The most useful distinction between commercial mediation in India and England & Wales is no longer whether one system is “voluntary” and the other “mandatory”. Both legal systems now compel parties to engage with mediation in defined circumstances, while preserving the parties’ freedom not to settle. Instead, the more significant difference lies in how mediation is integrated into the wider dispute-resolution system.

India has created a compulsory pre-action gateway for many commercial suits. England & Wales has instead developed a combination of judicial case management, costs incentives and, for lower-value claims, automatic referral. Each approach can bring reluctant parties to the table. By itself, neither approach can guarantee that the process will be timely, judicially well-supported or commercially productive.

While requiring attendance is comparatively straightforward, embedding mediation requires the integration of credible mediators, informed clients, lawyers able to identify the appropriate juncture, decision-makers with authority to settle, and regulations and rules that make settlements final and binding.

I. Compulsion to participate, not compulsion to settle

In India, section 12A of the Commercial Courts Act 2015 requires a claimant to exhaust pre-institution mediation before commencing a commercial suit that does not contemplate urgent interim relief. In Patil Automation Private Limited v Rakheja Engineers Private Limited [1], the Supreme Court held that the requirement is mandatory and that a non-compliant plaint must ordinarily be rejected under Civil Procedure Code 1908, Order VII Rule 11. The Court made that declaration effective from 20 August 2022. It nevertheless recognised that mediation cannot proceed substantively unless the other party participates. This statutory obligation is a gateway requirement imposed on the claimant to participate in the mediation and not an obligation on both parties to reach an agreement.

The exception in relation to urgent relief has been further clarified in Yamini Manohar v T K D Keerthi [2]. The Supreme Court held that the court should consider the nature of the suit, the cause of action, the documents and the relief sought. A request for urgency cannot simply be used as a device to avoid section 12A, but the court’s enquiry is limited and must be conducted from the claimant’s standpoint. In Novenco Building and Industry A/S v Xero Energy Engineering Solutions Private Ltd [3], the Court added that delay does not necessarily negate urgency where allegedly continuing intellectual property infringement is causing ongoing injury.

England & Wales has reached a similar position by a different route. In Halsey v Milton Keynes General NHS Trust [4], the Court proposed that compelling unwilling parties to mediate would obstruct access to the court, and recognised that an unreasonable refusal to mediate could impact costs. In Churchill v Merthyr Tydfil County Borough Council [5], however, the Court of Appeal held that the relevant observations in Halsey were obiter. A court may stay proceedings or order parties to engage in a non-court dispute resolution process, provided the order preserves the essence of the right to a judicial hearing and is proportionate to resolving the dispute fairly, quickly and at reasonable cost, in furtherance of the Civil Procedure Rule’s (“CPR”) overriding objective.

The CPR were amended on 1 October 2024 to give procedural effect to Churchill. The overriding objective now expressly includes promoting or using alternative dispute resolution (“ADR”), with provisions dealing with active case management empowering Courts to order or encourage ADR.

CPR 3.1(2)(o) permits the court to order parties to engage in ADR, and CPR 44.2(5)(e) directs the court, when considering costs, to take account of non-compliance with an ADR order or an unreasonable failure to engage. Crucially, it must be noted that a court can require genuine participation by the parties in ADR processes, but it cannot require agreement or settlement.

II Two models of integration

India’s principal statutory model operates before proceedings. England & Wales increasingly treats mediation as part of ongoing case management, with the option to mediate being open to the parties or suggested by the Court at various procedural checkpoints of a dispute.. That structural difference affects both timing and behaviour.

Section 12A of the Commercial Courts Act 2015 is designed to create an early opportunity for settlement before court costs accumulate. It can also produce an early exchange of positions. But mediation at that point may occur before pleadings, documents or expert issues have sufficiently crystallised. The mechanism can therefore work well where the dispute is essentially commercial or payment-driven, yet be less productive where the parties first need clarity about technical facts, the scope of contractual obligations, or the strength of competing legal cases.

The prescribed rules permit the process to be recorded as a “non-starter” where the opposite party does not participate. Practitioners have accordingly observed that the quality of the process depends greatly on whether both sides see a realistic settlement opportunity, rather than merely a procedural step that serves as a pre-condition to the admissibility of the plaint.

England & Wales allows greater flexibility over the stage at which mediation occurs. The Commercial Court Guide expects legal representatives to consider non-court dispute resolution with their clients and the other parties, and contemplates judicial invitations, stays and formal orders where appropriate. The court can revisit the question of mediation as the case develops. That may allow disclosure, expert evidence or an interim judgment to narrow the issues, before the parties mediate.

Mediation conducted too early may suffer from an information deficit, while mediation conducted too late may follow disproportionate expenditure and entrenched positions. In substantial commercial cases, a frequently useful window is after the principal issues and key evidence are understood, but before the heaviest trial expenditure becomes unavoidable. That is a practical consideration, and not a rule. Where relationships, cash flow or confidentiality are particularly important, mediation before proceedings may be preferable even if some factual uncertainty lingers.

III. Litigation economics and settlement incentives

The effectiveness of mediation cannot be separated from the economics of litigation. England & Wales combines adverse-costs exposure, active case management and the possibility of express ADR sanctions. That framework gives lawyers and litigants a recurring reason to assess mediation, record their response to an invitation, and explain any refusal.

The position should not be overstated. A party is not necessarily unreasonable merely because it considers that mediation would be premature or unsuitable. Churchill declined to prescribe a fixed checklist, leaving judges to consider the process, proportionality and the circumstances of the dispute. The 2024 CPR amendments nevertheless make clear that ADR conduct is now part of ordinary costs analysis, wherein the courts are now empowered to sanction unreasonable behaviour of litigating parties for their failure to reasonably engage in ADR that is either ordered by the court or proposed by another party.

Indian commercial courts also possess meaningful costs powers. The Commercial Courts Act’s amendment of section 35 of the Code of Civil Procedure Code 1908 permits the court to consider party conduct and whether a reasonable settlement offer was unreasonably refused. However, England & Wales has developed a more explicit body of ADR-specific case management and costs practice, whereas India’s most visible statutory incentive remains section 12A’s bar on instituting an eligible suit.

Litigation duration can operate in more than one direction. The prospect of extended proceedings may encourage commercial compromise, but delay can also alter bargaining power and make one party less receptive to early settlement. Practitioners working on Indian disputes report that this dynamic affects the point at which meaningful negotiations can occur. This position depends on liquidity, business relationships, interim protection and the parties’ respective tolerance for delay.

IV. Applicability to small value claims

Developments in lower value civil claims show most clearly how mediation is becoming part of the design of the English justice system. Under Practice Direction 51ZE, eligible money claims suitable for the small-claims track are automatically referred to the HMCTS Small Claims Mediation Service. The pilot began on 22 May 2024 and, following extension, is scheduled to run until 6 April 2027. It generally covers specified money claims of £10,000 or less, while personal-injury and road-traffic claims are excluded from the principal scheme. Non-attendance may be considered when sanctions and costs are determined.

The process is a free telephone mediation of up to one hour. Attendance is required, but settlement is not. If no agreement is reached, the claim proceeds to a hearing. HMCTS reported that monthly mediations increased from approximately 1,900 in March 2024 to more than 8,000 in March 2026 [6].

There is no direct equivalent at the same scale in Indian commercial litigation. Section 12A is wider in commercial subject matter but different in institutional design as it is a precondition to filing a claim administered through authorised legal-services institutions, rather than a short mediation appointment integrated into the management of an issued claim.

V. Mediator quality and market depth

The Supreme Court of India recognised this in Patil Automation, identifying the need for infrastructure, trained and skilled mediators, regular training and appropriate panels at district and taluka levels.

India already has substantial court-annexed mediation experience and well-regarded mediators, particularly in major centres. However, the depth and strength of the commercial mediator pool may vary by region, sector and claim value. Accreditation alone cannot substitute for repeated experience in complex negotiations, financial disputes or technically specialised cases. However, court mediation centres, private institutions and the Supreme Court’s Mediation and Conciliation Project Committee continue to provide training and institutional support.

England & Wales has a more developed private commercial mediation market, but it is not without structural issues. The 2025 CEDR Mediation Audit estimated approximately 21,000 civil and commercial mediations in the year to 30 September 2024 [7]. 69% of respondents described themselves as advanced mediators, while 16% were accredited but had no lead-mediator experience. The audit also recorded concerns about market concentration and the difficulty newer mediators face in securing appointments.

England & Wales illustrates how reputation, repeat appointments and lawyer confidence can create a sophisticated but concentrated market. A challenge for India might be viewed as being the expansion of consistent commercial capability in the mediator market, but without allowing accreditation of such mediators to become a detractor from experience and continuing professional development.

VI. Settlement finality

In England & Wales, a mediated settlement is ordinarily documented as a binding contract. Where proceedings exist, it may be embodied in a consent order or Tomlin order, allowing enforcement through the proceedings. Such settlements usually identify payment obligations, releases, confidentiality terms, tax consequences, authority to settle and the treatment of existing claims.

For Indian pre-institution mediation under the currently operative version of section 12A, a qualifying settlement has the same status and effect as an arbitral award on agreed terms. That gives settlements reached through the statutory process a direct enforcement framework.

The Mediation Act 2023 in India contains a broader architecture. Section 27 provides that an authenticated mediated settlement agreement is to be final, binding and enforceable as if it were a judgment or decree. Section 28 confines challenge to fraud, corruption, impersonation or mediation of a matter not fit for mediation, ordinarily within 90 days, with a possible further 90-day extension.

VII. Public procurement: significant, but not conclusive

The Government of India’s policy on domestic public procurement is another material development. An Office Memorandum dated 3 June 2024 applies to domestic procurement contracts entered into by central government departments and their entities and agencies, including Central Public Sector Enterprises, public-sector banks and government companies [8].

The memorandum states that arbitration should not routinely be included in procurement contracts and that, as a norm, arbitration may be restricted to disputes valued below INR 10 crore. The threshold refers to the value of the dispute, not the contract.

The same memorandum encourages negotiated settlement and mediation. In higher-value matters, an entity may constitute a high-level committee, negotiate and place a proposed solution before it, mediate before submitting a tentative agreement, or use the committee itself as mediator. It also says that mediation clauses need not automatically be included in every tender and that absence of a clause does not preclude pre-litigation mediation.

A further memorandum dated 25 March 2025 prescribed an interim fee structure for mediators or high-level committee members dealing with contractual commercial disputes of INR 10 crore or more. It contemplated no more than five sittings over a maximum of six months, pending finalisation of a model fee framework under the Mediation Act [9].

These measures are evidence of policy support and of an attempt to address the institutional difficulty public officials may face when approving negotiated outcomes. They do not, without implementation data, establish a wider cultural shift. Their effect will depend on whether officials receive sufficient authority and protection to evaluate compromise on its commercial merits, and whether approval processes remain proportionate.

VIII. The Statistical Picture

In January 2026, the Indian Government informed the Lok Sabha that the settlement rate for pre-institution mediation under section 12A was approximately 2%. The accompanying data covered PIMS applications from 1 December 2018 to 30 September 2025 and also recorded a substantial number of “non-starter” outcomes [10].

That evidence supports the narrower proposition that settlement through the statutory gateway has been limited. Non-participation, case selection, institutional capacity, timing and the fact that claimants must apply even when defendants have little interest in settlement all affect the denominator. The figures therefore justify examination of process design for mediated settlement in India.

The latest comparable UK evidence is the CEDR Mediation Audit 2025. It reported an aggregate settlement rate of 87%, with 70% on the mediation day and a further 17% shortly afterwards. This supersedes the earlier 2023 audit figures of 92% overall, comprising approximately 72–73% on the day and 20 per cent afterwards.

The contrast is striking but not like-for-like. CEDR’s figures are based principally on reported outcomes in a mature civil and commercial mediation market and expressly exclude the HMCTS Small Claims Mediation Service. India’s figure concerns all applications made to satisfy a statutory pre-institution gateway, including non-starters.

IX. Conclusion

Both jurisdictions are moving beyond the idea of mediation as an optional diversion from litigation. India has placed mediation at the gateway to commercial courts and has begun constructing a national statutory institution. England & Wales has embedded ADR within the overriding objective, judicial case management, costs and the administration of lower-value claims.

The next phase will be determined less by whether mediation can be ordered than by whether it is used intelligently. Effective integration requires careful case selection, appropriate timing, experienced mediators, authorised decision-makers and clear enforcement.

Court compulsion may open the door. The quality of the surrounding dispute-resolution system will determine whether the parties regard the process as a genuine opportunity to settle.

*Marc Keidan, Senior Partner, Keidan Harrison LLP

**Unnayan Mishra, Foreign Qualified Lawyer (India), Keidan Harrison LLP

About Keidan Harrison LLP

Keidan Harrison LLP is an international disputes and insolvency firm based in the City of London. See further information on our dedicated India Desk

[1] (2022) 10 SCC 1, paragraph 84

[2] (2024) 5 SCC 815, paragraph 8

[3] 2025 INSC 1256, paragraphs 23-25

[4] [2004] EWCA Civ 576

[5] [2023] EWCA Civ 1416

[6] Looking ahead: the next chapter for civil courts – Inside HMCTS

[7] The Eleventh CEDR Mediation Audit 2025, p. 2-3, CEDR Mediation Audit 2025

[8] Office Memorandum on “Guidelines for Arbitration and Mediation in Contracts of Domestic Public Procurement”, No. F.1/2/2024-PPD, Ministry of Finance, Department of Expenditure, Procurement Policy Division,
Guidelines_for_Arbitration_and_Mediation_in_Contracts_of_Domestic_Public_Procurement.pdf

[9] Office Memorandum on “Payment of Fees and other expenses to Mediators/Members of High Level Committees acting as a Mediator for mediation of contractual commercial disputes”, No. 19047/6/2024-E.IV, Ministry of Finance, Department of Expenditure, Payment of Fees and other expenses to Mediators/Members of High Level Committees acting as a Mediator for mediation of contractual commercial disputes.pdf

[10] Press Release, “Commercial disputes settled through pre-institution mediation under the Commercial Courts Act, 2015”, Ministry of Law and Justice, 29 January 2026, Press Release Page | Press Information Bureau; Pre Institution Mediation Progress Report by Law Ministry .