In short. For most commercial suits, you can't file until you've tried mediation through a Legal Services Authority under Section 12A. In Delhi that's the District Legal Services Authority for your district, or the Delhi High Court Legal Services Committee if the suit belongs in the High Court. In UP and Haryana, it's the district authority. If you're planning to sue a business for Rs 3 lakh or more, this applies to you. If the other side doesn't turn up, it can be over in weeks. It never runs past five months. Start by applying with your claim papers.
Is this your situation?
- A buyer owes you more than Rs 3 lakh, and you've finally decided to sue.
- Your lawyer said "mediation first". You nodded, and then realised you had no idea where to apply.
- A notice from a District Legal Services Authority has landed at your office about a claim someone's making against your company.
- Your legal notice went out six weeks ago. No reply, and you want to get to court.
- You're asking for an injunction too, and you can't tell if that's urgent enough to skip mediation.
- The other side signed a settlement at the mediation centre, paid the first instalment, and then went silent.
- Your three years are nearly up, and you're worried mediation will eat the time you've got left.
What Section 12A mediation through a Legal Services Authority actually is
Under Section 12A of the Commercial Courts Act, 2015, if your commercial suit doesn't contemplate urgent interim relief, you can't file it until you've tried pre-institution mediation. Section 12A(2) lets the Central Government authorise the authorities set up under the Legal Services Authorities Act, 1987 to run that mediation. And since 2018, that's exactly what State and District Legal Services Authorities across India have done, under the Commercial Courts (Pre-Institution Mediation and Settlement) Rules, 2018.
You'll know these bodies already. They run Lok Adalats and give free legal aid. Commercial disputes are different. The authority sends notice to the other business, assigns a trained mediator, holds sessions, and then either records a settlement or certifies that mediation never got going or failed. That certificate is your ticket to court.
In Patil Automation v. Rakheja Engineers (2022), the Supreme Court held the step is mandatory and that suits filed without it from 20 August 2022 are liable to be rejected. That date matters. We explain the general rule on our page on mandatory mediation before filing a commercial suit. This page is about the authorities. Which one you go to, how each one really works, what it costs you, and where things go wrong.
Which authority you go to in Delhi, UP and Haryana
- Delhi, suits up to the district court limit. You apply to the District Legal Services Authority (DLSA) for the judicial district where you'd file the suit. Each Delhi judicial district has its own DLSA, all working under the Delhi State Legal Services Authority (DSLSA). These suits end up in the Delhi district commercial courts, so think Tis Hazari, Saket, Karkardooma, Rohini, Dwarka or Patiala House.
- Delhi, suits above the district court limit. If your suit is headed for the Commercial Division of the Delhi High Court, currently above Rs 2 crore, the Delhi High Court Legal Services Committee (DHCLSC) handles the mediation. That Rs 2 crore line has been under review since late 2025. Check today's figure.
- Ghaziabad and Gautam Buddh Nagar. Go to the district's DLSA, which works under the Uttar Pradesh State Legal Services Authority. The suit then goes to the Ghaziabad commercial court, or the Gautam Buddh Nagar commercial court at Surajpur.
- Gurugram and Faridabad. Again it's the district's DLSA, this time under the Haryana State Legal Services Authority. Suits go to whichever court is designated Commercial Court for the district, the Faridabad commercial court for instance.
- Rule of thumb. Apply to the authority attached to the court where you actually mean to file. If you file somewhere else later, the defendant may say mediation wasn't properly tried. Don't hand them that.
The provisions that run the process
Section 12A(1), Commercial Courts Act, 2015
A suit that doesn't contemplate urgent interim relief can't be instituted until the plaintiff has exhausted pre-institution mediation. In Yamini Manohar v. T.K.D. Keerthi (2023), the Supreme Court said the court will look at the plaint and documents to check whether the need for urgent relief is genuine. Tacking on an injunction prayer just to dodge mediation won't work.
Section 12A(3), Commercial Courts Act, 2015
Mediation has to finish within three months from the date of the application, though with both parties' consent that can stretch by two months. Time spent in mediation isn't counted for limitation, which protects you if your limitation is close and you're worried about the date. But only if you actually apply before it runs out. Not after.
Section 12A(4) and (5), Commercial Courts Act, 2015
Any settlement has to be in writing, signed by the parties and the mediator. It then has the same status and effect as an arbitral award on agreed terms under Section 30(4) of the Arbitration and Conciliation Act, 1996. In plain words, you can enforce it like a decree. No suit.
Rules 3, 6, 7 and 11, Pre-Institution Mediation Rules, 2018
Rule 3 covers the application in Form 1, the notice to the opposite party in Form 2, a final notice if nobody responds, and a non-starter report in Form 3 if the opposite party doesn't appear or says no. Under Rule 6, parties can attend personally or through an authorised representative or counsel. Rule 7 deals with how the mediation is conducted, the settlement in Form 4 and the failure report in Form 5. The mediation fee comes from Rule 11 and the schedule.
Step by step, from application to certificate
The 2018 Rules give the outline. Each state authority layers its own standard operating procedure on top, and those get revised now and then, so check the current procedure of the authority you're applying to.
Put the claim together
Work out your claim, with interest up to the date of the application, because the mediation fee depends on that figure and later the choice of court does too. Collect the contract, invoices, ledger, your legal notice and any replies. You'll need a short synopsis of the dispute, plus the other side's correct address, email and phone number.
File the application
You apply to the authority in Form 1 with the Rs 1,000 fee. In Delhi, the DSLSA procedure lets you email the application to the designated address of the DLSA or DHCLSC and pay the fee online. In UP and Haryana you usually file at the DLSA office in the district court complex, though some authorities take applications online as well.
Notice goes to the other side
The authority sends notice in Form 2. It asks the other side to appear and say whether it'll mediate, ordinarily within ten days. Delhi serves by email and WhatsApp, and asks you for an affidavit that the contact details are correct and in use. If nothing comes back, a final notice follows.
Non-starter report if they don't engage
Suppose the other side ignores the final notice, refuses to take part, or simply doesn't show up on the date. The authority treats the mediation as a non-starter and issues a report in Form 3. You can file the suit with that report.
Sessions, if both sides agree
When both sides agree, the authority picks a mediator from its panel and fixes sessions. In Delhi these have run online and at the mediation centres in the district courts and the High Court. The mediator meets you together, and also separately. It's all confidential, and nothing is recorded.
Settlement or failure report
If you settle, the terms go into Form 4, signed by both parties and the mediator. If there's no settlement in time, or the mediator thinks one isn't possible, you get a failure report in Form 5. Either way, the process is done.
What comes next
With a non-starter or failure report, file your suit and annex the report to the plaint. With a settlement, chase the payments. If they default, enforce it.
The clock starts on the day the authority receives your application, not on the day of the first session. So if the other side drags its feet, the three months still run out, and the authority has to close the matter unless both sides agree to extend.
What it costs and how long it takes at the Legal Services Authority
| Item | Amount or time | Notes |
|---|---|---|
| Application fee | Rs 1,000 | You pay it when you file Form 1; Delhi won't refund it once notice has gone to the other side |
| Mediation fee, claim Rs 3 lakh to Rs 10 lakh | Rs 15,000 | From the schedule to the 2018 Rules; payable only if mediation actually goes ahead, and split equally between the parties |
| Mediation fee, Rs 10 lakh to Rs 50 lakh | Rs 30,000 | Split equally; check the current schedule |
| Mediation fee, Rs 50 lakh to Rs 1 crore | Rs 40,000 | Split equally; check the current schedule |
| Mediation fee, Rs 1 crore to Rs 3 crore | Rs 50,000 | Split equally; check the current schedule |
| Mediation fee, above Rs 3 crore | Rs 75,000 | Split equally; check the current schedule |
| Notice and reply period | About 10 days a notice, then a final notice | If the other side ignores it, a non-starter report can follow in a few weeks |
| Mediation sessions | Inside 3 months of the application | Another 2 months only if both parties consent |
| Court fee | Nothing at this stage | Ad valorem court fee is paid only when you file the suit |
What to send with the application
- Full name, address, email and mobile number, both for your business and for the other side
- An authority letter or board resolution for whoever signs the application
- A short note on the dispute: what you supplied or did, what's unpaid, and since when
- Your working of the claim, showing the interest rate and the period
- A copy of the contract, purchase order or work order
- Invoices, delivery challans, or completion certificates if it was a works job
- The other side's ledger account as it stands in your books
- The legal notice you sent, the proof it was delivered, and their reply if there was one
- An affidavit that the other side's contact details are correct, if the authority asks for it
- Proof you've paid the application fee
How the Delhi authorities work day to day
Of the three, Delhi has the most developed system. Under DSLSA's standard operating procedure, the DLSAs and DHCLSC work through nodal officers. Applications come in by email, fees are paid online, and notice goes out by email and WhatsApp. Mediators are drawn from the panels of the Delhi Mediation Centre in the district courts and from Samadhan, the High Court's mediation centre. Most sessions have moved online. Handy, if your directors travel.
Delhi's weak spot is service. Since notice goes by email and WhatsApp, the authority is only as good as the details you give it. An old email, or a number that belongs to someone who left the company, and the notice may never reach anyone who can decide anything. A non-starter report you get that way can be attacked later. Use the address and number the other side has actually been using with you over the last few months.
When Advocate B.K. Singh goes through a mediation file before a suit is drafted, the first thing he checks is whether notice reached someone who could bind the other company. A director, a partner, the head of accounts. Any of those is fine. A sales executive who left last year isn't.
How it works in Ghaziabad, Noida, Gurugram and Faridabad
In UP and Haryana, the DLSA sits inside the district court complex. For Ghaziabad that's the district court at Ghaziabad. For Gautam Buddh Nagar, it's the court complex at Surajpur. In Gurugram and Faridabad, the DLSAs work out of their district courts. A DLSA's Secretary is a judicial officer, and commercial mediations are just one part of a heavy workload that also covers legal aid and Lok Adalats.
Practice varies more than in Delhi, and it can change from one Secretary to the next, so some DLSAs take applications online while others still want physical filing with a set of copies. Ask. Notice goes by post and by electronic means, as the Rules require, and sessions tend to happen in person. Check with the DLSA office on the current procedure before you file. And keep a receipt for every paper you hand over the counter.
The other business may be in a different district, or a different state. Mediation still happens before the authority where you plan to file, and notice goes to the other side wherever it is. So a Ghaziabad DLSA can send notice to a Gurugram buyer, provided the Ghaziabad court has jurisdiction over the suit. The Haryana side of such disputes is covered on our page on the Gurugram commercial court.
When you can skip mediation: urgent interim relief
Section 12A doesn't apply to a suit that contemplates urgent interim relief. Think of a trademark owner trying to stop counterfeit goods, a business trying to stop a bank guarantee being encashed, or a creditor who wants assets attached because they're being moved. Our page on urgent injunctions sets out the tests.
The court decides this from the plaint itself. Say the plaint asks for an injunction, but the facts show the plaintiff sat on it for months, or the relief is obviously a money claim in disguise. The court can reject the plaint under Order VII Rule 11 for want of mediation. That wastes more time than the mediation ever would have. Frankly, where urgency is borderline, a short mediation is usually the safer bet.
If you're the defendant and the plaintiff skipped mediation by asking for an injunction it didn't need, raise the objection in your very first response. Courts have said the reverse, too. A defendant who ignored the mediation notices and refused to take part can't later complain that mediation wasn't properly done.
Making the session count
Plenty of businesses treat Section 12A mediation as a box to tick on the way to a non-starter report. Sometimes that's fair. The other side won't engage. But when the other side does turn up, the session is a real chance to settle without court fee, written statements and two years of hearings. Prepare.
Go in with a clear figure, a reasoned basis for the interest you're claiming, and authority to settle. Bring the person who actually knows the account, not just the lawyer. Think about a payment schedule you could live with and the security you'd want for it: post-dated cheques, a bank guarantee, or a director's personal guarantee. A mediator can't force anyone to settle. But if you turn up unprepared, you've wasted the one free attempt you get.
Everything said in mediation stays confidential. The other side can't use your offer against you in court, and the mediator can't be called as a witness. So both sides can talk more openly than they ever would in letters.
Enforcing a settlement, and what to do when the other side breaks it
A Section 12A settlement has the status of an arbitral award on agreed terms. Section 36 of the Arbitration and Conciliation Act, 1996 says an award is enforced as if it were a decree of the court. So if the other side misses an instalment, you don't start a fresh suit. You file an execution petition in the court that would have had jurisdiction over the suit and go after their bank accounts or assets.
Write the settlement with enforcement in mind. Put down the total, the instalment dates, interest on default, and a clause that the whole balance falls due if any instalment is missed. Record any security. Loose wording like "will try to pay by month end" just invites a fight at the execution stage. In settlements that come to Advocate B.K. Singh for enforcement, the gap we see most is a missing default clause. The deal says what's to be paid but not what happens if it isn't, and the creditor ends up arguing about what its own settlement means. Settlements reached later, during the suit, need the same care. Our page on settling a case midway explains why.
Anyone wanting to challenge a mediated settlement is limited to the narrow grounds available against an arbitral award, such as fraud or incapacity. In practice, challenges are rare. And they seldom get anywhere when the settlement was signed with legal advice.
Section 12A mediation next to Lok Adalat, court mediation and MSME councils
Section 12A mediation isn't a Lok Adalat. A Lok Adalat, which the Legal Services Authorities also run, passes an award under Section 21 of the Legal Services Authorities Act, and that award is final. No appeal. A pre-litigation Lok Adalat can settle a commercial claim. If it doesn't settle, though, it doesn't stand in for Section 12A mediation. Only a non-starter or failure report under the 2018 Rules satisfies Section 12A.
Court-referred mediation during a suit, under Section 89 of the Code of Civil Procedure, is a separate stage altogether. It can happen after Section 12A mediation has failed, once pleadings are in and everyone's position is clearer.
Micro and small enterprises registered under the MSMED Act, 2006 have another option. They can make a reference to the Micro and Small Enterprises Facilitation Council under Section 18, which runs conciliation and then arbitration. If your contract has an arbitration clause, the dispute usually goes to arbitration instead of a suit, and Section 12A doesn't apply to the arbitration. We cover that route on arbitrationlawyer.in. The Mediation Act, 2023 also provides for a substituted Section 12A that would let other mediation providers do this work. Check whether that change is in force before you rely on anything other than the Legal Services Authorities.
Mistakes that come back to bite you
- Going to the wrong authority. You mediated through one district's DLSA and then filed in another district. Or you went to a DLSA when the suit was always going to the Delhi High Court.
- Giving wrong contact details. A non-starter report built on notice to a dead email address, or to someone who left the company, can be challenged.
- Claiming one amount in mediation and another in the suit. If the suit asks for a lot more than the mediation application did, the defendant may say the bigger claim was never mediated. Keep the numbers consistent, with interest updated the normal way.
- Leaving it too late. Only the mediation period is excluded from limitation. If your three years were already over when you applied, mediation won't bring the claim back. Our guide on the time limit to recover unpaid dues explains the dates.
- Thinking a legal notice will do instead. However detailed it is, a legal notice isn't pre-institution mediation. Courts have refused to treat it as compliance.
- Ignoring the notice when you're the one being claimed against. Stay away and the plaintiff gets a quick non-starter report, and you lose the chance to settle on better terms before court costs pile up.
How it plays out for suppliers, service firms, lenders, startups, MSMEs and large companies
Suppliers with clean invoices and no quality complaints often find the other side settles at this stage, once a formal notice from a Legal Services Authority turns up. Service firms arguing about scope or acceptance have harder sessions. Bring the work order, the change requests and the approval emails. Lenders who made inter-corporate loans or paid trade advances should bring the loan agreement and any acknowledgment of the debt, because limitation questions come up early.
Startups are often the smaller party, up against a big customer. Mediation gets them a structured meeting with a decision-maker on the other side. Otherwise, hard to get. MSMEs should decide early between the Facilitation Council and the Legal Services Authority, since the two routes end up in different forums. Large companies should give their representative written authority to settle within a range. A mediator can't do much with someone who has to phone head office for every figure.
An invented example: an IT services firm and a Noida client
This is a made-up case, not a real client. A small Delhi IT services firm has built an inventory system for a Noida retailer. The last three milestone invoices, Rs 22 lakh in all, haven't been paid. The retailer says there were bugs. The contract gives jurisdiction to the courts at Gautam Buddh Nagar.
The firm applies to the DLSA, Gautam Buddh Nagar, with the contract, the invoices, the user acceptance emails and its legal notice. The retailer's director shows up. In separate sessions, the mediator finds out what's really bothering the retailer. A missing report module. The firm agrees to deliver it within a month. The retailer agrees to pay Rs 18 lakh in three instalments, with the full Rs 22 lakh falling due if any instalment is missed.
They sign the settlement in Form 4. When the second instalment is late, the firm files for execution in the Gautam Buddh Nagar commercial court rather than starting a suit. Plenty of mediations end in a non-starter report and no settlement at all. This example shows what a well-prepared session can do. It isn't a likely result.
What to do this week
First decide where your suit would be filed, because that's what tells you which authority to go to. Work out the claim with interest. If you haven't already, send a clear legal notice for recovery, and get the other side's current email, phone number and the name of someone there who can actually decide. Then file the application and diarise the three-month date, counted from the day the authority receives it.
Got a notice from a Legal Services Authority yourself? Don't ignore it. Reply in time, attend, and use the session to understand the claim against you. It costs far less than defending a suit. And if the mediation fails or turns out to be a non-starter, the plaint has to be ready fast. Our page on drafting a commercial suit explains what goes into one.
If you'd like your claim papers and the other side's details checked before you apply to the Legal Services Authority, or you want to hear about changes to Section 12A, share them with Advocate B.K. Singh's team through the contact page.
Frequently asked questions
Where do I apply for pre-institution mediation in Delhi?
To the District Legal Services Authority for the judicial district where you'd file the suit. If the suit is going to the High Court, apply to the Delhi High Court Legal Services Committee instead. Under the current DSLSA procedure, you email the application in the prescribed format and pay the fee online. Check the current procedure before you apply.
What's the fee for Section 12A mediation?
The application fee is Rs 1,000. If mediation actually goes ahead, there's also a mediation fee under the 2018 Rules, on a slab by claim value. It runs from Rs 15,000 for claims up to Rs 10 lakh to Rs 75,000 above Rs 3 crore, and the parties split it equally. Check the current schedule.
What happens if the other party doesn't attend mediation?
The authority sends a final notice. If that's ignored too, or the other side refuses or doesn't appear, you get a non-starter report in Form 3. You can then file the suit with that report.
How long does pre-institution mediation take?
Three months from the application date, at most. Both parties can agree to two more months, but only if both consent, and the authority can't extend it on its own. If the other side doesn't engage, a non-starter report can come in a few weeks.
Does time in mediation count towards limitation?
No. Section 12A(3) leaves the mediation period out of limitation. It won't revive a claim that was already time-barred on the day you applied, though.
Is a mediated settlement enforceable?
Yes. It has the status of an arbitral award on agreed terms under Section 30(4) of the Arbitration and Conciliation Act. You enforce it as a decree, through an execution petition. There's no need to file a suit.
Can I file a commercial suit without mediation?
Only if the suit genuinely seeks urgent interim relief, like an injunction or attachment. The court looks at the plaint and documents to see whether the urgency is real. If it isn't, the plaint can be rejected under Order VII Rule 11.
Can a lawyer attend Section 12A mediation for my company?
Yes. Rule 6 of the 2018 Rules lets a party attend in person or through an authorised representative or counsel. It's still worth having someone there who can actually agree a settlement figure.