Supreme Court Stays HC Order Directing ITC To Undergo Pre-Litigation Mediation In Counterfeit Cigarette Suit

The Supreme Court on Wednesday stayed the Calcutta High Court order requiring ITC Ltd. to undergo pre-litigation mediation before pursuing its trademark and copyright infringement suit against a cigarette manufacturer accused of counterfeiting its products.

ITC had sued SMM Tobacco Private Limited, a Bihar-based cigarette and tobacco manufacturer, along with three others and an unknown individual suspected of collusion. The suit, filed on August 27, 2026, alleged trademark infringement, copyright infringement and passing off, and sought a perpetual injunction.

A division bench of Justices J.B. Pardiwala and Manmohan issued notice on ITC's petition and stayed the impugned order of the High Court.

Appearing for ITC, Senior Advocate Mukul Rohatgi argued that ITC was being compelled to participate in mediation with parties allegedly involved in criminal activity, including an individual suspected of being absconding, while counterfeit products continued to be manufactured and distributed.

"The High Court is compelling me to have pre-suit mediation. With a man who is facing criminal charges, who is absconding, and who is copying my Gold Flake..."

During the hearing, Rohatgi submitted that the High Court's direction was preventing ITC from obtaining an injunction against the alleged counterfeiters. The Bench, while considering the request for interim protection, agreed to stay the order.

He further submitted that the company was unable to secure an injunction against the alleged unauthorised manufacturing and distribution operations.

The Court then issued notice and stayed the High Court's order.