The Calcutta High Court has formally dismissed an appeal filed by the conglomerate ITC Limited, effectively upholding a trial court’s refusal to grant an exemption from the mandatory pre-litigation mediation process mandated by the Commercial Courts Act, 2015. The ruling, delivered by a Division Bench consisting of Justice Tapabrata Chakraborty and Justice Partha Pratim Roy on October 12, 2026, reinforces the high procedural threshold required for litigants seeking to circumvent mediation under Section 12A of the Act.

The legal impasse stems from a trademark and copyright infringement suit initiated by ITC against SMM Tobacco Private Limited, a Bihar-based manufacturer, and several other associated parties. ITC had alleged that the respondents were involved in the illicit manufacture and distribution of counterfeit cigarettes, a claim it supported with reports of search and seizure operations conducted in July 2026. Despite filing an initial FIR and securing evidence through police action, ITC had failed to convince the Single Judge in September 2026 that the circumstances of its civil suit warranted an immediate waiver of the pre-litigation mediation requirement.

A High Bar for Procedural Exemption

The central issue before the Division Bench was whether the appellant had adequately demonstrated the existence of "urgent interim relief" sufficient to justify skipping the mediation process. Under the framework established by the Commercial Courts Act, mediation is a mandatory precursor to filing a commercial suit unless the plaintiff can prove that the situation is so time-sensitive that any delay would result in an irreparable loss.

The Bench meticulously reviewed the plaint, finding that ITC’s arguments lacked the necessary urgency to meet this statutory benchmark. While the company maintained that the illicit manufacturing activities posed a continuing threat to its intellectual property rights and market share, the Court observed that the mere existence of a cause of action does not automatically trigger an exemption.

As the Bench noted in its judgment: “Not merely interim relief but only an 'urgent interim relief' qualifies a suit to wriggle out of the rigours of Section 12A.” The Court emphasized that a plaintiff seeking to bypass the established procedural steps must satisfy the court that the “apprehended wrong or injury is imminent and that exhausting the remedy of pre litigation mediation without any intervention in the meantime can lead to an irreversible situation.”

The Question of Timely Action

A pivotal aspect of the Division Bench’s decision was the timeline of the events preceding the suit. ITC had argued that it received intelligence regarding the counterfeit operations in July 2026, leading it to lodge a criminal complaint and coordinate with law enforcement. The company contended that its active participation in criminal proceedings should not prejudice its right to initiate civil litigation immediately without mediation.

However, the Court remained unconvinced by the explanation regarding the delay in filing the civil suit. The Bench observed that while criminal and civil actions are distinct and can indeed run parallel, ITC provided no substantive reason for failing to bring the civil action at the time the right to sue first accrued. By delaying the civil filing, the appellant inadvertently weakened its own argument for "urgency."

The Court further clarified the distinction between a " continuing cause of action " and the specific requirements of Section 12A, noting that "seeking leave under Section 12A and establishing a ' continuing cause of action ' stand on different footings and serve distinct purposes and carry distinct legal consequences." Essentially, the Court determined that ITC had effectively neutralized its claim of urgency by not moving the civil court at the earliest possible opportunity following the detection of the alleged infringement.

Implications for Intellectual Property Litigants

For corporate entities and intellectual property owners, this judgment serves as a cautionary tale regarding the strict application of the Commercial Courts Act. The judiciary is signaling a firm commitment to the mediation-first policy, making it clear that courts will not act as a bypass for pre-litigation requirements simply because a plaintiff identifies a potential infringement. The ruling clarifies that the threshold for "urgency" requires a showing of imminent danger that cannot be mitigated through mediation, and any significant gap between learning of the harm and filing the suit will likely be scrutinized by the bench.

The Division Bench found no error in the earlier findings of the Single Judge, concluding that the original judgment had appropriately assessed the factual merits and the necessity for mediation. By refusing to interfere with the lower court's decision, the High Court has effectively mandated that ITC must either exhaust the mediation process as prescribed by law or demonstrate a significantly higher level of immediacy should it choose to re-file or persist with its legal strategy.

With the appeal now dismissed and the applications connected to the case rejected, the litigation process has reached a procedural standstill. The outcome leaves ITC with the clear task of adhering to the statutory requirements of the Commercial Courts Act if it wishes to proceed with its claim against the respondents. This development highlights a broader trend where courts are increasingly prioritizing the mediation mandate as a tool to reduce the burden of commercial disputes, leaving little room for litigants to evade the process without demonstrating compelling and time-critical necessity. Moving forward, plaintiffs must ensure that their filings meticulously document the exact nature and urgency of the threats they face to navigate these procedural hurdles successfully.