Self-Created Urgency No Ground To Skip Pre-Institution Mediation: Telangana High Court

The Telangana High Court has held that a party cannot avoid the mandatory pre-institution mediation process in a commercial dispute by claiming urgency that is of its own making.

A Division Bench of Justices Nagesh Bheemapaka and Vakiti Ramakrishna Reddy dismissed a plea by Trident Chemphar Limited. The company had challenged an order returning its proposed suit against ongoing ICC arbitration proceedings for failure to first undergo pre-institution mediation.

“The urgency, if any, is thus of Petitioner's own making, arising from its decision to wait until the Majority Award was passed before approaching the civil court. Self-created urgency, as already noticed, does not satisfy the requirement of the proviso to Section 12A. To permit Petitioner to bypass the salutary mandate of Section 12A on the basis of such urgency would set a dangerous precedent and effectively, permit any party to an arbitration to avoid the requirement of pre-institution mediation by the simple expedient of waiting until an adverse procedural order is passed before rushing to court,” the Court observed.

The case arose from an international arbitration between Mozambique-based Minas De Benga and Black Gold Resources Private Limited under a 2017 coal mining services contract. Although Trident Chemphar was not a signatory to that agreement, Minas De Benga sought to add it as a party to the arbitration.

Trident opposed the move. Despite its objections, a majority of the arbitral tribunal directed Trident's impleadment in May 2026. The ICC Secretariat later asked the company to pay arbitration fees.

Trident then approached the Commercial Court at Ranga Reddy seeking to prevent the arbitration from continuing against it. It also sought exemption from pre-institution mediation, arguing that immediate court intervention was necessary.

The Commercial Court declined the request and returned the plaint.

Trident then moved the High Court.

The High Court noted that pre-institution mediation reflects a conscious legislative choice requiring parties to attempt settlement before resorting to commercial litigation. It further held that the requirement is a substantive statutory obligation and not a mere technicality.

“The urgency contemplated by the proviso must be of an objective character, it must be urgency arising from circumstances that are sudden, unpredictable, and such that the time required for pre-institution mediation would itself result in irreversible prejudice to the plaintiff. It is well-settled that self-created urgency, or urgency arising from inaction on the part of plaintiff despite having knowledge of an impending threat, does not qualify as urgency within the meaning of the proviso,” the bench observed.

The Court found that Trident had long been aware of the joinder proceedings and had actively contested them before the arbitral tribunal. It was therefore aware of the possibility that it could be added as a party to the arbitration well before the majority award was delivered.

“Having kept quiet while the proceedings progressed and the Majority Award was passed, petitioner cannot now be heard to say that the situation is one of urgency that makes compliance with Section 12A impossible or impractical,” the Court held.

According to the bench, the impleadment order and the subsequent fee demand were not sudden or unforeseen events. They were the culmination of a process that had been underway for some time.

The High Court also found merit in Trident's argument that the Commercial Court should not have rejected the plaint at the threshold on territorial jurisdiction grounds. Even so, it held that the plaint was independently liable to be returned because the mandatory mediation requirement had not been satisfied.

“Territorial jurisdiction and compliance with Section 12A are two distinct and separate prerequisites for institution of a suit before a Commercial Court. Satisfaction of one does not excuse non-satisfaction of the other,” the Court observed.

Dismissing the plea, the Bench clarified that it was not expressing any view on whether Trident could ultimately be compelled to participate in the arbitration as a non-signatory.

Those issues remain open for consideration if the company initiates pre-institution mediation and subsequently approaches the competent Commercial Court.

For Petitioner (Trident Chemphar Limited): Senior Counsel Vivek Reddy, assisted by Advocate Dheeraj Appasani.