In Brief
The Supreme Court held that Section 12A of the Commercial Courts Act, 2015, mandating pre-institution mediation in commercial disputes (unless urgent interim relief is sought), is mandatory from its inception. For suits filed after 20 August 2022, non-compliance results in rejection under the CPC. However, for suits filed earlier without compliance, courts should not reject them outright but instead keep them in abeyance and direct time-bound mediation. The Court clarified that "urgent interim relief" is judged by whether the suit contemplates such relief at inception, not whether it is ultimately granted. The prospective application of rejection consequences balances the mandatory nature of mediation with practical justice concerns and prevents unfair forfeiture of court fees.
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