The procedure for resolving a commercial dispute in India typically follows the civil litigation process, but with some key differences due to the Commercial Courts Act, 2015, which governs commercial disputes of a specified value (generally ₹3 lakhs and above). Here’s a step-by-step outline:
PROCEDURE FOR COMMERCIAL DISPUTE RESOLUTION IN INDIA:
1. Identifying the Dispute as a ‘Commercial Dispute’
Under the Commercial Courts Act, 2015, commercial disputes include:
- Disputes related to trade, business, and commerce
- Partnership or joint venture issues
- Intellectual property disputes
- Sale of goods/services
- Construction and infrastructure contracts
- Banking and financial services, etc.
If the value of the subject matter is ₹3,00,000 or more, it qualifies as a “commercial dispute.”
2. Pre-Institution Mediation (Compulsory in most cases)
- Before filing a suit, the party must send a notice and try pre-institution mediation under the Commercial Courts Act (Section 12A).
- Mediation is conducted by the State Legal Services Authority (SLSA).
- If mediation fails within 3 months (extendable by 2 months), the plaintiff can proceed to file a suit.
- Exception: If urgent interim relief is sought, pre-litigation mediation is not mandatory.
3. Filing of Commercial Suit
- The commercial suit is filed in the Commercial Court (District level) or Commercial Division of the High Court, depending on pecuniary jurisdiction.
- The plaint (legal complaint) must contain:
- Specific details of the dispute
- Precise valuation of the claim
- List of documents with the Statement of Truth (affidavit under Order VI Rule 15A CPC)
4. Scrutiny and Issue of Summons
- Court scrutinizes the plaint.
- If found in order, summons are issued to the defendant to appear and file a written statement within 30 days (extendable to a maximum of 120 days).
5. Filing of Written Statement
- The defendant files a written statement (WS) within the prescribed period.
- Delay beyond 120 days will result in the defendant losing the right to file a WS.
6. Framing of Issues
- The court frames issues (questions of law/fact that need to be decided).
7. Evidence and Trial
- Parties submit their evidence by way of affidavits.
- Cross-examination of witnesses follows.
- The trial proceeds based on the evidence.
8. Final Arguments and Judgment
- After the trial, both sides present final arguments.
- The court delivers its judgment, ideally within 90 days from the conclusion of arguments.
9. Appeal
- An appeal lies to the Commercial Appellate Division of the High Court within 60 days from the date of judgment.
Time-bound Procedure
- Commercial Courts aim to dispose of cases expeditiously.
- Strict timelines are enforced under the Commercial Courts Act to prevent delay tactics.
Key Legal Provisions Involved:
- Commercial Courts Act, 2015 (Amended 2018)
- Civil Procedure Code (CPC) as amended for commercial suits
- Arbitration and Conciliation Act, 1996, if there is an arbitration clause
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