Dispute Resolution & ADR Newsletter - November 2025

The November 2025 edition of Fox & Mandal's Dispute Resolution & ADR Newsletter analyses the test for exemption from pre-suit mediation for IPR infringement; disqualification of an arbitrator for having previously adjudicated an identical clause; insolvency initiation by cumulative redeemable preference shareholders; key features of speculative investment; and other recent judgments of the Supreme Court of India and various High Courts.

• Continuing infringement involving irreparable injury may fulfil the urgency test for exemption from pre-suit mediation
• Interpretation of a similar clause in a prior proceeding is not a ground for disqualification of an arbitrator
• Cumulative Redeemable Preference Shareholders cannot initiate insolvency
• Landowners cannot reopen an unchallenged acquisition claiming parity to relief received by other litigants
• Demurrer involves a temporary assumption of facts and does not preclude the right to challenge the facts during trial
• Speculative investors can participate in but cannot initiate CIRP

TABLE OF CONTENTS

• Novenco Building & Industry v. Xero Energy Engineering Solutions Pvt Ltd

• Steel Authority of India Ltd v. British Marine LLC

• EPC Constructions India v. Matix Fertilizers and Chemicals Ltd

• State of West Bengal v. Santi Ceramics Pvt Ltd

• Urban Infrastructure Real Estate Fund v. Neelkanth Realty Pvt Ltd

• Mansi Brar Fernandes v. Shubha Sharma

Continuing infringement involving irreparable injury may fulfil the urgency test for exemption from pre-suit mediation

Novenco Building & Industry v. Xero Energy Engineering Solutions Pvt Ltd

Supreme Court of India | 2025 SCC OnLine SC 2278

The Supreme Court's recent clarification on the approach to determining 'urgency' to seek exemption from the mandatory pre-suit mediation in cases involving continuing Intellectual Property Right (IPR) infringement is likely to provide significant relief for intellectual property holders. Genuine cases of ongoing infringement, which expose rights holders to fresh wrongs and irreparable injury each day, cannot be defeated by procedural technicalities or delays construed rigidly. Further, the focus on viewing the urgency from the IPR-holder's standpoint ensures that legitimate rights holders are not left without remedy due to the requirement of mediation, particularly where mediation could cause unconscionable delays and further injury. However, it remains ever important for IPR-holders to substantiate the continuing nature of infringement, demonstrate irreparable harm, and establish the immediacy of the relief sought in their pleadings. This development sets an important precedent and will benefit clients facing protracted or ongoing IPR violations by ensuring that statutory mediation does not become an inadvertent shield for infringers or a bar to immediate judicial protection. As such, it balances the objective of alternative dispute resolution with the imperative of judicial protection in deserving cases.

SUMMARY OF FACTS

Novenco Building & Industry (NBI), a Danish manufacturer of industrial fans branded as 'Novenco ZerAx', alleged that Xero Energy Engineering Solutions Pvt Ltd and Aeronaut Fans Industry Pvt Ltd, previously associated with NBI, were manufacturing and selling fans identical to its products, thereby infringing its patents, designs, and trademarks.

NBI discovered the infringement in December 2023, collected expert evidence, and in June 2024, filed a suit before the Delhi High Court along with applications seeking an ad interim injunction and exemption from pre-suit mediation, which is mandatory under Section 12A of the Commercial Courts Act, 2015 (Act).

The Delhi High Court dismissed the suit as it did not demonstrate bona fide urgency to bypass pre-institution mediation, citing the delay between discovery and filing as defeating the claim of urgency. A Division Bench of the Delhi High Court affirmed this decision.

Aggrieved, NBI approached the Supreme Court of India.

DECISION OF THE COURT

Relying on its previous decisions¹, including Yamini Manohar v. TKD Keerthi² (argued by F&M), the Supreme Court allowed the appeal and restored the suit, fundamentally clarifying the test for determining urgency under the Act:

• Continuing infringement constitutes ongoing harm: Each infringing act is a fresh wrong causing continuous and irreparable injury to the intellectual property holder. As such, mere delay between discovery and filing does not in itself negate urgency for interim relief.
• Plaintiffs perspective is central: The test for urgency must be applied from the standpoint of the plaintiff. If the pleadings and supporting documents, on a prima facie reading, genuinely seek immediate judicial intervention to prevent ongoing harm, urgency can be recognised and pre-suit mediation exempted.
• Purpose of Section 12A: While the intent of Section 12A of the Act is to promote mediation and decongest Courts, it must not become an obstacle to judicial protection in cases involving genuine ongoing harm. The legislative intent is not to shield infringing acts from judicial scrutiny merely due to a procedural requirement.
• No detailed inquiry on merits: The Courts, at the threshold stage, should not conduct an in-depth examination on merits. The plausibility of urgency, evidenced by continuing infringement and risk of irreparable harm, is sufficient to bypass the mediation mandate.

The Supreme Court found that the Delhi High Court's restrictive approach, equating mere lapse of time with want of urgency, was incorrect and deprived the intellectual property holder of protection against continuing violation. Accordingly, the matter is remanded for consideration of interim relief on the merits.

Interpretation of a similar clause in a prior proceeding is not a ground for disqualification of an arbitrator.

Steel Authority of India Ltd v. British Marine LLC

Delhi High Court | Original Miscellaneous Petition (Commercial) No. 20 of 2023

The ruling by Delhi High Court – prior interpretation of a similar clause cannot, by itself, disqualify an arbitrator under Section 12 of the Arbitration and Conciliation Act, 1996 (Act) – reinforces a pragmatic balance between impartiality and domain expertise, rejecting theoretical apprehensions of bias. It affirms that issue conflict should be narrowly construed, and bias must be demonstrable, not presumed from prior experience. The judgment aligns with global arbitral standards that treat issue conflict as a narrow exception, not a broad disqualification tool. In practice, arbitrators with domain expertise often adjudicate similar issues across contracts within an industry. To hold that prior decision automatically implies bias would discourage qualified professionals from accepting appointments and significantly impair arbitral efficiency, particularly in cases of infrastructure projects and government contracts. By recognising that repeat appointments in similar subject areas are often inevitable, the Court ensures that expertise remains an asset and not a liability in arbitration.

SUMMARY OF FACTS

Disputes arose under a Contract of Affreightment between Steel Authority of India Ltd (SAIL) and British Marine PLC and were referred to arbitration under the Maritime Arbitration Rules of the Indian Council of Arbitration (ICA).

During the proceedings, SAIL objected to the appointment of 2 out of 3 arbitrators on the ground that both individuals had previously served as arbitrators in another arbitration involving SAIL, where the tribunal had interpreted Clause 62 of a similar Charterparty Agreement.

SAIL argued that since the present arbitration also involved the interpretation of a similar clause, the earlier award reflected a pre-existing opinion, thereby giving rise to 'issue conflict' and creating justifiable doubts regarding the arbitrators' independence and impartiality under Section 12(1) read with Entry 24 of the Fifth Schedule of the Act.

The ICA and the arbitral tribunal rejected SAIL's challenge, and the final award in favour of British Marine was challenged by SAIL before the Delhi High Court.

DECISION OF THE COURT

The Delhi High Court dismissed SAIL's petition, holding that mere participation of an arbitrator in a prior arbitration involving the interpretation of a similar clause does not amount to disqualification or bias. 'Issue conflict' must be established on objective grounds showing a real likelihood of prejudgment and not inferred merely from a previous experience or opinions rendered by the arbitrator.

The Court referred to international jurisprudence, including CC/Devas (Mauritius) Ltd v. Republic of India³ and Caratube International Oil Co LLP v. Republic of Kazakhstan,⁴ to explain that issue conflict arises only when an arbitrator's prior involvement demonstrates closedmindedness or pre-judgment on materially identical issues. This must be assessed on a case-by-case basis.

Applying this test, the Court found no evidence suggesting that 2 of the arbitrators had prejudged the issues or were incapable of approaching the dispute with an open mind. Their prior interpretation of Clause 62 was merely an application of contractual principles in another context. The mere fact that the clause under consideration was similar did not automatically mean the issues were identical or that the arbitrators were biased.

Arbitration, especially in specialised sectors such as maritime law, involves a limited pool of qualified arbitrators. Treating prior service in similar disputes as grounds for automatic disqualification would undermine the efficiency and expertise that commercial arbitration demands.

Dispute Resolution & ADR Newsletter - November 2025

Footnotes

1 Patil Automation Pvt Ltd v. Rakheja Engineers Pvt Ltd, (2022) 10 SCC 1; Dhanbad Fuels Pvt Ltd v. Union of India, 2025 SCC OnLine SC 1129.

2 (2024) 5 SCC 815.

3 Permanent Court of Arbitration Case No. 2013/09.

4 International Centre for Settlement of Investment Disputes Case No. ARB/13/13.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.