TEAM CODE-S

01HSHRI HASHUH ADVANI MEMORIAL

NATIONAL LAW FEST2023-24
BEFORE THE
HON BIE CROMBAY HIGH COURT OF WINDIVA PUBLIC INTEREST LITIGATION

COMMERCIAL DIVISION

UNDER COMMERCIAL COURTSACT, 2015

IN THE MATTER OF
Fre Insurance Company Applicant

Versus
Automata Smart Claims Processor Pvt. Ltd. Respondent

UPON SUBMISSION TO THE HON BLE BENCH

AND HIS COMPANION JIUSTICES OF

THE HON BLE CROMBAY HIGHCOURT OF WINDIVA

MOST RESPECTFULLY
SUBMITTED
 Page 2 of 16

TABLE OFCONTENTS

1 LISTOF ABBREVIATIONS 3-4

INDEX OF AUTHORITIES
STATEMENT OF JURISDICTION 6-7
STATEMENT OF FACTS 8-10

STATEMENT OF ISSUES
() SUMMARY OF ARGUMENTS 12
7 ARGUMENT ADVANCED 13-15

Whether the urgent interim reliefof specific performance of contract is sufficient for
dispensing with the mandatory pre-condition u/s 12A of the Commercial Courts Act, 2015 cr
whether such urgent interim relief being sought is frivolous and made with intent to avoid
pre- institution mediation and settlement? 13

Whether Finesse Tiles Limited can be impleaded as an intervener in the Commercial

Suit? 14

º Whether Fire Insurance Corporation is eligible to receive damages and simple interest for
breach of contract by Automata Smart Claims Processor Private Limited and does the
attribution of technical fault to WebLink Infosystems Private limited have any substance to

thepresent dispute? 15
16
8 PRAYER
 Page 5 of 16

INDEX OFAUTHORITIES

STATUES:
1. TheCommercial Courts Act, 2015
The Constitution of lndia, 1950.
3 Federal Rule of Civil Procedure, 1937.

4. S4th Reporton theCode of Civil Procedure, 1980.

5. Indian Contract Act, 1872.

Specific Relief Act, 1963
7. Installation and Maintenance Contract.

IRDAW Notifications.

CASES:
Engineers Pvt Ltd in [(2022) 10 SCC 1]
M/s Patil Automation Pvt Ltd & Ors v Rakheja
M/s SCG Contracts India Vs. K.S. Chamankar Infrastructure,
of 2022]
Micro LabsLtdvA. Santhosh, [C.S (Comm. Div.) No. 185
United States v. Cappetto (1974),
MANUBH/0423/2015 : (2016) (1) PLJR 307
Md. Sahood Alam Vs. Md. Nayyer
2014 (2) Mh.LJ265
Adarsh Water Parks and Resorts Pvt. Ltd.
BOOKS REFERRED:
Code,1908)
K.C. Takwani (CivilProcedure
Code, 1908)
Avatar Singh (Civil Procedure
WEBSITE REFERRED:

https://www.casemine.com/
https://www.barandbench,com/

https://www.legalscrviceindia.com/
https://indiankanoon.org/doc/|199182/

DICTIONARY:
Black's Law Dictionary
 Page 6 of 16

STATECMENT OFJURISDICTION

The lon'ble Conbay lliglh Court ofWindivn has the jurisdiction in this matter under Section 7 of the
(ommereial Courts Act, 2015 whieh rends as follows:
Section 7:-urisdiction of Commercial Divisions of High Courts.
Allsuits and applientions relating to eommercial disputes of aSpecified Value filed in a High Court
havingondinary original civil jurisdictionshall be heard and disposed ofby the Commercial Division of
that High Court:
Phovided that all suits andapplications relating to commercial disputes, stipulatcd by an Act to lie in a
court not inferior to a District Court, and filed or pending onthe originalside of the High Court, shall be
heard and disposed ofby the Commercial Division of the High Court:
P'rovided further that all suits and applications transferred to the High Court by virtue of sub-section (4) of
seetion 22 of the Designs Act, 2000 (16 of 2000)or section 104 of the Patents Act, 1970 (39 of 1970)
shallbe heard and disposed of by the Commercial Division of the High Court in all the areas over which
the High Court exercises ordinary original civil jurisdiction."
Section12:-Determination of Specified Value.
(1) The Specified Value of the subject-matter of the commercial dispute in a suit, appeal or application
shall be determined in the following manner:
(a) where the relief sought in a suit or application is for recovery of money, the money sought to be
recovered in the suit or application inclusive of interest, if any, computed up to the date of filing of the
suit or application,as the case may be, shall be taken into account for determining such Specified Value;
(b)where the relief sought inasuit, appeal or application relates to movable property or to aright therein,
themarket value of the movable property as on the date of filing of the suit, appeal or application, as the
case may be, shallbe taken into account for determining such Specified Value:
(c) where the relief sought in a suit, appeal or application relates to immovable property or to a right
therein. the market value of the immovable property, as on the date of filing of the suit, appeal or
application, as the case may be, shall be taken into account for determining Specified Value: l[and]
(d) where the relief sought in a suit, appeal or application relates to any other intangible right, the market
value of the said rights as estimated by the plaintiff shall be taken into account for determining Specified
Value: 2***

3*
set out in the statement of claim and the
(2) The aggregate value of theclaim and counterclam, if any as
for determining whether
counterclaim, if any, in an arbitration of a commercialdispute shall be the basis
Commercial Appellate Division or
Such arbitration is subject to the jurisdiction of a Commercial Division,
be.
Commercial Court, as the case may
section T15 of the Code of Civil Procedure. 1908 (5of
(3) Noanneal or civil revision application under
Commercial Cout f
order of a Commercial Division or
1908) as the case may be, shall lie from an
a commercial dispute under this Act.
that it has jurisdiction to hear
 Page 7 of 16
Specified Valuc:
Sec2():
Specified Value in relation toa commercial dispute, shall mean the value of the subjectmatter in respect
of a suit as determined in accordancewith section 12 1[which shall not be less than three lakl1 rupees] or
stuch highcr value, as may be notificdby the CentralGovernment.

The present memorandum set s forth the facts, contentions and arguments on the behalfof respondent.
 Page 8 of 16

STATEMENT OF FACTS
The Republie of Windiva is a democratic republic country it is the seventh largest country in the
world. The Information Technology industry contributes to 7.5% of Windiva's Gross Domestic
Products (Paral)
\utomata Smart Claims Processor Private Limited (hereinafter referred to as "ASCP")) is
lcchnology company incorporated in the Republic of Windiva and is involved in the business
activity of sale. installation, and maintenance of industrial internet of thing (UloT) sensors, (IIoT)
cameras, and industrial artificial intelligence software.(Para2)
ASCP also offers products leveraging artificial neural networks, big data analytics, machine
leaming, and computer vision for industrial risk assessment, safety updates, incident reporting.
and blockchain-enabled insurance claim processing.(Para3)
On 1 Feb 2023, the Insurance Regulatory and Development Authority of Windiva (IRDAW)
issued a Notification introducing the "Artificial Intelligence (hereinafter referred to as AI") in the
Insurance Industry Regulations" (hereinafter referred to as Regulations) permitting insurance
companies in India to partner with technology companies with the aim of developing the services
and products in the Indian insurance industry using artificial intelligence.(Para4)
In pursuance of the same, ASCP obtained registration under the Regulations after fulfilling all the
conditions provided in the IRDAW's Notifications 40 (forty) out of 57 (fifty-seven) insurance
companies agreed to partner with ASCP for automated processing of insurance claims of its
customerS as per the report automatically furnished by ASCP' product trio, viz., IIoT sensors, IloT
cameras, and AI. The blockchain platform for settlement is provided by Weblinks Infosystems
Private Limited, with detailed contracts in place.(Para5)
Finesse Tiles Limited (hereinafter referred to as "FTL"), renewed its Insurance Policy with Fire
Insurance Corporation, mandating the installation of IloT sensors, IIoT cameras, and industria, Al
software by ASCP at no cost. The policy covered losses up to INR 150,00,00,000 for fire,
implosion, and explosion,with FTL paying quarterly premiums of INR S0,00,000. Premiums for
February, May, and August 2023 were duly paid.(Para6)
Following the successful installations, ASCP confirmed the optimal functionality of IloT sensors,
IloT cameras, and Al software. Real-time safety updates were sent to the factory manager, and
safety reports were automatically transmitted to the insurance company. FTL declared a holiday
from November 11h to 14 November 2023, including its factory employees, in celebration of the
festivals of Deepavali.(Para7)
On 13th November 2023 at I1:58PM a major fire occurred at FTL's factory, due to an electrical
chort-circuit at Windivan Standard Time (WST). Technical malfunction in lloT sensors, and IloT
oomeras hindered the industrial AT's detection, leading to no alerts to the factory manager or the
Insurance Company. Locals discovered the fire on 14th November at 3:45AM (WST), resulting in
substantial damage to the factory, vehicles, raw materials, and finished goods. The incident
received widespread coverage in various media outlest. (Para8)
 Page 9 of 16
rollowing an internal inquiry, FTL found that the factory manager received the last safety update
on 9h November 2023, and no updates were received thereafter. The manager, was on leave since
7 November 2023, overlooked the absence of updates. The halt was due to a technical
malfunction in IloT sensors and cameras, impeding the industrial A's ability to detect the
clectrical short-circuit anomaly. Despite ASCP's maintenance check on November I, 2023, the
malfunetion oceurrod.(Para9)
º FTL, due to a malfunction, couldn't send an automated incident report to the Insurance Company,
halting the blockchain's claims processing.(Paral0)
On November 15, 2023, FTL issucd a Notice of Claim, seeking INR 150,00,00,000. FTL

requested the Insurance Company to send a surveyor for adetailed survey and provide a
Surveyor's Report on the incident.(Paral 1)
The Insurance Company rejected the claim of FTL vide Rejection Lctter dated 24h November
2023, alleging that the Insurance Policy did not contain any mechanism for manual processing of
claims since the insurance coud only be processed automatically on the blockchain after the trigger
event was initiated by the blockchain's smart contract on the basis of the incident report that was
submitted through the blockchain oracle by industrial artificial intelligence software after
assessing the data received by it from its IoT sensors, IloT cameras.(Para12)
FTL, unhappy with the Insurance Company's rejection, threatened legal action on 30th November,
2023. With no response, FTL filed a complaint with the National Consumer Disputes Redressal
Commission, alleging deficiency in service The Insurance Company cited FTL's negligence in
timely reporting the technical malfunction, suggesting redressal through IRDAW and the
Insurance Ombudsman, challenging the case's maintainability.(Paral3)
The Insurance Company filed a Commercial Suit at the Crombay High Court, alleging
ASCP's
breach of the Installation and Maintenance Contract. They sought damages, asserting that
ASCP's
faulty IIoT sensors and ca.neras led to non-detection by th: industrial AI software. The Insurance
Company claimed at least 25 customers reported malfunctions, accusing ASCP of inadequate
maintenance checks. This, they argued, resulted in undetected incidents causing substantial losses,
with sizable claims from the Insurance Company's
customers.(Paral4).
ASCP denied Insurance Company's allegations, stating no malfunction in its lloT
sensors or
cameras. ASCP attributed the issue to a technical fault in WIPL's blockchain oracle,
hindering
automated claims processing. ASCP emphasized its IRDAW mandate to link with WIPL's
platform, asserting no choice in selecting the hosting platform. Losses from WIiPL's technical
deficiencies, ASCPcontended, should not be attributed to them. (ParalS)
ASCP stated liability under the Installation and Maintenance Contract
required prompt notification
of malfunctions. They argued neither the Insurance Company nor
customers informed them of
technical defects in a timely manner, asserting their products were functioning
properly. ASCP
contended the lack of information resulted from the blockehain oracle fault,
impeding the
industrial Alsoftware from sending reports for automated claims processing.(Paral6)
 Page 10 of 16
ASCP objectcd to the Commercial Suit, citing non-compliance with the mandatory pre-requisite of
pre-institution mcdiation under Section 12A of the Commercial Courts Act, 2015. The Insurance
Company argued for urgeney and exemption from these pre-conditions, seeking interim relief
through specific performance of the contract.(Paral7)
ln ongoing proceedings, FTL sought to intervene in the Commercial Suit, supporting the Insurance
Company's claims against ASCP and seeking damages with interest for losses due to ASCP's IIoT
product malfunction, ASCP argued that FTL, not party to the Installation and Maintenance
Contract, was not necessary, and intervention should not be granted.(Para 18)
 Page 11 of 16
STATEMENT OF ISSUES

ISSUE I:

Whether ethertheurgent interim eliet of specificperformance of contract is sufficient for

dispensing withthe mandatory pre-conditionws 12A of the Commercial Courts Act, 2015 or
whether such urgent interin relief being sought is frivolous and made with intent to avoid pre
institution mediation and settlement'
ISSUE 2:

Whether Finesse Tiles Limited can be impleaded as an intervener in the Commercial Suit?

ISSUE 3:

Whether Fire Insurance Corporation is eligible to receive damages and simple interest for breach
of contract by Automata Smart Claims Processor Private Limited and does the attribution of
technical fault to Web Link Infosystems Private limited have any substance to the present dispute?
 SUMMARY O ARGUMENTS

1. Whether the urgent interim relicef of spccific performance of contract is sufficient for dispensing
with the mandatory pre-condition u/s 12A of the CommercialCourts Act, 2015 or whether such
urgent interim relief being sought is frivolous and made with intent to avoidpre- institution
mediation and scttlement?
The respondent most humbly submits that as per section 12A of the Commercial Courts Act, 2015
Section 12A of the Act has becn in force for over 4 ycars now, but its enforcement andimplementation
stilllargely remain vague and unclcar. Given the myth associated with mediation as a secondary and
inadequate fom of dispute redressal, parties often try to wriggle out of pre-institution mediation, as
mandated under Scction 12A of the Act, and institute a suit directly on the ground that the relief
claimed by them fallwithin the exception of "urgent interim relief" under Section 12A(1) of the Act.
2. Whether Finesse Tiles Limited can be impleaded as an intervener in the Commercial Suit?
The respondent humbly submits that the FTL cannot be impleaded as an intervenor in the
Commercial Suit it was decided in the case of United States v. Cappetto (1974),Courts may restrict
intervenors to maintain procedural efficiency and prevent undue delay.an, emphasizes the court's
discretion in managinginterventions to balance the interests of justice with the need for timely and
orderly resolution of disputes. Intervenors can be admitted if their participation significantly
contributes to the case, but thecourt ultimately decides based on the specificcircumstances
3 Whether Fire Insurance Corporation is eligible to receive damages and simple interest for breach of
contract by Automata Smart Claims Processor Private Limited and does the attribution of technical
fault to WebLink Infosystems Private limited have any substance to the present dispute?
The respondent most humbly submits that the Fire Insurance Corporation is not eligible to receive
damages and simple interest for breach of contract by ASCP he is liable to receive damages from
WIPL as it is already mention in the Written Statement of the ASCP that there was no malfunction in
ILoT sensors, IIoT cameras and the claims were not being automat1cally processed due to a technical
fault in the inbound blockchain oracle on WIPL's Blockchain platform even though its industrial AI
technology is detecting all anomalies and incidents on time, the Al software is unable to transmit the
information to the smart contract of the blockchain platform due to the technical fault in the inbound
blockchain mainatained by the WIPL
 Page 13 of 16

ARGUMIENTS ADVANCED
ISSUE-l

etner the urgent intenm relief of spvific performance of contract is

with the mandator precond1tion us 2A of the Commercial Courts Act,sufficient
2015 or
for dispensing
ungent intenm elief being sought is fnvolous and made with intent to avoid pre- whether such
mediation and settlement institution
Ihe ondent ost humblv submits that as per section 12A of the Commerciai Courts Act, 2015
Srn 1A of the Act has been in force for over 4 vears now, but its
enforcement and
tmpicmentaton still largely rmain vague and unclear. Given the myth associated with mediation asa
siary and inadequate fom of dispute redressal. parties often try to wriggle out of pre-institution
mediaton, as mandated under Section 12A of the Act., and institute a suit directly on the ground that
the rhet claimei bv them fall within the exception of urgent interim relief under Section 12A(1)
of the Act.

Ihe Supreme Cout of India examined the scope and importance of Section 12A of the Act in
Ms Patil AutomationPvt Ltd & Ors vRakheja Engineers Pvt Ltd in [(2022) 10 SCC 1](Patil).
In August 032, the Patil judgment put to rest the judicial divergence by the various High Courts on
the subject matter, and held that pre-institution mediation is not just aprocedural step. but it ought to
be complied aith before institution of a suit under the Act. The Supreme Court held that in case the
partis fail tocomply with Section 12A and invoke pre-institutional mediation, the commercial suit is
liable to be rejactei under Order VII Rule 1lof the Code of Civil Procedure. 1908. Further. the
Supreme Court in Patil endorsed the principle that the requirement of instiutional mediation would
apply only where he plaintift did not contemplate any urgent interim relief. However, it stopped
there and id not go dwell nto the meaning. interpretation or method of assessment of cases where
urgent interim relief is contemplated.
As such while the Supreme Court in Patil amply clarified the legal position., afirming the obligatory
naure of pre-litigationmediation when urgent interim relief is not involved, the question of what
cOnsüutes urgent interim relief was left unanswered, and in the absence of any specific guidelines.
at the merey of interpretation by various High Courts.

This objecive was further clarified by the Supreme Court's seminal judgment in Ms SCG Contracts
India x KS. Chamankar Infrastructure, wherein it was declared that the limit of 120 days with
respect to commercial suits under Order VIII Rule 1 is mandatorv:.

Micro Labs Ltd v A. Santhosh, (C.S (Comm. Div.) No. 185 of 2022] in September 2022 declined a
plea for urgent relief on the ground that there was substantial delay in filing the suit after the cause of
action had arisen, and hence, an urgent relief was not contemplated. In determining the plea for
urgenc. the court highlighted that theexpression used in Section 12A(1) is not merely interim
relief. but is Turgent interim relief". While interpreting the tem "contemplate" in Section 12A(1),
the court held that "a thought process which is not only detailed but profound too is a imperative
ingreiienat of the term 'contemplate' deployed by Parliament in sub section (1) of section 12A".
Further. the court emphasisedthat applications with interim pravers filed devoid of any
contemplation should not be allowed to fall within the exception of urgent interim relief". As such.
while the Madras High Court lumited the scope of "urgent interim relief", there still remained
uncertainty surrounding thne manner that courts are to interpret and assess if a relief praved for is
mediation.
urzent enough to bypass the process of mandatorv
ISSUE NO. 02

2 Whether Finesse Tiles Limited can be impleaded as an intervener in the Commercial Suit?

The respondent humbly submits that the FTL cannot be impleaded as an intervenor in the
Commercial Suit it was decided in the case of United States v. Cappetto (1974),Courts may
restrict intervenors to maintain procedural efficiency and prevent unduc delay.an, emphasizes the
court's discretion in managing interventions to balance the interests of justice with the need for
timely and orderly resolution of disputes. Intervenors can be admitted if their participation
significantly contributes to the casec, but the court ultimately decides based on the specific
Cicumstances.
Under Order 1Rule 10(2) of the CPC, 1908

(2)Court may strike out or add parties

The Court may at any stage of the proccedings, either upon or without the application of either
party, and on such terms as may appear to the Court to be just, order that the name of any party
mproperly joined, whether as plaintiff or defendant, be struck out, and that the name, of any
person who ought to have been joined, whether as plaintiff or defendant, or whose presence before
the Court may be necessary in order to enable the Court effectually and completely to adjudicate
upon andsettle all the questions involved in the suit, be added.
This Court in Md. Sahood Alam s. Md. Nayyer MANUBH/0423/2015: (2016) (1) PLJR 307
observed that the inter se dispute between the defendants cannot be decided in a suit filed by the
plaintiff. Order 1Rule 10 C.P.C. speaks about the jurisdiction of the Court not the right of a party
absence of the
for being added as defendant. If the intervenors are not necessary party and in
Court, the
intervenors, if the dispute raised between the parties can be effectively decided by the
Court should not add a person whose presence is not required for just decision of the case.

Parks and Resorts Pvt. Ltd.

In Space Developer, Mumbai In the matter between Adarsh Water
2014 (2) Mh.LJ 265 Abdul Rashid Abdul Rehman Yusuf impleadment of a party in a suit for
agreement
specificperformance was in question. The Bombay High Court held that the alleged
that agreement
between the applicants and third parties which are not even parties to the suit and
for specitic
also entered into much after the agreement which is subject-matter of the suit
not
performance. Applicants areneither necessary nor proper party to suit. Their presence is
defendants. Hence the
required for effective adjudication of the dispute between the plaintifts and
applicants cannot be impleaded as parties to the suit.
 Page 15 of 16

ISSUE NO. 03

3.
Whether Fire Insurance Corporation is cligible to receive damages and simple interest for breach
O contract by Automata Smart Claims Processor Private Limited and does the attribution of
technical fault to WebLink Infosystems Private limited have any substance to the present dispute?
Ihe respondent most humbly submitsthat the Fire Insurance Corporation is not eligible to receive
danages and simple interest for breach of contract byASCP he is liable to receive damages from
WIPL as it is already mention in the Written Statement of the ASCP that there was no malfunction
n loT sensors, IloT cameras and the claims were not being automatically processed due to a
technical fault in the inbound blockchain oracle on WIPL's Blockchain platformeven though its
industrial Altechnology is detecting all anomalies and incidents on time, the Alsoftware is unable
to transmit the information to the smart contract of the blockchain platform due to the technical
fault in the inbound blockchain mainatained by the WIPL. As it was mandated under the IRDAW
Notifications to link its products with WIPL'S blockchain platform since WIPL was the successful
bidder under the regulations and that ASCP didnot have any choice in choosing the blockchain
hosting the platform and therefore , loss caused out of WIPL's technical deficiencies cannot be
attributed to ASCP.
Furhter it was also alleged that under the Installation and Maintenance Contract, ACP couldonly
be held liable if it did not take any steps to remedy the malfunctions or technical defect in its
products after being informed by the Insurance Company or its customers and that, neither the
Insurance Company nor its customers had timely informed ASCP of any technical defects or
malfunctions in its products. Whic means the products were functioning properly.
IRDAW Notifications.

As per sect 4 sub-sect 6 the registered person'sproducts shall be

subjects to such checks and
verifications that shall be conducted by the Insurance Regulatory and Development Authority from
malfunction on part ofASCP then the
time to time. So if they would have been any defect or
action on it.
regulatory authority IRDAW would have taken
Maintenance Contract
Under Art 3of the Installation and
indemnify the Contractor in case of any technical
The Contractee shall not be responsible to
diftuculties or malfunctions arising on the blockchain platform.
 Page 16 of 16

PRAYER

Theretore inthe light of issues raiscd., argument advanced and authorities cited, the Petitioner respectfully
requests this Hon'ble Court to adjudged and pleased to:
This Hon'ble Court may be pleascd not togrant the urgent interim reliefof specific performance
Commercial
of contract as very essence of pre-1mediation is mention under section 12A of the
Cours Act, 2015 to resolve the disputes between the parties amicably. Commercial
This Hon'ble Court may be pleased not to allow FTL as an Intervenor in the in the
Suit so as to complicate or delay in passing the resolution.
interest for breach of
This Hon ble Court may be pleased not to grant the damages and simple
contractby ASCP as well as WIPL.

Hon'ble Court to adjudge the above

According to what is just and good, it is an appeal of the counsel to
may be pleased to grant as an deemed fit in the
prayers; and grant any other relief which the Hon'ble court
interest of justice, equality and good conscience.
Allof which is respectfully submitted
duly bound forever
For the act of kindness, the appellant shall be

Allof which is most humbly prayed.

Sd/
(Counsel for the Respondent)

RESPONDENT
MEMORIAL ON BEHALF OF