The Twin Requirement of Commercial Dispute
Introduction:
The Hon'ble Division Bench, High Court of Delhi recently grappled with an important issue related to the valuation and classification of commercial disputes. In the case of Vishal Pipes Limited Vs. Bhavya Pipe Industry, the Hon'ble Single Judge had the opportunity to review the directives issued by a Hon'ble Single Judge of the High Court in 2022 SCC OnLine Del 1730. This article examines the critical issues discussed in this judgment, focusing on the twin requirements of commercial disputes and specified value as laid down by the Commercial Court Act 2015 and the Court Fees and Suits Valuation Acts.
Background:
The Hon'ble Single Judge's directive in Vishal Pipes Limited Vs. Bhavya Pipe Industry emphasized that intellectual property rights (IPR) cases should typically be valued at Rs. 3 lakhs or more, with court fees paid accordingly. The directive further indicated that even if the commercial court were valued below Rs. 3 lakhs, it would be tried before Coomercial Court even if provision of Commercial Court Act 2015 would not apply. The Hon'ble Division Bench, however, did not concur with the directions contained in Paragraph 66 (iv) and (v) of the Vishal Pipes case.
The Twin Requirement: Commercial Dispute and Specified Value
"The Hon'ble Division Bench's decision in this matter underscores the importance of satisfying two essential conditions for a dispute to be tried by a commercial court: the presence of a commercial dispute and the specific valuation. It found that it would be erroneous to assume that all IPR-related cases would inherently warrant a valuation of Rs. 3 lakhs or more." This distinction is crucial in determining whether a case should be heard in a commercial court.
First, the requirement of a commercial dispute is paramount. A dispute qualifies as a commercial dispute when it involves matters that are inherently commercial in nature as defined in Commercial Court Act 2015. The Commercial Court Act 2015 was enacted to provide a specialized forum for the resolution of such disputes, promoting expeditious and efficient adjudication.
Second, the specified value is equally significant. The specified value refers to the monetary threshold above which a case falls under the jurisdiction of a commercial court. In the context of IPR cases, this valuation must not be presumed to be automatically above Rs. 3 lakhs. The valuation of Suit must be above 3 Lakhs in order to be tried by a Commercial Court.
Legal Framework:
The Commercial Court Act 2015 was enacted to streamline and expedite the adjudication of commercial disputes. Section 12 of the Act is particularly relevant in this context. It emphasizes the need to respect the principles enshrined in the Court Fees and Suits Valuation Acts. This provision ensures that the valuation of cases aligns with established legal norms, preventing the creation of commercial court jurisdiction contrary to the statutory criteria laid down by the Commercial Court Act 2015.
The Diversion of Matters: A Distorted Scenario
The Hon'ble Division Bench in its judgment contended that the directives formulated in Vishal Pipes and embodied in Paragraph 66 (iv) and (v) of the case have the potential to distort the distribution of cases between commercial and non-commercial courts. If these directions were upheld, they could lead to the conferment of jurisdiction on commercial courts contrary to the qualifying criteria mandated by the Commercial Court Act 2015.
The Concluding Note:
This Hon'ble Division Bench's judgment serves as a significant reminder of the importance of adhering to the twin requirements of commercial disputes and specified value for cases to be tried by commercial courts. It underscores the necessity of assessing each case individually, rather than imposing a uniform valuation threshold for IPR cases. Moreover, it reinforces the need to respect the legal framework provided by the Commercial Court Act 2015, preventing any distortion of jurisdictional boundaries between commercial and non-commercial courts.
The Case Law Discussed:
Date of Judgement/Order:02/11/2023
Case No.FAO (COMM) 98/2023
Neutral Citation No: 2023:DHC:7925-DB
Name of Hon'ble Court: Hon'ble High Court of Delhi
Name of Hon'ble Judge: Yashwant Varma and Dharmesh Sharma
Case Title: Pankaj Rajiv Bhai Patel trading as Rakesh Pharmaceuticals Vs SSS Pharmachem Pvt. Ltd.
Disclaimer:
Information and discussion contained herein is being shared in the public Interest. The same should not be treated as substitute for expert advice as it is subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the fact and issue involved herein.
Written By: Advocate Ajay Amitabh Suman,
IP Adjutor - Patent and Trademark Attorney
Mob No: 9990389539
