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CS Professional · Arbitration, Mediation and Conciliation · Commercial Transactions

Bharat Infra Ltd has a contract with a State Public Works Department to build a bridge, won through a tender. A dispute arises over payment. The department argues the matter is not commercial because one party is a State agency. What is the correct position under the Commercial Courts Act, 2015?

The dispute can be commercial. Construction and infrastructure contracts, including tenders, are listed in the definition, and the Explanation states that a dispute does not cease to be commercial merely because the State or its agency is a contracting party.

  1. AIt is not commercial because the State is a party
  2. BIt is commercial only if the Central Government notifies it separately
  3. CIt is commercial only if the contract is not won through a tender
  4. DIt can be a commercial dispute as construction and infrastructure contracts, including tenders, are covered, and the State being a party does not alter thisCorrect

Explanation

Section 2(1)(c)(vi) covers construction and infrastructure contracts, including tenders. The Explanation says a dispute does not cease to be commercial merely because one contracting party is the State or its agency or instrumentality. So the State's involvement is no bar.

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