Commercial Disputes in India & Pre-Institution Mediation

Commercial disputes typically arise out of business transactions and relationships—these may include matters of breach of contract, non-payment or delayed payment, shareholder disagreements, joint venture conflicts, franchising and distribution issues, construction/project failures, specific performance, and enforcement of foreign arbitral awards or judgments.

The Commercial Courts Act, 2015 (as amended in 2018) established specialized commercial courts at the district and High Court level. This framework aims to accelerate the resolution of disputes above a "specified value," currently INR 3 lakh or more, and to promote business certainty and ease of doing business.

What is a Commercial Dispute under Indian Law?
Statutory Definition: Under Section 2(1)(c) of the Commercial Courts Act, 2015 (“the Act"), a commercial dispute is defined as a dispute arising out of specified types of commercial relationships and transactions. The categories listed in the Act are exhaustive and provide clarity for the types of disputes subject to commercial court adjudication.

Typical Examples of Commercial Disputes: Commercial disputes include, but are not limited to:

Disputes about the sale of goods, supply agreements, banking or trade finance, mercantile documents (invoices, bills of exchange, letters of credit), contracts for services or distribution.

Conflicts arising out of shareholder rights, joint venture partner obligations, subscription and investment agreements.

Disputes regarding franchise arrangements, licensing of intellectual property, product distribution or agency contracts.

Breach, delay, or performance issues in major construction or engineering projects.

Infringement, licensing, royalty disputes related to patents, trademarks, copyrights, designs.

Coverage, indemnity, recovery under insurance/reinsurance policies; vessel ownership or chartering.

Lease, sale, or rent agreements for immovable property used solely for commercial purposes (note: not residential property).

Aspects to be mindful of:

Section 12A of the Commercial Courts Act, 2015 requires parties to any commercial suit (except those seeking "urgent interim relief") to undertake pre-institution mediation before they can file such a suit in court. Non-compliance results in automatic rejection of the plaint under Order VII Rule 11 of CPC.

If parties reach settlement, it carries the effect of an arbitral award under Section 30 of the Arbitration and Conciliation Act, 1996—meaning it is binding and enforceable as a court decree. If mediation fails, the parties are free to proceed to litigation before the commercial court or division.

Only disputes involving a “specified value”—currently Rs. 3 lakh or more—fall within the jurisdiction of commercial courts.

Mediation is initiated through a government-recognized authority, often a dedicated Mediation Centre attached to the commercial court. The process must be completed within three months from the date of filing (extendable by two months by mutual consent).

Pre-institution mediation is not required where the suit includes an application for urgent interim relief (e.g., injunction to restrain asset transfer, freezing bank accounts, protection of IP rights), recognizing the necessity of immediate judicial intervention.

Comprehensive Approach towards Commercial Disputes 
Our advisory and litigation teams work in tandem, combining sectoral knowledge, legal acumen, and negotiation skills to deliver pragmatic, business-driven outcomes. From prevention and pre-dispute counseling to expert courtroom and arbitration representation, we are committed to protecting our clients’ commercial advantage at every stage of the dispute.

Proactive Risk Management

Our team provides pre-emptive legal opinions and risk assessments covering commercial relationships, industry-specific regulations, and compliance matters—helping businesses avoid costly litigation before it arises.

When commercial disputes escalate, our experienced litigators represent clients at all levels of the Indian judiciary—from district and High Courts to the Supreme Court—as well as before regulatory tribunals and authorities.

We move quickly to obtain interim protections, such as asset freezes, stay orders, or injunctive relief, to safeguard client interests while litigation is pending.

We assist clients in structuring, reviewing, and negotiating commercial contracts and joint ventures to clearly allocate risk, prevent ambiguity, and reduce the scope for future disputes.

We guide clients through mediation, conciliation, and arbitration, promoting out-of-court settlements wherever possible to save time and preserve valuable business relationships.

We handle complex domestic and international arbitral proceedings, including emergency and interim relief applications, and assist with recognition or enforcement of arbitral awards in India and abroad.

Where appropriate, we help clients pursue early or out-of-court settlements using effective negotiation strategies to minimize business disruption and reputational risk.

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