Unlike arbitration or the adversarial system of litigation before courts of law wherein a dispute is adjudicated on merits, mediation is something which is not in essence propelled by deciding the merits of a claim, but works when the mediator listens, suggests solutions which can be explored and resolves the dispute balancing equities. Mediation has been a seasoned practice in India since many decades - the Local (Panchayati) Administrative System reflects the said narrative with its motto ‘Not to Adjudicate, But to Listen & Resolve!’. In fact, in our experience, mediation/s instituted post filing of a lawsuit relating to trademark/copyright infringement matters are resolved very quickly before the mediator and, if the final decree is then passed by the court within a year of filing of the law suit, court fee refund is also granted to the plaintiff. 

This article analyses the proposed impact of Section 5 of the recently enacted Mediation Act, 2023 (the Act) along with existing Section 12-A of the Commercial Courts Act, 2015 apropos claims of trademark infringement/ passing off. It also analyses the recent orders of the Indian Supreme Court and Delhi High Court on pre-suit mediation. 

The Act (as on date, it is not in force and awaits government notification[1]) intends to promote and facilitate mediation, especially institutional mediation for resolution of disputes; enforce mediated settlement agreements; provide for online mediation; establish a Mediation Council and a body for registration of mediators; and encourage community mediation. 

Section 5(1) of the Act proposes that irrespective of whether any mediation agreement exists or not, before filing a law suit, the parties may voluntarily and with mutual consent, take steps to initiate pre-litigation mediation. In the event, the mediation is unsuccessful, then such a report would have to be placed before the Court. 

Be that as it may, the proviso to Section 5(1) of the Mediation Act of 2023 conspicuously stipulates that pre-litigation in matters of commercial disputes shall be in accordance with Section 12-A of the Commercial Courts Act, 2015. The said Act expressly defines ‘Pre-Litigation Mediation’[2] as a process of undertaking mediation for settlement of disputes prior to the institution of a claim before a Court of law. Though the said definition does not form a part of the Commercial Courts Act of 2015, however, Section 12-A envisages ‘pre-institution mediation’ as a mandate, unless ‘urgent interim reliefs’ are prayed for. ‘Urgency’ being a subjective term, is not expressly defined in any of the clauses of the procedural statutes, and, is usually weighed as per the factual matrix of the dispute. 

The IP Division of the Delhi High Court has been at the forefront in protecting proprietary rights of IP owners and has, in a multitude of cases, granted ‘urgent interim reliefs’ as prayed for at the ex-parte stage itself and also allowed exemption applications from instituting such pre-institution mediations by following the dictum laid down by a Division Bench of the Delhi High Court in Chandra Kishore Chaurasia v. R.A. Perfumery Works Pvt. Ltd.[3]

Having said that, the October 2023 decision of the Indian Supreme Court in Yamini Manohar v. T.K.D Keerthi[4] after analyzing Chandra Kishore Chaurasia (supra) has gone a step further and opined that when a claim praying for ‘urgent interim reliefs’ is instituted under the Commercial Courts Act, 2015, the adjudicating Court should examine holistically the nature and subject matter of the claim of urgent reliefs, the cause of action and the prayers sought for. It further gives a forewarning that such urgent interim reliefs being sought for must have legs to stand on and should not be baseless pleadings just to wriggle out of the statutory mandate of Section 12-A of the Commercial Courts Act, 2015. This decision further strengthens the will of both judiciary and legislature to push disputes including IP disputes for pre-suit mediation which do not come under the ambit of ‘urgent interim reliefs’.

This recent order of the Supreme Court of India clarifying the position of ‘contemplation of urgent interim reliefs’ vis-à-vis a holistic view of the pleadings, documents and factual matrix of the claim could have a notable impact on certain IP disputes wherein delay and laches are involved. More importantly, claims having no urgent reliefs would certainly not be instituted unless the IP owner exhausts the remedy of pre-institution mediation. It is well-known in the IP fraternity that almost every commercial intellectual property dispute does contemplate and pray for ‘urgent interim reliefs’ such as infringement of proprietary rights, ex- parte ad interim injunctions, appointment of Court Commissioner/s, etc. for carrying out civil raids. IP owners, usually in matters of trademark infringement/ counterfeiting,  claim to execute search and seizure operations at the premises of imitators hoarding objectional material and, to preserve such evidence, however, should a right holder contemplating urgent reliefs go for a pre-litigation mediation prior to instituting the claim in court thereby giving imitators notice of such objectionable use (and an impending lawsuit) beforehand, the whole exercise of executing such Court Commissions/ Civil Raids would become infructuous. In view thereof, most IP law suits carry prayers for urgent interim reliefs to protect the interests of the right holder.

More recently, subsequent to a defendant taking a preliminary objection vis-à-vis maintainability of the respective claim without exhausting the channel of pre-institution mediation predicated on Section 12-A of the Commercial Courts Act, 2015, the Delhi High Court in Dr. Reddys Laboratories Limited v. Smart Laboratories Pvt. Ltd.[5] discussed in extenso the scope and impact of the Yamini Manohar (supra) order of the Supreme Court. In the said decision, the Court acknowledged the position that ‘commercial courts cannot presume that every IP suit necessarily and ipso facto¸requires urgent interim relief’ but also points out that in IP claims wherein meaningful averments are made (and not artificial ones!) with respect to infringement, dishonesty, damage/loss to goodwill/reputation, dilution, etc., the Court must defer to the perception of the claimant, that it needs urgent relief and requirement of pre-institution mediation is not incumbent. 

Moving forward, as and when the Central Government appoints/notifies the Act to come into force and in light of the order of the Supreme Court in Yamini Manohar (supra) it would be interesting to see if Courts in India would appoint a liberal or narrow approach while deciding applications seeking exemption from pre-litigation mediation. 

 


[1] Section 1 (3)

[2] Section 2(u)

[3] 2022 SCC OnLine Del 2529

[4] 2023 SCC OnLine SC 1382

[5] 2023 SCC OnLine Del 7276