NLIU LAW REVIEW

Determining Urgency in Compulsory Prelitigation Commercial Mediation

Aravind Sundar

Section 12A of the Commercial Courts Act mandates litigants to compulsorily attempt to settle their disputes through mediation, prior to instituting a suit and litigating the dispute. However, it provides an exception to this rule and allows suits that “contemplate urgent interim relief” to bypass pre-litigation mediation. This article identifies and critically analyses three conflicting approaches given by various High Courts on how this exception is to be interpreted and applied, and how a Court must determine whether a suit qualifies for this exception. It reconciles the conflicts on how urgency is determined, keeping in mind the landmark judgement of Patil Automation v. Rakheja Engineers, in which the Supreme Court held that the requirement of prelitigation mediation in Section 12A is mandatory and not optional. This article underscores the need for courts to meticulously adhere to Section 12A and uphold its intent of reducing judicial workload and docket explosion by directing suits to undergo mediation. It advocates for a rigorous assessment of urgency claims and argues that plaintiffs must be burdened to prove that their suit falls within the exception of Section 12A. This rigorous assessment is aimed at ensuring that litigants do not misuse its exception and render the pre-litigation mandate to be discretionary, which would defy the ruling of Patil Automation and the intent of Section 12A. Furthermore, it delves into some criticisms surrounding the compulsory pre-litigation mediation mechanism propounded by Section 12A and addresses concerns about the existing inadequacies in the Indian commercial mediation infrastructure, and the supposedly coercive nature of a mandatory mediation mechanism.