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Legal Analysis | July 16, 2025

The provisions of the Commercial Courts Act, 2015, for expediting commercial disputes.

INTRODUCTION

The commercial court act was enforced in 2015 following the enforcement there was an amendment in the act in 2018 the primary objective of the act is to speedily resolve the commercial disputes in india. This approach for the separate courts for commercial disputes improved the India’s ease of doing business and fostered the investment into the region.

The commercial court act presents various provisions which helped in achieving the core idea of the commercial courts, The provisions which are examined under the act are as follows:

Establishment of forums, pecuniary jurisdiction, the establishment of appellant division, some mandates after the amendment of 2018, time bound procedures, management hearing etc. in the paper the various aspects of the act has been analysed thoroughly following with the structure, which includes history, scope, objective, case laws, conclusion.

HISTORY

The concept of commercial courts is not new it is nurtured over decades:

Post globalisation period: after the commencement of globalisation in 1991 the trade and commercialisation increased in india, with the increment in the trade and commercial disputes also rocketed. Which lead to the burdening of the courts in india as the courts were already burdened with the pending cases. This whole scenario caused problems in the provision of remedy as it was delayed due to the numerous pending cases. Causing a wound in the trust of investors.

188^th law commission report: in this report the concern was raised regarding the delays in the Indian litigation system, the commission under justice M. Jagannadha Rao recommended for the establishment of “separate Fastrack commercial dispute division”.

253^rd law commission: this report further refined the recommendations and proceeded with the establishment of commercial courts at district level and commercial appellate division in high court.

The commercial court act 2015: this act was introduced in 2015 which established the commercial courts and also its appellate jurisdiction which would eventually help in combatting the commercial disputes.

The commercial court amendment act, 2018: This amendment played a vital role in tackling some real-world challenges and enhancing the goals of the Act. One of the key changes was lowering the "specified value" of a commercial dispute from ?1 crore to ?3 lakh, which allowed a broader range of disputes to fall under the Act's scope. Additionally, it introduced mandatory pre-institution mediation.

OBJECTIVES

The Commercial Courts Act of 2015 has a range of important goals; all aimed at creating a legal environment that supports business and economic growth. 

 Speeding Up Commercial Dispute Resolution: This is the top priority. The Act is designed to significantly cut down the time it takes to resolve commercial disputes. It does this by Creating Specialized Courts Setting up dedicated Commercial Courts and Commercial Divisions/Appellate Divisions staffed with judges who have expertise in this area. 

Implementing Strict Timelines: Enforcing tough, legally mandated deadlines for different stages of litigation, from filing documents to delivering judgments. 

Active Case Management: Judges are encouraged to actively manage cases to ensure they stick to these timelines and move along efficiently. 

Summary Judgments: Courts are given the power to issue quick judgments in cases that don’t have substantial merit, helping to avoid lengthy trials that aren’t necessary. 

Boosting India’s "Ease of Doing Business" Ranking: One of the key motivations behind the Act was to enhance India’s standing on the World Bank's "Ease of Doing Business" index, especially regarding the "Enforcing Contracts" aspect. A quicker and more reliable dispute resolution process sends a positive message to both global investors and local businesses. 

Building Investor Confidence: By ensuring that commercial disputes are resolved swiftly and effectively, the Act aims to boost confidence among both domestic and international investors. Predictability and timely justice are essential for making investment choices and for businesses to function without the stress of drawn-out legal battles.

 Encouraging Specialization in Commercial Law: Commercial disputes often involve intricate and specialized areas like trade, finance, and intellectual property. The Act seeks to Make sure that judges dealing with these cases have, or can develop, the specialized knowledge and experience needed in commercial law. Support ongoing training and education for judges who handle commercial cases.

PROVISIONS OF THE ACT WHICH HELPS IN EXPIDITING THE COMMERCIAL DISPUTES 

This part gives State Governments, in collaboration with the High Court, the authority to set up Commercial Courts at the District Judge level. 

Section 4: Constitution of Commercial Divisions of High Courts: Here, it’s required to establish Commercial Divisions within High Courts that handle ordinary original civil cases. 

Section 5: Constitution of Commercial Appellate Divisions of High Courts: This section lays out the creation of Commercial Appellate Divisions in every High Court to manage appeals coming from Commercial Courts and Commercial Divisions. 

Section 6: Jurisdiction of Commercial Courts: This section outlines the jurisdiction of Commercial Courts, which includes all commercial disputes that meet a "specified value." 

Section 2(1)(c): "Commercial Dispute": This important definition section broadly describes what counts as a "commercial dispute" under the Act, covering a wide array of business-related transactions. 

Section 2(1) (i) and Section 12: "Specified Value": These sections clarify and establish how to determine the "specified value" of a commercial dispute, which was originally set at ?1 crore but was later lowered to ?3 lakh by the 2018 amendment.

 Mandatory Pre-Institution Mediation: Section 12A: Pre-Institution Mediation and Settlement: This is a key section added by the 2018 amendment. 

Sub-section (1) states that a suit that doesn’t seek any urgent interim relief cannot be filed unless the plaintiff first tries pre-institution mediation.

 Sub-section (3) outlines the timeline for mediation to be completed: generally, within three months from the application date, with a possible two-month extension if both parties agree. 

Sub-section (5) indicates that any settlement reached under this section will hold the same status and effect as an arbitral award based on agreed terms under the Arbitration and Conciliation Act, 1996.

Case laws:

Contract and Specific Performance

1. Alagammal and Ors. v. Ganesan and Anr. (Supreme Court, January 2024) 
   • If a specific timeline for payment by the buyer is provided under the contract, it is mandatory to adhere to the timeline
   • Buyers who fail to pay within specified timelines cannot seek specific performance if sellers decline to proceed

Appeals and Commercial Courts

2. State of Kerala and Ors. v. Dr. Praveen Kumar T.K. (Karnataka High Court, January 2024) 
   • No appeal shall lie against any order or decree of a commercial division or commercial court except as permitted under the Commercial Courts Act, 2015
   • Eliminates second appeals in commercial disputes

Corporate Law and Share Transmission

3. Avanti Metals Pvt. Ltd. v. Alkesh Gupta (NCLAT Chennai, January 2024) 
   • Succession certificate is necessary for the transmission of shares, ensuring the company's compliance with the law
   • Establishes mandatory requirements for share transmission after death

Pratik Chandrakant Khandhadiya v. Hindustan Unilever Ltd. (NCLT Mumbai, August 2024) 

• Upon the death of a joint shareholder, the surviving joint holder(s) are entitled to the deceased's interest in the shares
• Clarifies title to shares cannot pass to third parties via will when joint holders exist

CONCLUSION

The Commercial Courts Act, 2015, and its 2018 amendment represent a seminal and forward-looking change in India's commercial dispute resolution strategy. From a manifestly felt need to counter systemic delay within the conventional judicial mechanism and to position India as a valuable international business player, the Act's central mission is the quick and efficient resolution of high-value commercial disputes.

Through the creation of specialized Commercial Courts and Divisions, adoption of tight timelines, institution of mandatory pre-institution mediation, and procedural overhaul of the Code of Civil Procedure, the Act has brought into being a specialized fast-track mechanism. Its provisions have the objective of promoting judicial specialization, expediting the litigation process, and restricting the endemic phenomenon of long-drawn-out legal warfare that chilled investment in the past and hampered economic development.

While the Act is a laudable legislative spirit and has initiated sweeping procedural reforms, its success will depend on firm and regular implementation throughout all echelons of the judiciary. However, it is an achievement testifying to India's resolve to establishing a pre-predictable, dependable, and investor-friendly juridical environment essential for developing a dynamic economy and strengthening confidence in its commercial justice delivery system.

 

REFRENCES

1. Statutes

• The Commercial Courts Act, 2015:
  • The Commercial Courts Act, No. 4 of 2016, India Code (2015).
• The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018:
  • The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, No. 28 of 2018, India Code (2018).
• The Code of Civil Procedure, 1908 (as amended for commercial disputes):
  • The Code of Civil Procedure, 1908, No. 5 of 1908, India Code (1908).

2. Law Commission Reports

• Law Commission of India, 188th Report, Proposals for Constitution of Hi-Tech Fast-Track Commercial Divisions in High Courts (2003):
  • Law commission of india, report no. 188, proposals for constitution of hi-tech fast-track commercial divisions in high courts (2003).
• Law Commission of India, 253rd Report, Commercial Division and Commercial Appellate Division of High Courts and Commercial Courts Bill, 2015 (2015):
  • Law commission of india, report no. 253, commercial division and commercial appellate division of high courts and commercial courts bill, 2015 (2015).

3. High court and supreme court cases on commercial disputes 

https://acuitylaw.co.in/yearly-rewind-2024-commercial-disputes/