Despite a steady rise in the number of cases being routed through alternative dispute resolution (ADR) mechanisms, actual settlement outcomes remain limited, particularly under mandatory pre-institution mediation for commercial disputes, according to a reply tabled in the Rajya Sabha.
The data was shared by the Union ministry of law and justice in response to an unstarred question by Trinamool Congress' member of Parliament (MP) Sagarika Ghose on the performance of ADR mechanisms, delays beyond prescribed timelines, post-Lok Adalat litigation, and the status of the Arbitration Council of India.
Under the Commercial Courts Act, 2015, pre-institution mediation and settlement (PIMS) is mandatory for certain commercial disputes that do not involve urgent interim relief. The provision was introduced in 2018 with the objective of encouraging early settlement and reducing the burden on courts.
However, government data shows that while applications for mediation have increased sharply over the years, the proportion of cases actually settled remains extremely low.
Between July 2018 and March 2019, 3,680 applications were received for mediation. Of these, mediation failed to even commence in 1,660 cases, while only 25 cases resulted in a settlement.
In FY19–20, applications jumped to 18,080, but settlements were recorded in just 167 cases. The trend continued in FY20–21, with 18,364 applications and only 186 settlements.
The gap widened further in subsequent years. In FY21–22, out of 32,335 mediation applications, parties reached a settlement in only 368 cases. In FY22–23, applications rose to 46,412, with settlements recorded in 1,449 cases.
Even as volumes crossed the 50,000 mark in recent years, settlement outcomes declined. In FY23–24, 51,019 applications were filed, but only 1,139 cases were settled. In 2024–25, applications increased to 59,568, while settlements fell to 877. During FY25–26, up to 25th September, 47,218 applications were received, with settlements in just 643 cases.
A significant number of cases did not even progress to mediation. In FY24–25 alone, mediation failed to start in more than 52,700 cases, reflecting limited participation or unwillingness among disputing parties.
The ministry also acknowledged that no consolidated data is available for ad hoc mediation or mediation conducted through private institutions, as ADR remains “party autonomy driven”.
When asked about cases that exceeded the prescribed 180-day resolution period, the government stated that no such data is maintained.
This admission highlights a key monitoring gap, given that timelines are central to the rationale for promoting ADR as a faster alternative to litigation.
On Lok Adalats, the ministry reiterated their statutory status under the Legal Services Authorities Act, 1987, noting that awards passed by Lok Adalats are deemed to be civil court decrees and are final and binding, with no appeal permitted.
However, the government did not provide data on cases where Lok Adalat settlements later resulted in fresh litigation by aggrieved parties, stating that the national legal services authority (NALSA) maintains information only on disposals, not subsequent disputes.
The disposal figures themselves show massive volumes.
In National Lok Adalats, total case disposals rose from about 1.28 crore cases in 2021 to over 14.84 crore cases in 2025. These included both pre-litigation matters and pending court cases, with pre-litigation settlements forming the bulk.
State Lok Adalats handled far smaller volumes. In FY21–22, about 5.3 lakh cases were disposed of. This rose to over 13.4 lakh cases in FY24–25, before falling to around 5.9 lakh cases in 2025–26 up to 25 November 2025.
Permanent Lok Adalats dealing with public utility services also showed incremental growth, with disposals increasing from around 1.18 lakh cases in FY21–22 to nearly 2.38 lakh cases in FY24–25, before moderating in the current financial year.
On arbitration reform, the government confirmed that the Arbitration Council of India, mandated under Part IA of the Arbitration and Conciliation (Amendment) Act, 2019, has not yet been established.
No timeline or reasons for the delay were provided in the reply, despite repeated references to the council as a key institutional reform intended to improve arbitration standards, accreditation and oversight in India.
While the government continues to promote ADR as a cornerstone of judicial reform and ease of doing business, the data presented to Parliament suggests a widening gap between policy intent and outcomes.
The sharp rise in mandatory mediation filings, coupled with persistently low settlement rates and the absence of data on delays or post-settlement disputes, raises questions about whether ADR mechanisms are delivering meaningful dispute resolution — or merely adding another procedural layer before parties return to court.
