Implementation of Commercial Courts Act, 2015 in India
The Commercial Courts Act,2015 provides to set up Commercial Courts, Commercial Appellate Courts, Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and other related matters. It is so required that the State Government take steps in consultation with the respective High Court to enact the provisions of the Act.[1] The Act has been drafted with a motive to provide for a speedier, simpler, time-effective and cost efficient method of claim settlement.[2] It also aims to reduce the burden of pending litigations on the judiciary for dispute settlement.
The definition of commercial disputes broadly covers disputes arising from ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, export and import of merchandise or service, admiralty and maritime law, transactions relating to aircraft, etc., carriage of goods, construction and infrastructure contracts including tenders, agreements relating to immovable property used exclusively in trade and commerce, infringement of Intellectual Property Rights, exploitation of natural resources, insurance, etc. The definition also includes disputes arising out of agreements of franchising, distribution, licensing, management, consultancy, JV, partnership, shareholders, subscription, investment, etc.[3]
According to a report prepared by Vidhi[4], it was observed that most of the courts did not maintain the data about the Commercial Courts. In fact, the data kept by various courts was inconsistent and unmanaged across different High Courts of various states across the country. The Bombay High Court, for example, maintained the data only for 1 month, the Orissa High Court for 2 months, the Punjab and Haryana High Court, and the Chhattisgarh High Court maintained it for four months. The Delhi High Court has consistently maintained the records for the longest period of time i.e. 35 months (from November 2015 to October 2018). 12 High Courts made no disclosures at all. These were the High Courts at Allahabad, Calcutta, Hyderabad, Jammu & Kashmir, Karnataka, Kerala, Madras, Manipur, Patna, Rajasthan, Tripura and Uttarakhand.
The definition of commercial disputes and various subject matters enlisted under it gives rise to vagueness. It also creates a larger perspective to debate on the vagueness of the topic. It is therefore suggested that a negative definition that might have excluded certain matters such as matrimonial disputes, succession disputes, etc might have proved to be more beneficial for the implementation of the Act.[5] Further, the Act is also criticized for being adopted from the US based principles as well the misuse of the summary judgment procedure. Poor infrastructure, inefficient management and insufficient number of judges in the courts are other such important reasons behind the non effective and inefficient implementation of the Act.
It hence provides another example of inconsistent and inefficient implementation of legislative reforms in India. Therefore, it is necessary for legislative and infrastructural reforms to go hand in hand for better implementation of laws. Thus, there is a need for a separate supervisory and management department to be established for checking the operations and implementations of Commercial Courts Act across all the High Courts.
By
Sheena Tyagi
[1] Commercial Court Act,2015 s. 1, No. 4, Acts of Parliament, 2015 (India).
[2]Notes and Comments, Business Courts And Private Tribunals: Is India Ready For Global Commerce?, Vol. 60:1 Journal of the Indian Law Institute 80,(2018). http://14.139.60.114:8080/jspui/bitstream/123456789/47612/1/005_Business%20Courts%20and%20Private%20Tribunals%20In%20India%20Ready%20For%20Global%20Commerce%20%2879-96%29.pdf.
[3] Commercial Court Act,2015 s. 2(1)(c), No. 4, Acts of Parliament, 2015 (India).
[4] Ameen Jauhar & Vaidehi Misra, Commercial Courts Act, 2015: An Empirical Impact Evaluation, VIDHI CENTRE FOR LEGAL POLICY (July 5, 2019).