Calcutta High Court Upholds Dispensation of Pre-litigation Mediation for Berger Paints

The Court validates urgent interim relief claims, dismissing GPHP Holdings Pvt Ltd's application for revocation under Section 12A of the Commercial Courts Act, 2015.

In a significant judgment, the Calcutta High Court has upheld the dispensation of pre-litigation mediation under Section 12A of the Commercial Courts Act, 2015, for Berger Paints India Limited in its legal battle against GPHP Holdings Pvt Ltd. The judgment was delivered by Justice Aniruddha Roy, addressing the complexities surrounding urgent interim relief in commercial disputes.

The legal dispute arose from an unpaid consideration claim by Berger Paints, concerning goods sold and delivered to GPHP Holdings. Berger Paints sought urgent interim relief, prompting a request to bypass the mandatory pre-litigation mediation process. This request was initially granted by a Co-ordinate Bench, allowing the suit to proceed without mediation. However, GPHP Holdings filed an application challenging this dispensation, citing a lack of immediate urgency and arguing that the cause of action had arisen much earlier.

Justice Roy meticulously examined the averments in the plaint, focusing on meetings and communications between the parties that highlighted the financial difficulties faced by GPHP Holdings. The defendant's expressed intention to sell its Faridabad plant to alleviate its financial crisis played a pivotal role in the Court's decision. Justice Roy emphasized that the contemplation of urgent interim relief by the plaintiff should be determined solely based on the plaint's averments and the relief sought.

The judgment referenced the Supreme Court's interpretation in Yamini Manohar v. T.K.D. Keerthi, stressing that the plaintiff's pleadings and relief sought are paramount in determining the need for urgent interim relief. The Court also cited the Division Bench's ruling in Shristi Infrastructure Development Corporation Limited v. Sarga Hotel Private Limited, reinforcing the principle that the assertion of urgent relief should not be interfered with unless shown to be palpably erroneous or mala fide.

In dismissing the application by GPHP Holdings, Justice Roy underscored the lack of merit in the challenge and affirmed the validity of the initial order granting dispensation of mediation. The judgment clarifies the interpretation of Section 12A, establishing a precedent for future commercial litigation where urgent interim relief is sought.

This ruling is expected to have a profound impact on how commercial disputes are approached in India, particularly concerning the mandatory mediation process under the Commercial Courts Act, 2015.

Bottom Line:

Commercial Courts Act, 2015 - Section 12A - Dispensation of pre-litigation mediation - Contemplation of urgent interim relief by the plaintiff qualifies for dispensation of mandatory pre-litigation mediation procedure.

Statutory provision(s): Commercial Courts Act, 2015 - Section 12A

Berger Paints India Limited v. GPHP Holdings Pvt Ltd, (Calcutta) : Law Finder Doc Id # 2807081