Shardul Amarchand Mangaldas represented High Point Supply Company LLC before the Hon’ble Bombay High Court in an appeal arising from the rejection of a commercial suit under Order VII Rule 11 of the Code of Civil Procedure, 1908 on the ground of non-compliance with the mandatory pre-institution mediation requirement under Section 12-A of the Commercial Courts Act, 2015.
High Point had instituted a commercial suit against Agati Healthcare Pvt. Ltd. alleging breach of an Exclusive Distribution Agreement granting it exclusive distribution rights in North America for the sale of colostrum powder. High Point contended that Agati had breached the exclusivity arrangement by supplying the product directly to a third party, failed to fulfil purchase orders and refund advances received, and wrongfully terminated the agreement. In view of the alleged continuing breaches during the subsistence of the agreement, High Point sought urgent interim reliefs, including specific performance, injunctions restraining further breaches, and disclosure of sales made in violation of the exclusivity covenant.
The Belapur District Court rejected the plaint on the basis that the suit did not genuinely contemplate urgent interim relief and was therefore barred for want of compliance with the mandatory pre-institution mediation requirement under Section 12-A of the Commercial Courts Act.
By its judgment, the Hon’ble Bombay High Court set aside the order rejecting the plaint, restored the commercial suit and directed the trial court to consider High Point’s interim application on its merits. The Court held that the question of whether a suit contemplates urgent interim relief must be determined by a holistic reading of the plaint and supporting documents, without examining the merits of the interim relief sought. It observed that the existence of claims for damages or delay in approaching the court does not, by itself, negate a genuine case of urgency where continuing contractual breaches threaten to defeat the plaintiff’s contractual rights.
The judgment provides important guidance on the interpretation of the exception to mandatory pre-institution mediation under Section 12-A of the Commercial Courts Act. It clarifies that while the exception must be construed strictly, courts must assess urgency on the basis of the overall factual matrix rather than a narrow or merits-based inquiry. The decision is expected to serve as an important precedent on the circumstances in which commercial litigants may seek urgent interim relief without first undergoing pre-institution mediation.
The SAM team representing High Point Supply Company LLC comprised Simil Purohit, Senior Counsel along with Partners Ameya Gokhale and Kriti Kalyani, Senior Associate Chintan Gandhi and Associate Abhishek Mookherjee.