Abstract
This paper examines pre-litigation mediation under the Mediation Act, 2023, India’s first standalone legislation on mediation. It analyses the voluntary framework established under Section 5, the mandatory exception applicable to commercial disputes under Section 12A of the Commercial Courts Act, 2015, and the Supreme Court’s ruling in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. The paper further examines the time-bound structure prescribed under Section 18 and the enforceability of Mediated Settlement Agreements under Section 27. It identifies the unresolved question of whether a challenge under Section 28 automatically stays enforcement under Section 27 and examines India’s non-ratification of the Singapore Convention on Mediation as a gap in cross-border enforcement. The paper finds that while the statutory framework is comprehensive, practical implementation faces constraints, including limited mediator capacity, an incompletely operationalised Mediation Council of India, and low public awareness. It concludes with recommendations for strengthening implementation and international enforceability.
Key Highlights of the Paper
- Examines the legal framework governing pre-litigation mediation under the Mediation Act, 2023.
- Analyses the voluntary nature of mediation under Section 5.
- Discusses the mandatory pre-institution mediation requirement under Section 12A of the Commercial Courts Act, 2015.
- Reviews the Supreme Court’s decision in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd.
- Explains the time-bound mediation process prescribed under Section 18.
- Examines the enforceability of Mediated Settlement Agreements under Section 27.
- Identifies the unresolved issue regarding whether a challenge under Section 28 automatically stays enforcement under Section 27.
- Highlights India’s non-ratification of the Singapore Convention on Mediation and its impact on cross-border enforcement.
- Discusses implementation challenges, including limited mediator capacity, the partially operationalised Mediation Council of India, and low public awareness.
- Provides recommendations for improving implementation and strengthening international enforceability.
Quick Overview
| Topic | Coverage |
|---|---|
| Primary Legislation | Mediation Act, 2023 |
| Voluntary Pre-Litigation Mediation | Section 5 |
| Mandatory Commercial Mediation | Section 12A, Commercial Courts Act, 2015 |
| Leading Supreme Court Case | Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. |
| Time Limit for Mediation | Section 18 |
| Settlement Enforcement | Section 27 |
| Challenge to Settlement | Section 28 |
| International Issue | India’s non-ratification of the Singapore Convention on Mediation |
| Main Challenges | Limited mediator capacity, partially operationalised Mediation Council of India, and low public awareness |
| Conclusion | Recommends stronger implementation and improved international enforceability. |
Introduction
Courts in India are currently dealing with an enormous backlog of pending cases — over 5 crore as of 2025 — and undergoing a full trial for every dispute is often slow, costly, and stressful for all parties concerned. A shift toward resolving disputes outside the courtroom has been observed in recent years, and mediation has become a significant method of doing so.
In 2023, India enacted the Mediation Act, 2023 (Act No. 32 of 2023), a significant legislative development and the country’s first standalone law dealing exclusively with mediation. This paper examines pre-litigation mediation under this Act.
It focuses on how the law encourages parties to attempt settlement before a case is filed in court and the safeguards built into the process and considers how well this framework is functioning in practice. This paper argues that while the statutory framework is comprehensive, its success depends on effective implementation and on resolving several unsettled legal questions that remain within it.
Key Focus Areas of This Paper
- Understanding mediation under the Mediation Act, 2023.
- Examining the concept of pre-litigation mediation.
- Analysing statutory safeguards available to disputing parties.
- Evaluating the practical functioning of the legal framework.
- Identifying implementation challenges and unresolved legal issues.
Meaning of Mediation and Pre-Litigation Mediation
Mediation is a process in which two or more disputing parties engage with a neutral third party, who assists them in reaching a mutually acceptable agreement, instead of adversarial litigation.
Under Section 3(h) of the Mediation Act, 2023, “mediation” is defined to include “a process, whether referred to by the expression ‘mediation’, ‘pre-litigation mediation’, ‘online mediation’, ‘community mediation’, ‘conciliation’ or an expression of similar import, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person referred to as ‘mediator’, who does not have the authority to impose a settlement upon the parties to the dispute.”
Unlike a judge, a mediator does not impose a decision on the parties; the mediator’s role is confined to facilitating discussion and helping the parties reach their own resolution.
What Is Pre-Litigation Mediation?
Pre-litigation mediation refers specifically to the practice of attempting this process before any case is filed in court.
It is separately defined under Section 3(u) of the Act as “a process of undertaking mediation, as provided under Section 5, for settlement of disputes prior to the filing of a suit or proceeding of a civil or commercial nature.”
The premise is that if disputing parties resolve their differences through mediation at an early stage, it saves time, money, and emotional strain, while reducing the burden on an already overloaded judiciary.
Statutory Definitions Under the Mediation Act, 2023
| Provision | Subject | Purpose |
|---|---|---|
| Section 3(h) | Mediation | Defines mediation, including pre-litigation mediation, online mediation, community mediation, and conciliation. |
| Section 3(u) | Pre-Litigation Mediation | Defines mediation undertaken before filing a civil or commercial suit or proceeding. |
Benefits of Pre-Litigation Mediation
- Encourages amicable settlement before litigation.
- Saves time and litigation expenses.
- Reduces emotional stress for disputing parties.
- Helps decrease the burden on Indian courts.
- Promotes faster and collaborative dispute resolution.
Legal Position Before the Mediation Act, 2023
Before the Mediation Act, 2023, mediation existed in India only in a form fragmented across provisions such as Section 89 of the Code of Civil Procedure, 1908, and the Legal Services Authorities Act, 1987, with no single, comprehensive law governing the subject.
The Voluntary Framework Under Section 5
The Legislative Evolution
Section 5(1) of the Mediation Act, 2023, allows parties, irrespective of whether a mediation agreement already exists between them, to voluntarily and with mutual consent take steps to settle a civil or commercial dispute by pre-litigation mediation before filing a suit or proceeding.
This voluntary character was not the original design. The Mediation Bill, 2021, introduced in the Rajya Sabha on 20 December 2021, had proposed making pre-litigation mediation compulsory for all civil and commercial disputes.
The Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice, to which the Bill was referred on 22 December 2021, submitted its report on 13 July 2022, taking the view that compelling parties into mediation would defeat its purpose, since mediation depends on the genuine willingness of both sides to engage and settle.
As a result, the final Act converted pre-litigation mediation into a consent-based, voluntary mechanism under Section 5.
Legislative Evolution at a Glance
| Stage | Position on Pre-Litigation Mediation |
|---|---|
| Mediation Bill, 2021 | Proposed compulsory pre-litigation mediation for all civil and commercial disputes. |
| Parliamentary Standing Committee Report (13 July 2022) | Recommended that mediation should remain voluntary because successful mediation depends upon the willingness of both parties. |
| Mediation Act, 2023 | Adopted a voluntary, consent-based framework under Section 5. |
The Commercial Disputes Exception
A significant exception exists to this general rule. Section 5(1) itself provides that pre-litigation mediation in commercial disputes of specified value shall instead be undertaken under Section 12A of the Commercial Courts Act, 2015.
“Specified Value” is defined under Section 2(1)(i) of the Commercial Courts Act, 2015, as an amount of not less than three lakh rupees.
2023,For such disputes, mediation remains compulsory under Section 12A, a provision the Ninth Schedule of the Mediation Act, 2023 substitutes and updates, extending the earlier 12A timeline to align with the 120-plus-60-day structure and linking enforcement to Sections 27 and 28 of the Mediation Act.
This mandatory position was affirmed by the Supreme Court of India in Patil Automation Pvt. Ltd v. Rakheja Engineers Pvt. Ltd, (2022) 10 SCC 1, at paragraph 113, where the Court held that Section 12A is mandatory in character, and that skipping this pre-institution mediation step, in the absence of a genuine need for urgent interim relief, can result in the plaint being rejected at the outset under Order VII Rule 11 of the Code of Civil Procedure, 1908, the provision under which a plaint may be rejected where it does not disclose a valid cause of action or is otherwise barred by law.
Section 5 vs. Section 12A: Quick Comparison
| Aspect | Section 5, Mediation Act, 2023 | Section 12A, Commercial Courts Act, 2015 |
|---|---|---|
| Nature | Voluntary | Mandatory (for applicable disputes) |
| Applicable To | Civil and commercial disputes generally | Commercial disputes of Specified Value |
| Consent Required | Yes, mutual consent | No, unless urgent interim relief is sought |
| Specified Value | Not applicable | Not less than three lakh rupees |
| Legal Consequence of Non-Compliance | No mandatory requirement | A plaint may be rejected under Order VII Rule 11 CPC, as affirmed in Patil Automation Pvt. Ltd v. Rakheja Engineers Pvt. Ltd. |
Key Takeaways
- Section 5 establishes a voluntary and consent-based framework for pre-litigation mediation.
- The Mediation Bill, 2021, originally proposed compulsory mediation, but Parliament ultimately adopted a voluntary approach.
- Commercial disputes of specified value remain governed by Section 12A of the Commercial Courts Act, 2015.
- Specified Value means not less than three lakh rupees.
- The Supreme Court has confirmed that compliance with Section 12A is mandatory unless urgent interim relief is genuinely required.
The Time-Bound Process Under Section 18
Section 18 prescribes a mandatory time limit for completing mediation proceedings. Under Section 18(1), mediation must be completed within 120 days, counted from the date fixed for the first appearance of the parties before the mediator, this deadline being framed to override any other provision of law for the time being in force.
Section 18(2) permits this period to be extended for a further period agreed by the parties, not exceeding sixty days, making 180 days the maximum period for which mediation may continue.
Commencement of Mediation Under Section 14
Related to this timeline is Section 14, which governs when mediation proceedings are deemed to commence — either when a party receives notice under an existing mediation agreement or when a mediator consents to appointment.
Non-Settlement Report and Termination of Mediation
If the dispute remains unresolved even after the 180-day period, or where the mediator forms the view that no settlement is possible, Section 21 requires the mediator to prepare a non-settlement report, and Section 24 provides that the mediation proceedings are thereupon deemed terminated.
The parties are then free to approach the appropriate court.
Purpose of the Statutory Time Limit
This time-bound structure serves a critical purpose: in the absence of such a limit, mediation could easily become another prolonged process, undermining its function as a faster alternative to litigation.
Section 18 Timeline at a Glance
| Stage | Relevant Section | Time / Requirement |
|---|---|---|
| Commencement of mediation | Section 14 | When notice is received under a mediation agreement or when the mediator consents to appointment. |
| Initial mediation period | Section 18(1) | 120 days from the first appearance before the mediator. |
| Extension of mediation | Section 18(2) | Up to 60 additional days by agreement of the parties. |
| Maximum duration | Section 18 | 180 days. |
| No settlement achieved | Sections 21 & 24 | A non-settlement report is prepared, and mediation proceedings terminate. |
| Next step | After Section 24 | Parties are free to approach the appropriate court. |
Exclusion of Limitation Period Under Section 29
The Act also addresses limitation period concerns.
Section 29 provides that, notwithstanding the Limitation Act, 1963, while computing the period of limitation for any proceeding relating to a dispute that was the subject of mediation, the period from the date of commencement of mediation under Section 14 up to the submission of a non-settlement report under Section 21, or termination of mediation under Section 24, shall be excluded.
This is a significant safeguard, since without it, parties might hesitate to attempt mediation at all, fearing that doing so could cause their claim to become time-barred by the time they eventually approach the court.
Key Points on Limitation Protection
- The Limitation Act, 1963, is overridden for the specific period spent in mediation.
- The exclusion begins from the commencement of mediation under Section 14.
- The exclusion ends upon submission of the non-settlement report under Section 21 or termination of mediation under Section 24.
- The provision protects parties from losing their legal remedies while attempting mediation in good faith.
Enforceability of Mediated Settlement Agreements Under Section 27
Section 27 is the Act’s most practically significant provision. It governs the legal effect of successful mediation. When the parties reach an agreement, it is reduced to writing, signed by the parties, and authenticated by the mediator, becoming what Section 3(n), read with Section 19(1), defines as a Mediated Settlement Agreement (MSA). Section 19(3) further requires that a copy of the authenticated agreement be provided to all parties, a date of receipt that becomes significant for the purpose of Section 28.
Under Section 27(1), the MSA is final and binding on the parties and persons claiming under them and is enforceable in the same manner as if it were a judgement or decree passed by a court, in accordance with the Code of Civil Procedure, 1908.
Under Section 27(2), the MSA may also be relied upon by the parties by way of defence, set-off, or otherwise in any legal proceeding. This provision is a significant improvement, since prior to the Act, a breached mediated settlement could only be enforced by filing an entirely new civil suit for breach of contract, a process that undermined the benefits mediation was meant to provide.
Legal Effect of Mediated Settlement Agreements
| Provision | Legal Effect |
|---|---|
| Section 3(n) read with Section 19(1) | Defines an authenticated Mediated Settlement Agreement (MSA). |
| Section 19(3) | Requires an authenticated copy of the MSA to be provided to all parties. |
| Section 27(1) | Declares the MSA final, binding, and enforceable like a court decree. |
| Section 27(2) | Allows the MSA to be used as a defence, set-off, or otherwise in legal proceedings. |
Registration of Mediated Settlement Agreements
Section 20 supplements this enforceability by allowing parties to optionally register their MSA with an authority constituted under the Legal Services Authorities Act, 1987, or another notified body.
Under Section 20(2), this registration must be made within 180 days of receiving the authenticated copy of the agreement, though late registration is permitted on payment of a specified fee.
Registration is not mandatory, and an explanation to Section 20 clarifies that it does not affect the parties’ underlying right to enforce the MSA under Section 27 or challenge it under Section 28.
Grounds for Challenging a Mediated Settlement Agreement
This enforceability is balanced by a narrow right of challenge. Under Section 28(1), a party seeking to challenge an MSA must file an application before the court or tribunal of competent jurisdiction.
Section 28(2) confines the available grounds to fraud, corruption, impersonation, or a case where the mediation was conducted in a dispute not fit for mediation under Section 6, which lists an indicative set of disputes — including those involving minors, persons of unsound mind, and matters requiring urgent interim relief — that are excluded from mediation altogether.
Permitted Grounds of Challenge
- Fraud
- Corruption
- Impersonation
- Mediation conducted in a dispute not fit for mediation under Section 6
Under Section 28(3), the challenge application must be made within 90 days from the date the challenging party received a copy of the agreement under Section 19(3), extendable by up to a further 90 days where the court or tribunal is satisfied that sufficient cause prevented a timely application.
The Act does not expressly clarify whether the initiation of challenge proceedings under Section 28 operates to automatically stay enforcement proceedings under Section 27, a question that remains open to judicial interpretation and is one of the more significant unresolved issues in the Act’s enforcement architecture.
Timeline for Enforcement and Challenge
| Stage | Relevant Provision | Time Limit |
|---|---|---|
| Authentication of MSA | Section 19(1) | Upon successful mediation |
| Supply of authenticated copy | Section 19(3) | Provided to all parties |
| Optional registration | Section 20(2) | Within 180 days (late registration permitted on payment of fee) |
| Challenge to MSA | Section 28(3) | Within 90 days, extendable by another 90 days |
Implementation Challenges in India
Despite this legislative design, practical implementation faces significant challenges.
There is an apparent shortage of trained and accredited mediators relative to the scale of litigation in India; as of 2025, India had over 5 crore pending cases across its courts against a judge-to-population ratio of approximately 21 to 22 judges per million, well below the 50 judges per million recommended by the Law Commission of India in its 120th Report of 1987.
The Mediation Council of India, the statutory body responsible for mediator training, accreditation, and standards under Chapter VIII of the Act, appears to have been constituted during 2025, though public reporting on the exact date and on the extent of its regulatory infrastructure – including detailed rules for mediator accreditation – remains limited as of the date of this paper.
Institutional Challenges
- Shortage of trained and accredited mediators.
- More than 5 crore pending court cases in India (2025).
- Judge-to-population ratio of approximately 21–22 judges per million.
- Recommended benchmark of 50 judges per million by the Law Commission of India (120th Report, 1987).
- Limited publicly available information regarding mediator accreditation rules and regulatory infrastructure.
Implementation Gap Analysis
| Challenge | Impact |
|---|---|
| Shortage of accredited mediators | Limits effective implementation of the Mediation Act. |
| High pendency of court cases | Increases the need for efficient alternative dispute resolution. |
| Low judge-to-population ratio | Places additional pressure on the judicial system. |
| Limited regulatory clarity | Creates uncertainty regarding accreditation standards. |
Awareness and Cultural Challenges
Beyond these institutional gaps, legal commentators have noted a litigation-first culture persisting among lawyers and litigants in India, partly due to unfamiliarity with mediation and partly due to professional reluctance, as advocates may perceive mediation as reducing litigation work.
Available commentary also suggests that public awareness of pre-litigation mediation remains low, especially in rural and semi-urban areas, meaning that many prospective litigants may not be aware that this option exists before approaching a court.
Since the process under Section 5 is voluntary outside the commercial disputes exception, this combination of low awareness and limited compulsion creates a significant risk that parties may bypass mediation altogether and proceed directly to litigation.
Key Implementation Challenges
- Persistent litigation-first mindset.
- Limited awareness of mediation among litigants.
- Professional reluctance within sections of the legal community.
- Low awareness of pre-litigation mediation in rural and semi-urban India.
- Voluntary nature of mediation under Section 5 (except specified commercial disputes) may result in parties directly approaching courts.
Comparative Perspective: Singapore
Singapore offers a useful comparative perspective. It has developed one of the most active mediation ecosystems globally through the Singapore International Mediation Centre, supported by clear enforcement mechanisms and strong institutional backing.
India signed the United Nations Convention on International Settlement Agreements Resulting from Mediation, commonly known as the Singapore Convention on Mediation, on 7 August 2019 but has not yet ratified it as of the date of this paper.
The Convention allows mediated settlement agreements arising from international commercial disputes to be enforced across signatory states.
Its non-ratification means that mediated settlements arising from mediations conducted outside India currently lack the statutory enforcement mechanism that Sections 27 and 28 of the Mediation Act provide for settlements concluded within India. This limits the enforceability of Indian-mediated outcomes in other signatory countries.
Key Takeaways from the Singapore Model
| Aspect | Singapore | Current Position in India |
|---|---|---|
| Mediation Institution | Singapore International Mediation Centre with strong institutional support. | The Mediation Council of India was established, but full operationalisation is still in progress. |
| International Enforcement | Supported through the Singapore Convention on Mediation. | India has signed but has not yet ratified the Convention. |
| Cross-Border Settlement Enforcement | Clear enforcement mechanism across signatory states. | International mediated settlements currently lack equivalent statutory enforcement. |
| Legal Certainty | Strong institutional and enforcement framework. | Further judicial clarification on Sections 27 and 28 would improve certainty. |
Recommendations
The following recommendations may strengthen India’s mediation framework and improve both domestic and international confidence in mediated settlements.
- India should, as a priority, accelerate the full operationalisation of the Mediation Council of India, including the accreditation and training of a larger pool of qualified mediators across both urban and rural areas.
- Law schools, district legal services authorities, and local bar associations should undertake public awareness campaigns, including workshops, informational materials, and digital awareness programmes, to familiarise litigants and practitioners with the benefits of pre-litigation mediation.
- India should ratify the Singapore Convention on Mediation, which would address the current gap in enforcing mediated settlements arising from international mediations.
- Judicial guidance clarifying the interplay between Sections 27 and 28 of the Act, particularly on whether a challenge automatically stays enforcement, would provide necessary legal certainty to parties relying on the enforceability of their settlements.
Summary of Key Recommendations
| Recommendation | Expected Outcome |
|---|---|
| Operationalise the Mediation Council of India | Increase availability of trained and accredited mediators nationwide. |
| Expand public awareness initiatives | Encourage greater use of pre-litigation mediation by litigants and legal practitioners. |
| Ratify the Singapore Convention on Mediation | Improve international enforceability of mediated settlement agreements. |
| Clarify Sections 27 and 28 through judicial guidance | Provide greater certainty regarding enforcement of mediated settlements. |
Conclusion
The Mediation Act, 2023, is a comprehensive legislative framework, offering parties substantial flexibility through the voluntary model under Section 5, a strictly time-bound process under Section 18, and enforceable legal weight for settlements under Section 27.
This analysis has shown that a mandatory exception continues to apply to commercial disputes under Section 12A of the Commercial Courts Act, 2015, as confirmed by the Supreme Court in Patil Automation, and that the enforceability regime under Sections 27 to 29 substantially improves on the pre-2023 position, where mediated settlements lacked inherent decretal force.
At the same time, the Act leaves at least two significant questions unresolved:
- Whether a Section 28 challenge automatically stays Section 27 enforcement.
- How India’s non-ratification of the Singapore Convention affects the recognition of mediated settlements from outside India.
The framework’s success in reducing the burden on India’s courts will depend less on the strength of its text and more on how quickly the country builds sufficient mediator capacity, spreads genuine public awareness, and gradually shifts a legal culture that continues to treat litigation as the default path to resolving a dispute.
Future research should examine empirical implementation data, including mediator accreditation numbers and settlement rates, as the Mediation Council of India’s regulatory infrastructure matures.
Key Conclusion Highlights
| Aspect | Conclusion |
|---|---|
| Legislative Framework | The Mediation Act, 2023, establishes a comprehensive statutory framework for mediation in India. |
| Voluntary Mediation | Section 5 provides substantial flexibility through voluntary mediation. |
| Time-Bound Process | Section 18 introduces a structured and time-bound mediation process. |
| Settlement Enforcement | Section 27 grants legal enforceability to mediated settlement agreements. |
| Commercial Disputes | Section 12A of the Commercial Courts Act, 2015, continues to apply as a mandatory exception, as confirmed in Patil Automation. |
| Unresolved Issues | Questions remain regarding Section 28’s stay on enforcement and international settlement recognition under the Singapore Convention. |
| Future Success | Implementation depends upon mediator capacity, public awareness, and cultural acceptance of mediation. |
Bibliography
- Acuity Law, ‘Frequently Asked Questions: The Mediation Act, 2023’ (2024).
- ATB Legal, ‘The Role and Rise of Mediation Under the Mediation Act, 2023: A New Chapter in India’s Dispute Resolution Landscape’ (23 April 2025).
- Code of Civil Procedure, 1908 (Act No. 5 of 1908), Order VII Rule 11.
- Commercial Courts Act, 2015 (Act No. 4 of 2016), s. 2(1)(i), s. 12A.
- Commercial Courts (Amendment) Act, 2018 (Act No. 28 of 2018).
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- Kluwer Mediation Blog, ‘The Mediation Act, 2023: India Paves The Way For A New Mediation Law – Part II’ (2023).
- Law Commission of India, 120th Report on Manpower Planning in Judiciary: A Blueprint (1987).
- Legal Services Authorities Act, 1987 (Act No. 39 of 1987).
- Limitation Act, 1963 (Act No. 36 of 1963).
- Mediation Act, 2023 (Act No. 32 of 2023).
- Ministry of Law and Justice, Government of India, Gazette Notification No. 35 dated 15 September 2023.
- Ministry of Law and Justice, Government of India, Notification No. S.O. 4384(E) dated 9 October 2023, bringing certain provisions of the Mediation Act 2023 into force.
- M/s Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1.
- Nishith Desai Associates, ‘Decoding the Mediation Act, 2023’ (September 2023).
- Report of the Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice on the Mediation Bill, 2021, presented to Parliament on 13 July 2022.
- Singapore Convention on Mediation, 2019 (United Nations Convention on International Settlement Agreements Resulting from Mediation), signed by India on 7 August 2019.
Written By: Ganga Mohith
Email: Gangamohith7@Gmail. Com, Ph No. 9160301999
