The Commercial Courts Act, 2015 was enacted by the Indian Parliament to streamline business operations and encourage foreign capital and investment in the country. The Act defines commercial disputes to include agreements related to franchising, distribution, licensing, management consultancy, joint ventures, shareholders' agreements, and various contracts in sectors such as construction, infrastructure, and exports or imports, among others.

A key provision of the Act, under Section 12A, mandates that parties involved in a commercial dispute must first attempt mediation before proceeding with a lawsuit. This requirement was reinforced by the Supreme Court in Patil Automation Private Limited v. Raheja Engineers Private Limited, where it held that mediation is a compulsory step before filing a commercial suit.

The debate surrounding mandatory pre-litigation mediation is twofold:

Whether the compulsory referral of disputes to mediation could delay the resolution process, and
Whether the process becomes ineffective when one party refuses to engage or continue with mediation.
This dilemma highlights an irony—an initiative designed to reduce court congestion may inadvertently become an obstacle to timely dispute resolution. However, it remains crucial to explore the benefits and challenges of mediation, especially online mediation, as a method to resolve commercial conflicts.

The Mediation Act, 2021 also emphasizes pre-litigation mediation for civil and commercial disputes of a certain value and provides the option for online mediation, bringing convenience, cost-effectiveness, and technological accessibility to the dispute resolution process. Online mediation, in particular, allows parties to resolve disputes from remote locations, saving time and costs associated with travel and physical meetings. It has become an essential tool in the modern dispute resolution ecosystem, allowing mediation to take place in real-time or asynchronously, depending on the needs of the parties.

In online mediation, the parties involved may appoint mediators or choose from service providers they trust, ensuring that both sides have confidence in the professional handling of their disputes. This flexibility has made online mediation an increasingly popular choice for businesses and individuals seeking to resolve conflicts outside the courtroom.

However, the involvement of the government in numerous commercial suits and contracts introduces complexities. Mandatory mediation under various statutes could impact the autonomy of the parties, especially when the Mediation Council's oversight is subject to Central government approval. This dynamic could potentially complicate proceedings, as government officials, due to fear of political repercussions, might be less willing to make compromises or settle matters amicably.

Mediation can also face delays, particularly in company-related disputes, where authorized representatives must communicate with senior management for approval before decisions can be made. This process can prolong mediation sessions as representatives seek instructions from their higher-ups, often due to concerns about the potential risks involved. However, the Mediation Act stipulates that mediation should be concluded within 180 days, with the possibility of extending this period by an additional 180 days.

Under the Companies Act, 2013, Section 442 and Rule 3 of the Companies (Mediation and Conciliation Rules), 2016 provide for the establishment of a Mediation and Conciliation Panel by the Central Government. Disputes can be referred to this panel at any stage of the proceedings, and the provisions of the Arbitration and Conciliation Act, 1996 also apply in the same manner.

In conclusion, given the slow pace of commercial dispute resolution in Indian courts, mediation—especially online mediation—presents a viable alternative. While there may be challenges, particularly regarding the engagement of reluctant parties or government involvement, mediation can provide a faster, more cost-effective way to resolve disputes. It remains an option worth exploring for businesses facing relational friction and conflict, even in the absence of a formal mediation agreement.