In order to enhance the objective of the Commercial Courts Act, 2015 (hereinafter referred to as ‘the Act’), amendments were made in 2018 to streamline the resolution of commercial cases and bring commercial matters within its scope. Additionally, matters related to Intellectual Property Rights were incorporated into the definition of a 'commercial dispute' under Section 2(c)(xvii) of the Act. To further promote the efficient resolution of commercial cases, the introduction of Section 12A of the Act made it compulsory for conflicting parties to attempt mediation before instituting a commercial lawsuit.
The primary objective of Section 12A of the Act is to encourage parties involved in commercial disputes to explore mediation as a primary recourse for resolving their conflicts. The provision mandates that before filing a lawsuit involving a commercial dispute, the plaintiff must exhaust the remedy of pre-litigation mediation. However, Section 12A(1) of the Act also provides an exception that allows parties to bypass the mediation process and directly approach the Courts in cases where urgent interim relief is requested.
A plain reading of the provision makes it clear that a commercial suit which does not contemplate an urgent interim relief ought not to be instituted before a Court unless the party exhausts the remedy of pre-institution mediation. The Courts, however, time and again have taken a varied view regarding the mandatory requirement of pre-institution mediation under Section 12A vis-à-vis urgent interim relief claimed by the party.
Due to the judicial divergence in the subject matter, the Supreme Court of India, in the Patil Automation Private Limited & Ors. versus Rakheja Engineers Private Limited case, while admitting that there was no urgent relief contemplated in the case in hand, deliberated on the compliance requirement of Section 12A. The Apex Court emphasized the need for expedited resolution of commercial disputes and concluded that pre-suit mediation is necessary in such cases, except in cases when urgent interim reliefs are involved. The Hon’ble Court while declaring the mandatory nature of Section 12-A of the Act held that “any suit instituted violating the mandate of Section 12-A must be visited with rejection of the plaint under Order 7 Rule 11 of CPC”.
Following the Patil Automation case, the Hon’ble High Court of Delhi, in the case of Bolt Technology versus Ujoy Technology case, discussed the two classes of commercial disputes contemplated under Section 12A of the Act. The Court accentuated that Section 12A segregates commercial disputes depending on their urgency. Hon’ble Justice Prathiba M. Singh also highlighted the significance of interim injunctions in Intellectual Property matters, considering the interests of consumers and the prevention of confusion and fraudulent practices in the marketplace. Hence, the urgent interim relief prayed in such cases must be looked at in the light of the facts and circumstances of the case and exemption from pre-institution mediation proceedings may be granted. The division bench of the Hon’ble Delhi High Court in the Chandra Kishore Chaurasia case has observed that “there is no ambiguity that a suit, which contemplates urgent interim relief, is excluded from the rigour of Section 12A(1) of the Commercial Courts Act, 2015. Thus, a plaintiff seeking to institute a suit involving urgent interim relief(s) is not required to exhaust the remedy of pre-institution mediation.”
While, in the Micro Labs Limited v. A. Santhosh case, the Madras High Court rejected the Micro Labs plaint in view of the fact that there was a considerable delay in filing the suit after sending a cease and desist notice to the opposite party and therefore an urgent interim relief was not contendable.The controversy to be addressed in the matter is two-fold. First, the meaning of "urgent interim relief" and its impact on the requirement of pre-litigation mediation under Section 12A of the Act. Second, whether the plaintiff has the sole authority to determine the “urgent interim relief” so contemplated, or alternatively, the judge may need to step in and assess the facts and circumstances before making a decision.
While the Apex Court has completely settled the legal position in this regard affirming the obligatory nature of pre-litigation mediation when urgent interim relief is not involved, the Courts handling commercial disputes face the crucial question of determining what qualifies as ‘urgent’ interim relief. The High Courts of Delhi in various instances have followed the view taken in Bolt Technology’s case, as the relief of interim injunction, including at the ex-parte stage and ad-interim stage, is extremely important. Intellectual property cases encompass a broad range of industries, including but not limited to pharmaceuticals, fast-moving consumer goods (FMCG), food products, financial services, technology, and creative works such as books, films, and music. The rights of the plaintiff are affected on a daily basis as there is continuous manufacturing, selling, and offering of services or goods to the consumers by the wrongdoer. The ambit of urgent interim relief that may need to be granted is varied and contingent upon the specific circumstances of each case. Courts often grant such reliefs not only to safeguard statutory and common law rights but also to prevent confusion, deception, unfair practices, and fraudulent activities in the marketplace.
With regard to whether the plaintiff possesses the exclusive authority to determine the necessity for urgent relief, it is well settled that the use of the words "contemplate any urgent interim relief" as used in Section 12(1) of the Act is used to qualify the category of a suit. This is determined solely by the frame of the plaint and the relief sought. The plaintiff is the sole determinant of the pleadings in the suit and the relief sought. Thus, in commercial disputes involving Intellectual Property, the Courts have to be diligent while granting and refusing the urgent reliefs in order to prevent any adverse ramifications.
