The Dhanush – Nayanthara copyright dispute is a gift that keeps giving, with its twists and turns and every development meriting a separate post. To quickly recap, in the first post, we discussed the substantial questions in Copyright law that the litigation raises. In the second post, I covered the order which dealt with jurisdiction and the question of urgent interim relief. This post will cover another fresh procedural development that was reported in the news. Wunderbar, co-owned by Dhanush (the plaintiff), has decided to proceed with the main suit. As per Livelaw’s update, the plaintiff’s counsel had mentioned orally that they were not going to pursue the interim injunction and would focus on the main suit. For some reason, this was not recorded in the order issued by the Court, which fixed the date for hearing the main suit on 09.04.2025. It also has to be noted that it is unclear as to what was the scope of the interim injunction sought. Some news outlets have reported that the Madras HC was unwilling to grant the interim injunction sought as the docu-series has already been released, which could also explain why the plaintiff might have decided to go forward with the main suit.
This showcases an interesting position: the plaintiff bypassed pre-institution mediation under Section 12A by claiming he was seeking urgent interim relief. Once the Court allowed the plaintiff to bypass mediation, the plaintiff, in the next hearing, decided to abandon the pursuit of interim relief, or the Court was not inclined to grant the relief. Now the question is, would the Court send back the parties to mediation?
To understand, it’s useful to take a quick and small detour into the Commercial Courts Act (CCA).
A small detour into the Commercial Courts Act:
The Commercial Courts Act 2015 was brought to fast-track ‘commercial disputes’ (a term defined in the Act) and has introduced certain procedural changes to give effect to a swift resolution. IP disputes would fall under the definition of what constitutes a commercial dispute, and hence, the Commercial Courts Act will apply when the specified value of IP suits is above 3 Lakhs. Thus, any IP suit with a specified value above 3 Lakhs will have to abide by the mandates of the CCA. The CCA also provides for an opt-out model of mediation with an exception to bypass mediation in the case of urgent interim relief, as discussed earlier in the blog (see here and here); the Supreme Court has settled the position that pre-institution mediation under Section 12A is mandatory and not directory in nature unless the Court can infer that the plaintiff is seeking urgent interim relief.
In the previous post, I pointed out the shoddy and problematic reasoning employed by the Court in the Dhanush – Nayanthara case to determine the existence of urgent interim relief. After convincing the Court that the plaintiff was seeking urgent interim relief, either the plaintiff no longer wants it, or the relief sought is not relevant anymore, and the Court is reportedly unwilling to grant it. Regardless of what exactly happened, an interesting counterfactual emerges from this case: the law allows the plaintiff to plead urgency in granting interim relief only to bypass mediation and then abandon the interim application midway, thus effectively short-circuiting the mandatory mediation requirement unless the Court is wary of this tactic and catches it at the first step as we will see later down the post.
What now?
The next question that comes to mind is, what now? Does the case proceed without the mediation, or does the Court direct the plaintiff back to mediation now that no urgent interim relief is being sought?
The Supreme Court’s observation in Patil Automation Private Limited v. Raheja Engineers Private Limited (Patil) and Yamini Manohar vs T K D Keerthi (Yamini) might hold some clues. The relevant paragraph from Patil, which is again reproduced in Yamini, is as follows:
“The proviso to Section 80 (2) contemplates that the court shall, if, after hearing the parties, is satisfied that no urgent or immediate relief need be granted in the suit, return the plaint for presentation to the court after compliance. Our attention is drawn to the fact that Section 12A does not contemplate such a procedure. This is a matter which may engage attention of the lawmaker.”
Thus, Section 12A does not empower the Court to send the plaintiff back to mediation if later on merits, it is determined that no urgent interim relief needs to be granted. This is why Yamini further observes that the plaint cannot be dismissed for skipping pre-institution mediation if after hearing the arguments, the Court concludes that the interim relief sought was not warranted. But things are changing; the Government has heeded the comments made by the Supreme Court in Patil and brought in a bill to amend the CCA, allowing the Court to send the parties back to mediation post-grant of interim relief.
It’s useful to think of the Court’s approach to the question of urgent interim relief as comprising two steps:
- Deciding whether the plaintiff is seeking ‘urgent’ interim relief as a threshold question based on the submissions of the plaintiff. The primary threshold question is the ‘urgency’ of interim relief and whether the plaintiff can take advantage of the exception. Other factors like parties’ conduct can be relevant to determine urgency (check out Aravind Sundar’s excellent paper covering the jurisprudence surrounding the first step).
- Deciding whether to grant the urgent interim relief sought by the plaintiff on merits post-hearing of arguments.
The Court had convinced itself that Wunderbar had cleared the first step in the previous order, which I had discussed earlier. As to the second step, they decided to skip it, or the Court did not find any merit in proceeding with it. But as seen earlier, once the threshold in the first step is cleared, the Courts cannot send the parties back to mediation, which is clear from reading the above para from Patil.
Short-circuiting pre-institution mediation:
As seen in the current case, the ‘urgent interim relief’ exception can also be used to short-circuit the mandatory requirement of pre-institution mediation (for example, see here and here where the Court has caught this tactic). This would not be a problem if the scrutiny at the first step is rigorous. Yet, as was seen in the Dhanush – Nayanthara case, deciding the threshold question of whether urgent interim relief is being sought can be bogged by two issues: Firstly, the issue of what constitutes an urgency can vary from one type of suit to another and the facts of the case. Secondly, borrowing principles from one area of law into another, such as trademark law, into copyright law might not yield good results all the time, as happened in the present case, which I discussed in the previous post. Yet all this does not say much about whether there are policy justifications for having a mandatory mediation requirement.
A Fact-based Approach to Pre-institution Mediation
Mediation, as per the Mediation Act 2023, is defined as a process in which “… parties attempt to reach an amicable settlement of their dispute with the assistance of a third person referred to as mediator, who does not have the authority to impose a settlement upon the parties to the dispute.”
The value of mediating IP disputes has been discussed in this blog. Thus, Section 12 A, which provides for a mandatory mediation system, should be welcomed. The amendment itself was bought in so as to improve India’s ease of doing business, and it was thought it would also prevent docket explosion (for more discussion on legislative intent, see Patil). Yet, questions have been raised about its effectiveness. Sanjeev Sanyal and Apurv Kumar Mishra have taken a strong stand against Section 12A and its mandatory nature. Another paper, even though sympathetic to mandatory mediation, has noted crucial differences (like phased implementation, capacity building, ensuring skilled and trained mediators are available, sunset clause to verify outcomes, etc.) between India and other countries in implementing opt-out mediation mechanisms and suggested a more streamlined and evidence-based approach to implementing mandatory mediations. It has also been noted that the Supreme Court ruling making mediation mandatory assumes the existence of a well-oiled machinery that can facilitate mediation, which may or may not be true.
Prof. Basheer noted long back that we should move from a faith-based IP to a fact-based IP. In the spirit of striving towards a more fact based enquiry it is necessary for us to test how effective Section 12A has been on an empirical basis and also understand bottlenecks in its implementation empirically. In the context of IP, it is also important to empirically study how frequently IP disputes are resolved through mediation. Likewise, there are two related and important questions: how frequently is the exception under urgent interim relief being invoked in IP suits filed under CCA, and how frequently does the plaintiff successfully convince the Court to grant the interim relief which he urgently pleaded when the matter is being decided on merits?