Navigating Urgency and Mediation: The Supreme Court Clarifies Procedure for IP Injunctions

Sharabh Shrivastava & Taaniyaa Dograa
12 hours ago
4 min read

The Hon’ble Supreme Court, in its recent decision in Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd., 2025 SCC OnLine SC 2278, has provided significant guidance on the interpretation and application of the mandatory pre-litigation mediation requirement under Section 12A of the Commercial Courts Act, 2015 (“the Act”) in the context of intellectual property disputes involving prayers for urgent interim relief.

In this landmark judgment, the Hon’ble Court elucidated two key principles:

Mandatory yet qualified nature of pre-institution mediation: While pre-institution mediation under Section 12A of the Act is mandatory, it is not absolute. The requirement may be dispensed with where the suit demonstrably involves an urgent need for interim relief.
Effect of delay on urgency: Mere delay in instituting proceedings does not automatically negate the element of urgency, particularly in cases concerning continuous infringement and/or counterfeiting.

This ruling strikes a judicious balance—ensuring that infringers cannot exploit procedural technicalities to perpetuate unlawful activities, while preserving the core objectives of the Commercial Courts Act, namely efficiency and early dispute resolution.

Brief Factual Background

The Appellant, Novenco Building and Industry A/S (“Novenco”), a Denmark-based manufacturer of industrial fans marketed under the brand Novenco ZerAx, entered into a dealership agreement in 2017 with Xero Energy Engineering Solutions Pvt. Ltd., Hyderabad (“Xero”) for the marketing and sale of its products in India.

Subsequently, a director of Xero incorporated another entity, Aeronaut Fans Industry Pvt. Ltd. (“Aeronaut”), which began manufacturing and selling identical fans under a deceptively similar name and trade dress.

Aggrieved by this conduct, Novenco issued multiple cease-and-desist notices to Xero and Aeronaut, which went unheeded. A technical inspection later confirmed that Aeronaut’s products infringed Novenco’s registered patents and designs. In June 2024, Novenco instituted a commercial suit before the Hon’ble High Court of Himachal Pradesh seeking permanent injunction and damages, along with an application for exemption from pre-institution mediation under Section 12A of the Act on grounds of urgency.

The Respondents objected to the maintainability of the suit and filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 (“CPC”). The Hon’ble High Court rejected the plaint, holding that a six-month delay between the inspection and the filing of the suit was inconsistent with a claim of urgency and, therefore, the exemption under Section 12A could not be invoked. The Division Bench affirmed this view. Aggrieved, Novenco preferred an appeal before the Hon’ble Supreme Court.

Understanding Section 12A of the Commercial Courts Act, 2015

Section 12A, introduced by the 2018 amendment to the Act, mandates pre-institution mediation in all commercial suits “which do not contemplate any urgent interim relief.” The provision seeks to encourage early dispute resolution and alleviate judicial backlog while recognising that certain disputes necessitate immediate judicial intervention.

The Hon’ble Supreme Court, while interpreting this provision, referred to a series of precedents that have progressively delineated its scope:

Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1 — The Court held that Section 12A is mandatory in nature.
Yamini Manohar v. T.K.D. Keerthi, (2024) 5 SCC 815 — It was clarified that the determination of urgency must be based on a holistic reading of the plaint from the perspective of the plaintiff.
Dhanbad Fuels Pvt. Ltd. v. Union of India, 2025 SCC OnLine SC 1129 — The Court observed that the relevant inquiry is not whether interim relief would ultimately be granted, but whether, on the facts pleaded, immediate relief is plausibly required. However, a mere perfunctory plea of urgency cannot be used to bypass the statutory mandate of mediation.

Collectively, these authorities establish that urgency must be assessed on the substance and context of the dispute, rather than its procedural framing or the timing of the plaintiff’s approach to the Court.

Hon’ble Supreme Court’s Analysis

The central question before the Supreme Court was whether a suit alleging continuing infringement of intellectual property rights, accompanied by a prayer for interim injunction, qualifies as one involving “urgent relief” under Section 12A of the Act, notwithstanding a delay in its institution.

On Delay and Urgency

The Hon’ble Court observed that Novenco’s suit was not a disguised attempt to circumvent the mediation process. The pleadings and evidence established that the alleged infringement was continuous, resulting in ongoing harm to Novenco’s goodwill and intellectual property. The Court held that each act of manufacture or sale of the infringing goods constituted a fresh cause of action.

In a noteworthy observation, the Court stated: “Urgency lies not in the age of the cause, but in the persistence of the peril.” Consequently, the Court held that delay in approaching the Court does not extinguish the urgency of stopping a continuing wrong. The Court further emphasized that intellectual property infringement has implications beyond private rights, as it affects consumers and market integrity at large.

On Pre-Institution Mediation

The Hon’ble Court cautioned that the requirement of pre-institution mediation under Section 12A must not be allowed to serve as a procedural refuge for infringers. Compelling mediation in situations involving ongoing infringement would subordinate substantive justice to procedural compliance.

However, the Court reiterated that this exemption must be invoked judiciously. Courts must carefully scrutinise whether the plea for urgent interim relief is bona fide or merely a stratagem to circumvent the statutory mandate of pre-litigation mediation.

Conclusion

The decision in Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd. represents a crucial step in harmonising the twin objectives of the Commercial Courts Act — promoting pre-litigation mediation and ensuring swift judicial protection where genuine urgency exists.

By holding that delay does not, per se, defeat urgency in cases of ongoing infringement, the Hon’ble Supreme Court reinforces a pragmatic and equitable approach. The judgment ensures that procedural formalities do not override substantive justice, thereby strengthening both the efficiency of the commercial justice system and the protection of intellectual property rights in India.