The Indian Commercial Courts Amendments: Challenges Remain

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 reallocates original and appellate civil-commercial cases into the Indian court hierarchy based on “specified value” listed by the Claimant at pre-filing valuation. The Act, bolstered by amendments in 2018, has rewritten several aspects of India’s civil procedure law in its application to civil-commercial claims and promises to have a significant impact on intellectual property litigation in particular.

The legislative changes proffer, in the first instance, to improve the pace of case disposal. They also seek to bring various elements of regular civil procedure in line with effectiveness-oriented tools, insofar as they apply to civil-commercial claims.

To wit, the Commercial Courts changes bring in rules incorporating: (i) a revised schema for costs payable by and to parties; (ii) a raft of procedural changes, including stricter timelines including entering written pleadings, verification and authentication of documents, including electronic records; (iii) the revamping of statutory case management and trial timelines; (iv) a focused and detailed inquiry by litigants and Courts into evidence exhibited at trial, and for disclosure and discovery of documents; and (v) a soft-trigger route for summary judgment, which is especially useful for Claimants against Defendants set ex parte.

The majority of these rules are extremely welcome not just in their construction but also in their execution. Encouragingly, this is has been demonstrated in live practice already, most notably by the High Court of Delhi, which has adopted the new procedure wholesale and strictly implemented several of the timeline-based rules.

Even so, there remain furrows of the revised procedure where amendments appear to have impeded rather than expedited the pace of proceedings. The revamped pre-trial procedure for admission and denial of documents suffices to illustrate the difficulty. The purpose of this procedure is commonly understood to be two-fold: first, it is intended to structure and inventory the documents to be led by the litigants in evidence; and second, it is an exercise in distilling common ground between the parties on the basis of which triable issues may be framed by the Court.

Under the procedure previously in place – and, indeed, one that continues to govern suits not covered by the Commercial Courts scheme – this activity was conducted in two stages. In the first stage, the parties would enter and exchange statements of admission and denial on documents led in evidence by the opposite side. The documents would then be inventorized and marked as exhibits for trial.

Under the new procedure, two additional wrinkles have been introduced. First, the statements of admission and denial themselves are required to be detailed by the parties directly rather than by their lawyers, and under numerous categories speaking to the antecedents of each document. However, the effective legal entry on record for each document remains a simple statement admitting or denying the document.

Second, while the stage of marking of exhibits proceeds unaltered, per the 2018 amendments, parties are now required to enter a documented schedule on the Court record which summarizes the stages of admission and denial statements and marking of exhibits and invites comments from the hearing officer in charge (usually a Court Registrar).

This sequence of events, confirmed by numerous pre-trial hearings taken up by the New Delhi litigation team of S Majumdar & Co at the High Court of Delhi in 2018, has not only lengthened the procedure in terms of detail but also added an additional stage entirely. This, it is estimated, could set back ordinary pre-trial procedure in contested intellectual property litigation by up to three months.

Similar instances abound elsewhere in the amendments brought in by the Commercial Courts Act: the revised summary judgment provision, for instance, requires litigants to navigate through the same overburdened path of interlocutory applications that is widely considered responsible for delays.

In sum, these instances expose clear weaknesses that persist in the Indian civil-commercial litigation system. While some appear to be hardwired into the practice of Indian civil procedure, it is clear that some others are unintended offshoots of the Commercial Courts Act.

They point to a future where workarounds will have to be evolved for these weaknesses by Courts, practitioners and litigants to ensure that the goals of pace and efficiency that the Commercial Courts amendments are in service of are meaningfully realized.

Eashan Ghosh

Eashan Ghosh graduated as a gold medalist from NLSIU, Bangalore in 2010, with distinction honours from the University of Oxford in 2011. He is a senior member in the litigation practice at S. Majumdar & Co. He has taught intellectual property law at NLSIU Bangalore and NLU Delhi. His writing on intellectual property law has been published in the European Intellectual Property Review, the World Trademark Review, the Journal of Intellectual Property Law & Practice, the Queen Mary Journal of Intellectual Property, the Journal of Intellectual Property Rights, and the Indian Journal of Law & Technology, and on the SpicyIP blog. His writing on Indian intellectual property law is available at medium.com/@EashanGhosh.

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