The Commercial Courts Act, 2015 (“Act”) was enacted to establish a distinct procedural framework for dealing with commercial disputes above a certain specific value. The main objective of the Act is to enable a speedy redressal of commercial disputes in India. The present FAQ’s deal with the constitution of commercial courts and the procedure for dealing with commercial disputes in India.
Commercial disputes include any dispute arising out of commercial relationship between parties such as mercantile documents, export and import of merchandise or services, admiralty, maritime law, aviation, infrastructure, immovable property, franchising, distributions, joint venture, managements, shareholders, partnership agreements, intellectual property rights, insurance, etc., its interpretation and enforcement. Further, the Act also clarifies that a commercial dispute shall not cease to be a dispute merely because of the presence of state or its instrumentalities as one of the contracting parties.
A commercial court has jurisdiction to deal with any suit or application dealing with a commercial dispute arising within its territorial jurisdiction where the value of the specified subject matter in a dispute(“Specified Value”) exceeds INR 300,000 (INR Three Hundred Thousand) or approximately USD 4,000 (US Dollars Four Thousand)
process of mediation of commercial disputes:
Once the Authority appoints the mediator, the mediator will decide the date and time of each mediation sitting after consulting with both the parties, which may be held jointly or separately. During the course of the mediation proceedings, both parties will make settlement proposals to the mediator. The parties can instruct the mediator regarding the extent of disclosure of their proposal by the mediator to the opposite party. Further the proposed settlement can be exchanged with the opposite party either orally or in a written format. If the parties are able to reach a mutually agreeable settlement with respect to the dispute, the terms of the settlement will be reduced to writing and it will have the same status as an arbitral award.
The mediation process is required to be completed within three months from the date on which the party makes an application for mediation. A two-month extension may be granted for the process, if required.
The Mediation Rules provide that the mediator shall be bound by the following conditions:
The mediator must uphold the integrity and fairness of the mediation process and be faithful to the relationship of trust and confidentiality reposed in him by the parties.
The mediator shall ensure that the parties are informed about the procedural aspects of the mediation process and must conduct the mediation in accordance with the applicable laws.
The mediator is required to disclose any financial or other interest in the subject matter of the commercial dispute to the parties.
The mediator must avoid impropriety while communicating with the parties and refrain from promises or guarantees of results.
The mediator must recognise that the mediation is based on the principles of self-determination by the parties and their ability to reach a voluntary agreement.
The mediator should not meet or communicate with the parties or their representatives / counsels privately except during the mediation sittings within the premises of the Authority.
The mediator should not interact with the media or publicise the details of any dispute under mediation or any other allied activity performed by him as a mediator, which may prejudice the interests of the parties to the commercial dispute.
