Sunday, December 26, 2010

Jurisdiction of Indian Courts over Non-registered Foreign Parties

In the last post, I discussed the issue of jurisdiction of Indian Courts on parties which do not have a registered place of business in India. There are enough and more Indian precedents on this point of law.

The first of which is the decision of the Karnataka High Court in Airbus Industries vs. Laura Howell Linton (ILR 1994 KAR 1370). This judgment is pretty informative for it traces the history of the term “forum shopping” and the evolution of principles of appropriateness of jurisdiction.

Among the various questions on jurisdiction that were dealt with in the judgment, the one that is of immediate relevance to this post is the issue of jurisdiction of Indian Courts over non-registered foreign parties. In finding a satisfactory answer to this issue, the K'taka Court cited another landmark judgment of the Bombay High Court in Chunnilal Kasturi Chand v. Dundappa Damappa (AIR 1951 Bombay 190)

An attempt was made in both these decisions to reconcile canons of International law with the demands of private law. Quoting another decision of the Patna High Court, the K’taka High Court in Airbus stated thus:

“...that according to the principles of International Law, a Court has no jurisdiction to entertain a suit against a foreigner who did not permanently or temporarily reside within its jurisdiction and who had not submitted to that jurisdiction. However, this is not the case where local Legislature confers jurisdiction upon a Court situated in a particular territory, to entertain suits against foreigners in situations where a cause of action arises wholly or partly within its jurisdiction, as in this instance. In such a case, the Rule of Private International law is subject to and over-ridden by the Rule of local Municipal Law.”

As deliberated in the last post, Clause (c) of Section 20 of the Code of Civil Procedure is the will of the Indian legislature which vests Indian Courts with the power to entertain suits against foreigners who do not reside in India, so long as a part or the whole of the cause of action has arisen in India.

Another brilliant judgment on this point is the one again delivered by the Patna High Court in Suresh Narain Sinha v. Akhauri Balbhadra (AIR 1957 Pat 256). The fundamental proposition which this judgment endorses is captured in Para 5 of this judgment, which reads as follows:

In a personal action, to which none of these causes of jurisdiction apply, a decree pronounced in absentem by a foreign Court, to the jurisdiction of which the defendant has not in any way submitted himself, is by international law an absolute nullity. He is under no obligation of any kind to obey it; and it must be regarded as a mere nullity by the Courts of every nation except (when authorized by special local legislation) in the country of the forum by which it was pronounced.”

So, a plaintiff, who has an Indian patent, can take action in India for an infringement of his patent by an infringer who pull strings from outside India without a registered place of business in India.

(Image: High Court of Karnataka)

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