The efficiency of the legal system and the pace at which disputes are resolved by courts are very important factors in deciding the growth of investment and the overall economic and social development of a country. The inefficiency of our justice delivery system is well known and well documented.
Thus the government has set up Commercial Court system to improve the justice delivery mechanism.
The types of disputes which can be covered under it covers commercial 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.
The Act provides for a separate set of Commercial Courts to be set up by State Governments at the District level to try suits and claims pertaining to commercial disputes of a value of at least Rs.1 crore and above. In states where the High Court exercises original civil jurisdiction, the High Courts are expected to set up Commercial Divisions to try such commercial disputes. The Act also requires the High Courts to set up Commercial Appellate Divisions within each High Court to hear appeals from the orders of Commercial Courts and Commercial Divisions ("Courts") and endeavor to dispose of them within 6 months of their filing date. The Act also amends the Code of Civil Procedure, 1908 ("CPC") as will be applicable to the Courts, which shall prevail over the existing High Courts Rules and other provisions of the CPC, so as to improve the efficiency and expeditious disposal of commercial cases.
The establishment of commercial courts in India is a stepping stone to bring about reform in the civil justice system. India's first Commercial Court and Commercial Disputes Resolution Centre was inaugurated at Raipur, Chhattisgarh.