Courts to speed up dispute resolution

The Law Commission’s recommendation for creation of specialised commercial courts across the country is welcome, as they can expedite the dispute resolution process in an important area. In its 253rd report, the commission has proposed the setting up of a commercial division in every high court which will have judges who have knowledge and experience in commercial matters. There will also be an appellate section which will deal with appeals on decisions of the commercial division. The idea is not new. The commission had proposed it in an earlier report and the UPA government had introduced a legislation in parliament to set up such courts. It was not passed in the Rajya Sabha. The commission has re-examined some of the provisions of that bill and has presented another draft which the government can consider for reintroduction. The creation of the new system will also call for changes in the Civil Procedure Code. The commission has proposed a new structure based on the experience of the working of commercial courts in other parts of the world. The basic idea is to separate commercial disputes from civil disputes.

The new courts will have jurisdiction only over cases involving disputes with a value of Rs 1 crore and above. This is to avoid these courts from being flooded with low-value cases. They will cover issues in areas ranging from banking, insurance, finance and trade to intellectual property rights and service industry. There is a large numbers of major cases pending in all high courts and the arrears are increasing every year. Delays in settlement of cases lead to huge losses for the parties involved. There are also litigants who try to delay settlement of cases. The commission has proposed giving the court the power to fix court fees and other expenses on the basis of the court hours spent on the case. This might also help to disincentivise parties from deliberately prolonging cases.

Rule of law and a speedy process of dispute settlement are important requirements to create a business-friendly environment. Investors are often discouraged by the slow judicial process. But the idea will be successful only if enough number of qualified judges are made available for the designated courts and the necessary infrastructure is created. This may not be easy when the higher courts are facing a severe shortage of judges. It should also be ensured that nomination of judges for the commercial courts will not reduce the bench strength of the high courts and further slow down the mainstream judicial process.