(COMMERCIAL COURTS ACT)

  1. BACKGROUND

1.1. The Commercial Courts Act is an important legislation to expedite the justice delivery system with regard to commercial matters. The Commercial Courts Act would prevail over the existing High Courts Rules and other provisions of the Civil Procedure Code (CPC) in order to improve the efficiency and expeditious disposal of commercial cases.

1.2. Pursuant to the amendment to the Commercial Courts Act in 2018, a civil suit relating to commercial matters of a minimum value of at least INR300000 can be filed before a Commercial Court.

  1. CHANGES CONCERNING COMMERCIAL COURTS

2.1. The Commercial Courts Act provides for establishing Commercial Courts at the District level within the jurisdiction of the High Courts in various States in India. And where a High Court has original jurisdiction, the concerned State Government may specify the pecuniary jurisdiction for the Commercial Court, which shall not be less than INR 300000.

2.2. Commercial Appellate Courts may be set up at the District level in areas where High Courts do not have original jurisdiction in order to hear appeals against orders of Commercial Courts below the level of a District judge.

2.3. The State Governments may appoint judges to the Commercial Courts either at the level of a District judge or below the level of a District judge

2.4. The process of pre-institution mediation is to be concluded before the filing of a suit in cases where no urgent relief is sought by the parties.

  1. KEY AMENDMENTS TO CPC

3.1. As regards the written statement to be filed by the defendant, strict timelines have been introduced and non-compliance would render the defendant forfeiting the right to file a written statement.

3.2. Any party my apply for summary judgment, in respect to a claim (or part thereof) which can be decided without recording oral evidence, at any time before the issues are framed.

3.3. Time bound procedure for disclosures, discovery and inspection of documents have been introduced.

3.4. The process of case management hearing, framing of issues, fixing of procedure and timelines have been prescribed.

3.5. Evidence (including conducting cross-examination) shall be recorded on a day to day basis and affidavit of evidence of all witnesses is required to be filed simultaneously and filing of written arguments by parties is made compulsory.

3.6. It is prescribed that the arguments shall be closed within six months from the date of first case management hearing and the judgment is to be pronounced within ninety days of conclusion of arguments.

  1. APPLICABILITY OF COMMERCIAL COURT TO ARBITRATION

4.1. Pursuant to The Arbitration and Conciliation (Amendment) Act, 2015, various changes were introduced incorporating the relevant provisions of the Commercial Courts Act with the intent that both these legislations complement each other.
4.2. All applications and appeals emerging out of arbitration are to be heard by Commercial Court/Commercial Appellate Division. Further, applications and appeals emerging out an International Commercial Arbitration and any other arbitration proceedings which would have been filed in the original side of the High Court will be heard by the Commercial Appellate Division.

4.3. Appeals against an order passed by the Commercial Appellate Division may then directly lie before the Supreme Court.

  1. CONCLUSION

5.1. If the Commercial Courts Act provides for a speedy disposal of commercial disputes through ensuring adherence to strict timelines and imposing penalties in case of non-compliance to deal with the issue of pendency and delay in litigation. However, its success is dependent upon how efficiently and effectively its provisions are enforced.

Disclaimer

Please note that the contents of this note are for general information purposes and not meant to be a substitute for obtaining legal advice. This note is only a brief introduction, which may not be up to date and we urge you to consult your lawyers for specific advice.


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