Pre-institution mediation cases under the Commercial Courts Act have seen extremely low settlement rates, despite lakhs of disputes being routed through the mandatory process, data placed before the Rajya Sabha reveals.
The Union Ministry of Law and Justice disclosed that although more than 5.6 lakh applications have been filed for Pre-Institution Mediation and Settlement (PIMS) since 2018, only a small fraction have resulted in actual settlements.
Rajya Sabha Data on Pre-Institution Mediation Cases
In a written reply to a question by Trinamool Congress MP Sagarika Ghose, the Ministry stated that between July 2018 and September 2025, a total of 5,65,676 pre-institution mediation cases were filed in commercial disputes where no urgent interim relief was sought.
However, most of these cases either failed to proceed to mediation or did not culminate in settlement.
Settlement Rates Remain Alarmingly Low
Official figures show that the success rate of pre-institution mediation cases remains below 2%:
- 2024–25:
877 settlements out of 59,568 applications - 2023–24:
1,139 settlements out of 51,019 applications
A large number of applications were marked as “non-starters”, indicating that parties chose not to pursue mediation after initiating the process.
Why Many Pre-Institution Mediation Cases Fail
The Law Ministry clarified that alternative dispute resolution (ADR) mechanisms are driven by party autonomy. Many litigants opt for:
- Ad-hoc mediation
- Private mediation institutions
Since these processes fall outside the government framework, no consolidated data is maintained, making it difficult to assess actual outcomes beyond official mediation channels.
No Data on Delays Beyond 180 Days
When asked how many pre-institution mediation cases exceeded the prescribed 180-day resolution period, the Ministry admitted that no such data is tracked.
This raises concerns over the effectiveness of mandatory mediation as a time-saving dispute resolution tool.
Lok Adalats Show Stronger Results
In contrast, the Ministry highlighted the success of Lok Adalats under the Legal Services Authorities Act, 1987.
According to data from the National Legal Services Authority (NALSA):
- 2025: Over 14.8 crore cases disposed of
- 2021: Around 1.27 crore cases disposed of
State Lok Adalats and Permanent Lok Adalats have also shown consistent growth in dispute resolution over the last five years.
Arbitration Council of India Still Not Constituted
The Ministry further confirmed that the Arbitration Council of India, mandated by the 2019 amendments to the Arbitration and Conciliation Act, 1996, has not yet been established.
No reasons for the delay or timeline for its constitution were provided.
Conclusion
The data placed before Parliament underscores a major gap between the legislative intent behind pre-institution mediation cases and their practical outcomes. While the framework aims to reduce litigation and court backlog, low settlement rates raise questions about awareness, incentives, and procedural effectiveness.
