Section 12A explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 12A says that a commercial suit which does not contemplate any urgent interim relief shall not be instituted unless the plaintiff first exhausts the remedy of mediation under rules made by the Central Government. This article explains section 12A as printed in the text of the Act consulted (amended up to 3 May 2018), and then sets out, under its own heading, the text that the Ninth Schedule to the Mediation Act, 2023 substitutes. If you are planning mediation services before a commercial suit, read both parts.
As printed in the text consulted, section 12A bars a suit that does not contemplate urgent interim relief unless the plaintiff has exhausted pre-institution mediation; the authorised Authority must complete mediation within three months, extendable by two months with the consent of the parties; the mediation period is excluded for limitation; and a written settlement signed by the parties and the mediator has the status of an arbitral award on agreed terms. The Mediation Act, 2023 substitutes the chapter with "pre-litigation mediation"; its commencement is by notification, date not in the source.
Part 1: Section 12A as printed in the Act's text
The Chapter heading in the text consulted is "Chapter III-A: Pre-Institution Mediation and Settlement", and section 12A carries no heading of its own beyond it. The section is marked as amended in 2018 and is printed within quotation marks.
Sub-section (1): the bar on instituting a suit
"A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government."
Break it down:
- Which suits. Those that do not contemplate any urgent interim relief under this Act.
- The bar. Such a suit "shall not be instituted" unless the remedy is exhausted.
- The route. Pre-institution mediation, in the manner and procedure prescribed by rules made by the Central Government.
- What the text omits. The rules are not in the source, so no step, form or cost from them is described here. The text of the Act says nothing about the cost of the process.
If the suit does contemplate urgent interim relief, the bar in this sub-section does not apply to it, on the words printed.
Sub-section (2): who conducts mediation
The Central Government may, by notification, authorise "the Authorities constituted under the Legal Services Authorities Act, 1987, for the purposes of pre institution mediation". (A stray marginal mark "19 of 1987" appears after sub-section (3) in the copy; it is not an Act number to repeat.) No notification is in the source.
Sub-section (3): time limit and limitation
Notwithstanding anything in the Legal Services Authorities Act, 1987, the Authority authorised under sub-section (2) "shall complete the process of mediation within a period of three months from the date of application made by the plaintiff under sub-section (1)".
- First proviso. The period of mediation may be extended for a further period of two months with the consent of the parties. So three months plus two months is the span printed.
- Second proviso. The period during which the parties remained occupied with pre-institution mediation "shall not be computed for the purpose of limitation under the Limitation Act, 1963". Our guide to the limitation period for filing suits describes the general limitation rules.
Sub-section (4): a written settlement
If the parties to the commercial dispute arrive at a settlement, it "shall be reduced into writing and shall be signed by the parties to the dispute and the mediator."
Sub-section (5): status of the settlement
The settlement arrived at under this section "shall have the same status and effect as if it is an arbitral award on agreed terms under sub-section (4) of section 30 of the Arbitration and Conciliation Act, 1996." (A stray mark "26 or 1996" appears inside the sentence in the copy consulted.) For the arbitration-side rule, see our sister article on section 30 of the Arbitration and Conciliation Act, 1996.
Example under the printed text
Lakshmi Machinery Pvt Ltd has an unpaid invoice dispute with Horizon Auto Components Ltd and wants only money, with no urgent interim relief. Under sub-section (1) as printed, its suit shall not be instituted unless it exhausts pre-institution mediation as per the rules. The Authority has three months from the date of Lakshmi's application, extendable by two months if both sides consent; a settlement is in writing, signed by both parties and the mediator.
Part 2: The substituted section 12A (Mediation Act, 2023, Ninth Schedule)
Section 64 of the Mediation Act, 2023 says the Commercial Courts Act, 2015 "shall be amended in the manner specified in the Ninth Schedule". The Ninth Schedule substitutes Chapter IIIA with the heading "Pre-litigation Mediation and Settlement". Commencement by notification, date not in the source. Section 1(3) of the Mediation Act says it comes into force on the date the Central Government appoints by notification, and different dates may be appointed for different provisions. No notification is in the text consulted, so this article does not say which version of section 12A applies on any given date. Check the current official text.
The substituted section 12A reads, in substance:
- Sub-section (1). A suit which does not contemplate any urgent interim relief under this Act shall not be instituted unless the plaintiff exhausts the remedy of pre-litigation mediation in accordance with the manner and procedure prescribed by rules made by the Central Government.
- Sub-section (2). For the purposes of pre-litigation mediation, the Central Government may, by notification, authorise (i) the Authority constituted under the Legal Services Authorities Act, 1987, or (ii) a mediation service provider as defined under clause (m) of section 3 of the Mediation Act, 2023.
- Sub-section (3). The Authority or mediation service provider shall complete the process within one hundred and twenty days from the date of application by the plaintiff under sub-section (1). The first proviso allows extension by a further sixty days with the consent of the parties. The second proviso excludes the period spent on pre-litigation mediation from limitation under the Limitation Act, 1963.
- Sub-section (4). A settlement shall be reduced into writing and signed by the parties and the mediator.
- Sub-section (5). The mediated settlement agreement "shall be dealt with in accordance with the provisions of sections 27 and 28 of the Mediation Act, 2023".
The Mediation Act itself, in the proviso to section 5(1), says pre-litigation mediation in matters of commercial disputes of Specified Value shall be undertaken in accordance with section 12A of the Commercial Courts Act, 2015 and the rules made under it. Our sister articles on pre-litigation mediation under the Mediation Act and on the Ninth Schedule amendments set out the Mediation Act side. Section 21A(2)(a) (the rule-making clause for the procedure) is substituted in step with section 12A; see our article on sections 21 to 23.
The two texts side by side
| Feature | Text printed in the Act | Text substituted by the Mediation Act, 2023 |
|---|---|---|
| Chapter heading | Pre-Institution Mediation and Settlement | Pre-litigation Mediation and Settlement |
| Name of the remedy | Pre-institution mediation | Pre-litigation mediation |
| Who may be authorised | Authorities under the Legal Services Authorities Act, 1987 | The Authority under that Act, or a mediation service provider under section 3(m) of the Mediation Act, 2023 |
| Time to complete | Three months | One hundred and twenty days |
| Extension | Two months with consent of the parties | Sixty days with consent of the parties |
| Limitation | Mediation period not computed | Mediation period not computed |
| Status of settlement | Same status and effect as an arbitral award on agreed terms under section 30(4) of the Arbitration and Conciliation Act, 1996 | Dealt with in accordance with sections 27 and 28 of the Mediation Act, 2023 |
Practical points
- The text gives no test for when a suit "contemplates urgent interim relief", so take advice before relying on the exception.
- Keep a dated record of the application to the mediation authority, since the period runs from the date of application.
- The text does not describe the forms or cost of mediation; the rules, which are not in the source, govern the procedure.
Need help with mediation before filing a commercial suit?
If you need to plan mediation as the first step of a commercial claim, our team can guide you on documents and timelines. See our mediation services page.
Key takeaways
- A suit without urgent interim relief shall not be instituted unless pre-institution mediation is exhausted, as printed.
- The printed periods are three months, extendable by two months with consent; the mediation period is excluded for limitation.
- The Mediation Act, 2023 substitutes the chapter with one hundred and twenty days plus sixty days; commencement is by notification, date not in the source.
- The mediation rules made by the Central Government are not in the source.
- The text is silent on cost.
Read next
- Section 10: jurisdiction in arbitration matters
- Sections 21 to 23: overriding effect, rule-making power and repeal
- Section 12: determination of Specified Value
- The Mediation Act 2023 for commercial and trade disputes
Disclaimer: Based on a text of the Commercial Courts Act, 2015 as amended up to 3 May 2018 and on the Ninth Schedule to the Mediation Act, 2023 as enacted, as consulted on 2 October 2026. Later amendments, the current Specified Value, the pre-institution mediation rules and High Court rules should be checked. This article is general information, not legal advice; check the official text before acting.