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Commercial Courts, Commercial Division and Commercial Appellate Divisi...

  Aug 05, 2020

Commercial Courts, Commercial Division and Commercial Appellate Division of the High Courts Act, 2015 

What is the objective of the Act?

The 2015, Act, the objective is to make litigation less cumbersome and expeditious especially related to Commercial Disputes. The Bill brings down the specified value of a commercial dispute to 3 Lakhs from the present one crore. Therefore, commercial disputes of a reasonable value can be decided by commercial courts. 

This would bring down the time taken (presently 1445 days) in resolution of commercial disputes of lesser value and thus further improve India's ranking in the Ease of Doing Business.

What are commercial disputes?

The term ‘Commercial Dispute’ has been given an inclusive definition, with the intent to, include almost all disputes that could entail with respect to a ‘commercial transaction’ understood in the most generic way. As such the definition broadly includes disputes relating to transactions between merchants, bankers, financiers, traders, etc. and also includes disputes in relation to shareholders agreements, mercantile documents, partnership agreements, joint venture agreements, intellectual property rights, insurance, etc. 

What is the institutional structure that Act envisages?

The Act constitutes a two layer set-up., i.e.

I. The Commercial Courts/Commercial Divisions; and

II. The Commercial Appellate Divisions.

The Act essentially introduces the setting up of a Commercial Court at District level and a Commercial Division in the High Court to deal with Commercial Dispute of a Specified Value. All appeals from the orders of the Commercial Court/Commercial Division would lie before the Commercial Appellate Divisions to be set-up in all High Courts.

Why was the need felt for the enactment of the Act?

With the rapid economic development there has been considerable increase in commercial activities and consequent steep rise in the number of commercial disputes at domestic and international level. Increase of Foreign Direct Investment (FDI) and overseas commercial transactions have further contributed to a significant increase of commercial disputes.

With a view to address the issue faster resolution of matters relating to commercial disputes and to create a positive image particularly among the foreign investors about the independent and responsive Indian legal system, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 was enacted and commercial courts were established at District Levels in all jurisdictions, except in the territories over which the High Courts have original ordinary civil jurisdiction.