The Commercial Courts Act 2015 came into force with the sole objective to address disputes that are of commercial nature above a certain specific value, in a time-effective manner. The Act specifies a distinct procedural framework and the establishment of commercial courts in India.

What is a Commercial Dispute?

A dispute is a disagreement between the parties. A commercial dispute means a dispute between parties that involves commerce or business. It can arise out of infringement of contract or in any specific transaction, etc Section 2 (1) (c) of the Commercial Courts Act 2015 defines the term “Commercial Dispute” as a dispute arising out of––

1. Ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents.
2. Export or import of merchandise or services.
3. Issues relating to admiralty and maritime law.
4. Transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same.
5. Carriage of goods.
6. Construction and infrastructure contracts, including tenders.
7. Agreements relating to immovable property used exclusively in trade or commerce.
8. Franchising agreements.
9. Distribution and licensing agreements.
10. Management and consultancy agreements.
11. Joint venture agreements.
12. Shareholder’s agreements.
13. Subscription and investment agreements pertaining to the services industry including outsourcing services and financial services.
14. Mercantile agency and mercantile usage.
15. Partnership agreements.
16. Technology development agreements.
17. Intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits.
18. Agreements for sale of goods or provision of services.
19. Exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum.
20. Insurance and re-insurance.
21. Contracts of agency relating to any of the above.
22. Such other commercial disputes as may be notified by the Central Government.

Explanation –– A commercial dispute shall not cease to be a commercial dispute merely because –

• (a) it also involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involves any other relief pertaining to immovable property.
• (b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions.

The Calcutta High Court in the case of Ladymoon Towers Pvt. Ltd. vs Mahendra Investment Advisors Pvt. Ltd. (2021), analysed the definition of “Commercial Disputes” under the Act and held that the definition section of the 2015 Act only contemplates a “commercial dispute” and not any other form of dispute where the basis of disagreement between the parties has a non-commercial cause. The gradation of disputes in Section 2(1) (c) taking into account all possible forms of agreements from which a “commercial dispute” may arise, makes it clear that the framers of the statute gave emphasis on the commercial flavour of the transaction as opposed to agreements entered into between parties without a commercial purpose. The qualification of the person being a Merchant, Banker, Trader or Financier imparts an unimpeachable commercial flavour to the transaction and the resulting dispute.