The Commercial Courts, Commercial Division and Commercial Appellate Division of High

Courts Ordinance, 2015

Foreign and Indian investors have expressed repeatedly the difficulty in protecting their rights due to
an undue delay in disposing off cases, which creates a negative reputation.
The requirement for an efficient and a stable alternative dispute resolution system ensuring speedy
enforcement of contracts, easy recovery of monetary claims as well as compensation for damages
suffered, all of which are critical in encouraging economic and investment activity in India.
However, with the enactment of the new Commercial Courts, Commercial Division and Commercial
Appellate Division of the High Court Ordinance, 2015 (Ordinance) which has been cleared by the
Cabinet and promulgated by the President on October 23, 2015, this position could possibly change
now.
The Ordinance proposes to establish the following:

Commercial Court (District Level)

Commercial Division (High Court)
Commercial Appellate Division (High Court)

Some of the pertinent changes proposed in the Ordinance are as follows:

I

Constitution of Special courts

The State Government may constitute such number of Commercial Courts at the District Level after
consulting with the concerned High Court as it may deem fit. The Honble Chief Justice of the High
Court would constitute Commercial Divisions within the concerned High Courts itself which have
ordinary civil jurisdiction. The Honble Chief Justice of the High Court would be entitled to nominate
Judges of the Commercial Court, Commercial Division and the Commercial Appellate Division. Any
appeal against the decision passed by a Commercial Court or the Commercial Division of the High
Court, is to be heard by the Commercial Appellate Division of the respective High Court. This would
be constituted by the Chief Justice of the High Court.
II

Jurisdiction

Commercial Courts shall have the jurisdiction to try all suits and applications relating to a
Commercial Dispute of a Specified Value not less than INR 1,00,00,000 (Indian Rupees One Crore) or
any higher value which may have been notified by the Central Government. Commercial Division of
the said High Court shall have the jurisdiction over suits and applications filed before the High Court
having original civil jurisdiction.
Commercial Disputes shall mean commercial disputes covering all types of commercial transaction
which shall include those disputes covering the export and import of services, partnership agreements,
franchising agreements, construction and infrastructures contracts, shareholders agreements etc.
In the event of a conflict of the Rules laid down by the concerned High Court, any amendment to the
Civil Procedure Code by the State Government on the one hand, and any amendment to the provisions
of the Civil Procedure Code by the Ordinance on the other; the latter shall prevail.

III

Appeals

Appeals from decrees of Commercial Court and Commercial Divisions can only be done provided its
within 60 days from the date of the decision and the Commercial Appellate Division should
endeavour to dispose of appeals within a period of 6 months from the date of filing such appeal.
IV

Transfer of pending suits

All pending suits and applications including those under the Arbitration and Conciliation Act, 1996,
relating to a commercial dispute of the Specified Value stand transferred to the relevant
Commercial Court or the Commercial Division of the relevant High Court, as the case may be.
However all suits or applications wherever the final judgment has been reserved/pending by the Court
prior to the constitution of the Commercial Court or the Commercial Division of the High Court, such
suits or applications will not be transferred.
Amendments to the provisions of the Code of Civil Procedure, 1908 in view of the proposed
Ordinance shall provide wider powers to alter the litigation practice that was followed till now. Some
of the pertinent changes are as follows:
A Section 35- Courts while deciding costs shall consider;

the conduct of the parties;

result of the proceeding;

whether the claim or counterclaim was frivolous;

whether the settlement procedure was refused unreasonably; and

frivolous claim resulted in wasting time of the court.

B Order V Rule 1- The defendant shall be allowed to file its written statement within a period
of 30 days. The Defendant may be allowed an extension to file on any other day as specified
by the Court, for reasons which are to be recorded in writing and payment of costs but not
exceeding 120 days from date of issue/service of summons.
C Summary judgment (Order XIII-A) - Section 1(1) of this order sets out the procedure for
Court to decide a claim related to Commercial Dispute without recording any oral evidence.
D Case management hearing (Order XV-A)- The courts shall hold first Case Management
hearing not later than 4 weeks from the date of filing the affidavit of admission or denial of
documents. The Court mandatorily shall have to hold a meeting between the parties where the
Court will decide upon a timeline for various stages in a proceeding like the recording of
evidence, filing of written arguments, commencement and conclusion of oral arguments.
E

Order XX- The Commercial Court, Commercial Division, and Commercial Appellate
Division, shall within 90 days of conclusion of arguments pronounce a judgement and copy of
it to be issued to parties either through e-mail or otherwise.

The promulgation of the Ordinance is clearly a major step towards guaranteeing the adjudication of
commercial disputes in a timely manner. Introduction of such Commercial Courts would mark a
landmark legal reform for the nation.