To work on the lines of the United Kingdom and Singapore courts for speedy disposal of commercial disputes in the country, the law commission of India on Thursday suggested that the Centre set up commercial courts and commercial appellate divisions for high courts.
What does report suggest?
Submitting its 253 report before the Union law ministry, the apex law panel also suggested amendments in the Civil Procedure Code (CPC) for effective function of these commercial courts.
Talking to dna, law commission chairman Justice AP Shah said: "The goal is to ensure that cases are disposed of expeditiously, fairly and at a reasonable cost to the litigants. It will also help economic growth, and increase foreign investment..."
What prompted move?
Shah said that commercial disputes have been pending for years, which discourages foreign investors and referred to such a case involving an Australian company, White Industries, that had obtained an arbitral award in its favour in a contractual dispute with Coal India in 2004.
The company had sought enforcement of the award before the Delhi high court and simultaneously, Coal India approached the Calcutta high court to have the award set aside, and the request was granted. White Industries appealed to the supreme court and the final decision is still pending.
How many cases pending?
As per the law commission's data, there are over 32,000 civil suits pending in the high courts of four metropolitan cities which have original civil jurisdiction. Nearly, 75 per cent of these cases are over 2 years old and about 9,000 commercial cases are over 10 years old.
What else has been proposed?
The report suggested that the Centre set up a commercial divisions (courts) in those states where the high courts—Delhi, Bombay, Calcutta and Madras. These high courts exercise original jurisdiction and the report suggests that they should have a uniform pecuniary jurisdiction limit of Rs one crore or more.
About the other states, the panel said that the government should set up courts in important cities and judges, who have expertise in commercial disputes should be appointed for commercial courts by the concerned high court chief justice for a fixed tenure of two years.
History behind report
The Commercial Division and Commercial Appellate Division of High Courts and Commercial Courts Bill 2009 was passed by the then government in the Lok Sabha, but the select commitee of Rajya Sabha had given some suggestions over some purported flaws in the bill. Later, the bill was referred to the law commission of India for appropriate recommendations.