The Commercial Courts Act, 2015 has transformed commercial litigation in India, facilitating a more efficient dispute resolution process and reducing the reliance on costly arbitration proceedings. The Act was introduced by the Indian government to establish specialized commercial courts with the aim of efficiently resolving commercial disputes, enhancing the business climate, and promoting ease of doing business.

Objective and Impact of the Act

The Commercial Courts Act has made a significant impact by creating specialized courts that streamline commercial dispute resolution, cutting down on delays previously associated with regular civil courts. The Act’s purpose is to expedite commercial litigation, providing a focused mechanism for businesses, thereby contributing to a more predictable and favorable business environment in India.

Scope of Application

The Act is applicable to commercial disputes of a specified value, which includes:

•   Ordinary commerce-related transactions
•   Mercantile documents
•   Partnerships
•   Maritime and aviation disputes
•   Infrastructure, immovable property, and franchising issues
•   Intellectual property rights, insurance, and other commercial contracts
•   Commercial and international arbitration disputes
•   Commercial matters involving government entities.

The Act mandates that only disputes valued above INR 3,00,000 fall under the jurisdiction of the commercial courts, with cases involving over INR 1,00,00,000 going directly to the original civil jurisdiction of select High Courts, including those in Delhi, Bombay, Madras, Calcutta, and Himachal Pradesh.

Structure of Commercial Courts

The Act requires establishing commercial courts at the district level and commercial divisions within High Courts to address complex commercial matters, managed by judges with expertise in commercial law. Additionally, these courts follow the Code of Civil Procedure, 1908 and the amended schedule outlined in the Commercial Courts Act.

Timeline and Pre-Litigation Mediation

The Act sets strict timelines for each stage of the litigation process. The commercial courts aim to resolve cases within six months from filing, extendable by another six months under exceptional circumstances. Appeals are also expected to be disposed of within six months.

For dispute resolution, the Act mandates pre-litigation mediation between parties, requiring them to explore mediation before initiating court proceedings, except in cases needing urgent interim relief. If a party fails to appear or the mediation is unsuccessful, the aggrieved party may proceed with the litigation process. The mediation period is limited to three months from application filing, with an additional two months if required.

Jurisdiction in Arbitration Matters

The Act grants jurisdiction over commercial arbitration matters, allowing the Commercial Division of High Courts to oversee cases of specified value, depending on whether the arbitration is international or domestic. For commercial disputes under the Arbitration and Conciliation Act, 1996, all related applications or appeals are handled by the commercial courts, ensuring that arbitration-related cases of specified value are managed by specialized courts.

Summary Judgment

A unique feature of the Commercial Courts Act is the provision for summary judgments. If it appears that one party has no reasonable prospect of succeeding in their case, the commercial court may issue a judgment without proceeding to oral evidence, provided that the defendant has been served summons and issues are yet to be framed. Summary judgments provide an efficient and cost-effective way to conclude cases with clear outcomes.

The Commercial Courts Act, 2015, has indeed revolutionized commercial litigation in India by introducing specialized courts, implementing efficient timelines, and incorporating mechanisms like pre-litigation mediation, establishing a more accessible and dependable framework for resolving commercial disputes.