Make pre-litigation mediation for commercial cases voluntary: Sanjeev Sanyal of EAC-PM
Economic Advisory Council to the PM (EAC-PM) has proposed making the pre-litigation mediation for commercial cases voluntary, similar to civil cases, saying it will reduce the timeline of dispute resolution in such cases by three to five months and lower the legal costs that entrepreneurs have to bear.
“Section 12A of the Commercial Courts Act, 2015, must be amended to make pre-litigation mediation for commercial cases voluntary,” Sanjeev Sanyal, member, EAC-PM said in his working paper co-authored with Apurv Kumar Mishra, a consultant at EAC-PM.
“This will reduce the timeline of dispute resolution in commercial cases by three to five months and lower the legal costs that entrepreneurs have to bear,” he said.
Section 12A of the Commercial Courts Act, 2015 makes it mandatory for parties in a commercial dispute (above Rs 3 lakh) to first attempt mediation before filing a case in the courts except if there is a special time-sensitive urgency.
Citing the revised Mediation Bill passed in August, and formalised as the Mediation Act 2023 which changed the provision to make pre-litigation mediation voluntary for civil cases, Sanyal argued if mandating pre-litigation mediation is unsuitable for civil cases, why should it be compulsory for commercial cases?
Quoting the case study of two district level commercial courts in Mumbai, Sanyal said between 2020 and 2023, around 98% of the applications for pre litigation mediation were non-starters because the parties did not participate in the proceedings.
“The requirement of pre-litigation mediation under the 2015 Act is not working, and only adds to the time and cost of inevitable litigation,” he said, adding since litigants know that mediation is futile, many try to use a
