The Commercial Court Act.

Commercial court Act has their own importance and always remember to never attend any proceeding without reading a bare Act, whether you are proxy counsel or main counsel, or let's say the matter is just been filed and the case is just at the stage of PF or summoning opp party. In case you don't get the time to read the small bare act, this article will help you.

Let's start with the commercial court Act, I will try my best to explain all in simple language so it would not take much time. Before doing it I want to share my bad experience in the commercial court, I filed a suit of damages on behalf of my client for the breach of the consultancy agreement before the hon'ble District Judge, but the findings of the case were that the dispute is with the consultancy agreement/employment agreement and the matter got transferred to the commercial court, the file got transferred and when I appeared before the commercial court the judge asked me, have you fulfilled all the conditions before filing this suit before the commercial court I answered- "yes lordship" the judge said "really" then where is a statement of truth & statement on oath, he asked, I asked the judge "statement of truth" -no lordship, the judge ordered to first fulfilled all the conditions and then he will summon to the opposite party. At that time I was not aware of what conditions was the commercial court judge asking about, but now I can write up an article and brief you all about each and everything related to commercial court disputes, how to file the matter, what are the requirements, and so on. So let’s begin.

Matters that are connected therewith and incidental to commercial transactions are tried by the commercial courts only. Lets first discuss what kind of cases are tried by the commercial courts? - ordinary transactions of merchants, bankers, financiers, and traders such as those relating to mercantile documents, and also include enforcement and interpretation of such documents,? export or import of merchandise or services related matters, issues relating to admiralty and maritime law transactions relating to aircraft, aircraft engines, aircraft equipment, and helicopters, including sales, leasing, and financing of aircrafts, carriage of goods, construction and infrastructure contracts, including tenders, agreements relating to immovable property used exclusively in trade or commerce, example commercial properties such as the mall, complex, etc, franchising agreements, distribution and licensing agreements, management and consultancy agreements, joint venture agreements,? shareholders agreements, outsourcing services and financial services,? mercantile agency and mercantile usage, partnership agreements, technology development agreements, intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits, agreements for sale of goods or provision of services, exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum,? insurance and re-insurance, contracts of agency relating to any of the above, such other commercial disputes as may be notified by the Central Government, so if you draft agreement related to any of above mentioned matters then never forget to mention commercial courts in jurisdiction clause incase any dispute arises.?

But further in explanation, exceptions are also mentioned, so what are those exceptions? relief, recovery, and any issue related to securities, monies with immovable property is not considered to be a commercial dispute, and the other exception is if one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions, which means the commercial Act is solely for the purpose of solving private dispute and no case can try before it against government entities or private body of a government, and also if government entity carries out a public function.?

Now let's come to the value that is specified in the act to institute a suit against a private commercial body/person, the minimum limit to file a suit is 3 Lakhs. Further, let's talk about the procedure or how evidence will be collected, it will follow as specified in CPC & Evidence Act, well yes, the court will follow the same procedure written in CPC for evidence, summons, trial, etc,?

First, when to say it's the jurisdiction of the commercial court to try a case "when a suit or any application is instituted as per sections 16 to 20 CPC the commercial court will have jurisdiction over the suit. Now let's see what this section 16 to 20 CPC talks about, (Suits to be instituted where subject-matter situate, Suits for immovable property situated within the jurisdiction of different Courts,? Place of an institution of the suit where local limits of the jurisdiction of Courts are uncertain, Suits for compensation for wrongs to person or movable, Other suits to be instituted where defendants reside or cause of action arises), hence where jurisdiction is uncertain then a commercial suit can also be instituted for immovable property (Comercial or private not mentioned just uncertainty of jurisdiction or multiple jurisdictions is mentioned in the explanation).?

Arbitration with respect to commercial disputes-: Section 10 of the commercial Act talks about when a commercial dispute is filed, before an arbitrator, whether it's international or domestic arbitration, and in findings, it's of a commercial nature matter shall be tried by the commercial court.?

Also, I want to include here something from my experience. If a suit is filed before the district magistrate, then when you should file an application for sending the matter to arbitration? the answer is to write after the summons is received and write before filing the written statement, first move an application for arbitration especially when an agreement has an arbitration clause.

The act also explained that if in any other law, the category of cases is expressly or impliedly mentioned to be tried by any other court other than the commercial court then the commercial court, will not have jurisdiction over the matter to be tried by it.?

Specifying the value and cost of damages how calculated is an important part of the plaint itself, never write cost in air and calculate it specifically, The specified value should be included properly and computed well in the suit as per the market value, whether the dispute is related to the recovery of money, immovable property, intangible rights, or moveable property.?

The value should be specifically calculated better if take help of a CA to calculator value and interest calculated on the filing of the suit, and it's extremely important that each and every amount mentioned in it is defined well, But if the value is less then 3 Lakhs the commercial court can not try it, also if the matter is filed and let us say appeal filed before commercial division bench or commercial appellant court then the aggrieved party can not file any revisions or review application before any other court and the commercial appellant court decision will be final.?

Chapter 3A in the commercial court act is an amazing opportunity for parties to amicably settle the dispute before filing a suit before the commercial court, but the Supreme court in its latest judgment mentioned that if the suit is transferred from the civil court to the commercial court then it is not mandatory for parties to try to settle the dispute amicable, hence what someone can do in that case is they can request the judge to kindly dismiss the civil suit and order plaintiff to file a fresh application before commercial court, again it will be the descretion of the court but yes parties can request that if civil court dismiss the matter it will give an opportunity to both the partities to settle the dispute and it will save the time of the court, but if plaintiff does not agrees and insisit to transfer the suit rather then dissmissing, then before filing a written statement before the commercial court after transfer and summons, file an application to kindly send the matter for arbitration.?

Chapter 4 talks about the limitation period for an appeal after the decision of the commercial court, there is a limitation of 60 days to file an appeal, and such appeals shall be disposed of within the period of six months from the date of filing the appeal.

Overriding effect -: ?the provisions of this Act shall have an effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law for the time being in force other than this Act.?

Important things to be followed before instituting suit in a commercial court is that, in the schedule, certain things are inserted and are mandatory to be followed before instituting a suit, let's understand the same in simple language, there had been certain amendments made in CPC when it comes to a commercial dispute, and if any amendments are made by the state government are in conflict with the amendment made in CPC in respect to a commercial dispute, the amendment mentioned in the schedule of commercial court Act will prevail over the amendment made by the state government.?

So, what documents do you need to file with plaint before the commercial court, In every plaint, there should be an affidavit proving the facts of the case, same with commercial suit rule 15A was added in where the statement of truth (Given in Appendix 1 at the end of the act) is important to mention with the plaint along with a statement on oath.?

Section 35 was also substituted with the following in CPC, for matters related to commercial disputes, when it comes to commercial court, the commercial court has the discretion to determine the cost.?

Further section 35A has also been added in CPC when the matter is before the commercial court and not before any civil court and the act is strict when it comes to the time limit to file a written statement, the commercial court can grant 30 days time to file a WS and if the defendant fails to file WS, the commercial court on its discretion can further allow the opp party upon cost and can further allow for 120 days, if the opp party still failed to file a WS, his right to file a WS will be forfeit.?

Denial & admission-: Commercial court gives freedom to the opposite party to the which facts he is against and why, if it is the jurisdiction then what jurisdiction where the suit should be instituted, where the opp party does not expressly mention the denial it will be accepted as accepted except in case of any disability.??

Further, in the schedule, there is also an option for summary judgment where any of the parties can as for summary judgment, but the application for summary judgment can only be filed before framing of issues and after the summons is served to the opp party.?

I know I am still missing many things related to commercial disputes and governing laws, but soon I will also share some interesting case laws to understand the commercial court Act well. Stay in touch and follow for more.?