2026 Supreme(Online)(Bom) 3681

HIGH COURT OF BOMBAY
Gauri Godse, J
Phoenix Arc Private Limited – Appellant
Versus
Future Brands Limited – Respondent
Commercial Suit No. 124 Of 2025 | Interim Application (L) No. 20363 Of 2025

The mandate for pre-institution mediation in commercial disputes does not preclude a court from granting urgent interim relief. If the plaint demonstrates authentic exigency to prevent irreparable harm, the suit remains maintainable even if the mediation process is incomplete or lacks a formal status report.

Headnote:(A) Commercial Courts Act, 2015 - Section 12-A - Code of Civil Procedure, 1908 - Order VII Rule 11 - Pre-institution mediation - Rejection of plaint - Urgent interim relief - Scope and maintainability.

(B) The requirement for pre-institution mediation is mandatory; however, it is not an absolute bar that leaves a claimant without legal recourse. If the plaint, read as a whole, demonstrates an urgent need for judicial intervention to prevent irreparable prejudice to the claimant’s rights or security interests, the court is authorized to entertain the suit even without the production of a formal non-starter report. (Paras 25, 26, 36)

(C) Procedural protocols are intended to facilitate the resolution of disputes and should not be invoked as technical tools to frustrate substantive justice. The court must evaluate the exigency of the situation from the perspective of the claimant to determine if the plea for urgency is genuine or a mere artifice to evade statutory requirements. (Paras 35, 39, 41)

Facts of the case:
A financial institution filed a commercial suit seeking mandatory injunctions and damages, alleging that the opposing parties failed to perform agreed-upon equity infusions and violated terms governing the security interests of the claimant. The defendants challenged the maintainability of the suit, arguing that the claimant failed to comply with the mandatory pre-institution mediation process and suppressed facts regarding the status of the mediation proceedings, thereby warranting dismissal under the code of civil procedure.

Findings of Court:
The court determined that the claimant had initiated the mediation process according to the applicable rules but faced an imminent expiry of vital contractual agreements. It found that the claim of urgency was supported by the threat of losing substantial financial security interests. Consequently, it was concluded that the absence of a formal status report from the mediation authority did not render the suit maintainable given the genuine, time-sensitive nature of the relief sought.

Issues: Whether the failure to conclude the mediation process and obtain a non-starter report at the time of filing justifies the rejection of the plaint, and whether the suit demonstrates the requisite urgency as an exception to the mandatory mediation rule.

Ratio Decidendi: The court affirmed that while mediation is a legislative mandate to decongest courts, it does not supersede the fundamental right to seek urgent protection. Allowing procedural formality to override the risk of irreparable commercial loss would defeat the objective of expeditious justice. Unless the plea for urgency is clearly illusory, the court must balance the compliance with procedural mandates against the necessity of preserving the subject matter of the dispute.

Result: Preliminary objections rejected.