Litigation in India

What is the structure of the Indian legal system, especially concerning litigation matters?

India’s court system is primarily divided in three distinct streams, ie Criminal Courts, Civil Courts and Tribunals with High Courts and the Supreme Court exercising supervisory jurisdiction.

Can you provide an overview of the hierarchy of courts in India and their jurisdictions concerning civil and commercial litigation?

In metropolitan areas, the principal court of original jurisdiction is either the City Civil Court or the High Courts (Bombay, Delhi, Calcutta, Madras) exercising original jurisdiction. In non-metropolitan areas, the District Court or the Court of Civil Judge, Senior Division is the principal court of original jurisdiction.

High Courts exercise superintendence and appellate jurisdiction over all courts throughout the territories in relation to which they exercise jurisdiction. High Courts as Constitutional Courts also exercise writ jurisdiction to enforce fundamental rights and legal rights.

Pursuant to the Commercial Courts Act, 2015, specialised commercial courts and divisions have been set up in principal court of original jurisdiction and High Courts for expeditious resolution of commercial disputes above a certain specified value (INR₹0.3m). Appeals arising out of commercial disputes lie before the Commercial Appellate Division.

The Supreme Court of India is the apex court in India. The Supreme Court’s appellate jurisdiction can be invoked in respect of any judgment, decree, or final order of a High Court and is the final court of appeal. The Supreme Court also exercises original jurisdiction in matters related to fundamental rights and constitutional questions.

How are jurisdictional issues determined in Indian courts, especially in cases involving international parties?

Jurisdiction of Indian courts is demarcated by territory, pecuniary value of the claim/dispute and subject matter. A court would have territorial jurisdiction if the defendant habitually resides, carries on business, or works for gain within its territory, or, if the cause of action arises, or concerned immoveable property lies, within the territorial limits of such court. Parties can choose to confer exclusive jurisdiction to a specific court so long as the said court otherwise has jurisdiction. In case of arbitration agreements, courts where the seat of the arbitration is located has exclusive jurisdiction. Indian courts usually recognise and enforce contractual clauses conferring exclusive or non-exclusive jurisdiction on foreign courts save and except where reference to foreign court is not justified on the grounds of forum non conveniens, lack of inherent subject matter jurisdiction or manifest injustice.

What factors should international businesses consider when choosing the appropriate venue for litigation in India?

Usually factors such as location/office of the defendant, place of execution of contract and place where subject matter of the contract is situated are considered relevant. Mumbai, Delhi, Kolkata and Chennai are centres of commercial disputes in India and are preferred over other venues. Additionally, parties often choose a venue based on where the stamp duty on the contract is paid.

What are the typical procedures involved in civil litigation in India, from filing a case to judgment and enforcement?

  1. Proceedings commence with filing a ‘plaint’ accompanied by applicable court fees and relevant documents.
  2. Summons are issued to the defendant.
  3. Defendants are given a timeframe to submit their defence and to submit any counterclaim.
  4. Directions for completion of discovery, inspection and admission and denial of documents are issued.
  5. Courts frame issues/points for determination.
  6. Parties present their evidence via sworn witness statements. This is followed by cross-examination.
  7. Parties submit oral arguments and written submissions referencing applicable law and evidence presented.
  8. Courts render their judgment on the framed issues.
  9. The successful party may seek local judgment enforcement through mechanisms like property attachment, sale, etc.

Can you outline the key steps in litigation process, including any pre-trial and post-trial procedures?

Pre-trial: upon filing of the written statement, parties are required to complete inspection of disclosed documents. Parties are required to file affidavits of admission and denial of documents disclosed and inspected. The court thereafter passes orders framing issues, listing witness(es) to be examined by the parties, fixing dates for leading of evidence, filing of written arguments, oral arguments etc.

Post-trial: parties are required to submit written arguments prior to commencing oral arguments. Judgment is reserved upon conclusion of oral arguments. Judgment is pronounced after giving notice to all parties.

How popular are alternative dispute resolution methods such as arbitration and mediation in India?

With Indian courts battling severe backlog of cases, alternative dispute resolution methods like arbitration and mediation are increasingly becoming more popular.

The government has undertaken substantial reforms to align its arbitration law with international standards, reduce court interference and delays and to enhance India’s status as a hub for arbitration. India is home to many arbitral institutions with top notch rules of procedure.

The Mediation Act, 2023 has been recently enacted encouraging institutional mediation and envisaging the enforcement of mediated settlement agreements. In commercial suits, pre-institution mediation is mandatory unless urgent interim reliefs are required.

What are the legal frameworks governing arbitration and mediation processes in India, and how are the decisions enforced?

Arbitration is governed by the Arbitration and Conciliation Act, 1996. Part I of the Act deals with arbitrations in India (both domestic and India-seated international arbitrations) while Part II deals with enforcement of foreign awards. The principle of party autonomy is considered paramount and an arbitral award is considered final and binding amongst the parties unless it is set aside by a court. The filing of an application to set aside an award does not by itself render that award unenforceable, unless the court grants an order staying the operation thereof. Scope of judicial review and interference with the arbitral process and the arbitral award is limited and Indian courts usually adopt a pro-arbitration approach. An award is enforced in the same manner as it were a decree of a court.

Mediation is governed by the Mediation Act, 2023 which recognises mediated settlement agreements as final, binding, and enforceable. It provides limited grounds such as fraud, corruption, and impersonation for challenging these agreements.