India: The Commercial Courts, Commercial Division And Commercial Appellate Division Of High Courts (Amendment) Act, 2018

Last Updated: 10 September 2018
Article by AMLEGALS  


The objective of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (the Principal Act) was speedy resolution of commercial disputes.

The "Commercial disputes" have been defined with an inclusive definition and it covers almost all disputes arising out of the commercial activities.



Definition of Commercial Appellate Courts has been inserted under Section 2(1)(a) of the principal Act by renumbering the existing Section to 2(1)(aa). The definition of Commercial Appellate Courts reads as follows:

"Commercial Appellate Courts means the Commercial Appellate Courts designated under section 3A."

The definition of Specific Value under Section 2(1)(i) has been amended which reads as follows:

"Specified Value, in relation to a commercial dispute, shall mean the value of the subject matter in respect of a suit as determined in accordance with Section 12 which shall not be less than three lakh rupees or such higher value, as may be notified by the Central Government."

Enhanced Value - This is the most important amendment. The ceiling limit of value has been reduced from Rs.1 Crore to Rs. 3 Lakhs only. It has widened the pecuniary jurisdiction of the Commercial courts.


State Government - With this amendment, the State Government have been conferred with the power to constitute a Commercial Court at district level, in states where High Courts exercise ordinary original civil Jurisdiction.

Earlier the commercial divisions of High Courts were established in places where the High courts have Original Ordinary Jurisdiction.

Pecuniary Jurisdiction - Along with such constitution, the state government can specify the pecuniary jurisdiction for such courts, which shall not be less than Rs. 3

lakhs and nor will be higher than the district courts pecuniary jurisdiction in that state.

This may create a situation where two states will have different pecuniary limit for their Commercial Court but in any case it won't be less than Rs. 3 lakhs.


The Section 3A has been inserted to the principal Act, which reads as follows :

"3A. Except the territories over which the High Courts have ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, designate such number of commercial appellate courts at District Judge level, as it may deem necessary, for the purpose of exercising the jurisdiction and powers conferred on those courts under this Act."

Establishment of Commercial Appellate Courts - Under Section 3A, the Amendment Act introduces the establishment of Commercial Appellate courts in jurisdictions where the Ordinary Original Jurisdiction of the High court does not exist.

Where High Courts already had jurisdiction then appeal against the order of Commercial Court will lie with Appellate Division of High Court.

For others it will be with Appellate Court at District level only. This will result Appeals from commercial courts below the district judge level would lie before such courts.


The amendment omits the Section 9 of the principle Act, due to the reduction in the specified value and taking into consideration the existing burden on the commercial courts.



Chapter IIIA has been inserted in the principal Act which consists of Section 12A,

"12A. (1) A suit, which does not contemplate any urgent interim relief under this act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the central government.

(2)....(3) .... (4) ...

(5) The settlement arrived at under this section shall have the same status and effect as if it is an arbitral award on agreed terms under sub-section (4) of section 30 of the Arbitration and Conciliation Act, 1996."

The advent of the Pre-Institution Mediation process in matters where no urgent, interim relief is required will give an opportunity to the parties to resolve the dispute outside the ambit of the court.

The Settlement arrived at via such mechanism shall be equivalent to an arbitral award passed under Sub-Section (4) of Section 30 of the Arbitration and Conciliation Act, 1996.

Such a step will help reinforcing investor's confidence and trust in the speedy resolution of commercial disputes.


The amended Sub-Clause 1 of Section 13 of the principal Act reads as follows:

"(1) Any person aggrieved by the judgement or order of a commercial court below the level of a district judge may appeal to the commercial appellate court within a period of sixty days from the date of judgment or order."

As mentioned above the Amendment Act establishes Commercial Appellate Courts in jurisdictions where the High courts do not exercise Ordinary Original Jurisdiction, wherein the appeal shall me made within 60 days from the day of the judgement or order of the Commercial Court.


Section 14 of the principal Act reads as follows:

"14. Expeditious disposal of appeals- The Commercial Appellate Court and Commercial Appellate Division shall endeavor to dispose of appeals filed before it within a period of six months from the date of filing of such appeal."

Time Period of Disposal- The disposing of the appeal within a time period of 6 months from the day of filing the appeal is a step towards safeguarding the rights of the innocent parties involved in the matter.


Section 21A has been inserted to the principal Act.

Pre-Institutional Mediation- This Section empowers the Central Government to prescribe rules for the Pre-Institution Mediation process under Section 12A and any other matter which requires such rule making by the Government, subject to the approval of the Parliament.

This casts a duty on the Government to ensure that the intent of the legislature behind this provision is met by making a positive use of this power and developing a proper Centre for this mediation along with experienced mediators and infrastructure facilities.


Section 19 of the Amendment Act states as follows:

"19. Save as otherwise provided, the provisions of this Act shall apply only to cases relating to commercial disputes filed on or after the date of commencement of this Act."

The Amendment Act provides for a prospective effect in order to not disturb the authority of the judicial forum adjudicating the commercial matters presently as per the principle Act.

The matters pending as of now before other courts shall not be transferred to Commercial Courts.

In addition to the above-mentioned alterations, the scope of Chapter II and Section 20 of the principal Act have been extended to the Commercial Appellate Courts by addition of the words 'Commercial Appellate Courts' to the heading of Chapter II and Section 20 of the principal Act.


India will finally have exclusive Commercial Courts for a wider horizon of commercial disputes in as much as it shall have jurisdiction even for disputes as small as an amount of Rs. 3 lakhs and more which previously was contained for only disputes involving Rs. 1 Crore and above.

The specialized courts will evolve with speedy trial and corrective results in corrective disputes as well. This is a measure seen as second biggest reform for speedy trail in commercial disputes after Arbitration & Conciliation Act was amended to expedite the arbitration process in India.

The changes are in line with a vision to boost the foreign investor's confidence and to facilitate an ease of doing business in India.

The year 2016 to 2018 has resulted into some drastic changes in law and its structure which in medium to long term will enhance the image of Indian Legal System.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions