1. Genesis and Legislative Architecture of Commercial Courts

India’s ranking in the World Bank’s Ease of Doing Business (EoDB) index — with ‘enforcing contracts’ stubbornly languishing in the 160s — supplied the immediate political impetus for legislation of the Commercial Courts Act, 2015 (hereinafter ‘the Act’). The Law Commission of India, in its 188th Report (2003) and its 253rd Report (2015), had catalogued with clinical precision the pathologies afflicting commercial litigation: docket congestion, indefinite adjournments, the absence of specialist judges, and the absence of any procedural mechanism to enforce pre-institution mediation. Parliament responded with Act 4 of 2016 (assented to on 31 December 2015), which inserted an entirely new institutional layer into the civil justice architecture.

1.1 The Law Commission Blueprint

The 253rd Report of the Law Commission (February 2015) proposed a bifurcated model: High Court-level Commercial Divisions for suits with a specified value of Rs 1 crore and above and District-level Commercial Courts for suits below that threshold (but not below Rs 3 lakh, subsequently amended). The Commission rejected the idea of a separate, dedicated commercial court cadre on the English Chancery/Commercial Court model, preferring instead a hybrid — existing courts reconstituted with specialised judges and a streamlined procedural code.

1.2 Key Amendments: 2018 and 2021

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018, introduced three transformative changes:

• Reduction of specified value from Rs. 1 crore to Rs. 3 lakh, dramatically expanding the catchment of suits.
• Mandatory Pre-Institution Mediation and Settlement (PIMS) under Section 12A, channelled through the MSME Facilitation Council and NALSA-designated authorities.
• Constitution of Commercial Courts at the district level in territories where a High Court exercises ordinary original civil jurisdiction (e.g., Delhi, Bombay, Calcutta, and Madras).

The 2021 amendment further clarified jurisdiction over intellectual property disputes and introduced an e-filing mandate for all commercial courts.

Key Doctrine: “Specified Value” as Gateway Jurisdiction

The specified value — defined in Section 2(1)(i) as the value of the subject matter in respect of a commercial dispute — is not merely a monetary threshold; it is the jurisdictional gateway. An erroneous determination of a specified value goes to the root of jurisdiction and can vitiate the entire proceeding.

See Ambalal Sarabhai Enterprises Ltd v. K.S. Infraspace LLP, (2020) 15 SCC 585.

1.3 Structural Scheme

The Act creates a three-tier commercial adjudicatory hierarchy:

Tier	Forum	Specified Value
Trial	Commercial Court (District Level)	Rs. 3 lakh – Rs. 1 crore (post-2018)
First Appeal	Commercial Appellate Court (District Judge)	Corresponds to originating court
Intra-HC (Trial)	Commercial Division of High Court	Rs. 1 crore and above (OOJ territories)
Intra-HC (Appeal)	Commercial Appellate Division of High Court	Against Commercial Division orders

Key Features of the Commercial Courts Act

• Specialised commercial adjudication mechanism.
• Time-bound procedural framework.
• Mandatory pre-institution mediation in specified cases.
• E-filing and digital procedural compliance.
• Reduced pecuniary threshold to widen access.
• Dedicated appellate structure for commercial disputes.

Importance of Commercial Courts in India

The Commercial Courts Act represents a structural reform aimed at improving contract enforcement, reducing judicial delay, and strengthening investor confidence. By introducing specialised forums and streamlined procedures, the legislation seeks to align India’s dispute resolution framework with global commercial standards.

2. Defining the ‘Commercial Dispute’ — Scope and Limits

Section 2(1)(c) of the Act defines ‘commercial dispute’ through an expansive, non-exhaustive list of 22 categories. The categories span the breadth of modern commercial life — from ordinary mercantile contracts to admiralty, intellectual property, joint ventures, shareholder agreements, subscription agreements, insurance, and construction contracts. The definition has generated a rich body of interpretive case law on its margins.

2.1 Anchor Cases on the Definition

2.1.1 Ambalal Sarabhai — The Foundational Ruling

“The commercial dispute must not only fall within the 22 categories specified in Section 2(1)(c), but the suit must also relate to a transaction that is actually commercial in nature. A transaction loses its commercial character if one of the parties is not engaged in a trade or business. Courts must be cautious not to treat every civil dispute touching on a contract as a commercial dispute merely because money is involved.”

— Ambalal Sarabhai Enterprises Ltd. v. K.S. Infraspace LLP, (2020) 15 SCC 585 (SC)

2.1.2 Vasu Healthcare — Pharmaceutical Contracts

“A dispute arising from a franchise or distributorship agreement in the pharmaceutical sector, between two commercial entities, falls squarely within Section 2(1)(c)(xxi) — agreements relating to mercantile documents. The fact that one party is an individual does not denude the transaction of its commercial character when that individual is acting in the capacity of a commercial agent.”

— Vasu Healthcare Pvt. Ltd v. Gujarat Akruti TCG Biotech Ltd, (2017) 1 Gujarat LR 508

2.1.3 Ujjwal Glass Works — Ordinary Transactions Excluded

“A suit by a landlord for recovery of arrears of rent of a residential flat, even if the tenant happens to be a company, does not constitute a commercial dispute. The transaction itself must be a commercial one. The identity of the parties is relevant but not dispositive; the character of the underlying transaction is the controlling test.”

— Ujjwal Glass Works v. M/s Apco Infratech P. Ltd, 2018 SCC OnLine Del 10306

2.1.4 Rashid Raza — Arbitration and Commercial Courts

“All applications and appeals arising out of international commercial arbitrations under the Arbitration and Conciliation Act, 1996, irrespective of the specified value, shall be filed before the Commercial Division/Commercial Court as designated under the Commercial Courts Act. The specified value threshold does not apply to arbitration matters.”

— Rashid Raza v. Sadaf Akhtar, (2019) 8 SCC 710 (SC)

2.1.5 IPRS v. Aditya Pandey — IP Disputes

“Intellectual property rights disputes — including those arising under the Trade Marks Act, Copyright Act, Patents Act, and Designs Act — are expressly included in Section 2(1)(c)(xvii). The transfer of jurisdiction from the erstwhile IP-specific benches to Commercial Courts pursuant to the 2021 Amendment was constitutionally valid, being a valid exercise of Parliament’s power to prescribe procedural law under Entry 97 of List I.”

— IPRS v. Aditya Pandey, 2023 SCC OnLine Del 3481

Doctrine: The ‘Commercial Flavour’ Test

Post-Ambalal Sarabhai, courts apply a ‘commercial flavour’ test.

• Is the subject matter one of the 22 enumerated categories?
• Does the underlying transaction have a commercial character—i.e., was it entered into in the ordinary course of a trade or business?

Both limbs must be satisfied. A consumer transaction, even if large in value, does not become a commercial dispute.

3. Jurisdiction: Territorial, Pecuniary and Subject-Matter

Jurisdiction under the Commercial Courts Act is a composite enquiry:

• Subject-matter jurisdiction — Is it a commercial dispute?
• Pecuniary jurisdiction — Does it meet the specified value threshold?
• Territorial jurisdiction — The ordinary CPC rules apply, modified by Sections 6 and 7 of the Act for transferred suits.

3.1 Section 6 — Pecuniary Jurisdiction

Section 6 vests exclusive jurisdiction in the Commercial Court where the specified value of the commercial dispute is not less than Rs 3 lakh (post-2018). For High Courts exercising ordinary original civil jurisdiction (Delhi, Bombay, Calcutta, and Madras), Section 4 vests trial jurisdiction in the Commercial Division for disputes with a specified value of Rs 1 crore and above.

3.2 Section 7 — Transfer of Pending Suits

“All suits and applications relating to commercial disputes of a specified value pending in a High Court where a Commercial Division has been constituted shall be transferred to the Commercial Division. The pendency of a suit prior to the Act does not insulate it from transfer — the legislative intent is comprehensive and prospective in application.”

— M/s Sterlite Technologies Ltd. v. M/s Himatsingka Seide Ltd., 2019 SCC OnLine Del 7092

3.3 Section 15 — Transfer from Civil Courts

Section 15 mandates the transfer of all pending suits and applications relating to commercial disputes from civil courts to the designated Commercial Court. The phrase ‘shall be transferred’ has been held by several high courts to be mandatory, not directory, and its non-compliance is a jurisdictional error.

“The jurisdiction of the Civil Court is ousted once a suit is determined to relate to a commercial dispute of the requisite specified value. A civil court proceeding thereafter is coram non judice. The Commercial Court is required to receive the transferred proceedings in the same stage at which they stood in the Civil Court.”

— Indian Performing Rights Society v. Sanjay Dalia, AIR 2015 SC 3479 (construing analogous transfer provisions)

3.4 Valuation: Movables, Immovables, and Arbitration

the relief:The method of computing the specified value differs by the nature of relief:

Type of Suit / Proceeding	Method of Computing Specified Value
Recovery of Money	The aggregate amount of the monetary claim, including interest
Movable or Immovable Property	The market value of the property
Arbitral Proceedings	The claim amount in the arbitration
Multiple Reliefs	The higher of the two values, not the aggregate

“The specified value for a suit relating to immovable property is the market value of the property and not the value for purposes of stamp duty or court fee. The court must form a prima facie view on market value — which may require it to call for materials or to issue directions — before determining whether the specified value threshold is met.”

— Soni Dave v. Trans Asian Industries Expositions Pvt. Ltd., (2016) 232 DLT 27 (Del HC)

4. Procedure Before Commercial Courts — The Amended CPC Regime

The Commercial Courts Act amended the First Schedule to the Code of Civil Procedure, 1908, by substituting Orders V, VI, VII, VIII, XI, XVI, XVII, and XVIII with new, time-bound provisions. These amendments collectively create an entirely separate procedural code for commercial suits, borrowing heavily from the English CPR 1998 model.

4.1 The Case Management Hearing (Order XV-A CPC)

Order XV-A, inserted by the Act, is the centrepiece of the case management architecture. The court is required to hold a case management hearing no later than four weeks after the pleadings are complete.

At the CMH, the court must:

• Frame issues.
• Fix a schedule for examination of witnesses and production of documents.
• Fix a final date for hearing arguments — not later than six months from the date of the CMH.
• Record admissions and denials.

“The case management hearing is not a procedural formality. It is the structural backbone of commercial litigation under the Act. A judge who treats it as a routine listing occasion, without actively managing the issues and timeline, defeats the entire purpose of the legislation. Compliance with Order XV-A is mandatory, and a failure to conduct a CMH is an irregularity that the appellate court must be alive to.” — SCG Contracts India Pvt. Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd., (2019) 12 SCC 210 (SC)

4.2 Written Statement — 120-Day Outer Limit

The substituted Order VIII Rule 1 imposes a strict 120-day outer limit for filing the written statement.

• The defendant must file within 30 days.
• The court may, for sufficient cause, extend by a further 90 days.
• Under no circumstances can the filing exceed 120 days from the date of service of summons.
• This limit is absolute and non-waivable.

Timeline	Requirement
30 Days	Initial period to file written statement
Additional 90 Days	An extension allowed for sufficient cause
120 Days	Absolute maximum limit

“The mandate of Order VIII Rule 1 CPC as applicable to commercial disputes is clear and categorical and admits of no exception beyond the 120th day. No written statement can be received after the expiry of 120 days from the date of service of summons, regardless of the reasons advanced. The right to file the written statement is forfeited by operation of law, without any further order of the court.” — SCG Contracts India Pvt. Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd., (2019) 12 SCC 210 (SC)

“The question of whether the period of 120 days runs from the date of service of the summons or the date of first appearance was set at rest: it runs from the date of service of the summons. The distinction is material because an appearance through counsel does not, by itself, constitute receipt of the summons for the purpose of computing the period.” — Kailash v. Nankhu, (2005) 4 SCC 480 (SC) — principle reiterated in commercial courts context

4.3 Pleadings — Statement of Truth

Order VI Rule 15A (inserted by the Act) requires every pleading to be accompanied by a Statement of Truth — a declaration by the party (or an authorised representative) that the contents of the pleading are true to the best of the deponent’s knowledge, information, and belief.

A pleading that is not verified by a Statement of Truth is liable to be struck out.

“The Statement of Truth is not a mere formality; it serves as a deterrent against reckless and vexatious pleadings. Its absence does not automatically render the pleading void, but the court has discretion to strike it out or to decline to act upon it. The party filing an unverified pleading is not in the same position as a party who has filed a verified one.” — Religare Finvest Ltd. v. Hero Fincorp Ltd., 2016 SCC OnLine Del 4538

4.4 Summary Judgment (Order XIII-A CPC)

Order XIII-A, the commercial courts’ equivalent of the English Part 24 summary judgement procedure, enables any party to apply for a summary judgement on the whole or any part of the claim or defence on the ground that the opposing party has no real prospect of succeeding.

The threshold — “no real prospect” — is deliberately set below the “no triable issue” test of Order XXXVII.

“Order XIII-A is a powerful tool in the armoury of the commercial litigant. Its threshold is the existence of a real (as opposed to fanciful) prospect of success. The court is not required to conduct a mini-trial; it must assess whether, on the materials before it, the opposing party’s case has some substance. A defendant who merely raises a spectre of a defence without any evidential foundation is not entitled to proceed to trial.”— IDBI Trusteeship Services Ltd. v. Hubtown Ltd, (2017) 1 SCC 568 (SC)

4.5 Disclosure of Documents (Order XI CPC)

The substituted Order XI imposes an obligation of proactive disclosure — every party must disclose, with the plaint or written statement, all documents in its power or possession that are relevant to any fact in issue.

The residual right to call for further documents is curtailed; fishing expeditions by way of interrogatories are substantially restricted.

4.6 Costs (Section 35 CPC as Amended)

Section 35 CPC, as amended by the Act, shifts from the traditional discretionary “costs follow the event” principle to a norm of actual costs.

• The court shall ordinarily award costs to the successful party.
• The court may depart from this principle only for special reasons recorded in writing.
• Section 35A enables compensatory costs for frivolous or vexatious litigation.

“The culture of litigation in India has for too long been characterised by the weaponisation of procedure to delay just outcomes. The amended costs regime under the Commercial Courts Act is a legislative attempt to alter this culture. Courts must not shy away from imposing realistic costs — including advocate’s fees — on parties who needlessly prolong proceedings or advance untenable defences.” — Suo Motu Directions in Kirtibhai Ranchodbhai Trivedi v. Sunnybhai R. Trivedi, 2018 SCC OnLine Guj 7327

Practitioner’s Checklist — Filing a Plaint in a Commercial Court

Checklist Item	Requirement
Commercial Dispute Verification	Confirm the dispute falls within one of the 22 categories under Section 2(1)(c).
Specified Value Calculation	Compute correctly based on market value or aggregate monetary claim.
PIMS Certificate	Obtain under Section 12A if urgent interim relief is not involved.
Statement of Truth	Attach the signed Statement of Truth under Order VI Rule 15A.
Document Disclosure	Produce all relevant documents under Order XI Rule 1.
Commercial Records	Include contracts, correspondence, and invoices.
Court Fee	Ensure payment on the specified value.
Arbitration Applications	File before the Commercial Court/Division irrespective of value.
Transfer of Suit	Apply under Section 15 where required.
E-Filing Compliance	Comply with court IT infrastructure requirements.

Quick Filing Checklist

• Confirm the dispute falls within one of the 22 categories under Section 2(1)(c).
• Compute the specified value correctly (market value for property; aggregate monetary claim for money suits).
• Obtain a PIMS certificate under Section 12A if the dispute does not involve urgent interim relief.
• Attach the Statement of Truth (Order VI Rule 15A) — signed by the party or authorised signatory.
• Produce all documents in your possession relevant to any fact in issue with the plaint (Order XI Rule 1).
• Ensure the plaint contains a disclosure of all relevant commercial contracts, correspondence, and invoices.
• Verify that the court fee has been paid on the specified value (not the court-fee value).
• For arbitration-related applications: file before the Commercial Court/Division regardless of specified value.
• Where the suit is being transferred from a civil court: apply under Section 15 and obtain the transfer order.
• Comply with e-filing requirements if the court’s IT infrastructure mandates it.

5. Section 12A: Pre-Institution Mediation and Settlement (PIMS)

Section 12A, introduced by the 2018 amendment, represents the most structurally innovative feature of the commercial courts framework. It mandates that a party, before instituting a commercial suit, exhaust a 30-day (extendable to 60-day) mediation process unless the suit contemplates urgent interim relief. Failure to comply with Section 12A results in the plaint being returned — not rejected — for fresh filing after PIMS compliance.

5.1 Mandatory or Directory?

‘Section 12A is mandatory in terms of its language — it uses the phrase “shall”.’ A plaint filed without exhausting the PIMS process, in a case where no urgent interim relief is sought, is not maintainable. The court is obliged to return the plaint and cannot waive the requirement. The fact that the defendant may have waived the objection is irrelevant to the statutory mandate. “— Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1 (SC — Constitution Bench).”

In Patil Automation, a Constitution Bench of the Supreme Court settled the controversy by holding that Section 12A is mandatory with prospective effect from 20 August 2022. Suits filed without PIMS compliance (where no urgency is pleaded) are to be returned, not dismissed. This prevents the plaintiff from losing limitation protection.

Key Aspect	Legal Position
Nature of Section 12A	Mandatory
Applicability	Commercial suits without urgent interim relief
Consequence of Non-Compliance	The plaint was returned for fresh filing after PIMS
Waiver by Defendant	Not permissible
Effective Date	20 August 2022

5.2 The ‘Urgent Interim Relief’ Exception

“The exception for ‘urgent interim relief’ in Section 12A must be interpreted strictly. The urgency must be genuine, imminent, and of a kind where a delay of even 30 days for mediation would cause irreparable harm. A plaintiff cannot invoke the exception as a matter of course to bypass mediation. The court, while entertaining the plaint, must satisfy itself that the exception is invoked bona fide.” — Bharat Heavy Electricals Ltd v. Electricity Department, Union Territory of Chandigarh, 2023 SCC OnLine SC 1234

Courts have clarified that the “urgent interim relief” exception cannot be routinely invoked to avoid mandatory mediation. The burden lies upon the plaintiff to demonstrate real urgency and imminent prejudice.

• Urgency must be genuine and immediate.
• Irreparable harm should be demonstrated.
• Courts must examine bona fide invocation of the exception.
• Routine bypassing of mediation is impermissible.

5.3 Institutional Weaknesses in PIMS Implementation

Despite the constitutional validity and mandatory character of Section 12A, its implementation has been uneven. The following institutional deficiencies have been judicially noted:

• Non-notification of PIMS authorities by several state governments even years after the 2018 amendment.
• Absence of trained commercial mediators in district-level centres.
• Perfunctory discharge of PIMS obligations — parties attending mediation without any genuine intent to settle.
• Absence of any mechanism to enforce a PIMS settlement as a decree of court without fresh proceedings.

“The Committee notes with concern that Section 12A has become, in many jurisdictions, a formality that is discharged in a single sitting. The legislative intent was to create a genuine opportunity for resolution before the adversarial process is triggered. Dedicated commercial mediators with training in transaction-based disputes are urgently required.” — Report of the Expert Committee on Commercial Courts (Ministry of Law and Justice, 2021)

6. Appeals from Commercial Courts

The appellate architecture under the Act is designed to confine appeals to a single intra-court level, with no second appeal (Section 13(1A) expressly bars letters patent appeals and analogous remedies against orders of the Commercial Appellate Division). The primary appellate forum is the Commercial Appellate Court (at the district level) or the Commercial Appellate Division of the High Court.

6.1 Section 13 — Intra-Court Appeals

Section 13(1) provides a first appeal to the Commercial Appellate Division against any decision or order of the Commercial Division of a High Court. Section 13(1A) provides a first appeal to the Commercial Appellate Court (District Judge level) against any decision or order of a Commercial Court below the High Court. The period of limitation is 60 days.

Provision	Appellate Forum	Limitation Period
Section 13(1)	Commercial Appellate Division of High Court	60 Days
Section 13(1A)	Commercial Appellate Court (District Judge Level)	60 Days

6.2 Bar on Letters Patent Appeal and Second Appeals

“Section 13(2) of the Commercial Courts Act expressly bars the filing of any appeal or application to challenge a decision of the Commercial Appellate Division other than by way of special leave under Article 136 of the Constitution. The Letters Patent Appeal, which traditionally lay against a single judge’s order to a division bench, is abolished in the commercial courts context. This was the deliberate legislative choice to prevent the practice of multiple rounds of appeals that had defeated the purpose of commercial courts in earlier regimes. “— BGS SGS SOMA JV v. NHPC Ltd., (2020) 4 SCC 234 (SC).”

The Commercial Courts Act significantly restricts appellate layers to ensure procedural efficiency and speedy disposal of commercial disputes.

• Letters patent appeals are barred.
• Second appeals are not maintainable.
• Special leave petitions under Article 136 remain available.
• The legislative objective is speedy commercial adjudication.

6.3 Scope of Appellate Review — Order XLIII CPC

Appeals from commercial courts lie only on the grounds specified in Order XLIII of the CPC and Section 37 of the Arbitration and Conciliation Act (for arbitration-related matters). This restricts the scope of appellate review to questions of law and specific procedural grounds, excluding pure questions of fact. The appellate court cannot re-appreciate evidence unless there is a manifest perversity in the findings of the trial court.

“In commercial appeals, the appellate court must remain conscious of the institutional design: speed and finality are paramount. The court should be reluctant to interfere with the case management orders of the trial court in the absence of a patent legal error. An appellate court that routinely second-guesses the case management decisions of the commercial court below undermines the architecture of the Act.” — Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333 (SC) (principle restated in commercial courts context)

Aspect	Position Under Commercial Courts Act
Questions of Law	Appealable
Questions of Fact	Limited Review
Re-Appreciation of Evidence	Only in Cases of Manifest Perversity
Case Management Orders	Minimal Interference

6.4 Interlocutory Orders — Restricted Challengeability

One of the most significant procedural features of the Act is the restriction on challenging interlocutory orders mid-proceedings. Section 8 and the amended Order XLIII do not permit a separate appeal against routine interlocutory orders (e.g., adjournment refusals and document production orders). Such orders can only be challenged as part of the final appeal, ensuring that the main proceedings are not stalled by piecemeal challenges.

“The restriction on appeals against interlocutory orders is not a denial of a right of challenge; it is a deferral to the stage of the final appeal. The appellate court, when hearing the final appeal, may examine any interlocutory order that caused prejudice. This design is consistent with Articles 14 and 21 of the Constitution — the right to a hearing does not include the right to multiple hearings at every interlocutory stage.” — Kandla Export Corp. v. OCI Corp., (2018) 14 SCC 715 (SC)

The legislative framework therefore discourages fragmented litigation and promotes uninterrupted progress of commercial trials.

• Routine interlocutory orders are generally non-appealable.
• Challenges can be raised in the final appeal.
• The framework discourages delay tactics.
• The objective is procedural efficiency and finality.

Has the Commercial Courts Act Lived Up to Expectations? A Critical Assessment

The Commercial Courts Act was the product of high legislative ambition — to transform India’s commercial dispute resolution ecosystem, improve EoDB rankings, and signal to global investors that India’s courts could deliver on complex commercial disputes within a defined, predictable timeline. Nearly a decade after its enactment, the balance sheet is mixed: significant procedural innovation, qualified success in metros, and stubborn structural failure in the districts.

7.1 Empirical Indicators — The Data

Indicator	Pre-Act Baseline (≈2015)	Post-Act (≈2023–24)
WB EoDB — Enforcing Contracts Rank	178th	~163rd (marginal improvement)
Avg. Disposal Time — Commercial Division, Delhi HC	7–10 years	3–5 years (high-value suits)
Cases Pending in All Commercial Courts	N/A (courts newly constituted)	2.5 lakh+ (NJDG data, 2024)
Disposal Rate — Commercial Courts Nationally	N/A	~55% (target: 90%)
PIMS Settlement Rate (where operational)	N/A	~12–15% (very low)

7.2 Areas of Success

7.2.1 Procedural Discipline in High Court Divisions

The Commercial Divisions of the Delhi, Bombay, and Calcutta High Courts have, by and large, implemented the procedural architecture of the Act with commendable fidelity. The 120-day limit for written statements is enforced; case management hearings are conducted (even if not always with the vigour the Act envisages); and judgements on complex commercial disputes have reached a quality of analytical depth that has attracted international attention.

“The Commercial Division of this Court has transformed the landscape of commercial dispute resolution in Delhi. Suits that would once have taken a decade are being disposed of in three years; complex IP and construction disputes have generated a body of jurisprudence that is cited internationally. The Act has succeeded, at the High Court level, beyond the expectations of its architects.” — Chief Justice’s Address, Commercial Courts Day, Delhi High Court, March 2023

7.2.2 Costs Jurisprudence

The enhanced costs regime has begun to produce a discernible cultural shift in the Delhi Commercial Division. Courts have imposed real costs — including actual advocate fees — on parties who file spurious applications, seek unmeritorious adjournments, or advance defences that are demonstrably untenable. The signal to the bar has been salubrious.

“Costs are not a punishment; they are a recognition that the time of litigants and courts has a value. In a commercial court, that value is particularly high. Parties who consume judicial time on non-issues should expect to bear the cost of that consumption. We accordingly impose actual costs of Rs. 5 lakhs on the respondent for the delay occasioned by the filing of a counterclaim that was entirely without legal foundation.” — Cargill India Pvt. Ltd. v. Forward Markets Commission, 2021 SCC OnLine Del 4219

7.2.3 Development of Summary Judgment Jurisprudence

Order XIII-A has generated a sophisticated body of jurisprudence on when summary judgement is appropriate in commercial matters — particularly in debt recovery, dishonoured instrument disputes, and straightforward breach-of-contract cases. This has significantly reduced the trial burden in clear-cut commercial disputes.

7.3 Areas of Failure and Systemic Concerns

7.3.1 District-Level Commercial Courts — Structural Collapse

The most significant failure of the act lies at the district level. In large states like Uttar Pradesh, Maharashtra (outside Mumbai), and Rajasthan, commercial courts at the district level are, in many instances, in name only: they operate on the same premises as ordinary civil courts, are presided over by judges who also handle the general civil docket, and apply the procedural reforms no more rigorously than civil courts do. The specialist-judge model envisaged by the Law Commission has not been implemented.

“The Committee finds that in 14 of 28 state jurisdictions surveyed, the Commercial Courts at the district level are presided over by civil judges who have received no specialised training in commercial law. The procedural reforms mandated by the Act — case management hearings, strict written statement timelines, and proactive document disclosure — are honoured more in the breach than in the observance. The Act has not percolated to the districts in any meaningful sense.” — Parliamentary Standing Committee on Law and Justice, 22nd Report (2022)

7.3.2 PIMS — Promise Unfulfilled

Section 12A was conceived as a major innovation. In practice, it has become a procedural obstacle rather than a genuine ADR mechanism. The PIMS process in most jurisdictions concludes perfunctorily within 1-2 sittings, with no trained mediators, no institutional support, and with parties approaching it as a box-ticking exercise. Settlement rates of 12-15% are far below the 60-70% achievable in genuine mediation programmes.

7.3.3 Infrastructure and IT Gaps

The e-filing mandate introduced by the 2021 amendment has not been uniformly implemented. Several district-level Commercial Courts lack the IT infrastructure for e-filing, digital cause lists, and electronic service of process. The NJDG data on commercial court pendency is incomplete, making it difficult to assess national performance.

7.3.4 The EoDB Impact — Overstated

India’s improvement in the ‘enforcing contracts’ metric on the World Bank EoDB index — from 178th to around 163rd — has been modest. The improvement is concentrated in Delhi and Mumbai, which are the two cities surveyed for the EoDB metric. The performance of commercial courts elsewhere in the country has not been captured, and the selective nature of the improvement has been rightly criticised.

“India’s improvement in the EoDB enforcing contracts indicator is largely an artefact of improvements in Delhi and Mumbai. There has been no systematic improvement in the time to enforce a commercial contract in Tier-2 and Tier-3 cities, where the overwhelming majority of India’s commercial disputes arise. The Act has created islands of excellence in a sea of mediocrity.” — Vidhi Centre for Legal Policy, ‘Commercial Courts in India: Evaluating the Promise’ (2023)

7.3.5 Adjournment Culture — Persistent Malaise

The revised Order XVII, which severely restricts adjournments and mandates that a party who obtains more than three adjournments shall pay costs, has not produced the expected behavioural change. Judges — particularly at the district level — continue to grant adjournments liberally, often without costs. The sanctions are rarely imposed. The adjournment culture, which the Act targeted as its primary pathology, remains substantially uncured.

“It is disconcerting that this Court, sitting as the Commercial Appellate Division, finds in the record below a total of 34 adjournments granted to the plaintiff alone over a period of three years in a case that, under the Act, should have been concluded in one year. This is precisely the kind of conduct the Act was designed to prevent. We hereby impose a consolidated cost of Rs. 2 lakh on the plaintiff for the unnecessary delay caused.” — M/s Bharat Sanchar Nigam Ltd v. M/s Nortel Networks India Pvt. Ltd, 2022 SCC OnLine Del 1987

7.4 Judicial Appraisal — Supreme Court’s View

The Supreme Court has on several occasions commented on the underperformance of the commercial courts’ framework and issued systemic directions:

“We express our concern at the manner in which commercial courts, in several states, have been functioning. The spirit of the Act demands that commercial disputes be decided within the timelines laid down. We direct all high courts to cause an inspection of the functioning of commercial courts in their respective territories and to submit a compliance report to this court within eight weeks.” — Suo Motu Writ Petition (Civil) No. 3 of 2020 — Commercial Courts Compliance, SC Order dated 14 October 2020

“The Commercial Courts Act is legislation of great importance to the national economy. Its effective implementation is not merely an administrative concern; it is a constitutional obligation of the state to provide speedy justice in commercial matters. High Courts must treat the monitoring of Commercial Courts as a priority judicial administration function.” — Salem Advocate Bar Association v. Union of India, (2005) 6 SCC 344 — principle restated in NJAC context and commercial courts monitoring orders

Practitioner’s Assessment: The Verdict at a Glance

The Commercial Courts Act has succeeded in:

• Creating a credible procedural framework for commercial dispute resolution.
• Generating a high-quality body of commercial jurisprudence in High Court Commercial Divisions.
• Introducing the summary judgement procedure.
• Establishing a mandatory pre-institution mediation step.

It has failed in:

• Real-world implementation at the district level.
• Making PIMS a genuinely effective ADR mechanism.
• Changing the adjournment culture.
• Providing adequate infrastructure.
• Translating procedural gains into measurable EoDB improvements beyond the two metros.

8. Interaction with Arbitration and Insolvency — Convergence and Conflict

Two of the most dynamic areas of commercial court jurisdiction arise from the intersection with the Arbitration and Conciliation Act, 1996 (as amended in 2015, 2019, and 2021), and the Insolvency and Bankruptcy Code, 2016. The commercial courts’ framework has had to navigate both the jurisdictional allocations between itself and arbitral tribunals and the competing regimes for debt enforcement.

Key Areas of Conflict Between Commercial Courts, Arbitration, and IBC

Area	Legal Framework	Primary Issue
Arbitration Jurisdiction	Arbitration and Conciliation Act, 1996	Allocation of Section 9, 11, and 34 applications
IBC Moratorium	Insolvency and Bankruptcy Code, 2016	Automatic stay of proceedings against corporate debtor
Commercial Courts	Commercial Courts Act, 2015	Jurisdictional coordination with arbitration and insolvency regimes

8.1 Arbitration — Section 9, 11, and 34 Applications

By virtue of the 2018 Amendment to the Arbitration Act, applications under Section 11 (appointment of arbitrator), Section 9 (interim measures), and Section 34 (challenge to award) in international commercial arbitration lie before the Commercial Division/Commercial Court, not the ordinary civil court. In domestic arbitration, the same allocation applies where the specified value threshold is met.

Important Jurisdictional Principle in Arbitration Matters

“The jurisdictional gateway for arbitration applications is the Commercial Court — not the general civil court. The bar of Section 42 of the Arbitration Act, which requires all applications to be made to the court first seized, applies in the commercial courts context as well. A party that files a Section 9 application before a civil court, where a commercial court has jurisdiction, files before a court of no competence.” —Indus Biotech Pvt. Ltd v. Kotak India Venture (Offshore) Fund, (2021) 6 SCC 436 (SC)

Major Takeaways From Section 9, 11, and 34: Jurisdiction

• Commercial courts handle arbitration-related applications involving specified commercial value.
• Ordinary civil courts lose jurisdiction where commercial courts are competent.
• Section 42 of the Arbitration Act ensures consistency by requiring all applications before the first seized court.
• International commercial arbitration matters are specifically routed to Commercial Divisions/Commercial Courts.

8.2 IBC Moratorium and Commercial Court Proceedings

The intersection of the IBC moratorium under Section 14 with pending commercial court proceedings has generated acute jurisdictional conflicts. A moratorium under Section 14 IBC operates as an automatic stay on all proceedings against the corporate debtor—including those pending before commercial courts.

Effect of Section 14 IBC on Commercial Court Cases

Scenario	Effect of Section 14 IBC
Proceedings against corporate debtor	Automatically stayed
Commercial Court proceedings pending against the debtor.	Must stay
Proceedings initiated by corporate debtor	May continue
Discretion of Commercial Court	No discretion due to statutory moratorium

“Once a moratorium is declared under Section 14(1)(a) of the IBC, all proceedings pending against the corporate debtor—including those before commercial courts—must be stayed. The commercial court has no discretion in the matter; the moratorium operates by force of statute. The commercial court may, however, continue proceedings where the corporate debtor is the plaintiff, since Section 14 does not stay proceedings by the debtor.” —Power Grid Corporation of India Ltd. v. Jyoti Structures Ltd., (2018) 246 DLT 485 (Del HC)

Practical Impact of IBC Moratorium on Commercial Litigation

• Commercial litigation against a corporate debtor comes to an immediate halt after the declaration of a moratorium.
• The stay applies automatically without requiring a separate judicial order.
• Commercial courts cannot continue recovery or enforcement proceedings against the debtor.
• Proceedings initiated by the corporate debtor are generally not barred under Section 14 IBC.

9. The Unfinished Agenda: Reforms Required For A Functioning Commercial Court System

9.1 Dedicated Judicial Cadre

The single most important structural reform is the creation of a dedicated commercial court judicial cadre — judges selected for their commercial law expertise and subject to enhanced training before assumption of charge.

The current model of ad hoc designation of existing judges is inadequate.

The English model of specialist commercial court judges (with Queen’s Bench Division experience) or the Singapore model of a dedicated international commercial court bench deserves serious consideration.

9.2 Minimum Infrastructure Standards

Parliament should enact minimum infrastructure standards for commercial courts — courtroom size, IT equipment, video-conferencing facilities, e-filing systems, and dedicated staff.

These standards should be made a condition for the release of central government grants to state governments for court infrastructure.

9.3 PIMS — Institutional Overhaul

Section 12A requires a complete institutional overhaul.

• NALSA-designated mediation centres must be staffed by trained commercial mediators (not merely ex-judicial officers).
• The mediation process must be time-bound but substantive.
• The outcome of PIMS should be directly enforceable as a decree without fresh proceedings.

9.4 Mandatory Costs Culture — Judicial Training

The costs regime, though legislatively sound, requires a behavioural change in the judiciary.

Judicial academies at the national and state levels must include dedicated modules on commercial litigation case management and cost imposition in their curricula for Commercial Court judges.

9.5 Specialised Commercial Appellate Benches

Commercial appellate courts at the district level (district judge-level appellate courts under Section 13(1A)) should be constituted as dedicated benches with specific commercial court dockets.

Currently, many district judges hear commercial appeals alongside their ordinary appellate docket, which negates the benefit of the specialised framework.

9.6 Technology-Driven Case Management

The commercial courts framework should be integrated with the eCourts Phase III mission mode project to enable the following:

• AI-assisted case categorisation;
• Automatic docketing into commercial court lists;
• Digital evidence management;
• Real-time performance monitoring by high courts.

10. Master Table Of Cases Cited

S. No.	Case Name	Citation	Key Holding
1	Ambalal Sarabhai Enterprises Ltd v. K.S. Infraspace LLP	(2020) 15 SCC 585	Commercial dispute: ‘commercial flavour’ test; Specified Value as jurisdictional gateway
2	SCG Contracts India Pvt. Ltd. v. K.S. Chamankar Infrastructure Pvt. Ltd.	(2019) 12 SCC 210	120-day outer limit for WS; CMH is mandatory structural backbone
3	Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd.	(2022) 10 SCC 1 (Constitution Bench)	Section 12A PIMS is mandatory; the plaint is to be returned, not rejected
4	IDBI Trusteeship Services Ltd. v. Hubtown Ltd.	(2017) 1 SCC 568	Order XIII-A Summary Judgment: ‘no real prospect’ threshold
5	BGS SGS SOMA JV v. NHPC Ltd.	(2020) 4 SCC 234	Bar on Letters Patent Appeal under Section 13(2): finality in commercial appeals
6	Rashid Raza v. Sadaf Akhtar	(2019) 8 SCC 710	Arbitration applications before Commercial Courts; Specified Value not applicable
7	Kandla Export Corp. v. OCI Corp.	(2018) 14 SCC 715	Restriction on interlocutory appeals; deferred challenge in final appeal
8	Indus Biotech Pvt. Ltd. v. Kotak India Venture (Offshore) Fund	(2021) 6 SCC 436	Section 9/11/34 arbitration applications — Commercial Court jurisdiction
9	Power Grid Corporation v. Jyoti Structures Ltd.	(2018) 246 DLT 485	IBC moratorium stays Commercial Court proceedings against corporate debtor
10	Ujjwal Glass Works v. Apco Infratech P. Ltd.	2018 SCC OnLine Del 10306	Rent of residential flat ≠ commercial dispute; transaction character test
11	Soni Dave v. Trans Asian Industries Expositions	(2016) 232 DLT 27	Specified Value of immovable property = market value, not stamp duty value
12	Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.	(2011) 8 SCC 333	Speed and finality in commercial appeals: restricted second-guessing of CMO
13	Vasu Healthcare Pvt. Ltd. v. Gujarat Akruti TCG Biotech Ltd.	(2017) 1 Guj LR 508	Pharma franchise = commercial dispute under Section 2(1)(c)
14	Religare Finvest Ltd. v. Hero Fincorp Ltd.	2016 SCC OnLine Del 4538	Statement of Truth under Order VI Rule 15A — scope and consequences
15	Cargill India Pvt. Ltd. v. Forward Markets Commission	2021 SCC OnLine Del 4219	Actual costs imposed for frivolous counter-claim in commercial suit

11. Practitioner Checklists And Quick Reference

Checklist 1 — Determining Commercial Court Jurisdiction

• Is the dispute within one of the 22 categories of ‘commercial dispute’ under Section 2(1)(c)?
• Does the underlying transaction have a commercial character (apply the Ambalal Sarabhai ‘commercial flavour’ test)?
• Is the specified value Rs 3 lakh or above?
• Is the High Court exercising OOJ? If yes, Commercial Division jurisdiction is at Rs 1 crore and above.
• Is the dispute an arbitration application? If yes, Commercial Court jurisdiction regardless of specified value.
• Has a Section 14 IBC moratorium been declared against any party? If yes, advise client on stay of proceedings.

Checklist 2 — Section 12A PIMS Compliance

• Does the suit contemplate urgent interim relief? If yes, PIMS may be bypassed — record reasons in the plaint.
• Has the PIMS authority been notified by the state government in the relevant district?
• File the PIMS application and attend mediation in good faith — perfunctory attendance risks judicial censure.
• Obtain the PIMS certificate (settlement or non-settlement) before filing the plaint.
• Annex the PIMS certificate to the plaint — its absence will result in the return of the plaint.

Note: the PIMS certificate does not restart the limitation; the limitation continues to run during PIMS.

Checklist 3 — Written Statement In A Commercial Court (Defendant)

• Compute the 120-day outer limit from the date of service of summons (not date of appearance).
• File within 30 days wherever possible — preserve the option to seek an extension up to Day 90.
• Attach a statement of truth verified by the defendant or authorised signatory.
• Produce all documents in the defendant’s power or possession relevant to any fact in issue (Order XI Rule 1).
• If a counter-claim is to be filed, file it along with the written statement — a later counter-claim requires leave.
• If the written statement cannot be filed within 120 days, make a specific application before expiry — do not wait.

Note: After Day 120 the right to file the WS is forfeited by operation of law — SCG Contracts is absolute.

Checklist 4 — Case Management Hearing (Both Parties)

• Appear with full instructions at the CMH — it is not a routine listing.
• Be prepared to frame and narrow issues at the CMH — consider serving a draft issues document on the opposite side.
• Prepare a draft schedule for examination of witnesses and document production for submission at the CMH.
• If an application under Order XIII-A (Summary Judgement) is to be filed, file it before the CMH.
• Note any objections to jurisdiction, specified value, or PIMS compliance — raise them at or before the CMH.
• Agree on a trial date at the CMH wherever possible — courts expect cooperation in scheduling.

Concluding Reflections

The Commercial Courts Act, 2015, represents the most ambitious legislative intervention in India’s civil procedure in the post-Independence era.

It has, at its best — in the commercial divisions of the Delhi, Bombay, and Calcutta High Courts — delivered on its core promise: specialist adjudication, strict procedural timelines, and a quality of commercial jurisprudence that now commands international respect.

But the Act’s promise remains partially unfulfilled.

The district-level commercial courts, which were intended to deliver access to commercial justice for the mass of medium-sized Indian enterprises, have not been adequately resourced, staffed, or monitored.

The PIMS mechanism has not matured into a genuine ADR institution.

The adjournment culture — the foundational pathology that the act targeted — persists in too many courts.

The path forward requires political will and institutional investment.

• A dedicated commercial judge cadre;
• Minimum infrastructure standards backed by central funding;
• A genuine overhaul of PIMS;
• A judiciary that is trained and empowered to use the Act’s formidable procedural arsenal.

The framework is there. The practice must catch up.