How to File a Commercial Suit in India: Fast-Track Court Process for Foreign Companies

Why Foreign Companies Need to Know India's Commercial Courts

When commercial disputes arise in India — a distributor defaults on payment, a JV partner breaches the shareholders' agreement, or a supplier delivers substandard goods — foreign companies face a critical decision: how to enforce their rights effectively in a legal system historically known for delays.

The Commercial Courts Act, 2015 (amended in 2018) was enacted precisely to address this concern. It created specialized commercial courts at the district level and commercial divisions within High Courts, specifically designed to handle business-to-business disputes on a fast-track basis. The Act applies to disputes valued at INR 3 lakh or above (reduced from INR 1 crore by the 2018 amendment), and its procedural rules are designed to compress timelines that would otherwise stretch to 5-10 years in ordinary civil courts.

For foreign companies, the Act represents a significant improvement in India's dispute resolution infrastructure. This guide walks through the entire process — from pre-filing preparation to final disposal — with specific attention to the considerations that affect foreign litigants.

What Qualifies as a "Commercial Dispute"

The Act defines "commercial dispute" broadly to cover most business-related controversies. Section 2(1)(c) lists the following categories:

• Ordinary transactions of merchants, bankers, financiers, and traders
• Mercantile documents including bills of exchange, promissory notes, and letters of credit
• Export or import of merchandise or services
• Issues relating to admiralty and maritime law
• Transactions relating to aircraft, vehicles, or associated infrastructure
• Carriage of goods
• Construction and infrastructure contracts
• Agreements relating to immovable property used exclusively in trade or commerce
• Franchise agreements
• Distribution and licensing agreements
• Management and consultancy agreements
• Joint venture agreements and shareholders' agreements
• Intellectual property rights including patents, trademarks, copyright, and design disputes
• Insurance and re-insurance
• Technology development, transfer, and licensing agreements

For foreign companies operating through a private limited company or wholly owned subsidiary, the most common disputes that land in commercial courts involve breach of shareholders' agreements, distribution or licensing agreement disputes, payment defaults by Indian counterparties, intellectual property infringement, and joint venture disagreements.

Jurisdictional Framework: Which Court to File In

Pecuniary Jurisdiction

The specified value of the dispute must be at least INR 3 lakh (approximately USD 3,600). The value is determined based on the plaint (statement of claim) as filed by the plaintiff. If the value exceeds the threshold, the suit must be filed in the commercial court — the parties cannot choose to file in an ordinary civil court.

Territorial Jurisdiction

The commercial court's territorial jurisdiction is determined by the location where the cause of action arose or where the defendant resides or carries on business. Foreign companies that have registered a branch office or liaison office in India can file suits in the jurisdiction where that office is located. For disputes involving contracts, the place where the contract was to be performed is typically the relevant jurisdiction.

High Court Commercial Division vs. District Commercial Court

Jurisdiction Clauses in Contracts

Foreign companies should ensure their contracts with Indian counterparties include exclusive jurisdiction clauses specifying the commercial court of a particular city. Without such a clause, the defendant may challenge territorial jurisdiction, delaying proceedings by months.

Step 1: Pre-Institution Mediation Under Section 12A

Before filing a commercial suit, the plaintiff must first attempt mandatory pre-institution mediation under Section 12A of the Act (introduced by the 2018 amendment). This requirement was confirmed as mandatory by the Supreme Court of India in the landmark M/s Patil Automation Pvt Ltd v. Rakheja Engineers Pvt Ltd decision (August 2022).

When Mediation Is Required

Pre-institution mediation is mandatory for all commercial suits unless the suit contemplates urgent interim relief. If the plaintiff seeks an injunction, attachment, or appointment of a receiver on an urgent basis, mediation can be bypassed. However, even in such cases, the court may refer parties to mediation after granting interim relief.

How Mediation Works

1. Application — The plaintiff files an application with the mediation authority designated by the Central Government (typically a body under the Legal Services Authority or a designated ADR center).
2. Timeline — The mediation must be completed within 3 months from the date of the application. This can be extended by 2 months with the consent of both parties.
3. Outcome — If mediation succeeds, the settlement is recorded and is enforceable as a court decree under Section 12A(5). If mediation fails, the plaintiff receives a certificate of non-settlement and can proceed to file the suit.

Consequences of Skipping Mediation

If a party files a commercial suit without first exhausting pre-institution mediation (and the suit does not seek urgent interim relief), the suit is liable to be rejected under Order VII Rule 11 of the CPC. The Supreme Court has held that suits filed before August 20, 2022 without mediation should be kept in abeyance to allow parties to explore mediation, rather than being outright dismissed.

Step 2: Drafting the Plaint (Statement of Claim)

The plaint is the foundational document in a commercial suit. It must comply with Order IV of the CPC and the specific requirements of the Commercial Courts Act.

Essential Contents

• Parties — Full details of plaintiff and defendant, including registered address, place of business, and authorized representative details. Foreign companies must provide their certificate of incorporation and proof of existence in their home jurisdiction.
• Cause of action — Clear statement of the facts constituting the cause of action, including when and where the cause of action arose.
• Specified value — The value of the suit as determined under Section 12 of the Act.
• Relief sought — Specific monetary claims, injunctions, declarations, or other remedies requested.
• Statement of truth — The plaint must include a statement of truth verified by an authorized signatory of the company.
• List of documents — All documents the plaintiff relies on or wishes the court to require the defendant to produce.

Special Requirements for Foreign Companies

Foreign companies filing commercial suits in India must provide a board resolution authorizing the filing of the suit and appointing a specific individual as the company's authorized representative. The board resolution must be notarized and apostilled (or attested by the Indian embassy/consulate in the foreign company's country of incorporation). A power of attorney in favor of the Indian advocate must also be executed, typically requiring notarization and apostillation.

Step 3: Court Fees and E-Filing

Court Fees

Court fees for commercial suits vary by state. In Delhi, the court fee is calculated as a percentage of the suit value (typically 1-7.5% of the claim amount on a sliding scale). For a suit valued at INR 1 crore, the court fee in Delhi would be approximately INR 3-5 lakh. In Mumbai, the ad valorem court fee structure applies similarly. Court fees must be paid at the time of filing — no suit is registered without payment.

E-Filing Procedure

Commercial courts in India support e-filing through the eCourts portal (filing.ecourts.gov.in). The process involves:

1. Registration — Create an account on the eCourts e-filing portal using an Indian mobile number and email.
2. Upload documents — Upload the plaint, supporting documents, board resolution, power of attorney, and court fee receipt, all in PDF format.
3. Payment — Pay court fees online or upload the demand draft receipt.
4. Filing number — Upon successful filing, a filing number is generated, and the case is assigned to a specific court.

Physical filing is also accepted. For foreign companies, it is common to engage an Indian law firm that handles the e-filing and court fee payment logistics.

Step 4: Defendant's Response — Written Statement

Once the suit is registered, the court issues summons to the defendant. The defendant must file a written statement within 30 days of receiving summons. The court may extend this deadline by a further 90 days at most — bringing the maximum permitted time for filing a written statement to 120 days.

This is a significant improvement over ordinary civil courts, where written statements are routinely delayed by years. Commercial courts enforce the 120-day outer limit strictly — if the defendant fails to file within this period, they forfeit the right to file a written statement.

Step 5: Case Management Hearing

After written statements are filed, the commercial court conducts a case management hearing — a distinctive feature of the Act designed to compress trial timelines. The case management hearing covers:

• Framing of issues (the specific questions the court must decide)
• Admissions and denials of documents
• List of witnesses each party intends to examine
• Fixing dates for evidence (examination and cross-examination)
• Fixing a date for written submissions and oral hearing
• Deadlines for discovery and inspection of documents

The court typically sets a complete trial schedule at the case management hearing, with specific dates for each stage. This prevents the frequent adjournments that plague ordinary civil courts.

Step 6: Summary Judgment (Order XIII-A)

The Commercial Courts Act introduced the summary judgment procedure under Order XIII-A of the CPC (as amended for commercial disputes). This allows either party to apply for judgment without a full trial if the court is satisfied that the opposing party has no real prospect of succeeding on the claim or defense.

When to Apply

Summary judgment is particularly useful for foreign companies in cases involving clear documentary evidence of debt (unpaid invoices, acknowledged payment obligations), breach of contract where the terms are unambiguous, or dishonored guarantees or letters of credit. If the court grants summary judgment, the dispute is resolved without a full trial — saving months or years of litigation.

Step 7: Trial, Evidence, and Disposal

Evidence Procedure

Evidence in commercial courts is primarily through affidavits (written sworn statements) rather than oral examination-in-chief. The witness files an affidavit of evidence, and the opposing party cross-examines the witness in court. This significantly reduces the number of hearing dates required.

Realistic Timelines

While 12-24 months is significantly faster than ordinary civil courts (where 5-10 years is common), foreign companies should plan for the upper end of this range in practice. Appeals to the Commercial Appellate Division add another 6-12 months.

Enforcement of Judgments

Once a commercial court passes a decree, enforcement follows the CPC's execution procedures. For money decrees, the winning party can seek attachment and sale of the judgment debtor's assets, garnishment of bank accounts, appointment of a receiver, or arrest and detention of the judgment debtor (for individuals, not companies). Our foreign subsidiary setup service includes legal structuring advice. For foreign companies, it is critical to identify the defendant's assets before filing the suit — a favorable judgment is worthless if the defendant has no attachable assets.

Interim Relief for Foreign Companies

Foreign companies can seek urgent interim relief at the time of filing (or even before filing) to protect their interests during the pendency of the suit. Common interim reliefs include:

• Injunctions — Restraining the defendant from transferring assets, breaching non-compete clauses, or continuing infringing activities.
• Attachment before judgment — Securing the defendant's assets to ensure the decree can be enforced.
• Appointment of a receiver — For disputed properties or business assets.

Applying for urgent interim relief also exempts the plaintiff from the mandatory pre-institution mediation requirement under Section 12A, allowing the suit to be filed directly.

Alternative: Arbitration vs. Commercial Courts

Foreign companies often include arbitration clauses in their Indian contracts. If a valid arbitration agreement exists, the commercial court will typically refer the parties to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996, and decline to hear the suit.

The choice between arbitration and commercial courts depends on whether the contract contains an arbitration clause (if yes, arbitration is generally mandatory), the value of the dispute (arbitration costs can be significantly higher for smaller claims), confidentiality requirements (court proceedings are public; arbitration is private), and enforcement considerations (arbitral awards and court decrees have similar enforcement mechanisms, but international arbitral awards can be enforced across jurisdictions under the New York Convention).

Key Takeaways

• The Commercial Courts Act applies to disputes valued at INR 3 lakh or above, with specialized courts at the district level and commercial divisions in High Courts for higher-value disputes.
• Pre-institution mediation under Section 12A is mandatory unless the suit seeks urgent interim relief. The mediation period is 3 months (extendable by 2 months).
• Foreign companies must provide apostilled board resolutions and powers of attorney to file suits in India — prepare these documents well in advance.
• Summary judgment under Order XIII-A allows disposal without full trial when the opposing party has no real prospect of success.
• Realistic timelines for commercial court disposal are 12-24 months from filing to judgment — significantly faster than ordinary civil courts but still requiring patience and strategic planning.