Commercial Courts Act | Pre-Institution Mediation Is A Pre-Suit Legal Drill, Cannot Be Post Suit Exercise: Madras High Court

Justice M Sundar stressed that Section 12A is in the nature of a jurisdictional fact. This means that a party cannot plead that the pre-institution mediation will be carried out after the institution of the suit. Thus, any such attempt by the parties to dispense with pre-institution mediation is impermissible.

Section 12A is in the nature of a jurisdictional fact. A jurisdictional fact has to precede the suit and it cannot be post suit…This Commercial Division has also held that Section 12A having been held to be mandatory by Hon'ble Supreme Court, any such manoeuvre qua the rigour of Section 12A of CCA either by way of dispensing with or post suit exercise when the law specifically talks about a pre-suit legal drill is impermissible.

The plaintiffs had claimed that the respondents were carrying on the business in the name of “Karaikudi Achi Mess” which was in infringement of the plaintiff’s trademarks. On coming to know of the infringement, the plaintiffs conducted an investigation and found out that the defendants did not exist at the given address nor there were any restaurants being run in the address.

The plaintiffs had directly filed the plaints without issuing any pre-suit notice or a cease and desist notice under Section 12A of the CCA. They were granted an interim stay without reference to Section 12A of the CCA.

The plaintiff contended that there was a dilution of marks and that the defendant was selling inferior quality food which can cause injury to the health of unwary customers. Citing interim orders passed by the court in other cases, the plaintiff sought relief of injunction.

The court, however, rejected the suit as it observed that the plaintiff had failed to fulfil the necessary criteria for urgent interim relief. The court added that even after coming to know of the infringement, the plaintiff had filed the suit only after a period of one and a half months and thus could not urge urgency. The plaintiffs had also failed to show that there was an actual or apprehended wrong or legal injury which was so imminent that the plaintiff could not go ahead with a pre-institution mediation.

Further, the plaintiffs had a prayer to direct post-filing of suit mediation under Section 12A of CCA. The court noted that this would point towards a possibility of mediation as an option. The court held that the plaintiffs could not say that they will go for mediation pending the suit at one part and also contend that they did not resort to pre-institution mediation on the other part.

Thus, the court rejected the plaint with liberty to the parties to approach the court again if the exercise of pre-institution mediation does not bring in any results.

Case Title: Mr. AD Padmasingh Issac and others v. Karaikudi Achi Mess and another

Citation: 2023 LiveLaw (Mad) 25

Case No: C.S. (Comm.Div.) No. 192 of 2022 etc (batch)