Can fast track commercial courts boost India’s ease of doing business ranking?
New Delhi: The department of industrial policy and promotion (DIPP) has called for an ordinance to establish fast track commercial courts in Delhi and Mumbai. Read more.
These courts are intended to handle high-value commercial cases related to disputes arising from agreements ranging from those of shareholders, franchising, joint venture agreements and subscription and investment agreements in the service industry to technology, intellectual property and insurance.
In 2015, the government passed the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act.
The law enabled creation of commercial courts in districts in various states. High courts with civil jurisdiction, like the ones in Delhi and Mumbai, among others, however, had commercial divisions set up. In these two cities, the government wants commercial courts to fast track these hearings.
The DIPP’s request for an ordinance in this matter is aimed at improving India’s ranking in the World Bank’s Doing Business report.
India ranks 172 out of 190 countries under the “enforcing contracts” indicator in the latest report.
Experts and practitioners, however, maintain that merely designating these courts will not suffice.
The move, as such, was welcomed as bringing confidence to investors and helping in the ease of doing business rankings.
“This will be one of the key aspects of doing business. It’s a great idea, it’ll instill a lot of confidence in investors. It’ll improve the ease of doing business in a significant way,” said Ramesh Vaidyanathan, managing partner at law firm Advaya Legal.
“The focus should be not just create these courts but also appoint commercially savvy people,” he added. Existing commercial divisions haven’t worked as efficiently in these courts owing to the large number pending cases.
Infrastructure support to these courts also remained an area for concern.
“The commercial courts will only work if the over all infrastructure around it is developed and the bureaucracy around it is reduced. In isolation, it’ll be another tick box approach,” said Suman Batra, chairperson of law firm Kesar Dass B. & Associates. He added that there was need for quality judges in the system and trained practitioners assisting these courts.
Global levels of efficiency couldn’t be expected unless the judiciary was supported with the infrastructure and standards of remuneration available globally, said Sitesh Mukherjee, national head of the disputes practice group at law firm Trilegal.
“The fast tracking will have to be done by the same people under the same framework. You can keep rebranding the courts, you can have any number of tribunals, but if we want our commercial courts and tribunals to be oriented towards the market, to adopt standards of efficiency that one experiences in developed economies such as in Singapore, you have to start implementing the standards of judicial remuneration and infrastructure that are available in those countries,” he said.
The government has taken several steps to improve its rank under the “enforcing contracts” category.