Sending Legal Notice Or Mediation Request Doesn't Satisfy Section 12A Of Commercial Courts Act Mandating Mediation: Delhi High Court

A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela held that non-response to such mediation request cannot treated as a 'non-starter' and thus the mediation requirement of Section 12A cannot be dispensed with.

The facts of the case are pursuant to a commercial arrangement, the petitioner agreed to supply goods to respondent no. 2. As per the petitioner, respondent no. 2 did not make payment despite the delivery of goods.The petitioner sent a legal notice to respondent no. 2 to pay the outstanding dues, however, no response was received. The petitioner then sent a mediation request through its advocate to respondent no. 2. As no response was received to the mediation request as well, the petitioner filed a commercial suit.

However, the Registry of the Commercial Court rejected the petitioner's plaint on the ground that in the absence of a Non‑Starter Report or Certificate of Non‑Settlement from the mediation authority, the procedural requirements under Section 12A of the Commercial Courts Act were not satisfied.

The petitioner thus filed the present petition for quashing the Registry's order and further to consider its mediation request as a compliance of Section 12A of Commercial Courts Act.

The petitioner contended that the non-response to the mediation request renders the process a 'non-starter' and thus it ought to be treated as compliance of the procedural requirements under the provisions of Section 12A of the Commercial Courts Act. The petitioner argued that it made a bona fide attempt to resolve the matter by sending a legal notice as well as a mediation request to respondent no. 2. It contended that mandating 'repetitive formalities' by the Registry after bona fide mediation efforts contravened the objective of speedy dispute resolution under the Act.

The Court did not agree with the petitioner's contention and was of the view that sending a legal notice or a mediation request cannot be considered as a part of the statutory regime.

The Court noted that Section 12A does not even remotely indicate that a mediation request would be considered as a compliance of the provision. It stated, “The act of issuing legal notice by a litigant may be exercised even to call the other party to mediate, if advised, but that can hardly be termed as having any statutory foundation. The said act would be purely in the realm of non statutory regime. There is nothing in Section 12A of the Act to even remotely suggest any such method or manner of calling the other party for mediation. It is settled that what is not mentioned cannot be deemed and the Courts can supply “casus omissus” only in very rare and exceptional circumstances. Surely, the present case is not such and thus, the said submission does not commend itself to us.”

The Court further observed that the legislative intent of Section 12A is not to replace the mediation process by issuing a legal notice calling for mediation. It remarked, “The plain reading does not suggest any such mode or method of initiating mediation proceedings. Infact, the intent appears to be to initiate the mediation process within the “statutory framework” so as to ensure that the commercial litigation is not protracted or prolonged unnecessarily. The legal framework also envisages the mediation to commence and culminate within a stipulated period, thus indicating the overarching control over the mediation process by the institution.”

It referred sub-section (5) of Section 12A, which states that the 'settlement' arrived by the parties through mediation would have the same status and effect of an 'award' as contemplated under the Arbitration and Conciliation Act. Referring to this provision, the Court opined that as the settlement is legally enforceable, the provision cannot be supplanted by sending a notice of mediation to the party.

In view of the above, the Court upheld the impugned order and dismissed the petition.

Case title: Renewflex Recycling vs. Facilitation Centre Rohini Courts & Ors

Citation: 2025 LiveLaw (Del) 212