Commercial Courts Act - Pre-litigation mediation is mandatory unless a case of "urgent interim relief"
Rohit W. Joshi J. emphasizes the significance of Section 12-A of the Commercial Courts Act, 2015, mandating pre-litigation mediation unless urgent interim relief is convincingly demonstrated.
In a significant judgment delivered by the Bombay High Court's Nagpur Bench, Justice Rohit W. Joshi underscored the mandatory nature of pre-litigation mediation under Section 12-A of the Commercial Courts Act, 2015. The court has quashed the plaint filed by M/s. Nithin Sai Constructions against M/s. Indo Engineering Project Corporation due to the failure to undergo the requisite pre-litigation mediation process.
The case, originating from Commercial Suit No. 10 of 2024, involved a dispute over the recovery of an amount totaling Rs.49,11,44,578/-. The plaintiff had filed the suit without undergoing pre-litigation mediation, claiming urgent interim relief due to an apprehension that the defendant might alienate properties, thereby frustrating the potential decree. The learned District Judge-09, Nagpur, had initially rejected the defendant's application for rejection of plaint, accepting the plaintiff's plea for urgent interim relief.
However, upon revisional scrutiny, Justice Joshi found that the pleadings did not convincingly demonstrate the necessity for urgent interim relief. The court highlighted that Section 12-A of the Act, which is couched in negative terms, mandates pre-litigation mediation unless urgent interim relief is demonstrably necessary. The plaintiff's general apprehensions and routine pleadings were deemed insufficient to bypass this requirement. Consequently, the High Court exercised its revisional jurisdiction under Section 115 of the Code of Civil Procedure to correct the jurisdictional error made by the trial court.
The judgment reaffirms the Supreme Court's stance in previous cases, emphasizing the mandatory nature of pre-litigation mediation and the stringent criteria for urgent interim relief. The court ordered the rejection of the plaint in Commercial Suit No. 10 of 2024, setting aside the trial court's order dated 01.04.2025. An interim order passed on 10.06.2025 will continue to operate for a period of eight weeks, providing temporary relief to the parties involved.
Legal experts view this judgment as a critical reinforcement of pre-litigation mediation procedures, urging litigants to adhere strictly to statutory requirements before instituting commercial suits. The decision serves as a reminder that procedural compliance is paramount in commercial litigation to ensure judicial efficiency and effective dispute resolution.
Bottom Line:
Pre-litigation mediation under Section 12-A of the Commercial Courts Act, 2015, is mandatory unless a case of "urgent interim relief" is made out. General apprehensions or routine pleadings in the plaint or application for interim relief do not suffice to waive this mandatory requirement.
Statutory provision(s): Commercial Courts Act, 2015 Section 12-A, Code of Civil Procedure, 1908 Section 115, Order VII, Rule 11
