New Delhi: The ministry of law and justice, seeking to speed up the resolution of commercial disputes, has sent the Commercial Division of High Court Bill 2009 to the cabinet for approval.
The move comes as the Delhi high court set up an arbitration council on 25 November along the lines of the Singapore International Arbitration Centre to provide a more “cost-effective” and “efficient” solution for companies, which usually have to go overseas to settle disputes.
The measures are expected to lower barriers to doing business in India and encourage foreign investors, said Dushyant Dave, senior Supreme Court counsel.
It will smoothen the contract enforcement process and investors would no longer be wary of long litigation battles in India that can last as long as 25 years, he said.
All disputes of Rs1 crore and above will be filed directly in the high court and be dealt with by the commercial divisions, speeding up the disposal of the cases as the district courts won’t have jurisdiction over such matters.
The commercial divisions will follow a fast-track procedure for the disposal of the cases unlike the normal route which is time-consuming. It will also help in clearing the existing backlog of cases in the high court as pending matters involving commercial disputes will also be allocated to the division.
Every high court will constitute a commercial division and the chief justice will select high court judges for it.
The Bill comes against the backdrop of the 2007 World Bank report, which cited the limited capacity of the judicial system in commercial procedures as one of the main obstacles in the enforcement of contracts in India.
The report said as many as 56 steps are involved in procedures that take 1,420 days from filing to the enforcement of the judgement.
The law ministry, in its letter of justification for the Bill, has assured foreign investors that Indian courts will be as fast as courts in developed countries.