The court mediation session on Thursday collapsed after the red and yellow leaders refused to drop nine cases which they sue one another for libel.
The three red-shirt leaders, Veera Musigapong, Jatuporn Promphan and Natthawut Saikua, filed seven lawsuits charging yellow-shirt leader Sondhi Limthongkul for defamation.
Sondhi filed two counter-lawsuits against the three.
Veera and Natthawut, presently being under remand on terrorism charges, attended the mediation session while Jatuporn and Sondhi were represented by their lawyers.
Following three hours of negotiations, Sondhi's lawyer Suwat Apaisak said the disputed parties could not reach a compromise although the court urged for both sides to drop their lawsuits.
"In my opinion, both sides must find an honourable way out instead of withdrawing the lawsuits in a dishonourable manner," he said.
Suwat said at stake was not just the litigation because both sides had to heed the feelings of their supporters before making any move.
The court has scheduled July 29,to hold a second round of mediation.