Calcutta High Court Enforces Mandatory Pre-Institution Mediation in Trademark Disputes

Why Criminal Proceedings Do Not Excuse Mediation

One of the key holdings in the ITC v. SMM Tobacco judgment is that the existence of parallel criminal proceedings does not relieve a party of its obligation to attempt mediation in the civil or commercial sphere. This distinction matters because many trademark disputes involve both civil claims for infringement and criminal complaints under the Indian Penal Code or other criminal statutes.

A trademark holder discovering unauthorised use of its brand might simultaneously file a civil suit for injunction and damages and lodge a criminal complaint alleging counterfeiting or fraud. The natural instinct is to pursue all available remedies with maximum speed. However, the Calcutta High Court's decision clarifies that the civil or commercial track must still comply with Section 12A, regardless of what is happening in criminal courts.

This approach reflects a deliberate legislative choice. The Commercial Courts Act was enacted to create a specialist forum for commercial disputes and to introduce procedural safeguards, including mandatory mediation, to encourage settlement before litigation consumes resources. Criminal and civil claims address different harms and different remedies. Both tracks should operate independently, each following its own procedural requirements.

The Problem with Claims of Urgency

Parties often argue that mediation would cause unacceptable delay and that the circumstances are too pressing to permit time for negotiation. In the trademark context, a business might argue that every day of unauthorised use causes irreparable harm to brand reputation and market share, making immediate court intervention essential.

The Calcutta High Court rejected this reasoning as insufficiently precise. The court's language—that mediation cannot be bypassed on "vague assertions of continuing wrong"—suggests that general statements about harm are not enough. A party seeking to dispense with mediation would need to present concrete evidence of specific, measurable harm that would worsen materially during even a brief mediation period.

This is a high bar. Most commercial disputes, even those involving intellectual property, can tolerate a mediation period of a few weeks without catastrophic consequences. Top trademark law firms in India typically advise clients that mediation, even when it does not result in settlement, can clarify the parties' positions and narrow the issues in dispute, potentially accelerating the subsequent litigation.

Trademark Disputes and Mediation Requirements

The judgment has direct consequences for how trademark disputes proceed through Indian courts. A party filing a trademark infringement suit must now expect that the court will require it to participate in mediation before the substantive hearing of the case. This applies regardless of whether the dispute involves domain name disputes and trademark law India, counterfeiting allegations, or simple questions of brand confusion.

For businesses and their counsel, this means that the timeline for resolving a trademark dispute must now include a mediation phase. Filing the suit is no longer the final step before court proceedings; it is merely the formal triggering of a process that will direct the parties toward negotiation first.

The judgment also has implications for how courts manage their dockets. By enforcing the mediation requirement, the Calcutta High Court is working to ensure that commercial disputes do not proceed to trial unless the parties have genuinely exhausted settlement possibilities. This reduces the number of cases that reach the merits stage and frees judicial resources for disputes that cannot be resolved through negotiation.

Consistency with Broader Commercial Courts Jurisprudence

The Calcutta High Court's approach aligns with the overall design of the Commercial Courts Act and recent decisions from other High Courts. The Delhi High Court, in a September 30, 2026 judgment, upheld the constitutional validity of Section 19 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018, confirming that the commercial courts regime, including its procedural requirements, does not violate the right to equality under Article 14 of the Constitution.

Similarly, the Kerala High Court has held that a plaint filed in an ordinary civil court in a suit involving a commercial dispute must be returned for presentation before the competent Commercial Court rather than being rejected outright. These decisions collectively reinforce the principle that commercial disputes must follow the statutory framework established by the Commercial Courts Act, including its requirement for mediation.

What Happens Next

For the ITC v. SMM Tobacco case itself, the judgment means that the parties must now engage in mediation before the suit can proceed to substantive hearing. The outcome of that mediation will determine whether the case ultimately reaches trial or is resolved through agreement. Counsel advising trademark holders must now budget time and resources for a mediation phase and prepare clients for the possibility that settlement discussions may be required even in cases where the infringement appears clear or the harm seems urgent.

Parties defending against trademark infringement claims should recognize that mediation offers a genuine opportunity to explore settlement options, potentially at lower cost than full litigation. The court's insistence on mediation is not a procedural technicality; it reflects a statutory policy that applies equally to all commercial disputes. The ruling clarifies that the Commercial Courts Act's procedural requirements are not mere formalities to be dispensed with when circumstances seem to warrant it.