In a move that straddles firmness with fairness, the Supreme Court has ruled that commercial suits filed before August 20, 2022—without undergoing the mandatory pre-institution mediation—should not be tossed out but rather placed on hold to give mediation a fighting chance.
The bench, comprising Justices JB Pardiwala and R Mahadevan, was dealing with a suit dating back to 2019—a time when the legal architecture for such mediation was more wish than reality. Acknowledging this gap, the Court chose not to apply the letter of the law with blind rigidity, instead ordering a pause: these legacy cases should go into hibernation while the parties attempt to settle their scores at the mediation table.
This decision follows the precedent set in Patil Automation v. Rakheja Engineers (2022), where the apex court declared that mediation under Section 12A of the Commercial Courts Act, 2015 is not optional—it’s mandatory. And any suit that skips it should be rejected under Order VII Rule 11(d) of the Civil Procedure Code. But crucially, that hardline stance was meant to apply only to suits filed after August 20, 2022.
So what happens to all those suits filed before that date? Here’s the Supreme Court’s roadmap:
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If the suit was filed after 20.08.2022 without the required mediation, it gets the axe—no mediation, no trial.
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If the suit was filed before 20.08.2022, and it doesn’t fall into specific exceptional categories (like being rejected and left unpursued, or filed after a High Court had already deemed Section 12A mandatory), then it’s eligible for a timeout. The court can put it on hold and send the parties off to try mediation first.
The mechanism isn’t automatic—the defendant has to object, or one of the parties must show a willingness to mediate. But once that’s in motion, the trial court must step back and let mediation take center stage, bound by a three-month deadline (extendable by two more months under the PIMS Rules).
With this ruling, the Court not only upheld the High Court’s decision in M/S Dhanbad Fuels Pvt. Ltd. v. Union of India & Anr., but also extended a practical lifeline to older cases caught in a procedural no-man’s-land.
The message? Mediation isn’t just a procedural formality—it’s a real door that must be tried before litigation slams shut.