- Why in news
- On 29 January 2026, the Law Ministry told the Rajya Sabha how many commercial disputes were settled through pre-institution mediation (Section 12A) since the 2018 amendment of the Commercial Courts Act, 2015.
- What it is
- The Commercial Courts Act, 2015 sets up special courts and divisions for commercial disputes of a specified value. The 2018 amendment added Section 12A, which makes mediation before filing a suit mandatory unless urgent interim relief is sought. The aim is to cut pendency and speed up resolution of business disputes.
- Origin of Section 12A
- The 2018 amendment to the 2015 Act added the Pre-Institution Mediation and Settlement (PIMS) mechanism under Section 12A.
- When PIMS is mandatory
- It applies to commercial disputes of specified value that do not contemplate urgent interim relief. Parties must exhaust it before going to court.
- Time limit
- Under Rule 3 of the 2018 PIMS Rules, mediation must finish within three months, extendable by two months with consent of both parties.
- Rules
- The Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018 lay down the manner and procedure of pre-litigation mediation under Section 12A.
- Mediation institute
- Under Section 3(l) read with Section 42 of the Mediation Act, 2023, a mediation institute trains, provides continuing education and certifies mediators.
- Mediator pool
- NALSA had around 22,398 mediators across the country as of November 2025.
Don’t confuse with Section 12A mediation vs court-annexed mediation: Section 12A mediation is before a suit is filed. Court-annexed mediation happens after filing, on referral by the court.
Don’t confuse with Commercial Courts Act, 2015 vs Mediation Act, 2023: The 2015 Act creates commercial courts and mandates pre-suit mediation. The 2023 Act is a general law on mediation, including institutes and certification.
Laws, judgments and statutory bodies: 30 Prelims questions since 2013 (what the law says, who chairs, legal basis). In Mains, 44 news-triggered questions, most in GS2, asking for provisions and challenges.
Why it matters
- Mandatory pre-suit mediation can reduce commercial litigation and court pendency.
- It supports ease of doing business through faster, cheaper dispute resolution.
Problems
- Most applications fail to start mediation: 30,353 of 47,218 in 2025-26 (up to September) were non-starters.
- Settlement numbers are very low compared with applications, so it may act as a procedural hurdle.
- Limited trained mediators and awareness among parties.
Way forward
- Build capacity through mediation institutes and certified mediators under the Mediation Act, 2023.
- Encourage respondents to take part, with incentives or consequences for non-participation.
- Track outcomes and cost savings regularly to refine the mechanism.
Put in your answer
Mediator strength: NALSA had about 22,398 mediators as of November 2025.
Statutory time limit: Three months, extendable by two, shows the aim of time-bound resolution.
- 2015Mains GS2 · Q6Major changes in Arbitration and Conciliation Act via ordinance; improvement in dispute resolution?
- 2024Mains GS2 · Q2Distinguish Lok Adalats from Arbitration Tribunals; do they handle civil and criminal cases?
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Single answer
Ours, not from a UPSC paper
With reference to pre-institution mediation under the Commercial Courts Act, 2015, consider the following statements:
- 1.Section 12A was part of the Commercial Courts Act, 2015 as originally enacted.
- 2.Pre-institution mediation is mandatory for commercial disputes of specified value that do not contemplate urgent interim relief.
- 3.Under the 2018 Pre-Institution Mediation and Settlement Rules, the mediation period of three months can be extended by a further two months with the consent of the applicant and the opposite party.
- 4.The procedure for Section 12A mediation is laid down only in the Mediation Act, 2023, and not in any rules under the Commercial Courts Act.
Which of the statements given above are correct?
True or false?
1 of 4
Statements the way Prelims prints them. Say first, then see the fact.
1.Section 12A of the Commercial Courts Act, 2015 was part of the original Act as passed in 2015.
False. It was inserted by the 2018 amendment.
2.Under the 2018 PIMS Rules, mediation must be completed within three months, extendable by a further two months with consent of the parties.
True. Rule 3: three months, plus two months with consent.
3.The PIMS mediation period can be extended by six months at the discretion of the mediator alone.
False. Extension is only two months and needs consent of the applicant and the opposite party.
4.Under the Mediation Act, 2023, a mediation institute provides training and certification of mediators.
True. Section 3(l) read with Section 42 covers training, continuing education and certification.
Written by us from the release, not by UPSC; checked by a second model.
Mains practice
15 marks · 250 words
The Law Ministry told the Rajya Sabha in January 2026 that mediation settled only a small share of the lakhs of applications filed under Section 12A of the Commercial Courts Act, 2015 since the 2018 amendment. Examine the rationale for mandatory pre-institution mediation. Critically analyse the challenges in its working and suggest a way forward to reduce pendency in commercial disputes.
Worth revising until Prelims 2027: most news questions come within two years of the event.