Access to Commercial Justice in India for Growing Businesses

In India’s thriving entrepreneurial ecosystem, access to commercial justice remains a distant goal for many growing businesses. While large corporates can afford top-tier law firms and drawn-out court battles, smaller players especially MSMEs and startups face significant challenges. These include small business litigation barriers, cost prohibitive lawsuits, and limited legal resources for businesses. The result? Many valid claims are left unpursued, and unfair settlements are quietly accepted. But it doesn’t have to be this way.

Why Access to Commercial Justice Is Often Denied to Indian SMEs

Indian businesses encounter legal hurdles more often than expected. These issues commonly arise due to:

Prolonged Legal Delays: With millions of pending cases, India’s courts often take years to resolve even simple contract disputes.
High Legal Costs: The hourly billing model, lack of legal help for businesses, and unpredictable fees turn routine disputes into cost prohibitive lawsuits.
Low Legal Awareness: Many SMEs are unaware of their rights or accessible legal remedies, relying on informal agreements without safeguards.
Lack of Structured Legal Support: Unlike developed countries, India lacks institutional frameworks for SME legal funding, leaving smaller players to fend for themselves.

Legal Framework Supporting Access to Commercial Justice in India

MSMED Act, 2006 – A Lifeline for MSMEs

Section 18 of the Micro, Small, and Medium Enterprises Development (MSMED) Act allows MSMEs to approach the Micro and Small Enterprises Facilitation Council (MSEFC) for speedy resolution of payment disputes via conciliation and arbitration.

Judgment Highlight:

In Gujarat State Disaster Management Authority v. Aska Equipments Ltd. (2021), the Supreme Court reaffirmed that MSEFC awards are binding and enforceable like court decrees.

Benefit: Cost-effective dispute resolution in 90 days
Keywords used: access to commercial justice, small business litigation barrier, SME legal funding

Commercial Courts Act, 2015 – Fast-Track, But Costly

This Act was introduced to streamline commercial disputes above ₹3 lakh. It introduced pre-institution mediation (Section 12A) and summary judgments (Order XIII-A of CPC).

Barrier: The process, while faster, still favours entities that can afford expert legal teams.

Judgment Highlight:

In Principal Chief Engineer v. Manibhai & Brothers, the Supreme Court ruled that MSMEs can invoke MSMED remedies despite existing arbitration clauses.

Benefit: Ensures fairness in legal system even for contractually bound disputes
Keywords used: limited legal resources for businesses, cost prohibitive lawsuits

Practical Steps to Improve Access to Commercial Justice for Businesses

Use the MSME Samadhan Portal

Why it works: Reduces paperwork and legal fees while offering a faster path to justice
Benefit: Practical support for overcoming small business litigation barriers

Insert ADR Clauses in All Contracts

Adopt Alternative Dispute Resolution (ADR) like arbitration and mediation, governed by the Arbitration and Conciliation Act, 1996.

Insight: ADR is quicker, private, and less formal than court litigation

Judgment Insight: Courts, including the Supreme Court, promote ADR as an effective means of decongesting courts and saving business costs
Keywords used: access to commercial justice, fairness in legal system

Adopt Legal Audits and Contract Hygiene

Many Indian companies neglect periodic legal reviews. This leads to loosely drafted contracts and high litigation exposure.

Actionable Tip: Conduct quarterly reviews of contracts, compliance procedures, and IP documentation
Benefit: Reduces risk and protects against cost prohibitive lawsuits

Choose Fixed-Cost Legal Plans

Firms like LawCrust Legal Consulting offer fixed-cost legal plans that bring transparency and affordability.

Insight: This model provides access to top legal services without unexpected billing surprises

Why it matters: Helps businesses manage budgets, avoid delays, and get expert legal guidance without breaking the bank
Keywords used: SME legal funding, limited legal resources for businesses

Judgments That Promote Access to Commercial Justice

Steel Authority of India Ltd. v. MSEFC (2023) – Delhi High Court upheld enforceability of MSEFC awards under the MSMED Act
Shree Ram Construction v. State of Maharashtra – Courts allowed MSMEs to bypass arbitration clauses to approach MSEFC directly

Message: Indian courts are reinforcing fairness in legal system, encouraging smaller businesses to pursue justice

Future Trends Supporting Access to Commercial Justice in India

India is evolving toward a more inclusive legal system for businesses of all sizes

Emerging Trends:

LegalTech adoption: AI-driven contract tools, e-court systems, and digital arbitration are improving speed and efficiency
Third-Party Litigation Funding (TPLF): Gaining policy interest post Bar Council of India v. A.K. Balaji
Outcome-Based Legal Models: Firms are moving from hourly billing to success-linked fee structures

What SMEs Should Do:

Digitise legal documentation
Incorporate mediation clauses
Partner with scalable legal providers like LawCrust

Conclusion: Democratising Access to Commercial Justice

Access to commercial justice must be a right, not a luxury. For Indian MSMEs and growing companies, overcoming small business litigation barriers is achievable through smarter legal strategies, fixed-cost solutions, and proactive compliance. The legal system is opening up to innovation, and businesses must align with firms that empower growth and protect rights.

About LawCrust Legal Consulting

LawCrust Legal Consulting, a subsidiary of LawCrust Global Consulting Ltd., is a trusted legal partner for NRIs and Indians across the globe. Backed by a team of over 70 expert lawyers and more than 25 empanelled law firms, we offer a wide range of legal services both in India and internationally. Our expertise spans across legal finance, litigation management, matrimonial disputes, property matters, estate planning, heirship certificates, RERA, and builder-related legal issues.

In addition to personal legal matters, LawCrust also provides expert support in complex corporate areas such as foreign direct investment (FDI), foreign institutional investment (FII), mergers & acquisitions, and fundraising. We also assist clients with OCI and immigration matters, startup solutions, and hybrid consulting solutions. Consistently ranked among the top legal consulting firms in India, LawCrust proudly delivers customised legal solutions across the UK, USA, Canada, Europe, Australia, APAC, and EMEA, offering culturally informed and cross-border expertise to meet the unique needs of the global Indian community.

Introduction: Justice Shouldn’t Depend on Legal Budgets