Supreme Court Annual Digest 2025: Commercial Courts Act, 2015

Arbitrability of Trademark Disputes – Dispute between two factions of a Coimbatore-based family over the "Sri Angannan Biriyani Hotel" trademark. The petitioner filed a civil suit seeking a permanent injunction and ₹20 lakhs in damages for alleged trademark infringement. The respondent invoked an arbitration clause in the Trademark Assignment Deed, leading to referral to arbitration by the Commercial Court and High Court. Held: Not all trademark disputes are non-arbitrable; disputes in personam arising from contractual obligations, such as those under a trademark license or assignment deed, are arbitrable. Allegations of fraud, misconduct, or statutory violations do not preclude arbitration when the dispute stems from an arbitration agreement. Under Section 8, the referral court's role is limited to confirming the existence of a valid arbitration agreement, leaving substantive issues like claim validity or fraud to the arbitral tribunal. Under Section 11(6A), the court's role is confined to verifying the arbitration agreement's existence, not adjudicating the dispute's merits. Disputes arising from trademark licenses or assignments, being in personam, are arbitrable unless they involve in rem rights affecting the public. Judicial authorities must enforce arbitration agreements under Section 8 without discretion to bypass this mandate. The principle that subordinate in personam rights arising from in rem rights are arbitrable, as established in Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532 and Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1, was reaffirmed. The Supreme Court dismissed the petitioner's challenge, upholding the referral to arbitration. Petition dismissed; trademark dispute held arbitrable as it arose from an assignment deed. K. Mangayarkarasi v. N.J. Sundaresan, 2025 LiveLaw (SC) 597 : 2025 INSC 687 : AIR 2025 SC (Civil) 1802 : (2025) 8 SCC 299

Bank Guarantees — Interim Relief - In exceptional circumstances, a High Court may invoke its supervisory jurisdiction under Article 227 of the Constitution to grant interim relief in arbitration proceedings, notwithstanding the Arbitration Act's emphasis on minimal judicial interference and the availability of remedies under Section 37(1)(b), where denial of such relief would occasion irreparable harm, such as the irretrievable injustice from encashment of a bank guarantee amid ongoing arbitration. The appellant, a construction contractor, furnished an unconditional bank guarantee of ₹3.73 crore to secure an advance payment under a residential construction contract with the respondent real estate company. Citing delays and poor performance, the appellant terminated the contract and invoked the guarantee. The respondent sought interim stay of encashment under Section 9 of the Arbitration Act, which the Commercial Court denied. Invoking Article 227, the High Court stayed encashment pending arbitration, subject to extension of the guarantee's validity. Dismissing the appellant's appeal against the High Court's interference, the Supreme Court upheld the order, emphasizing the guarantee's ongoing validity, the arbitration's pendency, and the need to preserve the status quo to avert irreversible prejudice to the respondent. The Court directed expeditious disposal of the Section 9 petition within eight weeks, with the guarantee to subsist until final adjudication. Judicial restraint in arbitration is paramount, but Article 227 empowers exceptional intervention to prevent fraud of an egregious nature or irretrievable injustice; here, the High Court's interim measure balanced interests without prejudging merits, aligning with the Act's pro-arbitration ethos. Jindal Steel and Power Ltd. v. Bansal Infra Projects, 2025 LiveLaw (SC) 544 : 2025 INSC 640

Code of Civil Procedure, 1908 (CPC) — Order VIII Rule 1 (Proviso) (as amended by Commercial Courts Act, 2015) — Written Statement — Extension of Limitation (COVID-19 Pandemic) — Right to Cross-Examine Witnesses (Even without Written Statement) — Appeal against rejection of Written Statement and decreeing of suit - The Supreme Court noted that the period for filing the Written Statement (WS) fell within the duration (15.03.2020 to 28.02.2022) excluded for the purpose of computing limitation - Held that WS filed belatedly in a commercial suit after the mandatory period of 120 days cannot be rejected when it was filed during COVID-19, as the delay fell entirely within the COVID-19 limitation extension ordered by Supreme Court. [Relied on In Re: Cognizance for Extension of Limitation (2022) 3 SCC 117; Aditya Khaitan & Ors. v. IL & FS Financial Services Limited 2023 INSC 867; Paras 28, 29] Anvita Auto Tech Works Pvt. Ltd. v. Aroush Motors, 2025 LiveLaw (SC) 988 : 2025 INSC 1202

Interpretation of Section 13(1A) Proviso – Held, Section 13(1A) consists of two parts - The main provision allows appeals against judgments and orders - The proviso acts as an exception only for interlocutory orders, restricting appeals to those specifically enumerated in Order XLIII CPC and Section 37 of the Arbitration and Conciliation Act, 1996 - Orders rejecting a plaint (Decrees) fall under the main provision, not the restrictive proviso - Appeal allowed. [Paras 17-18, 21] MITC Rolling Mills v. Renuka Realtors, 2025 LiveLaw (SC) 1085 : 2025 INSC 1300

Section 12A – Legal Test for rejection of plaint and adjudication of interim relief – Held, the Court is required to look at the plaint, pleadings, and supporting documents to decide whether urgent interim relief is genuinely contemplated - includes looking for the immediacy of the peril, irreparable harm, or where delay would render eventual relief ineffective - The court is not concerned with the merits of the urgent relief; if the relief sought seems to be plausibly urgent from the standpoint of the plaintiff, the requirement under Section 12A can be dispensed with - A proforma or anticipatory prayer for urgent relief used as a device to skip mediation will be ignored and the court can require the parties to comply with Section 12A of the Act - Appeal allowed. [Relied on Midas Hygiene Industries Private Ltd. & Anr. v. Sudhir Bhatia & Ors. (2004) 3 SCC 90; Paras 15-27] Novenco Building and Industry v. Xero Energy Engineering Solutions, 2025 LiveLaw (SC) 1027 : 2025 INSC 1256

Section 12A - Pre-Institution Mediation - Mandatory as per Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1, but applies prospectively from 20.08.2022 - Held, for commercial suits filed before 20.08.2022 without Section 12A compliance, courts shall stay the suit and refer parties to time-bound mediation if an objection is raised under Order VII Rule 11 CPC or parties express intent to mediate, unless exceptional circumstances apply (e.g., plaints rejected and not re-filed within limitation, or filed after jurisdictional High Court declared Section 12A mandatory). Suits filed on or after 20.08.2022 without pre-institution mediation must be rejected under Order VII Rule 11 CPC. The Court upheld the High Court's order staying the 2019 suit and directing mediation within three months, extendable by two months, as per Pre-Institution Mediation and Settlement Rules, 2018. Appeal dismissed. (Paras 62 - 65) Dhanbad Fuels v. Union of India, 2025 LiveLaw (SC) 579 : 2025 INSC 696 : [2025] 6 SCR 431 : (2025) 9 SCC 424

Section 12A – Pre-Institution Mediation and Settlement – Interpretation of the expression 'contemplates any urgent interim relief' in the context of Intellectual Property (IP) infringement suits – Held, requirement of pre-institution mediation under Section 12A of the Commercial Courts Act cannot be mechanically applied in cases involving continuing infringement of intellectual property rights, such as trademark violations - Insisting on mediation before filing a suit in such situations would effectively leave the plaintiff without a remedy, allowing the infringer to continue profiting under the cover of procedural formalities - The provision was never intended to produce such an “anomalous result - Scope of “urgency” under Section 12A - when a case involves ongoing infringement, the element of urgency must be assessed in light of the continuing injury and the public interest in preventing deception - Mere delay in filing a suit does not by itself negate the urgency of relief, so long as the infringement is ongoing - The court cannot be unmindful of the public interest element in IP disputes, which involves preventing confusion in the market and protecting consumers from deception, which further imparts a colour of immediacy to the reliefs sought. Novenco Building and Industry v. Xero Energy Engineering Solutions, 2025 LiveLaw (SC) 1027 : 2025 INSC 1256

Section 13(1A) – Code of Civil Procedure, 1908 – Order VII Rule 11 read with Section 2(2) – Appeal against Rejection of Plaint – Maintainability – Held, an order rejecting a plaint under Order VII Rule 11 CPC constitutes a "decree" as defined under Section 2(2) CPC as it conclusively determines the rights of the parties – Such an order is appealable under the main provision of Section 13(1A) of the Commercial Courts Act, 2015 – The High Court erred in treating it as an interlocutory order restricted by the proviso to Section 13(1A) – The proviso cannot be invoked to curtail the scope of the main provision regarding final judgments and decrees. MITC Rolling Mills v. Renuka Realtors, 2025 LiveLaw (SC) 1085 : 2025 INSC 1300

Section 13(1A) – Distinction between 'Rejection of Plaint' and 'Rejection of Application for Rejection of Plaint' - Supreme Court clarified that while an order rejecting an application under Order VII Rule 11 is not appealable under Section 13(1A) as it is not enumerated in Order XLIII CPC, an order actually rejecting the plaint results in a decree and is appealable. [Relied on Bank of India v. Maruti Civil Works 2023 SCC OnLine Bom 2667; Paras 18-19] MITC Rolling Mills v. Renuka Realtors, 2025 LiveLaw (SC) 1085 : 2025 INSC 1300

Section 13(1A) - Limitation Act, 1963; Section 5 - Limitation Period for Filing Appeal - Commencement from Date of Judgment Pronouncement - Held, the limitation period for filing an appeal under Section 13(1A) of the Commercial Courts Act, 2015, begins on the date of judgment pronouncement, not the date of receiving its certified copy. The Court clarified that while Order XX Rule 1 CPC mandates providing judgment copies, litigants must diligently procure them. A party cannot claim the limitation period starts only upon receiving the copy unless they demonstrate reasonable efforts to obtain it. Interpreting otherwise would defeat the Commercial Courts Act's objective of timely case disposal and the diligence required under limitation laws. The appellants' appeal was dismissed for failing to justify a 301-day delay, as they made no efforts to obtain the judgment copy within the 60-day statutory period. (Para 13, 14, 16) Jharkhand Urja Utpadan Nigam v. Bharat Heavy Electricals, 2025 LiveLaw (SC) 496 : 2025 INSC 533

The case arose from a 2018 lawsuit by Inox India Limited alleging copyright infringement by Cryogas Equipment and LNG Express India in engineering drawings for cryogenic semi-trailers. The Commercial Court dismissed Inox's suit under Order VII Rule 11, CPC, holding the drawings were unregistered designs reproduced over 50 times, falling under the Designs Act. The High Court reversed this, restoring the suit for trial. Cryogas appealed to the Supreme Court. Upholding the High Court's ruling, the Supreme Court criticized the Commercial Court's premature dismissal, which incorrectly assumed the drawings were designs without evidence of industrial reproduction or aesthetic nature. Determining the nature of the work involves a mixed question of law and fact, unsuitable for resolution at a preliminary stage. The case was remanded for trial to assess the true nature of the proprietary engineering drawings and related claims of literary works and confidential information infringement using the twin test. Appeal dismissed; Commercial Court directed to conduct a trial applying the twin test and independently evaluate all claims. Cryogas Equipment v. Inox, 2025 LiveLaw (SC) 426 : 2025 INSC 483

Vehicle Insurance - Insurance Policy Condition - Crane Accident - Insured Premises - Absurd Condition - Substantial Justice - Held, a condition in an insurance policy limiting liability to accidents occurring solely within the insured's premises is absurd, especially for a vehicle like a crane, typically used at construction sites. The appellant had insured a Tata Hitachi Heavy Duty Crane, which was damaged in an accident in 2007 at Tata Steel's powerhouse in Jamshedpur. The insurer rejected the claim, citing the policy condition that the accident occurred outside the insured's premises. Both the Commercial Court and the High Court upheld the rejection. The Supreme Court criticized the parties for overlooking this impractical condition at the time of insuring the crane and noted the insurer's delay in communicating the rejection. To ensure substantial justice, the Court directed the insurer to pay Rs. 40–45 lakh, including taxes, to settle the claim. The appeal was accordingly disposed of. (Para 21, 22, 24) Tarapore and Co v. United India Insurance, 2025 LiveLaw (SC) 231