Was George Orwell an Optimist?
Thelonious Monk - Monk's Dream
Ian gave you the correct answer. I think your initial premise is what has you confused:
My understanding is that since a battle takes place as soon as two opponents meet...
That's not correct - there are instances where opponents meet and no battle takes place, for example when someone plays the Escape d.i. card. From the official FAQ:
2.4 If I have Initiative and my opponent plays an Escape DI card, which effect wins?
As no battle occurs (as per the effect of the Escape DI card), Initiative has no effect.