Introduction:

The Delhi High Court in the case of Renewflex Recycling vs. Facilitation Centre Rohini Courts & Ors (W.P.(C) 2039/2025 & CM APPL. 9604/2025) has ruled that sending a legal notice or an informal mediation request cannot be considered compliance with Section 12A of the Commercial Courts Act, 2015. The Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela clarified that the statutory mandate for mediation must be adhered to within the prescribed framework and cannot be substituted by private mediation attempts. The petitioner, engaged in a commercial dispute, had contended that their legal notice and mediation request fulfilled the requirement of pre-litigation mediation under the Act. However, the Court rejected this argument, holding that the law requires mediation to be conducted within an institutional framework to ensure procedural regularity and effectiveness.

Arguments of the Petitioner:

The petitioner, involved in a commercial arrangement with respondent No. 2, had supplied goods, but the latter allegedly defaulted on payment. In an attempt to resolve the matter, the petitioner initially sent a legal notice demanding payment. Upon receiving no response, they sent a mediation request through their advocate. Despite no reply from the respondent, the petitioner proceeded to file a commercial suit. However, the Registry of the Commercial Court refused to entertain the plaint, citing non-compliance with Section 12A of the Commercial Courts Act, which mandates pre-litigation mediation before initiating a suit. The petitioner then approached the Delhi High Court, arguing that their efforts to seek mediation should be deemed sufficient compliance with Section 12A. The petitioner contended that forcing them to undergo another mediation process would amount to redundant formalities and delay justice, which contradicts the Act’s objective of swift commercial dispute resolution. They further asserted that since the respondent failed to respond, the mediation was effectively a “non-starter,” justifying the filing of the commercial suit without further procedural steps.

Arguments of the Respondents and Registry:

The respondents and the Commercial Court Registry maintained that Section 12A explicitly mandates mediation before filing a commercial suit and does not recognize private mediation requests or legal notices as a substitute. They emphasized that the Act requires mediation to be conducted within an institutional mechanism, ensuring compliance with structured rules and timelines. The Registry highlighted that, in the absence of a Non-Starter Report or Certificate of Non-Settlement from the designated mediation authority, the petitioner had failed to meet the procedural requirement. The respondents also argued that accepting private mediation requests as compliance would undermine the statutory framework, allowing litigants to bypass formal mediation and defeat the legislative intent behind Section 12A.

Court’s Judgment:

The Delhi High Court dismissed the petition, ruling that private mediation attempts, such as sending a legal notice or a mediation request, do not satisfy the statutory requirement of Section 12A. The Court reasoned that Section 12A necessitates mediation within an institutional setup, where a mediation authority officially acknowledges a settlement or issues a report of non-settlement. The Bench observed that the petitioner’s unilateral mediation request did not qualify as a statutory process and could not replace the requirement of an official mediation attempt. The judgment noted that “the act of issuing a legal notice or calling a party to mediate remains in the realm of non-statutory measures and does not form part of the statutory framework envisaged under Section 12A.” The Court reiterated that judicial interpretation cannot override explicit legislative provisions and that the law does not permit informal mediation requests to substitute for formal mediation. Emphasizing legislative intent, the Court pointed to Sub-section (5) of Section 12A, which grants settlement agreements obtained through formal mediation the same enforceability as arbitral awards under the Arbitration and Conciliation Act. This provision, the Court noted, underscores the necessity of structured mediation, ensuring that commercial litigation is not unduly prolonged or bypassed. The Bench clarified that the legal framework ensures that mediation follows a defined timeline, fostering efficiency and certainty in commercial dispute resolution. Allowing private mediation requests to qualify as statutory compliance would disrupt this structure and lead to inconsistent practices. The Court held that what is not explicitly provided in the statute cannot be implied by the judiciary unless exceptional circumstances warrant it, which was not the case here. Conclusively, the Court upheld the Registry’s decision to reject the plaint and dismissed the petition.