Legal notice can't be deemed as non-starter report for pre-litigation mediation: Delhi High Court

The Delhi High Court recently ruled that a legal notice issued by a litigant requesting mediation does not satisfy the requirements of Section 12A of Commercial Courts Act, 2015 which mandates pre-litigation mediation. [Renew Felx Recycling v. Facilitation Centre, Rohini Courts].The Court ruled that mandated mediation must be conducted within the statutory framework provided by the Act, specifically through the authorities constituted under the Legal Services Authorities Act, 1987..A bench of Chief Justice DK Upadhyay and Justice Tushar Rao Gedela said,“The plain reading (of law) does not suggest any such mode or method of initiating mediation proceedings. Infact, the intent appears to be to initiate the mediation process within the “statutory framework” so as to ensure that the commercial litigation is not protracted or prolonged unnecessarily.”.The petitioner had supplied goods to the respondent. Despite issuing invoices and repeated reminders, the payment was not made. After sending a legal notice on December 21, 2024, the petitioner requested mediation on December 24, 2024, but the respondent did not respond. When the petitioner filed a commercial suit, the Registry rejected it on January 14, 2025, citing non-compliance with Section 12A of the Act, which requires a non-starter report or certificate of non-settlement from an authorised mediation author.The petitioner argued that its mediation request and the respondent’s silence should be deemed sufficient compliance with Section 12A. It was contended that insisting on a non-starter report imposed an undue procedural burden, delaying access to justice in violation of Articles 14 and 21 of the Constitution..The bench rejected the petitioner’s arguments, calling them “completely misconceived.” The judgment emphasised that compliance with Section 12A requires following the statutory mediation process and cannot be substituted with informal attempts like legal notices.“The submissions of learned counsel for the petitioner are completely misconceived and absolute misunderstanding of the provisions of Section 12A of the Act. The act of issuing legal notice by a litigant may be exercised even to call the other party to mediate, if advised, but that can hardly be termed as having any statutory foundation. The said act would be purely in the realm of non statutory regime,” the Court said while dismissing the plea..The petitioners were represented by Advocate Mukul Sharma.The respondents were represented by Advocates Sameer Vashisht and Harshita Nathrani..[Read Judgment]