The Commercial Courts Act, 2015 - A Step Toward Speedy Justice Or Cosmetic Reform
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Category: International Law
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THE COMMERCIAL COURTS ACT, 2015: A STEP TOWARD
SPEEDY JUSTICE OR COSMETIC REFORM?
M Suraj, BA LLB, KLE Society’s Law College, Bengaluru
ABSTRACT
Commercial courts act 2015 was brought as a forward-thinking law it created special courts just for business-related cases allowed for faster decisions set up organized case hearings and in some cases required parties to try mediate prior to filing a case the aim was to make the legal process quicker and smoother for businesses and to fix the usual delays in India's court system this study looks into whether the act has truly helped in solving business disputes quickly and affordably or if it's just a change on paper without much real impact it also looks at the legal base of the act and how it has evolved over time.
INTRODUCTION
In recent years there's been a growing call to reform India's court system mainly when it comes to solving business-related disputes as India's economy grows and more businesses emerge its become clear that we need a faster organized and reliable court system to handle business matters along with build trust with investor sone major step taken to meet this need was the introduction of the commercial courts act 2015 law aimed to speed up resolution of business disputes and improve India's classify in the global ease of doing business index to do this it set up special courts for commercial cases at district level as well special division high courts along with appellate courts it also brought in new procedures like case management hearings summary judgments1 and pre-lawsuit mediation to help reduce delays in 2018 the law was updated to expand its coverage a key change was lowering minimal case value from 1 crore to
3 lakh so that even small and medium businesses could access these courts despite these
improvements the law has run into problems these include not enough infrastructure too few judges low public awareness and the inconsistent use regarding new policy this paper looks at either commercial courts act has truly made a difference in solving business disputes quickly and fairly or if it's mostly just a surface-level change without real impact.
LEGISLATIVE BACKGROUND AND POLICY GOALS
1. Legislative Milestones
In 188th law commission report played a key role development of the commercial division at high courts bill in 2009 however bill faced heavy criticism inside parliament especially within the Rajya Sabha lawmakers were concerned about applying western legal practices to India without fully considering the country's unique legal system due to these concerns the bill was sent to a select committee while the committee agreed with the idea in principle they felt that the proposal needed more work especially in defining legal terms dealing with overlapping court jurisdictions and improving infrastructure the matter was revisited the 253rd law commission report in 2015 which strongly emphasized the need to reform India's civil justice system this report recommended establishing commercial courts at district level along with commercial along with appellate divisions in high courts it also expanded the idea beyond just
1 Admin. (2023, September 1). Commercial Courts Act, 2015: Ultimate Guide for Businesses & Legal
professionals. Century Law Firm Blog.
big cities to include areas where high courts did not have civil jurisdiction2 These recommendations resulted in the passing of the commercial courts act 2015 which officially came into effect on October 23 2015.
2. The 2018 amendment
Initially the law only applied to cases with a minimum value of 1 crore which left out many small and medium-sized businesses to address two major amendments introduced in 2018 the minimum case value was reduced to 3 lakh making it easier to smaller disputes to be heard commercial courts pre-institution mediation was compel mandatory in cases not involve urgent temporary relief as per section 12a this change was aimed at reducing the burden on courts with encouraging ADR.3
3. Faster resolution of commercial disputes
One of the main aims of the act to reduce delays in resolving business-related court cases in the past slow court processes made it hard for companies, especially those from other countries to trust the Indian legal system for solving commercial issues to speed things up the act introduced some special procedures written replies must be filed within 120 days courts hold planning meetings case management hearings to keep cases on track judges can reject weak or baseless cases early on through summary judgments these steps help in finishing cases more quickly with fewer delays and early decisions when possible.
4. Special courts for commercial matters
Business disputes can be complicated involving areas like contracts international deals finance or intellectual property the act calls for setting up commercial courts with judges who are expected to understand these subjects better the goal is to improve the quality and consistency decisions make judgments more predictable for businesses help develop clearer legal rules over time, having judges who specialize commercial law makes the system more reliable for
2 Govindarajan, D. (2010, February 16). THE COMMERCIAL DIVISION OF HIGH COURTS BILL, 2009 -
AN OVERVIEW. Taxmanagementindia.com (a Unit of MS Knowledge Processing Pvt. Ltd.).
3 Paliwala, M. (2019, December 21). Concept of commercial courts under Commercial Courts Act, 2015.
iPleaders.
businesses.4
5. Encouraging mediation before going to court
The act also wants to reduce the number of cases that go to court by promoting mediation first according to section 12a parties must try to settle their dispute through mediation before filing a case unless the issue urgent benefits of this approach include solving problems without a full court trial saving time and money keeping business relationships intact while not fully consistent in practice yet this step supports global trends in resolving disputes through discussion rather than litigation.
6. Changes in civil procedure for commercial cases
The act makes specific changes to the usual court procedures under civil procedure code cpc for commercial matters these include strict deadlines for submitting documents a maximum of three adjournments per party penalties or costs for delays or misuse of court processes faster decision-making through summary procedures, these changes aim make commercial cases move faster and set an example for improving how all civil cases are handled.
7. Making the legal process more transparent and fair
The act promotes clear rules, fixed timelines and accountability, this helps reduce uncertainty in court decisions and supports fairness and trust in the legal system for business cases where consistency is key. A structured and transparent process helps companies plan better and feel more confident using the courts.
PROVISIONS AIMED AT SPEEDY JUSTICE
The enactment of the Commercial Courts Act, 2015 is aimed at expeditious adjudication of commercial disputes by streamlined procedure with utmost priority and least interference by the superior court in the trial at the lower level corresponding with the object of the Act to ensure that the dispute between the commercial parties is decided as soon as possible. It did so by effecting a number of amendments to the Code of Civil Procedure, 1908 (CPC) that are
4 Murtaza, I. (2023, November 20). 628. Lawyersclubindia.
inapplicable other than in the context of a commercial dispute. The amendment to Order V Rule 1 and Order VIII Rule 1 of the CPC (by way of Introduction of timelines for filing written statements) is perhaps one of the most significant of the reforms. The defendant is required to file a written statement within 30 days from the date of service of summons, with a provision for the extension of 120 days, and once the period is over, the right to file a written statement is lost or it stands forfeited. This is a black room of the former discretionary system it is designed to force trial to start sooner. Yet the promise of the model depends on vigorous judicial enforcement, which has been uneven from place to place. Another structural innovation is the policy of introduction of Case Management Hearings (CMH) under Order XV-A.
CMHs give judges to fix time schedule for the entire course of proceedings of the case, namely, filing of pleadings, documents, admission/denial of documents, framing of issues, witnesses, arguments and evidence. This system of case management is consistent with international best practice and is intended to drive procedural efficiency and discourage unnecessary adjournments, while encouraging active judicial management of cases. Summary Judgment under Order XIII-A is another modern concept which allows courts to dismiss a claim/defense at the pre-trial stage if it shakes itself to be on his face or without a real prospect of success. The purpose of this section is to screen out unsupported or legally insufficient claims before the court is required to devote significant resources to the litigation, and to relieve courts and parties from baseless claims and needless discovery.
Summary judgments are particularly effective with cases that have a documentary trail, such as contract disputes and for an obligation on a debt is not disputed. It also satisfies a sound costs regime under the amended Section 35 CPC which empowers the courts to award actual, reasonable as well as punitive costs against a party which acts in a vexatious and dilatory manner. It is intended to discourage frivolous litigation and abuse of the judicial process, and encourage Parties to act responsibly in their commercial affairs. This is complemented with the requirement to mediate mandatorily before institution under Section 12A of the Act (introduced vide the 2018 Amendment). With exceptions for urgent interim measures, parties must complete the mediation process before bringing an action in a commercial court. This is with a view to promoting early resolution of disputes, easing court
load and promoting negotiation culture. Nevertheless, the availability of this facility has been limited by both infrastructural and institutional bottlenecks, including dearth of trained *mediators, and insufficient awareness, particularly among litigants and micro, small and medium enterprises (MSMEs). Together, these provisions attempt not only to make the procedures straightforward, but also to “re-engineer the culture of dispute resolution” around ideas of judicial initiative, efficiency of procedure, and the early resolution of claims. However, they only work when backed by consistent enforcement, judicial training, and supportive institutional architecture.
ANALYSIS: SPEEDY JUSTICE IN REALITY
Despite the law’s strong structural design, implementation has been uneven due to systemic obstacles and variances in infrastructure, enforcement, and knowledge.
1. Achievements and Positive Outcomes
One of the notable successes of the Act has been the improvement in the disposal rates of commercial cases, particularly in metropolitan cities like Delhi, Mumbai, and Bengaluru. The setting up of specialized commercial courts in these cities, complemented by case management hearings and judicial training, has brought down finalization time lines substantially in some categories of cases, contract enforcement and recovery of dues being the major ones. Based on reports submitted by the Department of Justice and as per High Courts figures, a number of commercial cases are getting disposed of within 12 to 18 months as against years of pendency in traditional civil litigation. Further, in pilot areas the introduction of Case Management Hearings (CMH) and Summary Judgment measures is starting to show signs of effect.
And judges are more frequently exercising the power to set deadlines for the parties, to restrict the evidence, and to prevent adjournments piling up. They have helped to contain the range of disputed matters between the parties and to shift the focus of the parties to the core legal issues. Under section 17 of the Act, High Courts are mandated to upload detailed case statistics, performance reports and all other information which it gets from the subordinate courts to ensure judicial transparency, accountability and evidence based judicial performance monitoring.
The compulsory pre-institution mediation requirement (S. 12A), in spite of being under utilised, has not been altogether negative in certain cases where it has been effectively applied. In some jurisdictions with effective mediation centers and experienced facilitators, disputes have been harmoniously settled before the need to resort to the court, saving time and preserving business relationships.
2. Ground Realities and Persistent Challenges
Notwithstanding these positive changes, some practical and structural challenges impede the universal application of the Commercial Courts Act in India. Prominent among these are poor district-level infrastructure. Thousands of commercial courts still function in bedrooms without their own courtrooms, full staffs and digital case management systems. This kind of technology-empowered courtrooms are not there, which means Act cannot ensure quick and affordable justice, particularly to the people who live beyond the Tier-1 cities. The other major obstacle is the overstretched judiciary. While the Act envisages judges with commercial knowledge, in practice many judicial officers have to juggle a number of portfolios such as criminal and others, diluting the edge enjoyed by those with knowledge of the subject matter.
The absence of judges trained in commercial law, particularly at the district level, frequently results in conflicting applications of commercial laws, which undermines legal predictability and investor confidence. Moreover, procedural timelines prescribed under the amended CPC are relatively not being strictly felicitated. Though the statute requires the filing of statements in writing within 120 days and imposes strict time limits for procedural steps, courts have sometimes allowed departures on equitable grounds. While such discretion may at times be justified, it would undermine the predictability and deterrence the Act is designed to achieve. A third major problem area is the under-utilisation of pre-institution mediation. Although seen
as a mandatory requirement, section 12A is mostly given a skip on account of lack of awareness amongst litigants, non-availability of mediation centers and ambiguity in procedure. This not only clogs the courts, but denies parties the opportunity to achieve an early resolution. A NITI Aayog–Vidhi Centre for Legal Policy report has recommended better enforcement vehicles, including public information campaigns and institutional backing for mediation.
And, lastly, the reduction of the pecuniary jurisdiction from ₹1 crore to ₹3 lakhs, brought about by the 2018 Amendment with a view to including a wider class of commercial litigants, carries with it the unintended baggage of non--commercial matters which are routine in nature and the value of which is small. That has put weight on the commercial courts and diluted its specialized role, leading to concerns that the courts may now be overenrolled with cases that do not merit special fast-track treatment. IS IT COSMETIC REFORM?
The Commercial Courts Act, 2015 has faced criticism from legal experts who feel that it looks like a big reform but doesn’t actually bring deep changes. While the Act does introduce new procedures like set timelines, special courts, and faster case handling it mainly focuses on how things are done rather than fixing the bigger problems that slow down the justice system in India. A major complaint is that it doesn’t improve the system itself. Real reform would need better staffing, more funding, improved court buildings, and stronger accountability. Simply moving commercial cases to new courts without the right tools and support is seen as just a surface-level change. Also, one of the Act’s key ideas of settling disputes before filing a case (called pre-institution mediation) hasn’t worked well.
This part of the law was supposed to reduce the number of court cases, but it hasn’t been effective. There aren’t enough trained mediators, many areas lack mediation centers, and most businesses (especially small ones) don’t even know about it. As a result, people either skip this step or don’t take it seriously, which defeats its purpose. The 2018 change in the law lowered the minimum amount for commercial cases from ₹1 crore to ₹3 lakhs to make commercial courts more accessible. But this led to too many small, simple cases being filed, which overloaded the courts and blurred the line between regular civil cases and complex commercial ones. This shift reduced the expert focus these courts were meant to have. Another big issue is that the law hasn’t changed how courts work day-to-day. Many judges still allow delays, unnecessary formalities, and frequent postponements.
Unless judges are trained and held accountable, the new rules in the law will just stay on paper without real impact. For example, even though the law sets deadlines for filing documents, courts still allow delays, so the changes don’t work as intended.
In short, while the Act aims to make dispute resolution faster and more efficient, it hasn’t brought real transformation because it mainly changes procedures without fixing deeper problems. Just calling a court “commercial” and adding a few rules won’t guarantee better results unless it’s supported by strong systems and meaningful reforms. Without that, this law risks being only a cosmetic fix that looks good on paper but doesn’t solve the real issues.
RECOMMENDATIONS
In order to bridge the gap between the Commercial Courts Act’s legislative intent and its realworld efficacy, a multifaceted approach is required one that goes beyond procedural reforms to address the structural and institutional deficiencies of India’s dispute resolution system. The following recommendations aim to enhance the practical functioning of commercial courts and ensure that the Act evolves from a cosmetic reform into a substantive catalyst for judicial efficiency and economic growth.
1. Strengthen Infrastructure at the District Level
One of the most pressing needs is the creation of dedicated commercial court infrastructure, particularly in non-metropolitan and semi-urban regions. Several district courts continue to function in shared premises without adequate resources, staff, or digitization. To ensure uniform implementation across the country, the Union and State governments must allocate separate budgetary grants for commercial courts, focusing on exclusive courtrooms, trained clerical staff, and digital filing systems. Additionally, specialized courtrooms equipped with video conferencing and e-evidence capabilities must be established to facilitate modern, technology-driven litigation.
2. Build Judicial Capacity and Expertise
The effectiveness of any specialized court depends significantly on the expertise of its judges. Therefore, it is imperative to appoint judicial officers with prior experience in commercial law or to implement mandatory training programs in commercial jurisprudence, financial instruments, and business practices.5 Section 20 of the Act provides scope for such capacitybuilding initiatives, but its implementation has been largely perfunctory. Regular refresher
5 Bar & Bench, & Bar & Bench. (2018, August 17). The Commercial Courts Act, 2015: Bridging the gap
between Promise and Reality. Bar And Bench - Indian Legal News.
courses, workshops, and exposure to international best practices conducted through the National Judicial Academy or State Judicial Academies should be institutionalized to improve the quality of adjudication.
3. Revamp Pre-Institution Mediation Mechanisms
While Section 12A introduced pre-institution mediation as a condition precedent for filing commercial suits (with some exceptions), its current implementation suffers due to logistical and institutional shortcomings. There is a need to establish fully functional mediation centers in every jurisdiction, staffed by professionally trained commercial mediators. Further, the government and judiciary must undertake awareness campaigns among small businesses, startups, and MSMEs to educate them about the benefits of mediation in saving time and litigation costs. Incentivizing successful mediation through court fee refunds or expedited enforcement of mediated settlements may also improve participation and success rates.
4. Integrate Technology and Case Management Systems
To truly fast-track commercial litigation, the Act must be supported by a robust technology backbone. This includes online filing, e-payment of court fees, real-time case tracking, document management systems, and AI-based scheduling tools. These systems can minimize human delays and ensure greater transparency. In addition, court-specific case management software must be introduced to help judges monitor compliance with timelines, manage case progression, and auto-generate alerts for missed deadlines. These tools can operationalize the case management hearings (CMH) provision under Order XV-A and enhance the predictability of court processes.
5. Reassess the Pecuniary Threshold
The lowering of the pecuniary jurisdiction to ₹3 lakhs through the 2018 Amendment has led to an influx of routine commercial disputes, many of which are more appropriately handled by regular civil courts. A re-evaluation of the threshold is necessary to ensure that commercial courts remain focused on complex, high-stakes business disputes that require expedited and specialized attention. Alternatively, a tiered system could be considered, where district commercial courts handle matters up to ₹1 crore and High Court commercial divisions handle higher-value cases, ensuring a balance between access and specialization.
6. Institutionalize Performance Audits and Stakeholder Feedback
There is currently no regular mechanism for evaluating the performance of commercial courts from the perspective of litigants, lawyers, or businesses. Institutionalized performance audits, conducted by independent agencies in consultation with the judiciary, should be introduced to track disposal rates, compliance with procedural timelines, quality of judgments, and effectiveness of mediation. Additionally, stakeholder surveys should be conducted periodically to gather insights on the challenges faced by litigants, thereby ensuring user-centric reforms.
COMPARATIVE ANALYSIS
1. United Kingdom Commercial Courts
The UK’s commercial courts particularly the Commercial Court, Queen’s Bench Division of the High Court are globally recognized for efficiency, integrity, and legal sophistication. The UK model stands on three pillars: specialized judges, modern infrastructure, and predictable procedures. Judicial Expertise: UK commercial judges are highly experienced, often appointed from a pool of seasoned commercial barristers. This specialization ensures a deep understanding of complex commercial issues and consistency in rulings. Time-bound Hearings and Active Case Management: UK courts strictly adhere to procedural timelines, with judges actively managing the progress of cases from the outset—similar to India’s Order XV-A Case Management Hearings, but more rigorously applied.
Digital Infrastructure: UK courts employ electronic filing systems, virtual hearings, and digital bundles, significantly reducing procedural delays. During COVID-19, the UK transitioned seamlessly to virtual hearings, highlighting its digital preparedness. Enforceability and Business Confidence: UK judgments are highly respected and enforceable globally, making it a preferred forum for international commercial litigation. 6 This is reflected in London’s reputation as a leading global dispute resolution hub. 6 Rai, D. (2020, April 4). Assessing the implementation of Commercial Courts Act, 2015 in India. iPleaders.
Contrast with India: While India’s Act aspires toward specialization and case management, lack of strict enforcement, limited infrastructure, and generalist judges dilute its efficacy. The UK’s consistent judicial quality and technological integration far surpass Indian capabilities at present.
2. Singapore International Commercial Court (SICC)
Singapore has emerged as a top-tier jurisdiction for commercial dispute resolution, owing to the SICC, launched in 2015—the same year as India’s Act. The SICC offers a hybrid of litigation and arbitration, combining court procedure with arbitration flexibility. International Bench: SICC appoints foreign judges with expertise in diverse legal systems. This internationalization enhances its attractiveness to foreign parties and offers impartiality and cross-border insight. Flexible Procedure: Parties can opt out of local procedural and evidentiary laws, allowing for tailored, efficient processes. The court can operate without being bound by traditional formalism, which contrasts with India's rigid CPC structure. Digital Access and Transparency: Like the UK, Singapore utilizes e-filing systems, online cause lists, and virtual hearings.
The transparency and ease of navigation for litigants is exceptional. Support for Arbitration and Mediation: Singapore courts have strong linkages with SIAC and SIMC, ensuring that commercial disputes have a broader ecosystem of resolution mechanisms. 7 Contrast with India: The SICC’s internationalization, procedural flexibility, and technological integration give it a decisive edge over India’s Commercial Courts, which are still grappling with awareness issues, rigid formalities, and infrastructural bottlenecks.
CONCLUSION
The Commercial Courts Act, 2015 was a major step by the Indian government to make 7 Henderson, A., Satryani, G., & Chua, E. (2015, January 6). The new frontier: Singapore launches the Singapore International Commercial Court offering a new forum for. . . Lexology.
resolving business disputes faster and more efficient. The goal was to reduce delays in court, make it easier to enforce business contracts, and improve India’s image as a good place to invest. To do this, the law created special courts for commercial cases, set strict timelines, allowed for quicker judgments, and introduced a process where people try to settle disputes before even going to court. But as this paper shows, the results have been mixed. Some High Courts and big cities have seen good progress because they already have better infrastructure and more capable judges. However, in many parts of the country, the new system hasn’t been fully effective. Problems like poor infrastructure, not enough trained judges, failure to stick to deadlines, and not using mediation properly are still big issues. One important takeaway is that just changing court procedures isn't enough.
Without bigger changes like better buildings, more training for judges, and the use of technology the reforms might look good on paper but won’t really change how things work. Also, by lowering the minimum case value and not properly tracking court performance, the new courts may get overloaded and lose focus on specialized cases. So, the Commercial Courts Act sits somewhere between small fixes and real change. It has brought in important reforms and started a push for modernizing the courts, but it’s not a complete solution. For the Act to truly work, it needs to be part of a bigger plan that includes better infrastructure, more training, digital tools, better monitoring, and public awareness. In short, this law should be seen as a starting point for deeper reforms to make India’s commercial courts faster, more accessible, and better at delivering justice.
Only with a broader, well-rounded approach can India unlock the full economic benefits of a strong legal system for businesses.