The said Commercial Courts’ Act now stands amended (from 3rd May, 2018) by way
of an Ordinance titled as ‘The Commercial Courts, Commercial Division And Commercial Appellate Division
of High Courts (Amendment) Ordinance, 2018’ (Ordinance).
Two Key features of this Ordinance are contained in Section 11
thereof - it adds a new Section 12A in the main Act:
- Section 12A (1) introduces an additional dispute resolution mechanism -
mediation - to further speed up the process of finality in dispute
management. As per its provisions, except for matters which require urgent interim
reliefs, it is now mandatory to first exhaust the remedy of
pre-institution mediation in accordance with prescribed procedure, before
being eligible to institute a suit with regard to a commercial dispute;
- Sub-Section (5) lends enforceability to the mediated settlement agreement
(commonly referred to as MSA) by equating its status as being on par with an
arbitral award on agreed terms under Section 30(4) of the A&C Act, 1996. Thus, as
far as commercial matters are concerned, mediation now stands equated with
conciliation initiated under the A&C Act, 1996. Thus, there is no need to
file a fresh suit in case any party reneges from their obligations under the MSA
– one can directly execute the same as if it were a decree of the court.
There are two additional features of the said Ordinance worthy
of mention up front:
- Section 6 of the Ordinance, by amending Section 3 of the Commercial Courts’
Act, empowers the State Governments to reduce the minimum pecuniary value for filing
commercial suits to as low as Rs. Three Lacs [approximately a little over four
thousand US dollars]. The existing minimum pecuniary value is Rs. 1 Crore [roughly
150 Thousand US dollars;
- The Second Proviso to Section 12A (of the amended Commercial Courts’ Act)
provides that the period utilized in pre-institution mediation, when undertaken as
per these provisions, shall not be computed for the purpose of limitation under the
Limitation Act, 1963.