been repeatedly recognised in later decisions. The Supreme Court's later decision in Dhanbad Fuels expressly reaffirmed that Patil Automation correctly determined the mandatory nature of Section 12A.

Pre-litigation mediation in employment disputes

For employment and labour disputes, it is important not to assume that Section 12A automatically applies. Whether mediation is mandatory depends upon the nature of the claim, forum, applicable legislation and whether the dispute qualifies as a commercial dispute of specified value.

For example, disputes involving termination, wages, discrimination, workplace conditions or disciplinary action may be governed by specialised labour statutes and forums rather than the Commercial Courts Act. The Mediation Act nevertheless provides a broader framework for voluntary pre-litigation mediation in civil disputes, subject to statutory exclusions and requirements.

Key legal requirements at a glance

In summary, Indian law increasingly treats mediation as an important first step before litigation, but “pre-litigation mediation” is not universally mandatory for every dispute. The strongest mandatory requirement currently operates for applicable commercial disputes under Section 12A of the Commercial Courts Act. The Mediation Act, 2023 provides the wider statutory framework for voluntary pre-litigation mediation and recognised mediation procedures.