PROBLEM OF JURISDICTION IN PRIVATE INTERNATIONAL LAW AND STAY OF ACTIONS BY: SURYANSH TIWARI
PROBLEM
OF JURISDICTION IN PRIVATE INTERNATIONAL LAW AND STAY OF ACTIONS
AUTHORED
BY: SURYANSH TIWARI
INTRODUCTION
Generally
speaking, Jurisdiction denotes the extent of power of a court to entertain
suits and applications. It implies authority and competency of the court to
adjudicate disputes presented before it.
For a Court to have Jurisdiction to adjudicate a particular controversy, it
must not only have Jurisdiction to try the matter but also have the authority
to decide the questions in issue and pass appropriate orders.
There could be three kinds of Jurisdiction of Courts, that is, Territorial,
Pecuniary and Subject-matter jurisdiction. However, Jurisdiction may also be classified
as Original or Appellate.
The
problem of Jurisdiction in Private International Law arises as the case
involves a ‘foreign element’. This implies that a court has come across a case in
which one or the other element is connected with a foreign country, that is,
the case involves the application of different system of law of another
country. The foreign element could be anything as the parties may be of
different nationality or
the property may be situated in some other country or the tort may have been
committed in some other country etc.
Problem of Jurisdiction
The
first ques that arises in conflict of laws cases is whether the forum or the
court has the power to decide the case in hand. The
question of Jurisdiction also arises when the question before the court is of
recognition or enforcement of foreign judgement, wherein the court has to
decide that whether the foreign judgement was given by the court of competent
jurisdiction.
Generally,
the Procedural laws of the country specify that in what matters will the court
have jurisdiction. The problem of Jurisdiction shall be discussed both under
Indian
and English principles.
The
topic can be discussed under three broad heads-
a) Against
whom actions may be filed?
b) Who
may file a suit?
c) Actions
in respect of the property
As
for the question that what type of actions may be filed, they may be personal
actions like breach of contract, tort etc. or may be related to property or may
be related to status like suits in adoption, custody, matrimonial cases etc.
Against whom the action may be filed
English
Law: In English law, the rule for personal actions (an
action inter partes) is that the court has jurisdiction if the process
is served on the defendant when he is present in England even if he is on a
fleeting visit or he is in transit. It
is immaterial if the defendant is foreigner or the subject-matter of the suit
is not connected to England. Once the process is served on the defendant while
he is present in England, the court has jurisdiction to try the suit.
The
English court may also have jurisdiction when-
a) The
court assumes jurisdiction against an absentee defendant,
or
b) The
defendant submits to the Jurisdiction.
Defendant
Present within the Jurisdiction
It
is noteworthy that if the defendant is brought within the jurisdiction by fraud
or force then the service summons on him shall be quashed.
Maharanee
of Baroda v. Wildenestein, In
this case Maharanee of Baroda purchased a painting, which was believed to be
‘La Poesie’ by Francois Boucher, from Mr. Wildenstein, who was an art dealer, in
Paris. The Maharanee got the painting formally evaluated in England and it was
found that the painting was not a work of Boucher.
A
suit was filed by Maharanee and the process was served upon the defendant in
1970 when he was in England visiting the Ascot races. The defendant objected to
the court’s jurisdiction.
The
court observed that since the summons was properly served on the defendant,
while he was in England, though on a short visit, the plaintiff was entitled to
continue the proceedings and the case could be tried in England.
Substituted
service: In English law, the process must be served
personally on each defendant, though substituted service is permitted in
certain cases. Lord Reading pointed out following two circumstances- (a). when
the defendant went outside the jurisdiction to evade the service, or
(b).
Defendant went outside the jurisdiction with some other motive but he had the
knowledge of the issue of process before he went out of the jurisdiction.
Assumed
Jurisdiction:
The
above general rule of jurisdiction posed problems in those cases where the
defendant was outside the jurisdiction. To counter this problem certain rules
were developed which were then consolidated as Order 11 of the Supreme Court
Rules. The rules contained herein authorised the English courts to order
service out of the jurisdiction, on a defendant who is neither present within
the jurisdiction and nor has submitted to the jurisdiction.
The
court assumes jurisdiction:
(i)
Where the subject-matter is land
situated within the jurisdiction.
(ii)
Where any act, deed, contract or
liability affecting land within the jurisdiction is sought to be set aside or
enforced in an action.
(iii)
Where the person/corporation against
whom any relief is sought is domiciled or ordinarily resident within the
jurisdiction.
In
Levene v. Inland Revenue Commissioner it was held that
residence here signifies habitual residence and not temporary.
(iv)
If the defendant is not domiciled or
ordinarily resident in Scotland-
(a). When
an action is brought against a defendant to rescind/dissolve/annul a contract
or recover damages for breach of contract which was either-
-made in England, or
-made by an agent
trading/residing in England, or
-by its terms or by implication
is to be governed by English Law.
(b). In case of breach of contract made in or
out of England, if the performance of the contract has to happen in England.
(v)
Action based on Tort committed in
England.
(vi)
Injunction to order defendant to do or
refrain from doing something in England. It is immaterial whether or not the
damages are sought in respect thereof.
In
Rosler vs Hilbery it was observed
that the main relief sought should be injunction and shouldn’t be incidental to
the main relief.
Indian
Position: In India, Section 19 and Section 20 of
the Code of Civil Procedure incorporate rules relating to jurisdiction. A suit
for wrong to movable property may be brought either at a place where cause of
action arose or where the defendant resides, carries on business or personally
works for gain.
Thus,
an Indian court has jurisdiction in any of the above case. This section is
confined to torts committed in India and to defendants residing in India. It
does not include in its purview suits in respect of foreign torts.
The
defendant must reside in India at the time of institution of suit and if he
resided outside India at that particular time, the court has no jurisdiction
irrespective of the fact that subsequently he resides within the jurisdiction
of court.
Section
20 deals with all suits not covered by any of the foregoing rules. In such
suits following courts have jurisdiction-
a) where
the cause of action arises, wholly or in part
b) where
the defendant resides, carries on business or personally works for gain, or
c) In
case of two or more defendants, where any of them resides or carries on
business or personally works for gain, provided either- (i) the leave of court
is obtained, or (ii) the the defendants who do not reside/ carry on business/
personally work for gain acquiesce in such institution.
The
factors relating to foreign torts and other inter-partes suits are covered in
section 20 of CPC. In Kasinath vs Anant, a question came
before the Bombay High Court that whether defendant’s presence within
jurisdiction is enough to confer jurisdiction. In this case the defendant
refused to give plaintiff’s share to him to which he was entitled under a
contract. Under the contract both plaintiff and defendant were entitled to
share the income from the property situated outside the jurisdiction. The
defendant was not residing within the jurisdiction though he was present at the
time of the suit.
It
was held that the court has jurisdiction as it follows English legal system.
Clause
12 of the Letters Patent also confer jurisdiction on the High Courts on the
basis of residence of defendant within the jurisdiction.
Service
of summons outside India (Order 5 of CPC):
Where
the defendant resides outside India and has no agent to accept service the
summons shall be served by post or courier or fax or electronically. If the
defendant resides in Bangladesh or Pakistan then the summons may be sent to any
court (not being a High Court) in that country for service on the defendant.
SUBMISSION TO JURISDICTION
Parties
may submit to the jurisdiction of the court. In this regard, the concept of
forum shopping may be referred here.
Forum
Shopping- It refers to the
practice of choosing the court or jurisdiction that has the most favourable
rules or laws for the position being advocated. A party has this prerogative
when more than one court has jurisdiction over the dispute choosing the court
which gives it an advantage over the other party. The
party considers the right forum and the law which would best protect its
interests.
English
Law: If a defendant who is outside the jurisdiction of
the court submits to the jurisdiction of the court, under an express agreement
or by conduct, the court gets the jurisdiction to try the case. It is
noteworthy that submission to jurisdiction will not confer jurisdiction upon
the court in those cases which are otherwise outside the jurisdiction.
Submission
by Contract: The parties in advance, by way of an express
stipulation in the contract, submit to the jurisdiction. It is noteworthy that
for submission by contract, the stipulation must be express and cannot be
implied.
Implied
by Conduct: This
may be in different forms. Some of the illustrations are-
-A
person who voluntarily appears as a defendant submits to the jurisdiction of
court even if he was out of jurisdiction at the time of issue of writ.
-
The court has jurisdiction to entertain counter-claim against a foreigner who
appears before the court as plaintiff. It is noteworthy that an action on an
independent ground can’t be entertained.
In
Boyle vs Sacker, defendant’s
lawyer made oral submission on the merits.
It was observed that when a foreigner-defendant files an affidavit and appears
through counsel to argue the case on merit, it amounts to submission to
jurisdiction.
Indian
Law: Indian Law closely follows English Law on
submission. In Hiralal vs Kalinath, the Apex Court
observed that when a party to the suit consents to refer the case to
arbitration through the court system, it is believed to have waived their
objection to the territorial jurisdiction of the court.
It amounts to submission.
JURISDICTIONAL IMMMUNITY
There
are certain persons who enjoy jurisdictional immunity and therefore suits
cannot be filed against them
English
Position: Earlier, the theory of Absolute
Sovereign immunity was recognised at common law. In The Christina, it was observed that
the courts shall neither implead a foreign sovereign nor shall seize any
property which is his or of which he is in possession or control.
The
decision expressed the absolute theory of sovereign immunity and was applied in
many cases. Immunity to the Sovereign extended to both Acta Imperii (Governmental
Acts of Sovereign State) and Acta Gestionis(Acts of commercial
nature). However, as the States started engaging in commercial activities on a
larger scale, the courts started distinguishing between acta imperii,
where the State enjoyed immunity and acta gestionis, where there was no
immunity. This was the theory of ‘Restricted Immunity’
This
theory was recognised by the Privy Council in The Phillipine Admiral. Later, in Trendtex
Trading Corpn v. Central Bank of Nigeria, it was observed
that the restrictive theory should be applied in England and there was no
immunity in respect of commercial activities of a foreign state. This was
accepted as correct position in common law.
Currently,
the position is regulated by the (English) State Immunity Act, 1978. Under this
Act, sovereign immunity applies to governmental acta of a foreign state but
does not extend to several situations like where the State submits to
jurisdiction or acts of commercial nature, or in matters related to contract
entered into or to be performed in England etc.
The
Foreign Head of State, Officers of Foreign States (for their acts in official
capacity), Foreign State entities, Property of Foreign States, Foreign
Diplomats, Foreign Consuls, International Organisations and its officers enjoy
immunity.
Indian
Position:
In
India, the question is governed by section 86 of the Code of Civil Procedure,
1908 which confers immunity upon a foreign State from being sued except with
the consent of Central Government, the United Nations (Privileges and
Immunities) Act, 1947 which confers immunity upon United Nations and its
agencies, and Diplomatic Relations (Vienna Convention) Act, 1972 under which
specified diplomats enjoy immunity from suits in India.
Who may File a Suit
English
Law: Any person other than
an alien enemy can file an action in English Court. In Porter vs Freudenberg, it was observed
that an alien enemy is a person, of whatever nationality, who voluntarily
resides or carries on business in enemy territory, or in territory in enemy
occupation. He cannot sue but may be sued and then can appear and be heard in
his defence.
Indian
Law: Any person, except alien enemy, can file a suit in
an Indian court. As per section 83 of the CPC, alien enemies residing in India,
with the permission of the Central Government, may sue in any court otherwise
competent to try a suit. Explanation
to the section states that every person residing and carrying on business in a
foreign country at war with India shall be deemed to be an alien enemy.
If
a suit has been filed against an alien enemy, he has a right of defence.
Actions in Respect of Property
English
Law
(i).
Actions in rem: Broadly, these are of three types,
that is, those which determine the title or right to possess property,
admiralty actions relating to ships within English territorial waters, and
actions affecting personal states. After the passing of Common Law Procedure
Act, 1852 all actions in Queen’s Bench division of High Court are in
personam and the only action in rem that survives is action in
Admiralty division of High Court against a ship or other res.
To
give effect to the Brussels Convention of 1952, the Administration of Justice
Act, 156 was passed. Section 3 of the Act lays down cases in which admiralty
jurisdiction of court be exercised in action in rem. Section 4 provides
for the jurisdiction of the court in actions in actions in personam for
damage, loss of life or personal injury arising out of a collision between two
ships.
(ii).
Immovable Property: Courts in England exercise
jurisdiction over property situated in the country. Cases in which the Courts
won’t assume jurisdiction are suits for partition of foreign land, to recover
possession of foreign land etc. The basis of the rule was that if the court
could not make its order effective, it would be futile to pass it. The rule was
extended to suits for trespass to foreign land by British South Africa Co v.
Comapanhia de Mocambique.
Through
a statutory change made in England, suits for trespass or other torts relating
to foreign land can be entertained in an English court.
Indian Law
Indian
Law doesn’t speak of an action in rem. However, Section 41 of the Indian
Evidence Act, 1872 speaks about judgement in rem.
Immovable
Property: The
law is broadly same as England. The proviso to section 16 of CPC provides that
if relief in a suit (relating to immovable property) can be obtained entirely
by personal obedience of the defendant, the suit can be filed either within
whose local limits the property is situated or defendant actually or
voluntarily resides or carries on business or works for gain.
Courts
in India, following English Law, will not entertain suits in respect of
property outside India. However,
courts in India will entertain suits if the defendant is within the
jurisdiction of the court and relief can be granted by an order against him.
This was done in a suit for recovery of a one-third share of the income from
property outside India and
in certain other cases.
Stay of Actions
The
litigant is free to choose a country as a forum of his action and can also
pursue his remedy in more than one jurisdiction. Therefore, to avoid multiplicity
of suits and chances of conflicting judgements, most countries have provisions
for stay of actions.
English
Law: Lis alibi Pendens
is a latin term that means action on the same cause of action is pending
elsewhere. The doctrine comes into application when two simultaneous actions
are pending, one in an English court and other in a foreign court, when both
the actions are between same parties and when same or similar issues are
involved and same relief is sought in both the actions.
Under
the English law, the defendant can raise a plea of lis alibi pendens
whereby the court, in its discretion, may order the plaintiff to discontinue
the foreign suit at the expense of forfeiting his claim in the forum court in
case he disobeys the order.
Indian
Law: Under the CPC, section 10 deals with the stay of
suits. This application of this section is confined to domestic suits. In
respect of international disputes, explanation to section 10 lays down that the
pendency of suit in a foreign court does not preclude the courts in India from
trying a suit based on same cause of action.
In
Jethabhai Versey and Co. v. Amarchand, the court used
inherent powers under section 151 CPC to exercise the power of staying domestic
suit when a suit is pending in foreign court.
The
Indian courts exercise jurisdiction for stay of actions in those cases where
under the terms of the contract parties have consented to refer their disputes
to courts of a particular country (not being India) and in contravention to the
stipulation institute a proceeding in another country.
Conclusion
Jurisdiction
is concerned with the competence of the court to determine a dispute. An
English Court has jurisdiction if the process is served on the defendant while
he is present in England, even if on a fleeting visit, or the defendant submits
to the jurisdiction. Under Order 11 of the Supreme Court rules, the English
court may also assume jurisdiction in certain cases when the defendant is
outside the jurisdiction. The Indian law, in this regard, is governed by
section 19 and section 20 of the Code of Civil Procedure.
There
are certain persons against whom the suit can’t be instituted. In this regard
the English Law has developed from theory of absolute sovereign immunity to
theory of restrictive immunity. In India, the question is governed by section
86 of the Code of Civil Procedure, 1908, the United Nations (Privileges and
Immunities) Act, 1947 and Diplomatic Relations (Vienna Convention) Act, 1972.
As
regards jurisdiction over immovable property, Courts in England and India
exercise jurisdiction over immovable property situated in the country and
courts of neither country exercise jurisdiction directly over property
located outside the country.
BIBLIOGRAPHY
STATUTE
REFERRED
(i).
The Code of Civil Procedure, 1908 (Act 5 of 1908)
BOOKS
REFERRED
(i).
Paras Diwan and Peeyushi Diwan, Private International Law (Deep and Deep, New
Delhi, 4th edn.)
(ii).
Setalvad, Conflict of Laws (Lexis Nexis, Haryana, 3rd edn.)
(iii).
Mulla, The Key to Indian Practice: A Summary of Code of Civil Procedure (Lexis
Nexis, Haryana, 12th edn)
(iv).
C.K. Takwani, Civil Procedure with Limitation Act, 1963 (EBC, Lucknow, 8th
edn.)
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