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Commercial Courts Act and Arbitration Act Amendment comes into force [Read the Text]

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015 and Amendments to Arbitration and Conciliation Act, which got passed in Rajya Sabha on December 23rd , is notified in the official gazette. Both the laws are deemed to have come into force from 23rd October 2015 and they replace the ordinances.

Commercial Courts, Commercial Divisions and Commercial Appellate Divisions

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015 Act is enacted to provide for the constitution of Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and matters connected therewith or incidental thereto. Commercial Courts are a courts equivalent to District Courts and will adjudicate commercial disputes.

Appellate Division in High Courts would hear the appeals from orders and judgments from the Commercial courts. Suits of a value of Rs one Crore or more that are pending in the high court/ District courts will now be transferred to the commercial division/would be transferred to the commercial court. Commercial divisions may be set up in those high courts which exercise ordinary original civil jurisdiction, that is, the High Courts of Delhi, Bombay, Calcutta and Madras.

The Act also says that appeals to High Court from the orders passed by tribunals like Competition Appellate Tribunal, Debt Recovery Appellate Tribunal, Intellectual Property Appellate Board, Company Law Board or the National Company Law Tribunal, Securities Appellate Tribunal and Telecom Dispute Settlement and Appellate tribunal may be heard by the commercial appellate division of the high court if it relates to a commercial dispute.

This Act replace the ordinance which was promulgated in October 2015. The Delhi High Court had Delhi High Court has  already set up six commercial division courts and four commercial appellate division courts for adjudicating commercial disputes of a specified value of which is above Rs.1 Crore.

 Amendment to Arbitration Act

The amendment, to Arbitration and Conciliation Act, which now replaces the ordinances which were promulgated in December 2014, has added additional grounds to set aside an award viz. those awards contravention with the fundamental policy of Indian Law or in conflict with the notions of morality or justice, in addition to the grounds already specified in the Act. The amendment also limits the jurisdiction of Courts for passing interim orders when it says “the Court must not accept such an application, unless it thinks that the arbitral tribunal will not be able to provide a similar remedy”.

In case of International Arbitration, the amendment says that the relevant court would only be the relevant high court. The amendment also adds that the provisions under part 1 of the Act would now also apply to international commercial arbitrations even if the place of arbitration is outside India.

Another feature of this amendment is that, it says that challenge to an arbitral award that is made before a Court, must be disposed of within a period of one year. It also permits parties to choose to conduct arbitration proceedings in a fast track manner.  The award, in that case, would be granted within six months.

Read the full text here.

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  • Sundaram says:

    What’s worth to file a case rs.1 crore over commercial court Act from January 1, 2016

  • PK..Srivastava says:

    who will be eligible for appointment as judge of Commercial Court.

  • K.S.P.Reddy says:

    The establishment of commercial courts and the amendments made in Arbitration act are noteworthy and necessary.

  • J says:

    Dear Sir,

    I am unable to gather where in the Act does it suggest that appeals from Competition Appellate Tribunal, IPAB, CLB, NCLT etc will lie to the Commercial Appellate Division? Please shed some light on this.


    • S says:

      I have the same question… where does it say that “appeals” against IPAB rulings lies before the Commercial Division or commercial courts?

  • Satyanarayan says:

    Really informative.


    Another futile exercise.Existing Courts and Benches will be designated as Commercial Courts and Commercial Divisions. The remedy is worse than the disease.

  • s kumar says:

    It good that Modji is governing with most litigation seeing the light of the days expeditiously. The govt should also fix the fees the arbitrators are people with luxury and fancy fees.should be fixed. similarly there are other laws like dowry act should also be reviewed seeing the rush in family courts it is pathetic .
    The police reforms are needed and the police shold work as public servants and shouldn’t abuse their positions.
    i suggest that all state govts laws need to be reviewed like the revenue and survey -settlment act
    survey and land records acts are also not functional needs review the states are in sleep mode.
    The municipality acts need to be reviewed since the swatch Bharat act and food act are not being implemented and the states and municipalities are giving excuses of shortage of staff and escape, shoulndt be negotiatalble and all policies/rules should be executed in deed.

  • Jitendra Kothari says:

    Commercial disputes are the main source of breeding corruption in the system. And when these disputes are separated from the regular Courts ,the law ministry will have appoint 100% honest Judges otherwise the courts halls will become auction halls where highest bidder will win the cases.And I think this will prevail and the disposal will be fastest.This the fear.