When can businesses skip pre-institution mediation in IP infringement cases under Commercial Courts Act?

Case Overview

Court: Supreme Court of India
Coram: Justice Sanjay Kumar and Justice Alok Aradhe
Date of Judgment: 27 October 2025
Case: Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd. & Anr. (SLP (C) No. 2753 of 2025)

1. Factual Background and Procedural History

The appeal arose from a judgment of the High Court of Himachal Pradesh dated 13 November 2024, which affirmed an earlier order of a Single Judge dated 28 August 2024 rejecting the plaint for non-compliance with Section 12A of the Commercial Courts Act, 2015.

Factual Matrix:

• The appellant, a Danish company, manufactures industrial fans marketed under the brand “Novenco ZerAx”.

• A dealership agreement was executed with the first respondent in 2017 for marketing in India.

• The appellant alleged that the respondent, in breach of the agreement, began manufacturing and selling deceptively similar products through another entity.

• The appellant issued communications and a cease-and-desist notice between 2022 and 2023.

• An expert inspection in December 2023 allegedly confirmed infringement.

• A commercial suit was filed on 4 June 2024 alleging infringement of patent and design rights, along with applications for interim injunction and exemption from pre-institution mediation under Section 12A.

Procedural History:

• Single Judge (28 August 2024): Rejected the plaint under Order VII Rule 11 CPC for non-compliance with Section 12A, holding absence of urgency.

• Division Bench (13 November 2024): Affirmed the rejection, emphasizing delay and lack of urgency.

• Supreme Court: Granted leave and examined whether the suit “contemplated urgent interim relief” within Section 12A.

2. Identification of Legal Issues

The Supreme Court addressed the following issues:

• What is the meaning of the expression “contemplates any urgent interim relief” under Section 12A of the Commercial Courts Act, 2015?

• Whether a suit involving continuing intellectual property infringement can be said to involve urgency despite delay in filing.

• Whether the High Court correctly applied the legal test for determining urgency while rejecting the plaint.

3. Arguments of the Parties

Appellant’s Submissions

• The High Court failed to apply the correct legal test for determining urgency.

• Urgent interim relief was genuinely sought and not as a device to bypass mediation.

• The plaint and accompanying documents must be read holistically to assess urgency.

• Mere delay does not negate urgency in cases of continuing infringement.

• Reliance was placed on:

• Midas Hygiene Industries Private Ltd. v. Sudhir Bhatia

• Yamini Manohar v. T.K.D. Keerthi

Respondents’ Submissions

• The plaint did not demonstrate urgency and contained no specific averments to that effect.

• There was substantial delay (over a year from notice and months from expert report).

• Filing an interim relief application does not automatically establish urgency.

• Non-compliance with Section 12A was fatal, justifying rejection of the plaint.

4. Court’s Analysis and Reasoning

(a) Statutory Framework and Purpose

The Court examined Section 12A of the Commercial Courts Act, 2015, noting that:

• Pre-institution mediation is mandatory unless the suit contemplates urgent interim relief.

• The provision aims to ensure early resolution of commercial disputes and reduce court burden.

(b) Legal Test for Urgency

Drawing from prior precedents, including:

• Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd.

• Yamini Manohar v. T.K.D. Keerthi

• Dhanbad Fuels (P) Ltd. v. Union of India

the Court distilled the following principles:

• Courts must assess urgency from the plaintiff’s standpoint, based on pleadings and documents.

• The inquiry is limited to whether urgent relief is plausibly contemplated, not whether it will ultimately succeed.

• A mere formal prayer to bypass mediation should be disregarded.

(c) Nature of Intellectual Property Infringement

The Court emphasized that:

• Intellectual property infringement is often continuous in nature, with each infringing act constituting a fresh cause of action.

• Ongoing infringement causes irreparable harm to goodwill, reputation, and proprietary rights.

(d) Delay vs. Continuing Harm

A central holding of the Court:

• Mere delay does not negate urgency if the infringement is ongoing.

• The focus must be on the persistence of harm, not the timing of the suit.

(e) Public Interest Considerations

The Court expressly recognized that IP disputes involve:

• Consumer protection and prevention of deception in the marketplace.

• These factors impart immediacy and urgency to the relief sought.

(f) Error by the High Court

The Supreme Court found that:

• The High Court improperly assessed merits of the case instead of urgency.

• It wrongly treated delay as determinative of lack of urgency.

• It failed to appreciate the continuing nature of infringement.

5. Final Conclusion and Holding

The Supreme Court:

• Allowed the appeal.

• Set aside the judgments of the Single Judge and Division Bench.

• Restored the commercial suit to the High Court for adjudication on merits.

Ratio / Core Legal Principle:

• In cases of continuing intellectual property infringement, urgency must be assessed based on ongoing harm and public interest, not merely delay.

• Section 12A does not require mechanical insistence on mediation where urgent interim relief is plausibly contemplated.
• Courts must assess urgency from the plaintiff’s standpoint based on pleadings, without examining the merits of the relief sought.