The Commercial Courts,
Commercial Division and Commercial Appellate Division of High Courts Act, 2015
-Romit Chandrakar Sem.-3, HNLU, Raipur
Brief overview of the Act
The Commercial Courts, Commercial
Division and Commercial Appellate Division of High Courts Act, 2015 was enacted
India for the creation of commercial divisions in high courts, and
commercial courts at the district level. The Act provides for a separate
set of Commercial Courts to be set up by State Governments at the District
level to try suits and claims pertaining to commercial disputes of a value of
at least Rs.1 crore and above. The Act also requires the High Courts to set up
Commercial Appellate Divisions within each High Court to hear appeals from the
orders of Commercial Courts and Commercial Divisions ("Courts")
and endeavor to dispose of them within 6 months of their filing date. The Act
also amends the Code of Civil Procedure, 1908 ("CPC")
as will be applicable to the Courts, which shall prevail over the existing High
Courts Rules and other provisions of the CPC, so as to improve the efficiency
and expeditious disposal of commercial cases.[1]
Salient
Features of the Act
1. Meaning of ‘Commercial Disputes’
The term ‘Commercial Dispute’ has been given a wider meaning
in the 2015 Ordinance. It provides an inclusive definition of commercial disputes
to include almost every kind of transaction
that gives rise to a commercial dispute’even in the most generic sense. The
definition broadly includes commercial contracts disputes ranging from
infringement of Intellectual Property Rights, exploitation of natural
resources, insurance, to disputes between bankers, traders, merchants, etc. The
Act also talks about disputes with respect to partnership agreements,
shareholder agreements, joint venture agreements, mercantile documents, etc.[1]
2. Constitution of Commercial Courts
The
Act provides for constitution of various commercial courts:
- Commercial Courts- The Act makes provision for the constitution of Commercial Courts in every district of the state as well as union territory where the High Court of that concerned state or union territory does not have original jurisdiction. At present, there are only five High Courts which exercise original jurisdiction over the commercial disputes namely, the High Courts of Bombay, Calcutta, Delhi, Himachal Pradesh and Madras. However, with the coming of this Act, now each state will have its own commercial courts to decide upon commercial disputes.
- Commercial Divisions- Those High Courts which do not have original jurisdiction over cases related to commercial contracts will now have a Commercial Division to be set up within itself which is empowered to hear all applications with respect to commercial transactions.
- Commercial Appellate Divisions- These divisions will be set up in every High Court to hear appeals against (i) orders of Commercial Division of High Court; and (ii) orders of Commercial Courts. The appeal has to be filed within sixty days from the date of judgment. The Commercial Appellate Division is required to dispose of such an appeal within six months from the date of filing such Appeal. However, the Ordinance does not mention a statutory right to appeal to the Supreme Court from an order of the Commercial Appellate Division. Accordingly, a limit of one is imposed on a number of appeals allowed in case of commercial disputes. The Act also bars any revision application filed against any interlocutory orders passed by Commercial Court.[2]
3. Valuation of Disputes-
Under the Ordinance, the Specialised
Commercial Courts have jurisdiction to hear those cases pertaining to commercial
matters where the value of the subject matter is more Rs. 1,00,00,000. The Bill
also prescribes the manner of determining the value of a commercial dispute.
4. Jurisdiction over Arbitration
Matters
As far as Arbitration is concerned,
the Act provides that all the matters dealing with international commercial
arbitration must be brought within the ambit of High Court irrespective of the
fact whether the High Court exercises such jurisdiction or not. However, there
is a proviso added to this clause which provides that the matters pertaining to
the appointment of arbitrators in international commercial contracts must be
excluded from the purview of High Court’s jurisdiction. Commercial Court will
also have the power to hear appeals filed against domestic arbitrations
involving Indian parties, which initially lie before any civil court other than
High Court exercising territorial jurisdiction over such arbitration.[3]
5. Strict deadlines
The
rules relating to the deadlines have been made more stringent by the Act. The
Act provides for strict deadlines for conduct of case, filing of written
statements, filing of documents, filing of written statements, etc. if any
party fails to comply with the deadlines provided by the Act, they have to face
serious consequences as the penalties are harsh such as forfeiture of right to
make a filing or the right to rely on a document. A deadline of judges is also
imposed through this Act. The Act states that the judgment should be pronounced
within 90 days from the conclusion of the final arguments.
[4]
6. Innovative procedure
Several
new procedures have also been adopted by the Act to make the process of hearing
of the disputes faster. The Act states that following the procedure which is
practiced in other countries, the Commercial Courts and Commercial Divisions
will hold a case management hearing before going into the detailed hearing.
Case management can be defined as a preliminary hearing in which the Court hear
out the parties and frame the issues on which the hearing will proceed. The
Court can also decide the dates on which various steps involved in the matter
will be taken up, such as filing of evidence, examination and cross-examination
of witnesses and the date of hearing the arguments of the party. The time
limits for agreements may also be fixed by the Court during case management.
One more procedural change which has been brought about by the Act is that the
parties to the case are required to file their written arguments in advance of
the oral hearing. This is to be done so that each party gets the time to
prepare for the counter-arguments.
7. Costs
The act has also provided some detailed guidelines with respect to the factors which the Court has to consider when giving the direction about costs, that whether one party should bear all or some of the cost of the other party, such as fees, expenses incurred in hiring lawyers, expenses in relation to witnesses, etc. the Act also states that in the regular course, the unsuccessful party will have to bear the cost of the successful party. The Act has also authorized the Court to impose costs on the parties depending on their conduct during the case. While imposing any such costs on the parties the Court should consider that whether a party has wasted the time of the Court, or refused to settle the matter by giving unreasonable expenses, or failed to comply with any direction which the Court gave during case management. The Court has also been given the authority to impose any amount of exemplary cost. It is very evident that the Act has taken a tougher stand with respect to costs. It is because the Act seeks to dispose of the matters quickly, and does not want the parties to prolong the matters unnecessarily. A party is less likely to seek adjournment if the party has to bear not only its own cost but also those of the other parties.[5]
7. Costs
The act has also provided some detailed guidelines with respect to the factors which the Court has to consider when giving the direction about costs, that whether one party should bear all or some of the cost of the other party, such as fees, expenses incurred in hiring lawyers, expenses in relation to witnesses, etc. the Act also states that in the regular course, the unsuccessful party will have to bear the cost of the successful party. The Act has also authorized the Court to impose costs on the parties depending on their conduct during the case. While imposing any such costs on the parties the Court should consider that whether a party has wasted the time of the Court, or refused to settle the matter by giving unreasonable expenses, or failed to comply with any direction which the Court gave during case management. The Court has also been given the authority to impose any amount of exemplary cost. It is very evident that the Act has taken a tougher stand with respect to costs. It is because the Act seeks to dispose of the matters quickly, and does not want the parties to prolong the matters unnecessarily. A party is less likely to seek adjournment if the party has to bear not only its own cost but also those of the other parties.[5]
8.
Limited
Appeals
The
Act provides a window of 60 days within which the parties can file an appeal
against the order of the Court. Appeals would be filed before the Commercial
Appellate Division of the appropriate high Court. The Act also states that the
Appellate Division shall strive to dispose of the appeal within six months. The
Act also states that the parties can appeal only against specified types of
interim orders passed by the Commercial Courts and Divisions.
[1]Section-2 of Commercial Division
and Commercial Appellate Division of High Courts Act, 2015
[2] Chapter-II from Section 3 to11 of
Commercial Division and Commercial Appellate Division of High Courts Act, 2015
[3]Section-10 of Commercial Division
and Commercial Appellate Division of High Courts Act, 2015
[4]
Nishith Desai Advocates/ Introduction of
Commercial Courts: End of Endless Litigation!/ http://www.nishithdesai.com/information/research-and-articles/nda-hotline/nda-hotline-single-view/article/introduction-of-commercial-courts-end-of-endless
litigation.html?no_cache=1&cHash=2747250a08f728e125b01c97278f334f/ last
visited on December 08 2017
[5] Bulwark Solicitors/Provisions: Commercial Court of India/ http://www.bulwarksolicitors.com/litigation/commercial-courts-in-india-an-analysis-of-the-provisions-of-the-commercial-courts-commercial-division-and-commercial-appellate-division-of-high-courts-act-2015/
last visited on Dec. 08 2017
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