The Mediation Act, 2023 received Presidential assent on September 14, 2023. Furthermore, it came into force on October 9, 2023 [^1]. Its primary objective is clear: decongesting courts by promoting institutional mediation. Therefore, it aims to resolve commercial and other disputes effectively. The Act establishes a comprehensive framework for mediation. As a result, lawyers must now navigate pre-litigation mediation requirements.
Supreme Court’s Intervention in Implementation
The Supreme Court has played a crucial role in clarifying operations. In a series of landmark judgments, the apex court addressed fundamental questions about compliance. These rulings have significant implications for law firms. Additionally, they reshape the litigation strategy that practitioners must adopt.
The significance of pre-litigation mediation cannot be overstated. Government data reveals that Pre-Institution Mediation and Settlement (PIMS) applications have exceeded 2.76 lakh since July 2018 [^22]. However, only around 4,800 settlements have been achieved. Primarily, this occurs because opposing parties fail to participate in 70-80% of cases. Therefore, lawyers must understand both the mandate and its practical limitations.
Decoding Section 12A: The Mandatory Mediation Framework
Before analyzing the Supreme Court’s clarifications, practitioners must understand statutory provisions. Notably, the primary mandatory mediation requirement appears in Section 12A of the Commercial Courts Act, 2015. This section was amended in 2018. Consequently, the Mediation Act 2023 builds upon this foundation through its Ninth Schedule amendments [^2].
Scope of Mandatory Pre-Litigation Mediation
Section 12A mandates that commercial suits “shall not be instituted” unless the plaintiff exhausts pre-litigation mediation [^4]. This language is imperative, not directory. Therefore, the provision applies to all commercial disputes as defined under the Commercial Courts Act. However, this applies only where no urgent interim relief is contemplated.
Authorized mediation centers include: – Legal Services Authorities under the Legal Services Authorities Act, 1987 – Mediation service providers defined under Section 3(m) of the Mediation Act 2023 [^3] – Court-annexed mediation centers
Time Limits and Procedural Requirements
The mediation process must complete within 120 days from the application date. Furthermore, this period can extend by up to 60 additional days with both parties’ consent [^11]. Consequently, the maximum mediation window spans approximately 180 days. Importantly, this entire period is excluded from limitation calculations. This exclusion occurs under the Limitation Act, 1963.
The Central Government notifies authorized mediation authorities through official notifications [^2]. Therefore, practitioners must verify their chosen mediation center. It must fall within these authorized entities before initiating the process.
Supreme Court’s Clarification: Key Takeaways for Legal Practitioners
The Supreme Court has delivered three significant rulings. These address Mediation Act 2023 mandatory pre-litigation mediation requirements. Each judgment addresses distinct aspects of implementation and compliance.
Patil Automation: Establishing the Mandatory Nature
In Patil Automation Private Limited v. Rakheja Engineers Private Limited (August 17, 2022), the Supreme Court definitively held that Section 12A is mandatory [^4]. The court declared that suits filed without complying must face rejection. This rejection occurs under Order VII Rule 11 of the CPC. The bench emphasized that the language “shall not be instituted” leaves no room for discretionary interpretation.
However, the court applied this ruling prospectively from August 20, 2022 [^4]. This prospective application protects suits filed before this date from automatic rejection. Nevertheless, practitioners must recognize that current filings face strict scrutiny.
Dhanbad Fuels: Comprehensive Implementation Guidelines
The most detailed clarification came in M/s Dhanbad Fuels Private Limited v. Union of India (May 15, 2025) [^8]. Justice J.B. Pardiwala and Justice R. Mahadevan delivered a comprehensive 10-point framework governing implementation.
First, the court reaffirmed that Section 12A is mandatory [^9]. Second, suits filed on or after August 20, 2022, without compliance face plaint rejection. Third, for pre-August 2022 suits, courts should keep matters in abeyance. Instead, they should refer parties to time-bound mediation rather than rejecting them outright.
The Urgent Interim Relief Test
A crucial clarification concerns when parties can bypass pre-litigation mediation. Unlike Section 80(2) of the CPC, no court leave is required before filing a suit claiming urgent interim relief [^11]. The court established a clear test. If the nature and subject-matter of the suit make urgent interim relief “contemplable,” the exemption applies. This is assessed from the plaintiff’s standpoint.
However, courts must remain vigilant that this exemption is not misused [^14]. The urgent relief prayer cannot be merely an unfounded excuse to bypass mandatory mediation requirements. Notably, even if interim relief is ultimately denied, the suit may proceed. This holds true if the test is satisfied at the filing stage.
Divya A. Nichani: Preventing Dilatory Tactics
More recently, in Divya A. Nichani v. Dipti D. Palchi (February 12, 2026), the Supreme Court addressed a practical problem [^5]. Defendants were raising Section 12A objections as dilatory tactics. However, they did not genuinely intend to participate in mediation. The court used its Article 142 powers to deem mediation as having failed. This applied where defendants failed to appear despite raising objections.
This ruling sends a clear message: parties seeking Section 12A compliance must demonstrate genuine willingness to mediate [^7]. Courts will not permit procedural provisions to become weapons for delay.
Impact on Filing Strategy and Client Advisory
Law firms must fundamentally rethink their approach to commercial disputes. The Mediation Act 2023 mandatory pre-litigation mediation framework demands procedural compliance before litigation initiation.
Restructuring Intake Processes
Firms should implement systematic screening at the intake stage. Key questions include: – Is this dispute a “commercial dispute” under the Commercial Courts Act? – Does the client contemplate urgent interim relief? – Does any exclusion under Section 6 or the First Schedule apply? [^16]
Additionally, intake forms should capture mediation-related information systematically. This ensures no commercial suit proceeds without proper compliance assessment.
Advising Clients on Cost-Benefit Analysis
Practitioners must help clients understand mediation’s practical implications. Benefits include time-bound resolution and lower costs. Additionally, they include preserved business relationships and enforceable settlement agreements. The mediation period also excludes from limitation calculations. As a result, this protects clients’ rights.
However, the 70-80% “non-starter” rate means parties often waste 4-6 months awaiting defendant participation [^22]. Clients should understand that mediation attempts frequently prove unsuccessful. Often, this is not through any fault of their own.
Drafting Pleadings for Compliance
When filing suits after mediation, pleadings must clearly demonstrate compliance. Therefore, attach the mediation application receipt and mediator’s report. Alternatively, attach the settlement agreement. For suits claiming urgent interim relief exemptions, articulate urgency grounds clearly and specifically [^15].
The pleading should explain why interim relief is “contemplable” given the dispute’s nature. Courts will examine this question from the plaintiff’s standpoint. Therefore, the narrative must support the urgency claim.
Exceptions and Limitations: When Mediation is Not Required
The Mediation Act 2023 mandatory pre-litigation mediation requirements contain important exceptions. Understanding these exclusions helps lawyers advise clients accurately.
Urgent Interim Relief Exemption
As discussed, suits contemplating urgent interim relief qualify for exemption [^11]. Examples include intellectual property infringement cases requiring immediate injunctions. Additionally, matters involving threatened asset disposal qualify. The test examines whether urgent relief is contemplable from the plaintiff’s perspective.
Critically, this determination happens at filing. Even if the court ultimately denies interim relief, the suit proceeds if the urgency was genuinely contemplable. However, courts will scrutinize whether urgency claims are genuine. They will check if they are merely procedural bypasses [^14].
Statutory Exclusions Under Section 6
The Mediation Act’s First Schedule lists categories entirely excluded from mediation [^17]. These include:
Vulnerable Persons: – Claims against minors, deities, or persons with intellectual disabilities
Criminal Matters: – Prosecution of criminal offenses
Tax Disputes: – Levy, collection, penalty, and refund disputes
Professional Discipline: – Registration and misconduct complaints against lawyers, doctors, architects, and dentists [^18]
Third-Party Rights: – Disputes affecting non-party rights, except matrimonial matters involving children
Regulatory Proceedings: – SEBI, TRAI, Competition Commission, and similar regulatory matters [^19]
Land Acquisition: – Compensation determination under land acquisition laws
Overriding Effect Limitations
The Second Schedule lists statutes where the Mediation Act does not override existing mediation frameworks [^20]. These include the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016. Furthermore, the MSME Development Act, 2006 is included. Practitioners handling matters under these statutes must follow their specific mediation procedures.
The Role of Legal Practice Management in ADR Compliance
Managing mediation compliance across multiple matters presents significant challenges. Law firms need robust systems to track deadlines. Additionally, they need to manage documents and ensure procedural compliance.
Tracking Complex Deadlines
The 120-day primary mediation period plus 60-day extension window requires careful monitoring [^12]. Missing these deadlines affects litigation strategy and limitation calculations. Additionally, follow-up dates for mediation sessions demand systematic tracking. So do settlement deadlines and post-mediation filing requirements.
Document Security and Confidentiality
Mediation proceedings require strict confidentiality [^13]. Settlement agreements, mediation communications, and related documents need secure storage. This storage must have proper access controls. Version control for settlement drafts prevents disputes over agreed terms. Furthermore, audit trails demonstrate compliance if courts question procedural adherence.
How LawSathi Supports ADR Compliance
Modern practice management platforms like LawSathi address these challenges comprehensively. The platform offers:
Automated Deadline Tracking: – Alerts for 120-day and 60-day mediation periods – Limitation calculator accounting for mediation exclusions – Post-mediation filing reminders
Document Management: – Secure, confidential storage for mediation records – Version control for settlement agreements – Easy retrieval for compliance demonstrations
Workflow Integration: – Intake checklists for Section 12A applicability – Status tracking from mediation initiation through resolution – Analytics on firm-wide mediation outcomes
Compliance Dashboard: – Track mediation status across all matters – Identify approaching deadlines – Generate compliance reports for court filings
By integrating these functions, LawSathi helps firms avoid plaint rejections. Consequently, firms can serve clients effectively under the new framework.
Conclusion: Adapting to the New Mediation Landscape
The Supreme Court’s clarifications on Mediation Act 2023 mandatory pre-litigation mediation requirements establish a clear compliance framework. Section 12A of the Commercial Courts Act is mandatory, not directory. Suits filed without compliance since August 20, 2022, face rejection under Order VII Rule 11. However, courts will not permit defendants to weaponize these provisions as dilatory tactics.
The future of ADR in India appears promising yet challenging. With over 22,000 trained mediators nationwide, the infrastructure continues expanding. Furthermore, institutional support is growing. However, the high non-starter rate demonstrates that cultural acceptance of mediation remains incomplete. Law firms that develop ADR expertise will serve clients best. This is especially true if they implement robust compliance systems in this evolving landscape.
India’s massive case backlog demands innovative solutions. Mandatory pre-litigation mediation represents one significant step toward reducing judicial burden. Practitioners must embrace this shift. It should not be viewed merely as a procedural hurdle. Instead, it is an opportunity to deliver faster, more cost-effective dispute resolution for clients.
Streamline your firm’s ADR workflow. Use LawSathi to track mediation deadlines and manage settlement documents. Additionally, ensure compliance with the new Mediation Act 2023 guidelines. Start your free trial today.
Note: This blog post addresses the framework established under Section 12A of the Commercial Courts Act, 2015 (as amended). This section governs mandatory pre-litigation mediation. The Mediation Act 2023’s Section 12 addresses mediator replacement, a distinct topic. Therefore, practitioners should reference Section 12A when discussing mandatory pre-litigation mediation requirements.
