COMMERCIAL COURTS ACT, 2015

IMPORTANT INSIGHTS OF COMMERCIAL COURTS ACT, 2015

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INTRODUCTION:

The Government of India has been somewhat courteous in their platform of ‘Make in India’ and magnifying the ‘ease of doing business in India’. The quick and effective enforcement of contracts, recuperation of monetary rights and resolution of business disputes and award of just repayment for damages are undeniably quintessential to buoy up journey and economic events. With India focusing towards fetching a paradigm of strong regulatory substructure for business and economic advancement with a substantial upturn in commercial undertakings; it is likely to experience an increase in numeral commercial disputes both at the national and global levels.

The Indian Judicial System confronted extravagant slowdowns and there was an urge for quick disposal of commercial disputes of high pecuniary value. Thus, the Law Commission of the country, in its 253rd report[1], had advocated for the formation of the Commercial Courts at distinct levels. The bill for the same was initiated in the Rajya Sabha in April, 2015 and passed through Lok Sabha on 16th December, 2015. By this, the Commercial Courts, Commercial Division and the Commercial appellate division of High Courts Act, 2015 comes into pictures which aimed at attaining an early resolution of commercial disputes and also refine the depiction of the judiciary.

An efficacious segment of law can be examined on the following touchstones:

  • Precise and Lucid goal of the legislation.
  • Simplified and unambiguous provision promoting the objectives of the Act.
  • Conducive implementation of provisions.

The Commercial Courts Act is definitely a welcome step and wake – up call for the sluggish picture of the judiciary in India, however what requires to be seen is the effect the provisions of the new piece of legislation is capable of bringing and the hurdles in its effective implementation.

COMMERCIAL COURTS ACT, 2015 – A SNAPSHOT

In view of the globalized economy, several Bilateral Investment Treaties (BITs)[2] have been taken on by the Government. A legal forum is being recommended by the states that invade into BITs with India in some other states although the source of action has been raised in India. It is clearly for the grounds that these states have little credence in the Indian justice conveyance system which is overburdened by disobliging deferments. In White Industries v. Union of India[3], it was noticed that the delay in justice delivery can have waves upon India’s treaty obligation as well as terms with other nations, eventually commerce of our country. The Commercial courts are anticipated to overcome the delayed judicial processes.

Henceforth, with the view of hastening economic advancement; upgrading the global image of Indian justice delivery mechanism; and to improve the faith of venture capitalists in the legal ethos of the state, Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015 was came into effect by the President of India on 23rd October, 2015 with the following key features:

  • Comprehensive domain of commercial disputes.

The term ‘Commercial Disputes’ has been referred in Section 2(1) (c), which takes account of a comprehensive form of transactions that maybe give upswing to a commercial liaison. The Act includes the whole gamut of commercial litigation leaving few by the merchant, banker, trader, and investors’ etc. matters regarding admiralty and maritime law, exploitation of natural resources, intellectual property rights, construction and infrastructure contract, government contracts and immovable property, etc. It is limpid that the definition of commercial disputes is not only exhaustive but is also an inclusive- having room of new matters of commercial disputes in the future.

  • Establishment of the Courts.

The Commercial Courts Act, 2015 deals with the initiation of Commercial Courts[4], Commercial Division of High Court[5] and Commercial Appellate Division[6] respectively. In the Division of High court, Judges of the High Court shall be designated as the Judges of such courts who are trained in dealing with the commercial disputes. The Act also furnishes that the Commercial Appellate Division will be set up in every High Court to hear the appeals against[7]:

  1. Orders of the Commercial Court.
  2. Orders of Commercial Division of High Court.

  It is compulsory for each Commercial Division in every High Court to have ordinary original civil jurisdiction. However, out of 24 High Courts only 5 enjoys the original civil jurisdiction that is, – Bombay, Madras, Delhi, Calcutta and Delhi. Pondering the purpose of the Act, that is, the speedy disposal of Commercial Disputes, one must make out the need for the appointment for more judges. Therefore, this call for the initiation of specialized Commercial Courts similar to Arbitration Centres.

  • Determination of the specified value.

Preliminary in the chief Act only those commercial disputes were adjudged whose value was Rs. 1 Crores or more, however, The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment), 2018 have restricted the described worth of a commercial dispute at Rs. Three lakhs.

  • Training of the Judges.

Disputes under this Act shall be perceived by the judges having appreciable expertise and experience in commercial law. Instructing of judges on newest trends, comprehensive practices and commercial dealings are highly required. The provisions of the Act states that, it is the duty of the government of the state to form requisite facilities for the training of the judges appointed as Judges of such Commercial Courts/ Divisions[8]. Currently, most of the Indian Judges are more willing towards solving criminal, family disputes, etc. as a result, they have less experience in resolving commercial disputes. Consequently, placing in work the entrenched National Judicial Academies for bestowing uninterrupted training and education along with managing disparate examinations for appointment of judges will guarantee that the best talent is being recruited in such Commercial Courts/ Divisions.

  • Infrastructure.

Section 19[9] furnishes that it is the liability of the state government to make accessible required infrastructure, imperative for the flexible working of these courts. Presently, these commercial courts are located in the same building as the District/High Courts itself. There is a need to have a separate building for these designated Commercial Courts/Divisions where these courts shall be facilitated with hi-tech facilities such as e-filing, video conferencing of witnesses and other latest infrastructure, therefore matching the global standards.

  • Appeal.

The Act gives that all appeals in opposition to the order of Commercial Court/Division shall be heard and inclined by the Commercial Appellate Division of High Court within the period of six months from the date of filing such appeal[10]. Further, the Act also provides that the Commercial Appellate Division of High Courts shall hear the appeal from the judgments of the following tribunals:

  • Competition Appellate Tribunal
  • Debts Recovery Appellate Tribunal
  • Intellectual Property Appellate Board
  • Company Law Board or the National Company Law Tribunal
  • Securities Appellate Tribunal
  • Telecom Disputes Settlement and Appellate Tribunal
  • Transfer of existing commercial disputes.

All the commercial applications undecided including the Arbitration cases shall be transferred to the Commercial Courts/Divisions from the District Court or High Court concerned after the constitution of these courts. However, suits where the final verdict has been passed in reserve by the court earlier to the formation of these Commercial Court/Division shall not be transferred[11].

  • Time lines.

A time- limited remedy is crucial for the rapid disposition of the matters, so keeping in mind the very aim of the Act certain timelines has been specified. Subsequent are the certain instances for the same:

  • All applications to the Commercial Appellate Division shall be made within 60 days from the date of impugned decision, and the disposal will be made with the 6 months.
  • The written statements need to be filed within 120 days from the date of service of summons on termination[12].
  • Pronouncement of the decision must be held within the 90 days of the conclusion of arguments.

CONCLUSION

Successfulness of the judicial system is fundamentally connected with the progress of the country. This Act blemishes as a courageous attempt in not only refining the ease of doing business in India but also matching the international standards in the arena of the judicial system. The Act may also expedite in changing the opinion of venture capitalists regarding India as an investment hub. Only time could convey as to whether the Act shall actually envisage the commitments for which it has been legislated, however, it would not be wrong to say that this Act is a welcome endeavor.


[1] Addresses the concerns of all the stakeholders and lawmakers equally.

[2] An agreement establishing the terms and conditions for private investments by nationals and companies of one state in another state.

[3] (2011)

[4] Section 3 of the Act

[5] Section 4 of the Commercial Dispute Act, 2015

[6] Section 5 of the Commercial Disputes Act, 2015

[7] Section 5 of the Act

[8] Section 20 of the Commercial Disputes Act, 2015

[9] The Commercial Dispute Act, 2015

[10] Section 13

[11] Section 15

[12] Section 16 of the Act

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