By S&S Co. Advocates & Solicitors · Published 24 September 2026 · Informational content, not legal advice — see our disclaimer
Two Frameworks, Read Together
The Mediation Act, 2023 creates a unified, staged framework for mediation in India, brought into force progressively from September 2023 onward. For commercial disputes of 'specified value', however, pre-institution mediation continues to be governed specifically by Section 12A of the Commercial Courts Act, 2015 — now read alongside the Mediation Act's own enforcement provisions rather than as a wholly separate regime.
When Mediation Is Mandatory Before Filing Suit
Section 12A applies to commercial suits above the specified-value threshold of Rs. 3 lakh, and requires a plaintiff who is not seeking any urgent interim relief to first attempt mediation through the prescribed authority before instituting the suit at all. This is not a mere procedural formality that can be skipped and cured later — the Supreme Court's ruling in Patil Automation v. Rakheja Engineers held that Section 12A is mandatory, not directory, so a suit filed without first exhausting pre-institution mediation, where no urgent interim relief is genuinely sought, is liable to be rejected under Order VII Rule 11 of the Code of Civil Procedure.
The Urgent-Relief Exception — and Its Limits
A plaintiff who does genuinely seek urgent interim relief can bypass pre-institution mediation and go straight to filing suit. Courts, however, scrutinise whether the urgency plea is real or merely a device to sidestep Section 12A — a colourable or manufactured claim for interim relief, made only to avoid the mediation requirement, will not save the suit from the consequence of skipping mediation.
Timeline and Enforcement of a Mediated Settlement
The mediation process itself must ordinarily be completed within three months from the date of the application, extendable by a further two months with the parties' consent, after which the plaintiff is free to institute the suit if mediation has failed to produce a settlement. A 2026 procedural update to this pre-institution mediation framework has been referenced in some commentary, so the current timeline should be checked against the Mediation Act, 2023 as currently in force, rather than assumed unchanged from its original text.
Where mediation succeeds, the settlement must be reduced to writing and signed by the parties and the mediator. Once so recorded, it carries the same status and effect as an arbitral award on agreed terms — making it directly enforceable as a decree, rather than remaining merely a private contract that would itself need to be separately sued upon if a party later failed to honour it.
Frequently Asked Questions
Is pre-litigation mediation mandatory for all commercial suits?
It is mandatory under Section 12A of the Commercial Courts Act, 2015 for commercial suits above the specified value of Rs. 3 lakh, where the plaintiff is not seeking any urgent interim relief.
What happens if a commercial suit is filed without first attempting mediation?
Following Patil Automation v. Rakheja Engineers, Section 12A is mandatory, not directory — such a suit is liable to be rejected under Order VII Rule 11 CPC unless the plaintiff genuinely sought urgent interim relief.
Can a plaintiff skip mediation by asking for urgent interim relief?
Yes, if the urgency is genuine. Courts scrutinise the claim, though, and a colourable or manufactured urgent-relief plea used merely to dodge Section 12A will not save the suit.
How is a settlement reached in pre-institution mediation enforced?
Once reduced to writing and signed by the parties and mediator, it carries the same status and effect as an arbitral award on agreed terms, making it directly enforceable as a decree.
References & Further Reading
This article references the following statutory provisions. Readers should always verify current rules, fees and timelines against the applicable statute and rules as amended, since these are revised from time to time.
- Mediation Act, 2023 (Act No. 32 of 2023).
- Commercial Courts Act, 2015, Section 12A.
- Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1.