Commercial Corporate Cases Online in India

Overview

Commercial and corporate law encompasses a wide range of legal matters that arise in the course of business activities. These include disputes between companies, disputes between a company and its shareholders or directors, contractual disputes between businesses and their clients or vendors, employment disputes, intellectual property conflicts, insolvency proceedings, and regulatory actions by government authorities.

In India, commercial disputes are governed by a comprehensive framework of laws including the Companies Act, 2013, the Indian Contract Act, 1872, the Arbitration and Conciliation Act, 1996, the Insolvency and Bankruptcy Code, 2016, the Competition Act, 2002, the Intellectual Property laws, the Commercial Courts Act, 2015, and various other sector-specific regulations.

The Commercial Courts Act, 2015 was enacted specifically to ensure faster resolution of high-value commercial disputes. Commercial Courts have been established at the district level and Commercial Divisions have been set up in High Courts to handle disputes of a specified value in a time-bound manner. This has significantly improved the speed and efficiency of commercial dispute resolution in India.

Before approaching a court, parties to a commercial dispute are often encouraged to attempt resolution through negotiation, mediation, or arbitration. These alternative dispute resolution mechanisms are faster, less expensive, and more confidential than traditional court proceedings, making them particularly suitable for business disputes where parties may wish to preserve their commercial relationships.

Legaltax will help you identify the most appropriate legal remedy for your commercial or corporate dispute and connect you with an expert lawyer who can protect your business interests effectively.

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Types of Commercial and Corporate Disputes

Commercial and corporate disputes can arise in many different contexts. Some of the most common types include:

• Breach of Contract Disputes: Disputes arising when one party to a contract fails to fulfil its obligations as agreed. These include disputes over non-payment, non-delivery of goods or services, delayed performance, or violation of specific terms and conditions of a commercial agreement.
• Shareholder and Partnership Disputes: Conflicts between shareholders of a company or partners of a firm over management decisions, profit sharing, voting rights, oppression and mismanagement, or the exit of a shareholder or partner from the business.
• Director Disputes: Disputes involving the appointment, removal, or conduct of directors of a company, including allegations of breach of fiduciary duty, misappropriation of company funds, or conflict of interest.
• Intellectual Property Disputes: Disputes involving infringement of trademarks, copyrights, patents, or trade secrets. These include cases of passing off, counterfeiting, unauthorized use of a brand or logo, and misappropriation of confidential business information.
• Employment and Labour Disputes: Conflicts between an employer and employee or a group of employees over termination, non-payment of dues, wrongful dismissal, breach of employment contract, non-compete agreements, or workplace harassment.
• Mergers and Acquisitions Disputes: Disputes arising from mergers, acquisitions, joint ventures, or business restructuring transactions, including disputes over valuation, representations and warranties, indemnification, or post-closing adjustments.
• Insolvency and Bankruptcy Disputes: Proceedings initiated under the Insolvency and Bankruptcy Code, 2016 for recovery of dues from a defaulting corporate debtor or individual, or for resolution and restructuring of a financially distressed company.
• Competition Law Disputes: Complaints filed before the Competition Commission of India alleging anti-competitive practices such as cartelization, abuse of dominant position, or anti-competitive agreements that harm the market or consumers.
• Consumer and Product Liability Disputes: Disputes between businesses and consumers over defective products, deficient services, unfair trade practices, or misleading advertisements.
• Real Estate and Infrastructure Disputes: Commercial disputes involving construction contracts, real estate development agreements, infrastructure projects, or disputes with contractors and sub-contractors over project delays, cost overruns, or quality of work.
• Banking and Finance Disputes: Disputes between banks or financial institutions and their borrowers over loan recovery, enforcement of security, restructuring of debt, or allegations of wrongful classification of accounts as non-performing assets.
• Franchise and Distribution Disputes: Disputes between franchisors and franchisees or between manufacturers and their distributors or dealers over territory rights, royalties, termination of agreements, or violation of exclusivity clauses.

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Legal Remedies Available for Commercial and Corporate Disputes

Depending on the nature of the dispute, the following legal remedies are available to businesses in India:

• Civil Suit for Damages: A suit filed in a civil or commercial court seeking monetary compensation for losses suffered due to the breach of a contract or any other wrongful act by the opposite party.
• Suit for Specific Performance: A court order directing a party to fulfil its contractual obligations where monetary compensation alone is not an adequate remedy, such as in cases involving unique goods or property.
• Injunction: A court order restraining a party from doing or continuing to do a specific act that is causing or is likely to cause harm to the other party. Injunctions are commonly sought in intellectual property, employment, and contract disputes.
• Arbitration: A private dispute resolution process where the parties agree to submit their dispute to one or more arbitrators whose decision (called an award) is binding and enforceable. Arbitration is faster and more confidential than court proceedings and is widely used in commercial contracts.
• Mediation: A voluntary, confidential process where a neutral third party (the mediator) assists the disputing parties in reaching a mutually acceptable settlement. Mediation is increasingly being used as a first step in resolving commercial disputes in India.
• Winding Up Petition: A petition filed before the National Company Law Tribunal (NCLT) seeking the winding up of a company on grounds such as inability to pay its debts, just and equitable grounds, or oppression and mismanagement.
• Insolvency Application under IBC: An application filed before the NCLT under the Insolvency and Bankruptcy Code, 2016 by a financial or operational creditor to initiate the Corporate Insolvency Resolution Process (CIRP) against a defaulting company.
• Complaint before Regulatory Authority: A complaint filed before the relevant regulatory authority such as the Competition Commission of India, the Securities and Exchange Board of India (SEBI), the Real Estate Regulatory Authority (RERA), or the Telecom Regulatory Authority of India (TRAI) for addressing specific regulatory violations.
• Criminal Complaint: In cases involving fraud, cheating, criminal breach of trust, or forgery in a commercial transaction, a criminal complaint can be filed with the police or before a Magistrate's Court under the Indian Penal Code or the Bharatiya Nyaya Sanhita, 2023.

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Commercial Courts in India

The Commercial Courts Act, 2015 established a dedicated court system for resolving high-value commercial disputes in a time-bound and efficient manner. Key features of the commercial courts system are as follows:

• Specified Value: Commercial Courts handle disputes where the value of the subject matter is Rs. 3,00,000/- (three lakh rupees) or above. This threshold was reduced from the original Rs. 1 crore to ensure that a wider range of commercial disputes benefit from the faster commercial court process.
• Commercial Division of High Courts: Commercial Divisions have been established in High Courts to handle high-value commercial disputes that would otherwise go to the High Court in its original jurisdiction.
• Case Management Hearings: Commercial courts conduct structured case management hearings to ensure that cases are managed efficiently and disposed of within the prescribed timelines.
• Mandatory Pre-Institution Mediation: Before filing a commercial suit (except in cases where urgent interim relief is sought), parties are required to attempt pre-institution mediation through the Legal Services Authority. This encourages out-of-court settlement and reduces the burden on courts.
• Strict Timelines: Commercial courts follow strict timelines for filing of pleadings, completion of discovery, and hearing of arguments to ensure faster disposal of cases.

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Steps Involved in Filing a Commercial or Corporate Case

1. Consultation with a Commercial Lawyer: The first step is to consult an experienced commercial and corporate lawyer who will review your contracts, documents, and correspondence, assess the merits of your case, and advise you on the best legal strategy.
2. Sending a Legal Notice: In most commercial disputes, the first formal step is to send a legal notice to the opposite party demanding resolution of the dispute within a specified time. A well-drafted legal notice often leads to an out-of-court settlement and demonstrates that you have made reasonable efforts to resolve the matter before resorting to litigation.
3. Exploring Alternative Dispute Resolution: Before filing a case in court, the parties should consider whether the dispute can be resolved through negotiation, mediation, or arbitration. If the contract contains an arbitration clause, the dispute must first be referred to arbitration as per the agreed procedure.
4. Pre-Institution Mediation (for Commercial Suits): If the dispute qualifies as a commercial dispute under the Commercial Courts Act, the parties are required to attempt pre-institution mediation before filing a suit, unless urgent interim relief is required.
5. Document Verification and Case Preparation: The lawyer will verify and organize all relevant documents including contracts, invoices, correspondence, financial records, board resolutions, and any other evidence supporting your claim.
6. Drafting and Filing the Plaint or Application: The lawyer will draft the plaint (for a civil or commercial suit) or the appropriate application (for arbitration, NCLT proceedings, or regulatory complaints) and file it before the appropriate forum along with the required court fees and supporting documents.
7. Interim Relief (if required): If there is an urgent need to protect your interests while the case is pending, the lawyer can apply for interim relief such as an injunction, attachment before judgment, or appointment of a receiver.
8. Reply by the Opposite Party: The opposite party will file its response to your claim. In commercial court cases, strict timelines apply for filing of the written statement.
9. Evidence and Arguments: Both parties will present their evidence and arguments before the court or arbitral tribunal. Expert witnesses may be examined in complex commercial cases involving technical, financial, or industry-specific issues.
10. Judgment or Award: The court or arbitral tribunal will deliver its judgment or award after examining the evidence and hearing arguments from both sides. The successful party can then take steps to enforce the judgment or award against the opposite party.

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Where to File a Commercial or Corporate Case?

Territorial Jurisdiction

A commercial suit must be filed in the court having territorial jurisdiction over the area where the cause of action arose, where the defendant resides or carries on business, or where the contract was to be performed. For corporate matters such as oppression and mismanagement or insolvency proceedings, the case must be filed before the National Company Law Tribunal (NCLT) bench having jurisdiction over the registered office of the company.

Pecuniary Jurisdiction

The pecuniary jurisdiction determines which court handles the case based on the value of the dispute. Commercial disputes valued at Rs. 3,00,000/- or above are handled by Commercial Courts. Disputes above the specified pecuniary limit are handled by the Commercial Division of the High Court. Your lawyer will advise you on the appropriate court based on the value and nature of your dispute.

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Required Documents for a Commercial or Corporate Case

• Original contract, agreement, or memorandum of understanding between the parties
• All purchase orders, invoices, delivery receipts, and payment records
• All correspondence including letters, emails, and written communications between the parties
• Company incorporation documents such as Certificate of Incorporation, Memorandum of Association, and Articles of Association
• Board resolutions, shareholder agreements, and partnership deeds (as applicable)
• Financial statements, bank statements, and audit reports (as applicable)
• Intellectual property registration certificates (for trademark, patent, or copyright disputes)
• Employment contracts and HR records (for employment disputes)
• Regulatory approvals, licenses, or permits relevant to the dispute
• Legal notices already sent or received in the matter
• Any prior court orders, arbitral awards, or settlement agreements in related matters
• Identity proof and address proof of the claimant or the authorized representative of the company

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Limitation Period

The time limit for filing a commercial or corporate case varies depending on the type of dispute:

• Suit for breach of contract: 3 years from the date of breach.
• Suit for recovery of money due under a contract: 3 years from the date the money became due.
• Application under the Insolvency and Bankruptcy Code: 3 years from the date of default.
• Petition for oppression and mismanagement under the Companies Act: No fixed limitation period, but must be filed without unreasonable delay.
• Arbitration proceedings: 3 years from the date the cause of action arose, unless the arbitration agreement specifies otherwise.

Note: Limitation periods in commercial matters are strictly enforced by courts and tribunals. It is strongly advisable to consult a lawyer as soon as a dispute arises to avoid losing your right to legal remedy.

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Arbitration in Commercial Disputes

Arbitration is a widely preferred method of resolving commercial disputes in India, particularly where the parties have included an arbitration clause in their contract. Key aspects of arbitration in India are as follows:

• Arbitration Agreement: Arbitration can only be initiated if there is a valid arbitration agreement between the parties, either as a clause in the main contract or as a separate agreement.
• Appointment of Arbitrator: The parties can mutually agree on the appointment of a sole arbitrator or a panel of arbitrators. If they fail to agree, either party can approach the court for appointment of an arbitrator.
• Arbitral Award: The arbitral tribunal will pass an award after hearing both parties and examining the evidence. The award is binding on the parties and enforceable as a decree of a civil court.
• Timeframe: Under the Arbitration and Conciliation Act, 1996, arbitral proceedings are expected to be completed within 12 months from the date of completion of pleadings, extendable by six months by mutual consent of the parties.
• Confidentiality: Arbitration proceedings are private and confidential, which is a significant advantage for businesses that wish to keep their disputes out of the public domain.
• International Commercial Arbitration: For disputes involving foreign parties, international commercial arbitration can be conducted in India or abroad, and foreign awards are enforceable in India under the New York Convention and the Geneva Convention.

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How to Handle a Commercial or Corporate Case with Legaltax?

At Legaltax, we understand that business disputes can be disruptive, time-consuming, and costly. Our team of experienced commercial and corporate lawyers is equipped to handle a wide range of business disputes across industries and sectors. We provide practical, commercial, and results-focused legal advice tailored to your specific business needs. Just follow our 3 simple steps:

1. Fill our simple form and receive a call back from our team of experienced commercial and corporate lawyers.
2. Provide us with all necessary details and documents related to your commercial or corporate dispute.
3. Our team of legal experts will assess your case, advise you on the best strategy, and handle the entire legal process on your behalf.

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Why Choose Legaltax?

• Free Legal Advice
• Expert and Verified Commercial and Corporate Lawyers
• Lowest Fee
• Quick and Transparent Process
• Dedicated Case Manager
• 100% Confidentiality
• Pan-India Legal Network
• Experience Across Industries and Sectors

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Payment Structure

1. You are required to pay 50% of the case fee to start the work.
2. 25% is payable after the case is admitted by the appropriate court or tribunal.
3. Remaining 25% is to be paid before the final hearing of the case.

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FAQ's on Commercial and Corporate Cases in India

Q1. What is a commercial dispute?

A commercial dispute is a legal conflict arising from business or trade activities between two or more parties. It includes disputes arising from contracts, partnerships, shareholder agreements, intellectual property rights, employment relationships, insolvency proceedings, and regulatory matters. In India, commercial disputes of a specified value are handled by dedicated Commercial Courts established under the Commercial Courts Act, 2015, which ensures faster and more efficient resolution compared to ordinary civil courts.

Q2. What types of cases are handled by the Commercial Courts in India?

Commercial Courts in India handle a wide range of business disputes including disputes arising from contracts for supply of goods or services, disputes relating to immovable property used exclusively in trade or commerce, intellectual property disputes, disputes arising from agreements relating to shareholders, joint ventures, partnership agreements, technology licensing, insurance disputes, and disputes relating to maritime law, among others. The dispute must have a commercial value of Rs. 3,00,000/- or above to be eligible for filing before a Commercial Court.

Q3. What is oppression and mismanagement in company law?

Oppression and mismanagement refers to a situation where the affairs of a company are being conducted in a manner that is prejudicial to the interests of its members or the public, or in a manner oppressive to any member or members. Under Section 241 of the Companies Act, 2013, any member of a company who feels that the company's affairs are being conducted in such a manner can file a petition before the National Company Law Tribunal (NCLT) seeking appropriate relief, which may include change in management, modification of the company's memorandum or articles, or winding up of the company.

Q4. What is the Corporate Insolvency Resolution Process (CIRP) under the IBC?

The Corporate Insolvency Resolution Process (CIRP) is a time-bound process initiated under the Insolvency and Bankruptcy Code, 2016 when a corporate debtor defaults on payment of a debt of Rs. 1 crore or more. A financial creditor, operational creditor, or the corporate debtor itself can file an application before the NCLT to initiate CIRP. Once admitted, a Resolution Professional is appointed to manage the company's affairs and invite resolution plans from prospective buyers or investors. The entire process is required to be completed within 330 days from the date of admission of the application.

Q5. How is an arbitration award enforced in India?

An arbitral award passed in India is enforced as a decree of a civil court under Section 36 of the Arbitration and Conciliation Act, 1996. The successful party can file an execution petition before the civil court having jurisdiction to execute the award. A foreign arbitral award can be enforced in India if it is made in a country that is a signatory to the New York Convention or the Geneva Convention and has been notified by the Government of India. The enforcement of a foreign award is governed by Part II of the Arbitration and Conciliation Act, 1996.

Q6. What is the difference between a franchise dispute and a distribution dispute?

A franchise dispute arises between a franchisor and a franchisee over the terms of a franchise agreement, which typically grants the franchisee the right to operate a business under the franchisor's brand name and system in exchange for fees and royalties. A distribution dispute arises between a manufacturer or supplier and its distributor or dealer over territory rights, pricing, minimum purchase commitments, termination of the distribution agreement, or commission and payment issues. Both types of disputes are governed primarily by the terms of the respective agreements and the Indian Contract Act, 1872.

Q7. Can a company file a criminal complaint for fraud committed by its director?

Yes, a company can file a criminal complaint against its director or any other person for fraud, criminal breach of trust, cheating, or misappropriation of company funds. Such complaints can be filed with the Economic Offences Wing of the police, the Serious Fraud Investigation Office (SFIO), or directly before a Magistrate's Court. Additionally, under Section 447 of the Companies Act, 2013, any person guilty of fraud in relation to a company can be punished with imprisonment of up to ten years and a fine up to three times the amount involved in the fraud.

Q8. What is a non-compete agreement and is it enforceable in India?

A non-compete agreement is a contractual provision that restricts an employee or a party to a business transaction from engaging in a competing business or joining a competitor for a specified period and within a specified geographical area after the termination of their employment or business relationship. In India, non-compete clauses in employment contracts that operate after the termination of employment are generally not enforceable as they are considered to be in restraint of trade under Section 27 of the Indian Contract Act, 1872. However, non-compete clauses in the context of the sale of a business or a partnership agreement may be enforceable to a reasonable extent.

Q9. What is the role of the Competition Commission of India (CCI) in commercial disputes?

The Competition Commission of India (CCI) is a statutory body established under the Competition Act, 2002 to prevent anti-competitive practices and promote fair competition in the Indian market. Any person or business that believes it has been harmed by anti-competitive conduct such as cartelization, price fixing, bid rigging, abuse of a dominant market position, or anti-competitive mergers can file a complaint before the CCI. The CCI has the power to investigate such complaints, impose significant financial penalties on violators, and direct them to cease and desist from the anti-competitive conduct.

Q10. What is the procedure for winding up a company in India?

A company can be wound up voluntarily by its members or creditors, or compulsorily by an order of the National Company Law Tribunal (NCLT). Compulsory winding up can be ordered by the NCLT if the company is unable to pay its debts, if it has acted against the interests of the sovereignty or integrity of India, or on just and equitable grounds. The winding up process involves the appointment of a liquidator who takes charge of the company's assets, settles its liabilities, and distributes any remaining assets among the shareholders. The entire process is governed by the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016.

Q11. What are the legal options available to a startup if an investor breaches a shareholders agreement?

If an investor breaches a shareholders agreement, the startup and its founders have several legal options available. They can send a legal notice to the investor demanding compliance with the agreement or compensation for the breach. If the agreement contains an arbitration clause, the dispute can be referred to arbitration for a binding resolution. Alternatively, the startup can file a civil suit before a Commercial Court seeking specific performance of the agreement, damages for the breach, or an injunction restraining the investor from taking any action in violation of the agreement. The appropriate remedy will depend on the specific terms of the agreement and the nature of the breach.

Q12. How can a business protect its trade secrets and confidential information in India?

India does not have a specific trade secrets law, but businesses can protect their confidential information through a combination of contractual and legal mechanisms. These include including non-disclosure agreements (NDAs) and confidentiality clauses in employment contracts and business agreements, obtaining intellectual property registrations for inventions, designs, and software where applicable, and taking legal action for breach of contract or passing off in case of misappropriation. In cases of theft of confidential information, a criminal complaint under the Information Technology Act, 2000 or the Bharatiya Nyaya Sanhita, 2023 may also be pursued.

Q13. What is SEBI's role in corporate disputes involving listed companies?

The Securities and Exchange Board of India (SEBI) is the regulatory authority for securities markets in India. In corporate disputes involving listed companies, SEBI plays a crucial role in investigating and penalizing violations of securities laws such as insider trading, fraudulent and unfair trade practices, non-disclosure of material information, violation of takeover regulations, and market manipulation. Any investor or market participant who believes that a listed company or its promoters have violated SEBI regulations can file a complaint with SEBI. SEBI has the power to impose financial penalties, debar individuals from the securities market, and initiate prosecution in serious cases.

Q14. How can Legaltax help my business with commercial and corporate legal matters?

Legaltax offers a comprehensive range of commercial and corporate legal services to businesses of all sizes across India. Our experienced lawyers can assist you with drafting and reviewing commercial contracts, advising on corporate governance and compliance, resolving shareholder and partnership disputes, handling intellectual property matters, representing you in commercial court and arbitration proceedings, filing insolvency applications before the NCLT, and addressing regulatory issues before the CCI, SEBI, RERA, and other authorities. With free initial legal advice and a dedicated case manager for each matter, Legaltax ensures that your business receives prompt, practical, and cost-effective legal solutions.