Legal Review and Analysis of Novenco Building and Industry AS vs Xero Energy Engineering Solutions Private Limited & Anr 2025 INSC 1256

1. Heading of the Judgment

Novenco Building and Industry A/S vs. Xero Energy Engineering Solutions Private Limited & Anr.
Citation: 2025 INSC 1256
Court: Supreme Court of India
Civil Appeal No.: Of 2025 (@ S.L.P. (C) No. 2753 of 2025)
Judges: Justice Sanjay Kumar and Justice Alok Aradhe
Date: October 27, 2025

2. Related Laws and Sections

The judgment primarily interprets and applies Section 12A of the Commercial Courts Act, 2015. This section mandates pre-institution mediation for commercial disputes, with a crucial exception.

Key Statutory Provision:

• Section 12A of the Commercial Courts Act, 2015: "A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation..."

3. Basic Judgment Details

This appeal was filed by Novenco, a Danish company, against the orders of the Himachal Pradesh High Court. The High Court (both the Single Judge and the Division Bench) had rejected Novenco's commercial plaint for infringement of its patent and design rights, citing non-compliance with the mandatory pre-litigation mediation requirement under Section 12A of the Act. The High Courts held that Novenco's case did not demonstrate the "urgent interim relief" necessary to bypass this mediation.

4. Core Principle of the Judgment

The Main Issue

The core issue before the Supreme Court was the correct interpretation of the phrase "contemplates any urgent interim relief" in Section 12A of the Commercial Courts Act, 2015. Specifically, the Court had to determine whether a suit alleging continuing infringement of intellectual property rights (patents and designs), which inherently seeks an injunction, can be considered as "contemplating urgent interim relief" even if there has been a delay in filing the suit.

Analysis and Reasoning of the Supreme Court

The Supreme Court undertook an in-depth analysis, overruling the High Court's approach and laying down a nuanced legal framework.

A. Reiteration of the Legal Test from Precedents
The Court began by consolidating the legal principles established in its earlier decisions, including Patil Automation Pvt. Ltd., Yamini Manohar, and Dhanbad Fuels (P) Ltd.. The key criteria for evaluating urgency under Section 12A are:

1. Mandatory Nature: Compliance with Section 12A is mandatory. A plaint filed without mediation is institutionally defective and liable for rejection.

2. Genuine Urgency Test: The exemption applies only if a holistic reading of the plaint and its annexed documents reveals a genuine need for urgent interim intervention.

3. Plaintiff's Standpoint: The court must assess urgency from the plaintiff's standpoint, considering factors like immediacy of peril, risk of irreparable harm, and whether delay would make the final relief ineffective.

4. No Merits Assessment: The court is not to adjudicate the merits of the interim relief at this stage but only to see if the plea for urgency is plausible and not a mere device to bypass mediation.

B. Application to Continuing Intellectual Property Infringement
The Supreme Court then applied this test to the facts of the case, focusing on the unique nature of intellectual property (IP) infringement.

• Continuing Wrong Doctrine: The Court emphasized that in cases of continuing IP infringement, every new act of manufacture or sale constitutes a fresh cause of action. The wrong is not a one-time event but a persistent injury.

• Inherent Urgency: The Court held that in such cases, "the urgency... is inherent in the nature of the wrong and does not lie in the age of the cause but in the persistence of the peril." This means that the ongoing nature of the infringement itself creates a situation of urgency, as each day of violation causes further irreparable harm to the plaintiff's business, reputation, and market share.

• Delay is Not Fatal: Consequently, mere delay between discovering the infringement and filing the suit does not, by itself, negate the element of urgency. The Court criticized the High Court for focusing solely on the time lapse (e.g., the six-month gap between the expert inspection and the suit filing) while ignoring the continuous nature of the injury.

• Public Interest Consideration: The judgment introduced a significant public interest dimension. It stated that IP infringement "sows confusion among consumers, taints the marketplace and diminishes faith in the sanctity of trade." Therefore, the need to protect consumers from deception and maintain market integrity adds a colour of immediacy to the relief sought.

C. Finding on the Facts
The Supreme Court found that Novenco's plea for an injunction was a "real grievance" founded on continuing infringement and the likelihood of irreparable prejudice. It was not a "camouflage" to evade mediation. The High Court erred by examining the merits of the entitlement to interim relief rather than confining itself to whether, from the plaintiff's standpoint as revealed in the plaint, urgent relief was being contemplated.

5. Final Outcome

The Supreme Court allowed the appeal and set aside the judgments of the Himachal Pradesh High Court. The Commercial Suit No. 13 of 2024 filed by Novenco was restored to the file of the High Court to be heard and decided on its merits.

Directions Implied: The judgment directs that for suits involving continuing IP infringement, courts must assess the need for urgent interim relief by looking at the persistent nature of the wrong and the resulting ongoing injury, rather than treating any delay in filing as a disqualifier for urgency under Section 12A.

6. Multiple Choice Questions (MCQs) Based on the Judgment

1. According to the Supreme Court in Novenco Building and Industry A/S vs. Xero Energy Engineering Solutions Private Limited (2025 INSC 1256), what is the key factor in determining "urgent interim relief" in a suit for continuing intellectual property infringement?
A) The length of delay between discovering the infringement and filing the suit.
B) The final outcome of the application for interim injunction.
C) The persistent nature of the infringement and the ongoing injury caused by it.
D) The financial capacity of the plaintiff to pursue mediation.

2. The Supreme Court held that the High Court erred in its application of Section 12A of the Commercial Courts Act, 2015 because?
A) The High Court granted the interim injunction without a trial.
B) The High Court assessed the merits of the interim relief instead of examining the plaintiff's standpoint on urgency from the plaint.
C) The High Court ordered the parties to undergo mediation after the suit was filed.
D) The High Court refused to consider the defendant's counter-claim.