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Cabinet approves Commercial Courts, Commercial Division and Commercial Division of High Courts Bill

On 7th March 2018, the Union Cabinet chaired by Prime Minister Narendra Modi approved the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill, 2018 for introduction in the Parliament.

Following are the objectives of the bill:

Cabinet approves Commercial Courts, Commercial Division and Commercial Division of High Courts Bill

  • The Bill brings down the specified value of a commercial dispute to 3 Lakhs from the current 1 Crore. Hence, commercial disputes of a reasonable value can be decided by commercial courts.
  • This will reduce time taken (presently 1445 days) to resolve commercial disputes of lesser value and will improve India’s ranking in the Ease of Doing Business.
  • It 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 Chennai, Delhi, Kolkata, Mumbai and State of Himachal Pradesh.
  • The State Governments, in such territories may specify value of commercial disputes to be adjudicated at the district level, which shall ‘not be less than 3 lakhs rupees 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.
  • The introduction of the Pre-Institution Mediation process in cases where no urgent, interim relief is contemplated 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.
  • Inclusion of new section of 21A which enables Central Government to make rules and procedures for PIM.
  • To give 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.