The Commercial Courts Act 2015: The road ahead in the Bombay High Court

It’s been more than two weeks since two division benches and four single benches of the Bombay High Court began hearing commercial disputes cases with a minimum pecuniary value of Rs. 1 crore..The Commercial courts, commercial division and commercial appellate division of high courts Act 2016 came into force after the bill recieved presidential assent in January this year..Much has been said about this new legislation; in a nutshell, the Act establishes commercial divisions in high courts with ordinary original civil jurisdiction, and commercial courts at the district level. The Act also provides for commercial appellate divisions to be established in all high courts. These appellate divisions will have jurisdiction over arbitration appeals as well..The nomenclature of commercial dispute matters has also been modified..There are five High Courts in the country that have original civil jurisdiction-Bombay, Delhi, Calcutta, Madras and Himachal Pradesh. According to the law commission’s 253rd report, 51.7% (or 16,884) of the cases in the five High Court’s belong to the category of commercial disputes..All other High Court’s in the country will have commercial courts which will function at the level of a district court. In other words, these commercial courts will not be presided by a High Court judge..That is not the only possible shortcoming of the Act. Having the same pecuniary value limit for all High Courts does not take into account the variable factor in such dispute cases. It is only reasonable to believe that the Himachal Pradesh High Court will have fewer commercial dispute cases than the Bombay High Court, and also of lesser commercial value. If the pecuniary value of these cases for every High Court or even the district court were to be decided based on the relevant data of the entire state, pendency would have been addressed more effectively..The other issue relating to pecuniary value relates to IP matters. As was the case in Delhi, the valuation of IP disputes has proven to be a tricky matter..Keeping in mind the Act’s objective to reduce pendency, one must recognize the need for appointment of more judges. These commercial divisions and commercial courts are being assigned to the existing batch of judges, hence they will be hearing these cases apart from the matters that are already assigned to them. This seems counter productive..For example, Justice SJ Kathawalla in the Bombay High Court has been designated as a commercial division judge, his judicial assignment however has not changed. The judge continues to hear admiralty suits, arbitration matters, trust petitions etc..Along with this, he will now hear commercial dispute cases that may be additionally assigned to him. On any regular day, he has between 65 to a 100 matters listed on the supplementary board and more often then not he hears all the listed matters..When CJI TS Thakur made an emotional appeal to the central government to clear appointment of more judges in order to reduce pendency, he spoke of the Commercial Courts Act..“The concept of commercial courts came up because we wanted to improve the image of Indian judiciary specially in the eyes of people from other countries. .They should quickly dispose off commercial disputes but what is happening is these courts are being designated out of the existing judge strength. That was never the object. .If in Tees Hazari you simply put a board and say this is a commercial court, that doesn’t satisfy the purpose of setting up of such courts.”.As far as effectiveness goes, there are certain provisions in the act that address this issue. When it comes to admission and denial of documents disclosed by each party, under S. 4(6) of the Act, the court may impose costs (including exemplary costs) if it holds that any party has unduly refused to admit a document. Under S. 8, non-compliance of orders passed in any case management hearing will have several consequences including dismissal of plaint or allowance of a suit. There are also provisions for speedy disposal; S. 14 for instance, says that the commercial appellate divisions must “endeavour” to dispose of appeals within six months..As The Hindu recently reported, a number of law firms have welcomed the act while many senior lawyers have questioned the reasoning behind the new law. Senior counsel Harish Jagtiani called the law”cosmetic”, Janak Dwarkadas spoke of specialized judges and said how in India we have “jack of all trades” (referring to judges)..A young lawyer who frequently appears in commercial matters was more optimistic than his seniors. Speaking to Bar & Bench he said,.This is essentially a beginning. It is a good start. The time frames provided are good, it will help in moving things along. I don’t think it will bring in a sea change but atleast it is being acknowledged that there is a problem..While two distinct views may exist, we will find out how effective this act will be after a few years. However, the larger issue of pendecy must be looked into with more seriousness, that is if the legislature and the executive wish to make the judicial process more effective.