With the rapid development in the field of technology, a tremendous shift in the way businesses operate can be witnessed. The traditional approach of conducting business in a physical environment has been somehow replaced by transactions taking place via online platforms. This has led to a rise in e-commercial transactions and the law of contracts to develop at a faster pace to incorporate E-contracts under its ambit, thereby signifying the enforceability of the E-contracts as traditional contracts do. It brings along with it the probability of occurrence of disputes between the parties that are unavoidable and makes it crucial for them to resort to a legal remedy i.e., a resolution process to enforce their legal rights and liabilities. For it to happen, jurisdiction plays a significant role, identification of which is the greatest challenge when it comes to e-commercial transactions. Even, though the Indian Contract law is developing faster than the usual pace, there does exist an ambiguity with regards to the jurisdiction involved in course of e-transactions since there is an involvement of different stages to it, thereby making the entire process way more complicated.
Even though complications arise, it is significant to delve into the discourse of jurisdiction because any ruling passed by the Courts that do not have jurisdiction to adjudicate on the matter results in its nullity as the law strikes down the authority of the Court. Thus, by way of this article, an attempt has been made to determine the jurisdiction of Courts in e-commercial transactions.
JURISPRUDENCE GOVERNING JURISDICTION IN E-COMMERCIAL DISPUTES
Whenever a dispute between the parties arises, the most crucial question that arises is if the Court has jurisdiction to deal with the matter or not, be it subject-matter jurisdiction or territorial jurisdiction. Though, it is well known that there is not much Jurisprudence in India with respect to the jurisdiction of e-commercial disputes but there are certain judicial precedents wherein the Courts have assumed its jurisdiction over e-commercial matters. Not only this, but the Indian Judiciary has also gone to the extent of propounding some tests to determine the jurisdiction concerning the e-commercial disputes that have been discussed below.
- Purposeful Availment Test
- Forum Convenience Test
PURPOSEFUL AVAILMENT TEST
Purposeful availment is one of the crucial requirements when it comes down to the determination of jurisdiction especially in contractual disputes and can be simply understood as “placing of goods into the stream of commerce, by the defendant, with the expectation that they will be purchased by consumers within the forum of the State”, thereby making the defendant subject to the jurisdiction of the state forum even without his entrance into the state.
Though, the concept says so, its interpretation has been done by the Courts stating that the main test is associated with the intention of the defendant to submit himself to the power of the sovereign through his activities. The test was initially propounded by the US Supreme Court in the year 2011 which was later affirmed by Delhi HC at different times in Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy in 2009wherein the Courtheld that “to establish jurisdiction in cases where the defendant does not reside/carry on business in the forum state but the website in question is universally accessible, the plaintiff will have to show that the defendant purposefully availed the jurisdiction of the forum court”and further the stance was clarified in Impresario Entertainment & Hospitality (P) Ltd. v. S&D Hospitalityin the year 2017 wherein the Court ruled that “to decide jurisdiction, it was not enough for the defendant to show that he had avoided the forum state but rather essential for the plaintiff to prove that the defendant had purposely availed the jurisdiction of the forum state”, thereby meaning that the duty of proof is upon the Petitioner in such cases to prove that either the defendant “carried business” in the place of jurisdiction or that the Petitioner suffered injury within the place of jurisdiction.
The term “carrying of business” was further clarified in the Dokha House caseto avoid any confusion with regards to the e-companies spread across various jurisdictions. The Court opined that the mere presence of an agent at a particular place should not be considered as that company carrying on its business at that place. For the jurisdiction to arise at the place of carrying out of business, the main branch or sub-branches of the company carrying out “substantial task” i.e., taking and initiating order has to be looked into.
FORUM CONVENIENCE TEST
The test has been derived from a doctrine of “Forum Non-Conveniens” that is applicable on all civil suits wherein the Courts have a discretionary power to dismiss a case on the ground that some other forum is more appropriate to deal with the matter. The same is done in the interests of parties to a case and ensures justice.
The test though was propounded by the foreign jurisdictions but the same was given affirmation to by the Apex Court ruling that the Courts are empowered to “refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum convenience”.
The above discussed two tests have been legitimized in India but there are other tests too that have been propounded by the foreign jurisdictions such as the substantial connection test, zippo test, and the effects test. The development of these tests proves that there do exist plenty of judicial precedents in foreign nations with regards to the jurisdiction in e-commercial transaction disputes, but India lacked in its legislations and policies formulating and implementing the same.
After the study of the article, it can be concluded that there needs a lot of development in Indian laws when it comes to the arena of e-contracts especially jurisdiction in matters of disputes. Thus, it is suggested for the Courts to come up with their own tests and for the legislature to focus on the subject matter too and draft legislation in this regard to eliminating the ambiguity that exists.
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Kiran Singh v. Chaman Paswan, (1955) 1 SCR 117.
E-Commerce in India: Legal, Tax and Regulatory Analysis, NISHITH DESAI (July 2015), https://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/E-Commerce_in_India.pdf.
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Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy, 2009 SCC OnLineDel 3780.
Impresario Entertainment & Hospitality (P) Ltd. v. S&D Hospitality, 2018 SCC OnLine Del 6392.
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NAVIN KUMAR JAGGI