Executive Summary

The Commercial Courts Act, 2015 establishes a specialised framework for resolving qualifying commercial disputes in India. Although ₹1 Crore was the original specified-value threshold, the 2018 amendment reduced the statutory minimum to ₹3 Lakh, subject to applicable law and notifications. For businesses pursuing ₹1 Crore+ claims, jurisdiction, evidence, litigation costs, and recovery strategy remain critical.

The ₹1 Crore Question: Is Your Commercial Dispute Eligible for a Commercial Court?

A business can have a strong contractual claim worth ₹1 Crore, ₹5 Crore, or more—and still face costly procedural complications if it approaches the dispute without understanding the applicable court jurisdiction, valuation rules, and pre-litigation requirements.

For corporate promoters, CFOs, managing partners, and legal heads, the Commercial Courts Act, 2015 is important because it creates a specialised framework for certain commercial disputes. It also provides procedural rules intended to support the efficient management and resolution of commercial litigation.

But one common misconception needs to be corrected at the outset: ₹1 Crore is not the current nationwide statutory minimum specified value under the Act. The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018 reduced the minimum specified value under Section 2(1)(i) from ₹1 Crore to ₹3 Lakh. The pecuniary jurisdiction of the relevant court is a separate issue and must also be checked.

For LegalFund, the ₹1 Crore+ figure serves a different purpose: it is the minimum dispute value for commercial claims and enforcement actions evaluated for potential litigation funding, subject to individual assessment.

That distinction matters when deciding whether to litigate, how to finance a claim, and how to convert a legal entitlement into actual commercial recovery.

1. What Is the Commercial Courts Act, 2015?

The Commercial Courts Act, 2015 provides a legal framework for designated Commercial Courts, Commercial Divisions, and Commercial Appellate Divisions to handle qualifying commercial disputes.

Its purpose is to facilitate more structured adjudication of commercial matters through specialised judicial forums and procedural provisions tailored to commercial litigation.

For businesses, the Act can be relevant to disputes involving substantial contractual obligations, unpaid invoices, business transactions, infrastructure projects, commercial property, and other matters falling within the statutory definition of a commercial dispute.

What types of disputes may qualify?

The definition of a commercial dispute under Section 2(1)(c) covers specified categories of disputes arising from commercial relationships and transactions. Depending on the facts and statutory requirements, these can include:

• Commercial contracts: Breach of contract, unpaid contractual dues, supply agreements, and service disputes.
• Infrastructure and construction disputes: Payment claims, project contracts, and disputes arising from commercial construction arrangements.
• Business and partnership disputes: Certain disputes relating to partnerships, joint ventures, and commercial arrangements.
• Real estate and property disputes: Commercial transactions involving immovable property, where the statutory definition and other requirements are satisfied.
• Intellectual property disputes: Qualifying disputes involving trademarks, copyright, patents, and other protected rights.
• Distribution and supply-chain disputes: Disagreements involving goods, services, distribution agreements, and business obligations.

Important: A high claim value alone does not make a matter a commercial dispute under the Act. The nature of the dispute must fall within the statutory definition, and the applicable specified-value and jurisdictional requirements must be met.

2. Understanding the ₹1 Crore+ Mandate: Specified Value vs. Court Jurisdiction

When assessing a commercial dispute in India, businesses should distinguish between three separate questions:

1. Is it a commercial dispute?

The subject matter must fall within the definition under Section 2(1)(c) of the Commercial Courts Act, 2015.

2. What is its specified value?

Section 2(1)(i), read with Section 12, governs how specified value is determined. The statutory minimum was reduced from ₹1 Crore to ₹3 Lakh in 2018, subject to any applicable higher threshold.

3. Which court has jurisdiction?

The applicable territorial rules, the relevant court’s pecuniary jurisdiction, and any special statutory provisions must be examined. Meeting the specified-value threshold does not, by itself, establish that a particular Commercial Court can hear the case.

How is specified value calculated?

Section 12 sets out valuation rules for different categories of relief. For example:

• Money recovery suits: The amount sought to be recovered, including interest calculated up to the date of filing where applicable.
• Movable property disputes: The relevant market value of the property or right.
• Immovable property disputes: The applicable market value of the property or right.
• Intangible rights: The estimated market value of the right, as provided under the statutory framework.
• Counterclaims: The value of the subject matter of the counterclaim is also relevant under the applicable rules.

For commercial arbitration matters, Section 12 contains a separate rule addressing the aggregate value of the claim and counterclaim when determining the relevant commercial court or division’s jurisdiction. The precise valuation depends on the nature of the proceeding.

Practical takeaway: A ₹1 Crore+ claim may be commercially significant and potentially suitable for funding, but the correct legal forum must be determined independently.

3. The Financial Cost of Commercial Litigation

Commercial disputes rarely affect only the legal department. When a business pursues unpaid dues or a contractual claim, the dispute can influence working capital, debt servicing, project delivery, supplier relationships, and investment decisions.

For a company pursuing a multi-crore claim, the cost of litigation can include more than advocate fees.

The four costs corporate decision-makers should evaluate

Locked-up working capital

Unpaid invoices, withheld contract payments, or disputed receivables may prevent a company from deploying funds elsewhere in its business.

Legal and case-related expenditure

Depending on the dispute, costs may include legal representation, court fees, expert opinions, documentation, evidence preparation, and enforcement proceedings.

Financing and opportunity costs

A business may need additional borrowing or may defer investment while waiting for a disputed payment or judgment.

Management and operational distraction

Senior teams must coordinate legal strategy, preserve evidence, support counsel, and manage the commercial consequences of an unresolved dispute.

Illustrative financial impact

Consider a company pursuing ₹3 Crore in unpaid commercial dues. If the claim remains unresolved, that capital may be unavailable for expansion, procurement, or debt reduction.

At an illustrative annual opportunity-cost rate of 12%, ₹3 Crore tied up for one year represents approximately ₹36 Lakh in opportunity cost. This is a simplified illustration, not a prediction of actual loss, a legal entitlement to interest, or an accounting conclusion.

For CFOs and promoters, the question is therefore not only whether the claim is legally strong. It is also whether the company can pursue it efficiently, manage the cost, and sustain the financial impact until resolution and recovery.

4. Section 12A: Pre-Institution Mediation in Commercial Disputes

Before filing a commercial suit, businesses must consider Section 12A of the Commercial Courts Act, 2015.

Where a commercial suit does not contemplate urgent interim relief, the plaintiff must generally exhaust the prescribed pre-institution mediation process before instituting the suit. The statutory framework and applicable rules govern the procedure and timelines.

This requirement can be particularly important in commercial debt recovery and contractual disputes where the claimant intends to seek payment through litigation.

What should businesses do before filing?

1. Organise the evidence: Collect contracts, purchase orders, invoices, delivery records, correspondence, account statements, and payment acknowledgements.
2. Calculate the claim: Verify the principal amount, applicable contractual interest, and the correct valuation under Section 12.
3. Assess mediation requirements: Determine whether Section 12A applies and whether the matter genuinely contemplates urgent interim relief.
4. Evaluate settlement options: Consider whether a documented settlement could achieve a commercially acceptable result.
5. Plan for litigation if required: Prepare the case strategy, budget, and supporting documents with qualified legal counsel.

The urgent-interim-relief exception should not be treated as a routine way to bypass mediation. Its applicability depends on the facts and the relief genuinely contemplated.

5. How Third-Party Litigation Funding Can Support High-Value Commercial Claims

For businesses pursuing substantial commercial claims, third-party litigation funding in India may provide an alternative to financing every agreed case-related expense from company cash.

Under a litigation funding arrangement, an independent funder evaluates a claim and may agree to finance specified legal or case-related costs in return for a contractually agreed share of a successful recovery.

The funding decision generally considers the legal merits, evidence, likely recovery, counterparty solvency, anticipated costs, and commercial economics of the case.

What is non-recourse litigation funding?

Non-recourse litigation funding generally means that if the funded claim is unsuccessful, the claimant does not have to repay the funding covered by the agreement, subject to the agreement’s specific terms, exclusions, and applicable law.

Where the claim succeeds, the funder receives the agreed contractual return from the recovery, as provided in the funding agreement.

This structure may help businesses manage the financial risks of pursuing eligible commercial claims.

Potential benefits for corporate claimants

• Preserve business liquidity: Potentially reduce the need to divert company capital towards covered legal and case-related expenses.
• Manage litigation expenditure: Assess funding against the expected cost, potential recovery, and commercial value of the claim.
• Support substantial recovery actions: Consider funding for suitable contractual claims, commercial debt recovery, and eligible enforcement proceedings.
• Align funding with outcomes: Structure the funder’s return around the agreed recovery arrangement rather than treating funding as a conventional loan.
• Retain a business-focused perspective: Evaluate litigation as a capital allocation decision alongside its legal merits.

Funding is not automatic, and it does not guarantee a favourable judgment or successful recovery. Cost coverage, control provisions, settlement rights, the funder’s return, and any exclusions must be clearly documented and reviewed before execution.

6. Which ₹1 Crore+ Commercial Disputes May Be Suitable for Funding?

LegalFund evaluates high-value commercial claims where the potential recovery may justify a structured funding arrangement.

Examples of matters that may merit assessment include:

• Commercial debt recovery: Substantial unpaid invoices, outstanding contractual payments, and business-to-business receivables.
• Breach of contract claims: Disputes involving supply agreements, service contracts, distribution arrangements, and other commercial obligations.
• Infrastructure and real estate disputes: Qualifying claims involving project payments, construction contracts, and commercial property transactions.
• Arbitration award enforcement: Eligible awards where the claimant requires funding to pursue enforcement and recovery.
• Court decree execution: Qualifying money decrees where the award or judgment holder needs a commercially viable recovery strategy.
• MSME commercial disputes: High-value claims involving delayed payments or contractual defaults, subject to individual evaluation.

The central consideration is not simply the amount claimed. A funder must assess whether the claim is legally supportable, supported by adequate evidence, and commercially recoverable.

7. LegalFund’s ₹1 Crore+ Funding Evaluation Process

LegalFund evaluates commercial claims and arbitration enforcement actions with a minimum dispute value of ₹1 Crore+. This is LegalFund’s funding-screening threshold, not the statutory minimum for filing a commercial suit under the Commercial Courts Act.

Step 1: Case submission

Provide the dispute summary, claim value, relevant contracts, and current litigation status.

Step 2: Legal and financial diligence

The claim is assessed for legal merits, evidence, likely recovery, counterparty position, and expected costs.

Step 3: Funding terms

If the opportunity is suitable, proposed terms may specify the funding scope, disbursement arrangements, allocation of risk, and funder’s return.

Step 4: Agreement and funding

Funding proceeds only after the necessary approvals, due diligence, and execution of mutually acceptable agreements.

Submitting a case does not guarantee approval. Each opportunity is assessed individually, and the claimant should obtain appropriate legal and financial advice before entering into a funding agreement.

8. A Practical Checklist for CFOs, Promoters, and Managing Partners

Before committing further capital to a high-value commercial dispute, ask:

• Does the dispute fall within the definition of a commercial dispute under the Act?
• Has the specified value been calculated correctly under Section 12?
• Does the proposed court have the necessary territorial and pecuniary jurisdiction?
• Does Section 12A pre-institution mediation apply?
• Are the contracts, invoices, correspondence, and supporting evidence complete?
• What is the estimated cost of litigation through judgment and, if necessary, enforcement?
• Is the opposing party likely to have assets or resources from which a recovery can be made?
• Could third-party litigation funding help manage the financial burden of pursuing the claim?

These questions help align legal strategy with financial priorities. The aim is to pursue a supportable claim while making informed decisions about capital, risk, and recovery.

Frequently Asked Questions

1. Is ₹1 Crore the minimum value required to file a commercial suit in India?

No. The original specified-value threshold under the Commercial Courts Act, 2015 was ₹1 Crore, but the 2018 amendment reduced the statutory minimum under Section 2(1)(i) to ₹3 Lakh, subject to applicable law and any higher notified threshold. The relevant court’s pecuniary jurisdiction must be checked separately.

2. What is the purpose of the Commercial Courts Act, 2015?

The Act establishes a specialised framework for qualifying commercial disputes, including designated Commercial Courts and Commercial Divisions, with procedural provisions intended to facilitate efficient commercial dispute resolution.

3. What is specified value under Section 12?

Specified value is determined under Section 2(1)(i), read with Section 12. The valuation method depends on the type of relief sought, such as recovery of money, movable or immovable property, or intangible rights. The applicable rules should be checked for the specific proceeding.

4. Is pre-institution mediation compulsory for commercial disputes?

Under Section 12A, pre-institution mediation is generally mandatory for a commercial suit that does not contemplate urgent interim relief. The requirement and applicable procedure should be assessed based on the facts and current statutory framework.

5. Can LegalFund finance a commercial dispute worth ₹1 Crore or more?

LegalFund evaluates commercial claims and arbitration enforcement actions with a minimum dispute value of ₹1 Crore+. Funding depends on individual legal and financial diligence, the likely recovery, case costs, and mutually acceptable terms.

6. Does litigation funding mean the claimant must repay the money if the case is lost?

Under a properly structured non-recourse funding agreement, the claimant generally does not repay the funded amount if the case is unsuccessful, subject to the contract’s terms, exclusions, and applicable law. The actual allocation of risk should be reviewed before signing.

7. Can litigation funding help with enforcement after winning a case?

Potentially. Eligible court decree execution and arbitration award enforcement matters may be assessed for funding, depending on the enforceability of the award or decree, the debtor’s recovery profile, the costs involved, and the proposed funding terms.

Have a ₹1 Crore+ Commercial Claim? Explore Your Funding Options.

Unpaid contractual dues, a substantial commercial dispute, or an arbitration award awaiting enforcement can tie up valuable business capital. LegalFund assesses eligible high-value claims for potential third-party litigation funding.

Protect your cash flow. Submit your case details for a confidential underwriting evaluation. Submit Your Case to LegalFund

info@legalfund.in +91 8448330076

Disclaimer: This article is for general informational purposes only and does not constitute legal, financial, or investment advice. Applicable law, court jurisdiction, procedural requirements, limitation periods, and funding eligibility require case-specific professional review.