Law Commission submits its 253rd report to Union Law Minister, suggests exclusive commercial courts [Read the report]

Law Commission submits its 253rd report to Union Law Minister, suggests exclusive commercial courts [Read the report]

The Law Commission of India, headed by Justice AP Shah has reportedly submitted its 253rd report to the Union Law Minister Sadananda Gowda. In its report, the Commission has suggested setting up of Courts to deal exclusively with commercial disputes. It has also suggested changes in the procedural law, i.e. the Civil Procedure Code.

The setting up of new courts and changes in procedural law have been suggested considering the number of years commercial disputes end up being in court, leading to increasing number of pending cases and also harming business.

The Commission has suggested ‘The Commercial Division and Commercial Appellate Division of High Courts and Commercial Courts Bill, 2015’, in which it has defined “commercial dispute” to mean disputes arising out of ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, joint venture and partnership agreements, intellectual property rights, insurance and other such areas as have been defined in the proposed Bill.

The report also says, “Not only does this benefit the litigant, other potential litigants (especially those engaged in trade and commerce) are also advantaged by the reduction in backlog caused by the quick resolution of commercial disputes. In turn, this will further economic growth, increase foreign investment, and make India an attractive place to do business.”

“The minimum pecuniary jurisdiction of such Commercial Courts shall also be Rs one crore or more. Pecuniary jurisdiction of the high courts having original jurisdiction to be raised uniformly to Rs one Crore and commercial divisions should be set up only when the pecuniary jurisdiction has been so raised” reads the report. It has also suggested setting up of commercial divisions in High Courts that are exercising original civil jurisdiction and Commercial Courts in states wherein the original civil jurisdiction lies with District Courts. Once the pecuniary jurisdiction is raised, the Commission has suggested setting up of divisions in Delhi, Himachal Pradesh, and Madras high courts.

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Read the 253rd report of Law Commission here.