Bombay High Court Refuses To Reject Phoenix ARC's ₹500 Crore Suit Against Future Brands

The Bombay High Court recently refused to reject a suit involving a claim of over Rs 500 crore filed by Phoenix ARC Private Limited against Future Brands Ltd, holding that the requirement of pre-filing mediation will not apply where urgent interim relief is sought.

Justice Gauri Godse held that a party cannot be denied access to the court merely because mediation was not completed if urgent protection is required. The court observed:

“Hence, in view of the well-settled legal principles, the bar under Section 12-A would not apply, as the plaintiff's pleadings show that from the plaintiff's standpoint, urgent interim relief is contemplated..”

The dispute arose from a restructuring arrangement under which Future Brands, through a guarantee letter dated June 4, 2021, agreed to infuse Rs 250 crore into Future Entertainment Pvt Ltd. Phoenix ARC, which became the assignee of the loan in June 2022, claimed that over Rs 500 crore remained unpaid.

It said its security, in the form of royalty receivables from trademark licence agreements, was at risk due to the expiry of those agreements on July 1, 2025.

Phoenix ARC had started the mediation process on March 21, 2025. After the expiry of the initial three-month period under the rules, it filed the suit in early July 2025 before a formal closure report was issued, citing urgency due to the imminent lapse of the agreements.

The defendants argued that the suit should be rejected for not completing the mediation process and also alleged suppression of facts.

Rejecting these objections, the Court held that the absence of a formal closure report is not fatal where urgent interim relief is shown. It also found that there was no suppression of material facts. The Court said:

“If, for any reason, the service of notice and issuance of a non-starter report remains incomplete, it would not take away the plaintiff's right to file a suit if, for the reasons pleaded by the plaintiff, an urgent interim relief is contemplated on the date of filing of the suit.”

The court emphasised that the mediation requirement cannot be used to block genuine claims, especially where delay may lead to loss of security or serious harm.

Accordingly, the court rejected the objections seeking dismissal of the case at the threshold and allowed the suit to proceed.