Ordinance marks overhaul of Commercial Courts Act

By Deepak Sabharwal, Deepak Sabharwal & Associates
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Companies with business interests in India need to analyse and evaluate their approach to dealing with mercantile disputes in the wake of amendments by way of an ordinance dated 3 May in the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, now to be known as the Commercial Courts Act, 2015. The ordinance continues the government’s efforts to adopt swift and efficient means of resolution for trade disputes in view of the increase in foreign investment and the consequent rise in commercial disputes, by establishing commercial courts below the level of district judge in all jurisdictions, except where the high courts have ordinary original civil jurisdiction, i.e. in the cities of Chennai, Delhi, Kolkata, Mumbai and the state of Himachal Pradesh.

Deepak SabharwalManaging partnerDeepak Sabharwal & Associates
Deepak Sabharwal
Managing partner
Deepak Sabharwal & Associates

Highlights of the ordinance are:

New name: The new name removed confusion about the courts and clarified that there are separate courts with different procedures established solely for commercial disputes.

Specified value: The “specified value” of commercial disputes to be adjudicated under the act, as defined in section 2(1)(i), was reduced from ₹10 million (US$147,000) and above to ₹300,000 and above. This is expected to reduce the time taken to resolve such disputes (now 1,445 days) and improve India’s ranking in the World Bank’s ease of doing business index.

Commercial courts hierarchy and appeal mechanism: The ordinance (i) amends section 3 of the act and introduces commercial courts at the district judge level where the high court has ordinary original civil jurisdiction; (ii) inserts section 3A, introducing commercial appellate courts; (iii) splits commercial courts where the high court does not have ordinary original civil jurisdiction into (a) courts at the level of a district judge and (b) commercial courts below the level of a district judge.

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Deepak Sabharwal is the managing partner of Deepak Sabharwal & Associates.

Deepak Sabharwal & Associates
A-19, 1st Floor, Kailash Colony
New Delhi – 110 048, India

Mumbai | Kolkata | Chennai |
Hyderabad | Bengaluru
Contact details
Tel: +91 11 2923 0232 / +91 11 2924 0232
Email: delhi@sabharwalindia.com
Website: www.sabharwalindia.com

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