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Commercial Courts…(Amendment) Bill passed by Lok Sabha


6th of August

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill, 2018 has been passed by the Lok Sabha (lower house of the Indian Parliament).

The Bill provides for faster resolution of matters relating to commercial disputes, thus creating a positive image particularly among the foreign investors about the independent and responsive Indian legal system.

According to the Press Release issued earlier when the Bill was cleared by the Union Cabinet, the Bill seeks to achieve following objectives:

Value limit will be brought down:

It brings down the specified value of a commercial dispute to Rs. 3 Lakhs from the present Rs. one Crore. This would bring down the time taken in resolution of commercial disputes of lesser value and thus improve ease of doing business.

Commercial Courts at district level in Chennai, Delhi, Kolkata, Mumbai and HP:

The Bill also provides for establishment of Commercial Courts at district Judge level for the territories over which respective High Courts have ordinary original civil jurisdiction i.e., in the cities of Chennai, Delhi, Kolkata, Mumbai and State of Himachal Pradesh. State Governments, in such territories may notify such pecuniary value of commercial disputes to be adjudicated at the district level, which shall not be less than Rs. 3 Lakh and not more than the pecuniary jurisdiction of the district court.

In the jurisdiction of High Courts other than those exercising ordinary original jurisdiction a forum of Appeal in commercial dispute decided by commercial courts below the level of District judge is being provided, in the form of Commercial Appellate Courts to be at district judge level.

Pre-institution mediation:

The introduction of Section 12A under new Chapter IIIA pertains to Pre-Institution Mediation process in cases where no urgent, interim relief is contemplated. It will provide an opportunity to the parties to resolve the commercial disputes outside the ambit of the courts through the authorities constituted under the Legal Services Authorities Act, 1987.

It will also help in reinforcing investor's confidence in the resolution of commercial disputes. The insertion of new section of 21A will enable the Central Government to make rules and procedures for Pre-Institution Mediation.

Prospective effect of amendments:

The Bill provides prospective effect to the amendment so as not to disturb the authority of the judicial forum presently adjudicating the commercial disputes as per the extant provisions of the Act.

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