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New large claim commercial-only courts in the offing

The Government will set up specialised high-value commercial courts in the large metros, Law Minister Veerappa Moily said today.

Moily (pictured) said in a conference on legal reform: "We plan to set up commercial courts in mega cities to deal exclusively with high value cases.

"Such courts will be good for investors and help in FDI and domestic investments."

Norton Rose London-based dispute resolution senior associate Sherina Petit said: "I think at the moment the court system is discouraging clients from doing business in India but something like this would be extremely encouraging."

Stephenson Harwood London disputes partner Kamal Shah said: "It's a very positive step if they are serious about it because most of the bigger corporates and foreign companies all go to international courts or arbitral instutites to resolve their conflicts.

If they get it right it'll bring back some of the litigation or arbitration which is going abroad at the moment."

He added that the main test would be how quickly the Government was able to form these new courts and whether it would find judges with the right experience to preside over them.

India's courts system has long been criticised for excessive delays, particularly in high-value litigations involving companies.

Petit commented that setting up specialised commercial courts would be extremely helpful, particularly if the courts were to also have strict case management and procedural rules and powers, as is the case in the UK.

Moily said in his speech that India could be transformed into an international arbitration hub like Singapore and Hong Kong by the changes he envisages.

"Like Karnataka has become the hub of IT industry, the legal fraternity of the country can make India the capital of legal world," he said, referring to his former tenure as chief minister of the state.

Shah noted that Moily's statement was "overambitious given the current state of the legal system".

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