Highlights of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015

President of India on 23rd October 2015 promulgated ordinance  providing for constitution of Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and for matters connected therewith or incidental thereto. 

About the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015

The ordinance provides for constitution of Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and for matters connected therewith or incidental thereto. The salient features are as under:

  1. The Commercial disputes as defined would means a dispute arising out of ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents; export or import of merchandise of services; issues relating to admiralty and maritime law; transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same; carriage of goods; construction and infrastructure contracts, including tenders; agreements relating to immovable property used exclusively in trade or commerce; franchising agreements; distribution and licensing agreements; management and consultancy agreements; joint venture, shareholders agreements, subscription and investment agreements pertaining to the services industry including outsourcing services and financial services, mercantile agency and mercantile issues, partnership agreements, technology development agreements, IPR relating to unregistered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits, agreements for sale of goods or provision of services, exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum; insurance and re-insurance, contracts of agency relating to any of the above and such other commercial disputes as may be notified by the central government.
  1. The courts constituted under this ordinance will have the jurisdiction over the above mentioned “commercial disputes”.
  2. The ordinance clarifies that the commercial dispute shall not cease to be commercial dispute merely because it also involves property or for realisation of monies out of immovable property given as security or involves any other relief pertaining to immovable property; One of the contracting parties is the state or any of its agencies or instrumentalities, or a private body carrying out public functions.
  3. The ordinance provides for setting up of commercial divisions in those High Courts which are already exercising ordinary original civil jurisdiction such as Delhi, Bombay, Calcutta, Madras, and Himachal Pradesh High Court. Commercial Divisions will exercise jurisdiction over all cases and applications relating to commercial disputes. The Commercial Division shall have territorial jurisdiction over such area on which it has original jurisdiction.
  4. Commercial Courts equivalent to District Courts to be set up in (i) the States and UTs where High Courts does not have ordinary original civil jurisdiction, and (ii) in States where High Court has original jurisdiction, in respect of those regions to which the original jurisdiction of a High Court does not extend.
  5. The minimum pecuniary jurisdiction of such Commercial Courts and commercial division would be Rs. One Crore. If a counter claim is filed in a suit before a civil court relating to a commercial dispute of a Specified Value, such a suit will be transferred to the Commercial Division of a High Court or a Commercial Court, as the case maybe. The Specified Value of a suit or application will be determined by taking into account the subject matter of the case, including the relief sought, market value of the immovable property or rights involved or the counter- claim;
  6. The “Commercial Appellate Division” in all the High Courts would hear appeal against (i) Orders of Commercial Division of High Court; and (ii) Orders of Commercial Courts. Appeal will have to be preferred within a period of 60 days from the date of the order or judgement, to be dispose of within a period of 6 months;
  7. Commercial Divisions or Commercial Courts shall not have jurisdiction in matters relating to commercial dispute, where the jurisdiction of the civil court has been either expressly or impliedly barred under law.
  8. All pending suits and applications relating to commercial disputes involving a claim of Rupees One Crore in the High Courts and Civil Courts will be transferred to the relevant Commercial Division or Commercial Court as the case may be.
  9. It is proposed to have a streamlined procedure which is to be adopted for the conduct of cases in the Commercial Division and in the Commercial Court by amending the Code of Civil Procedure, 1908 so as to improve the efficiency and reduce delays in disposal of commercial cases. The amended CPC as applicable to the Commercial Divisions and Commercial Courts will prevail over the existing High Court Rules and other provisions of the CPC to the contrary.
  10. No civil revision application or petition against interlocutory orders of a Commercial Court will be permitted. Appeals will only be permitted against decrees of the Commercial Courts. Applications or appeals pertaining to international commercial arbitration under the provisions of the Arbitration Act, filed in a High Court and suits relating to domestic commercial arbitration filed in the original side of the High Court or would ordinarily be filed before the principal civil court of ordinary jurisdiction in a district, will be heard and disposed of by the Commercial Appellate Division.
  11. Commercial Divisions/Commercial Courts to follow provisions of the Code of Civil Procedure, 1908 as amended by the Ordinance.
  12. In the event of there  being any conflict between the amended CPC by this ordinance and High Court Rules or amendment to Code of Civil Procedure made by the High Court/ State Government, In a case where the rules of a HC or any amendment to CPC made by a State government, the former would prevail.