The court emphasizes the necessity of complying with Section 12A of the Commercial Courts Act, 2015, for counter-claims, reaffirming its mandatory nature unless prior mediation has addressed the disputes.
In a landmark judgment, the Delhi High Court has reinforced the mandatory requirement for pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, for counter-claims filed in commercial suits. The division bench comprising Justices Anil Kshetarpal and Amit Mahajan delivered the verdict on July 1, 2026, in the case of Vijay v. Havells India Limited and Others.
The case centered around a counter-claim filed by the appellant, Vijay, against Havells India Limited. The appellant challenged the district court's decision to reject his counter-claim due to non-compliance with the mediation requirement outlined in Section 12A of the Commercial Courts Act. The appellant argued that the mediation requirement should not apply to counter-claims, contending that such claims are inherently part of the ongoing suit and do not necessitate separate mediation.
The court, however, held that Section 12A's requirement for pre-institution mediation is unequivocally mandatory for all commercial disputes, including counter-claims, unless the disputes have already been subjected to mediation or addressed during previous proceedings. The judges highlighted that the legislative intent behind Section 12A is to afford parties a genuine opportunity to resolve disputes amicably before resorting to litigation.
In its detailed analysis, the court clarified that treating counter-claims as exempt from mediation would undermine the legislative objective of expeditious and fair resolution of commercial disputes. It emphasized that the statutory mandate must be interpreted purposively, ensuring that counter-claims are not automatically excluded from mediation, as this would dilute the legislative intent.
The court's decision also addressed concerns about the potential delay in filing counter-claims due to mediation requirements. It pointed out that the period of mediation could be excluded for limitation purposes, thereby not hindering the defendant's ability to file a counter-claim within the prescribed timelines.
The judgment drew upon precedents, including the Supreme Court's decision in Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd., which underscored the mandatory nature of Section 12A for commercial disputes. The court also referenced its own earlier decisions, such as in Sanjana Agarwal v. Namoshivai Apparels Private Limited, affirming that a second round of mediation is unnecessary if disputes have already been mediated.
Ultimately, the court dismissed the appeal, finding no infirmity in the district court's rejection of the counter-claim. The decision reinforces the importance of mediation in the commercial litigation process, ensuring that all claims, including counter-claims, undergo the requisite pre-institution mediation unless previously addressed.
Bottom line:-
Compliance with Section 12A of the Commercial Courts Act, 2015 is mandatory for Counter-claims unless the disputes forming the subject matter of the Counter-claim were already subjected to pre-institution mediation or addressed during earlier mediation proceedings.
Statutory provision(s): Commercial Courts Act, 2015 Section 12A, Civil Procedure Code, 1908 Order VIII Rule 6A
Vijay v. Havells India Limited, (Delhi)(DB) : Law Finder Doc id # 2933204
