The government has proposed amendments to the Commercial Courts Act, 2015, to provide further impetus to quicker and specialized commercial dispute adjudication and simplify the applicable procedure related to commercial dispute resolution in courts. The objective of the Commercial Courts Act, 2015, is to ensure the expeditious, efficacious, and reasonable resolution of commercial cases.
Dedicated Commercial Courts
Section 3 of the draft empowers the state government to constitute such a number of Commercial Courts at the District level including dedicated Commercial Courts, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under the Commercial Courts Act. “The proposed amendment Bill carves out a provision which gives power to state government to constitute Dedicated Commercial Courts which will exclusively handle the commercial suits,” said Tushar Agarwal, Founder and Managing Partner, C.L.A.P. JURIS, Advocates & Solicitors
This provision will ensure speedy disposal of the commercial suits which will give great relief to business owners whose amount is to be recovered as they have to spend their time, money, and energy for a number of years to get their money recovered due to the huge pendency of cases.Tushar Agarwal, Founder and Managing Partner, C.L.A.P. JURIS, Advocates & Solicitors
Jurisdictional ambiguity remains a major concern. “While the creation of dedicated commercial courts for arbitration-related disputes is a welcome provision, it remains to be seen whether it will lead to confusion amongst courts and litigants regarding jurisdictional boundaries, which may also lead to forum shopping by litigants to cause delays in obtaining relief,” said Chaitanya Kaushik, Associate Partner, DMD Advocates.Insertion of Section 18A
The draft proposes Section 18A directing courts to dispose of an application for an injunction within ninety days from the date of filing of the said application and where an injunction has been granted without giving notice to the opposite party. Further, mandating the Court to dispose of the application within thirty days from the date on which the injunction or relief was granted; and where it is unable so to do, it shall record its reasons for such inability.
“The bill emphasizes stricter timelines, requiring injunction applications to be resolved within 90 days and judgments pronounced within 60 days, thereby reducing delays and enhancing judicial efficiency,” said Venkatesh, Managing Partner, SKV Law Offices.
The 90-day timeline for injunctions and 12 months for execution might be tough to meet in complex cases. This could lead to rushed decisions or courts getting overburdened, which might affect the quality of judgments.Mohit Garg, Managing Partner at Lex Panacea LLP
Execution Application
The draft proposes that all proceedings, pursuant to the filing of an application for execution, shall be disposed of within twelve months of the filing of the application.”While the proposed amendment in the bill proposes a timeline of 12 months for disposal of execution application, it should also be proposed that once an application for execution has been filed, the judgment debtor has to disclose alist of all the assets presently owned by the judgment debtor and also the list of assets that were available and owned by the judgment debtor at the time of institution of suit,” said Apeksha Lodha, Partner, Singhania & Co.
The adherence to a strict timeline will fasten the dispute redressal mechanism, which shall have positive prospects for the businesses, “The focus on strict timelines for injunctions, appeals, and execution will speed up dispute resolution, making the process much more predictable and efficient for businesses. This helps build confidence in the legal system,” said Mohit Garg, Managing Partner at Lex Panacea LLP.
The objective of these proposals is to ensure the speedy disposal of commercial disputes, “These may have a direct impact on ensuring timely disposal of cases and towards effective justice,” said Chaitanya Kaushik, Associate Partner, DMD Advocates.
Alay Razvi, Managing Partner, Accord Juris highlights that the courts will not be able to adhere to such timelines on the ground of case pendency in court.
In another instance to be considered is, the procedural costs associated with stricter deadlines, mandatory mediation and adoption of technology will go up and in the event, if the party lacks technical resources.Alay Razvi, Managing Partner, Accord Juris
Appeals
The draft suggests amendment in the Section 13 of the act, adding time-frames in the appeal. The proposals provide condonation of delay on the grounds of the court’s satisfaction that the applicant was prevented by sufficient cause from filing the appeal within the said period of sixty days.
The same shall not be in contravention of section 5 of the Limitation Act, 1963, on which the court may entertain the appeal within a further period of thirty days, but not after the expiry of the aforesaid appeal. “Amongst other issues, one important issue that is being addressed fixing a time limit to an otherwise endless process of litigation by way of appeals,” said Shashank Agarwal, Advocate, Delhi High Court.
“The proposed amendment seeks to fix the time for filing an appeal to a maximum period of 90 days,” he adds.
This is pretty much in line what is prevalent these days under the provisions of the Insolvency and Bankruptcy Code, 2016 and the Companies Act, 2013.Shashank Agarwal, Advocate, Delhi High Court.
Video Conferencing Facilities
The draft expands the meaning of Section 19 mandating the State Government to provide necessary infrastructure including video conferencing facilities to facilitate the working of a Commercial Court or a Commercial Division of a High Court. “Among other proposed revisions, one of the most prominent features in the Draft Commercial Courts (Amendment) Bill, 2024, is the incorporation of technology throughout the dispute resolution process for commercial cases,” said Aditya Chopra, Managing Partner, The Victoriam Legalis.
The inclusion of electronic proceedings may lead to positive outcomes, such as faster dispute resolution, increased ease of filing cases, and a reduction in the cost of litigation.Aditya Chopra, Managing Partner, The Victoriam Legalis
Mediation
Section 12A proposes reference the parties to mediation wherein an urgent interim relief was sought and has been granted or denied by the court, with procedure for pre-institution mediation, shall be applied mutatis mutandis. “By emphasizing mediation, the amendments aim to reduce adversarial disputes, fostering amicable settlements and reinforcing ease of doing business,” said Ankit Rajgarhia, Principal Associate, Karanjawala & Co.
If effectively implemented, these changes have the potential to modernize India’s commercial litigation landscape, reduce case backlogs, and attract global business confidence, positioning the judiciary as a reliable partner for economic growth.Ankit Rajgarhia, Principal Associate, Karanjawala & Co.
The aforesaid section deals with Pre-Institution Mediation and Settlement. “Commercial Courts Act by all stakeholders further ensures effective and efficient disposal of matters, more specifically, the process of pre-litigation mediation – lessening the burden on the Courts as well,” said Rishi Sehgal, Advocate On Record, Supreme Court of India.
Unrealistic Timeline
The speedy resolution is a fundamental pillar of the proposed draft. However, there are several practical challenges and implications of the same which need to be evaluated before proceeding with this draft proposal. “Unrealistic timelines like 90 days for injunction disposal may clash with procedural delays and capacity issues, while the push for digital processes risks leaving behind jurisdictions lacking proper infrastructure,” said Sameer Jain, Managing Partner, PSL Advocates & Solicitors.
“Mandatory pre-institution mediation, though well-intentioned, could inadvertently slow things down,” He adds.
He suggested that clear jurisdictional boundaries for new Commercial Courts and stricter enforcement of procedural timelines are essential to avoid confusion and delays.
Mohit Garg, Managing Partner at Lex Panacea LLP finds the introduction of mandatory mediation as a “good move,” however states that, “the Bill doesn’t define clear timelines for completing mediation after interim relief is granted,” adding. ” This could lead to delays, defeating the purpose of expediting cases.”
Investment
The significant impediment to the practicality of the draft proposal is the question of investment in building a national judicial capacity. “Addressing these issues will require significant investment in judicial capacity, digital infrastructure, and robust protocols to balance efficiency with flexibility,” said Sameer Jain, Managing Partner, PSL Advocates & Solicitors.
The draft proposes electronic and video-conferencing infrastructure. The same needs to be supplemented by infrastructure. “The requirement for enhanced electronic and video-conferencing infrastructure demands significant investment, which might not be uniformly feasible across districts,” said Ankit Rajgarhia, Principal Associate, Karanjawala & Co.
Two Fundamental Pillar
Sanjoli Jain, Counsel at LAWSB highlights two key aspects of the proposed amendments. “Developing infrastructure to efficiently handle commercial disputes and ensuring their timely resolution,” she added.
“These amendments could be more effective if they entail guidelines on the minimum qualifications for judges in the proposed dedicated commercial courts,” Sanjoli Jain said.
Further clarification to accomplish the objective can be laying out standard operating procedures (SOPs) for pre-litigation or post-relief mediation could further enhance the process and introduce an indicative list of grounds for adjournments, along with applicable costs and penalties, could help reduce ambiguities and subjectivity, Sanjoli suggested.
Impact on Business
The introduction of a dedicated commercial court is a significant relief for the companies. “These courts can drastically cut down on the length of litigation by enacting expedited and time-bound procedures, freeing up companies to concentrate on their core competencies rather than drawn-out court cases,” Shimpy Arman Sharma, Partner, Anand Sharma & Associates said.
Businesses, particularly small and medium-sized businesses, will find it easier to obtain legal action if district courts are established. By reducing travel expenses and logistical difficulties, this localized strategy encourages more companies to pursue justice without worrying about the burdensome legal intricacies.Shimpy Arman Sharma, Partner, Anand Sharma & Associates
What can be done?
The state must ensure investment in the infrastructure building judicial capacity, laying clarification on ambiguous jurisdictional questions, and check in implementation of strict timelines for further achieving the objective of the amendment. “To ensure its success, the Bill must clearly delineate jurisdiction to avoid overlaps, prioritize digital infrastructure with adequate funding, and mandate specialized training for judges and court staff,” said Rishabh Gandhi, Managing Partner, Rishabh Gandhi and Advocates.
Nonetheless, the amendment is a welcome move considering delays in dispute resolution, particularly in litigation at district level, have long been a significant concern for businesses operating in the country.Venkatesh, Managing Partner, SKV Law Offices
These proposed amendments are in line with the objective of the act toward addressing the problem by ensuring technology-led reforms and streamlining the procedure.
