Based upon the recommendations of the Law Commission made in its 253rd report, a bill namely, the Commercial Courts, Commercial Division and Commercial Appellate division of High Courts Bill, 2015 was introduced in the Rajya Sabha on 24th April 2015.
Speedy disposal of High Value Commercial Disputes which involve complex facts and question of law to be taken into consideration, thus there was a need to provide an independent Mechanism for their disposal and early resolution.
What do we understand of the term ‘Commercial Disputes’?
‘Commercial Dispute’ has been described in the 2015 ordinance giving it a wide meaning. The inclusive definition includes all those transactions which may cause a commercial dispute in general. But the definition encompasses disputes of commercial nature starting from “ infringement of Intellectual Property Rights (IPR), exploitation of natural resources, insurance, and the list extends to dispute amongst bankers, traders, merchants etc. and also the disputes in relation to partnership agreements, shareholders agreements, joint venture agreements and mercantile agreement etc.
This setup of devised by the government is formed in two basic layers being:
The Commercial Courts/Commercial Divisions; and
The Commercial Appellate Divisions.
Except when the High Court has ordinary original jurisdiction in Civil matters, the State Government then are to form and set up Commercial Courts at the District level and the Chief Justice sets up a Commercial Division bench headed by a Single Judge.
Whereas, the Commercial Appellate Division is headed by a bench constituted by the Chief Justice of all the High Courts. This bench is constituted by two Judges who are there to hear Appeals arising from decisions of the Commercial Court or the Commercial Division.
COMMERCIAL COURTS AND ARBITRATION
Commercial Dispute wherein the subject matter is valued more than Rs. 1 Crore along with the Appeals and other applications arising due to such an arbitration matter is supposed to be heard and decided/disposed by:
Commercial Court, in such a matter, that would ordinarily lie before a principal Civil Court, OR
Commercial Division, in a matter which would ordinarily lie before the High Court as its original Jurisdiction.
Keeping in mind the Arbitration and Conciliation Act, 1996, any matter involving international Commercial arbitration enclosing a dispute of subject matter valued above Rs. 1 Crore have been brought under the umbrella of High Courts and therefore are to be heard and decided by the Commercial Division.
The court procedures in India have always been so cumbersome and long drawn process and thus highly frowned upon. This act would help formulate that into a speedy and time saving process, which is important as it will not only cause speedy disposal of commercial disputes but also change the perception of foreign investors about India as a country to invest in. Commercial courts are the need of the hour in Indian judicial system these are often viewed as the stepping stone in the reformation process of the Civil Justice System in India.
This act is framed with sky high objects as it’s a way through which Commecial Disputes are being handled in a swift and speedy manner but it all depends upon the execution of the said act. This act needs to be executed as such that its implementation is such that it achieves the aims and objectives of the Act.
HIGH POINTS OF THE FORMATION OF THE ACT
Commercial Dispute has been defined with a wide scope.
The judges presiding the Commercial Courts are judges who have a lot of expertise in Commercial Dispute matters.
All the applications and appeals attached to any international commercial arbitration matter are catered by the Commercial Division of the particular High Court.
Pecuniary limit of valuation of commercial dispute has been set making it very clear.
Speedy disposal of disputes and Appeals of the Commercial nature which leads to reduction of long led cases through years.
There have been certain amendments to the Civil Procedure Code, 1908, that is applicable to the commercial disputes.
Insertion of a new order XIII A that is for applying to obtain a summary judgment in respect to claim of commercial disputes.