PRE-INSTITUTION MEDIATION MANDATORY UNDER COMMERCIAL COURTS ACT - PLEA BEFORE THE TOP COURT

The Supreme Court bench of Justices KM Joseph and PS Narasimha was hearing an appeal against an order passed by the High Court of Punjab & Haryana. The plea questioned whether the pre-institution mediation as provided u/s 12A of the Commercial Courts Act is mandatory or directory in nature. 

The P&H High Court held in the September 9 order that pre-institution mediation under the Act is not mandatory before the institution of the suit.

The appellants, a manufacturing company, argued that the HC ignored the fact that section 12A specifies that when a suit contemplates any necessary interim relief under the Act, it shall not be instituted in the court until the plaintiff exhausts the pre-institution mediation remedy.

The pleas further argued that by ignoring the pre-institution mediation remedy, "the entire Commercial Courts Act will stand defeated and amount to becoming toothless and ineffective."

Author: Papiha Ghoshal