Date December 31, 2015
The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015 (“Bill”) was passed by the Indian Parliament on 23 December 2015 and is deemed to have come into force on 23 October 2015. Some salient features of the Bill are:

  • Commercial dispute has been defined to include, inter-alia, any dispute related to transactions between merchants, bankers, financiers and traders such as those relating to mercantile documents including enforcement and interpretation of such documents, construction and infrastructure contracts, including tenders, agreements relating to immovable property used exclusively in trade or commerce, franchising agreements, distribution and licensing agreements, management and consultancy agreements, joint venture agreements, shareholders agreements, subscription and investment agreements pertaining to the services industry including outsourcing services and financial services, partnership agreements, intellectual property rights, insurance, etc.
  • The concerned State Government may, after consultation with the concerned High Court, constitute required number of Commercial Courts at the district level. Provided that no Commercial Court shall be constituted for the territory over which the High Court has ordinary original civil jurisdiction.
  • The Chief Justice of the High Court that exercises ordinary civil jurisdiction may constitute a Commercial Division in that High Court.
  • The Chief Justice of the concerned High Court shall constitute a Commercial Appellate Division in that High Court.
  • The Commercial Courts and Commercial Division in the High Courts will deal with all matters relating to commercial disputes involving a value of not less than INR 10 million (approximately USD 150,000).
  • Commercial Appellate Divisions shall hear appeals against (i) orders of Commercial Divisions of High Courts; (ii) orders of Commercial Courts; and (iii) certain orders passed under the Arbitration and Conciliation Act, 1996. The appeal is required to be made within 60 (sixty) days of the judgment or order and the Commercial Appellate Division should endeavour to dispose of an appeal within a period of 6 (six) months from the date of filing such appeal.
  • The Bill sets out the manner of appointing judges to the Commercial Courts, Commercial Divisions and Commercial Appellate Divisions and the manner of determining the specified value of a commercial dispute.
  • All suits of a specified value of INR 10 million or more that are pending in the High Courts or in the civil courts are required to be transferred to the Commercial Division or the Commercial Court (as the case may be) after they are constituted. However, a suit will not be transferred if a final judgment on the matter is reserved prior to the constitution of the relevant Commercial Division or Commercial Court.
  • The Bill amends certain provisions of the Code of Civil Procedure, 1908 relating to a suit in respect of a commercial dispute of a specified value.
  • The Bill also prescribes certain timelines/measures to ensure speedy resolution of disputes.