BREW YOUR TEA #8 Sunday Reflections with CA Hemant Gupta

Dear Esteemed Professional Colleague,

Today I would like to share and discuss an offbeat topic in relation to commercial courts Act 2015, which for some reasons is not much publicized and known.

We all have taken the heat of our legal system at some point of time. The delays can be excruciating and costly especially in the matters of commercial transactions.

In order to strengthen legal framework for settlement of commercial disputes, In 2015, Applicable to whole of India an Act was promulgated for constitution of Commercial Courts under the High Courts for adjudicating commercial disputes of specified value which shall be minimum of Rs. 3,00,000/- .

The term commercial dispute encompasses wide array of disputes under its umbrella Such as ordinary transactions of merchants, bankers, financiers and traders,  export or import of merchandise or services, maritime law, transactions relating to aircraft, carriage of goods, construction and infrastructure.

It further includes agreements relating to immovable property used exclusively in trade or commerce, franchising , distribution and licensing management and consultancy, joint venture, shareholders, subscription and investment, partnership, technology development, IPR, sale of goods, mercantile agency and mercantile usage, exploitation of oil and gas, insurance and re-insurance;

The State Government in consultation High Court to constitute Commercial Courts at District level. Pecuniary value may be specified which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, However state can increase the pecuniary value in consultation with high court and also can decide the territorial jurisdiction of commercial courts with in the state.

The Commercial Court shall have jurisdiction to try all suits and applications relating to a commercial dispute of a Specified Value arising out of the entire territory of the State over which it has been vested territorial jurisdiction.

This Act also provides that no civil revision application or petition shall be entertained against any interlocutory order of a Commercial Court, including an order on the issue of jurisdiction, and any such challenge shall be raised only in an appeal against the decree of the Commercial Court.

Even for Commercial arbitration (including international commercial arbitration) dispute of a Specified Value filed with high court or those which would ordinarily lie before any principal civil court of original jurisdiction in a district (not being a High Court) shall be heard and disposed of by the Commercial Division/Commercial court.

There is a pre-institution mediation provision as well. It shall complete the process of mediation within a period of three months from the date of application. This period may be extended by two months.

Lastly this act also provides for overriding clause that the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

This Act provides for specialised courts with strict time lines and limited and time bound appeals for meaningful dispute resolution. The Act seems to take steps for reducing delays in resolving disputes in commercial matters. Its success depends largely on efficiency of our legal system all stakeholders with actual powers needs to ensure that this does not become a replica of already existing system which at times proves to be lacking desired efficiency.

But first I believe more awareness needs to be created for this law than it has actually gathered.

Once again wish you a Happy New Year.

Thank you for Reading!!