Jurisdictional Issues In Internet Disputes

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Jurisdictional Issues In Internet Disputes

  1. 1. JURISDICTIONAL ISSUES IN INTERNET DISPUTES By TALWANT SINGH ADDL. DISTT. & SESSIONS JUDGE; DELHI [email_address]
  2. 2. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>“ As long as different countries have different laws and cultures, there are no good principles for jurisdiction. Only less bad ones. Every nation wants unity, but no nation wants to give up any of its traditions.” Carlen-Wendels, T.: Nätjuridik , Stockholm, Norstedts Tryckeri AB, 2:1, 1998, p. 38. </li></ul>
  3. 3. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>The concept of jurisdiction is commonly referred to include two main legal aspects: </li></ul><ul><li>(i) To what extent a court is legally competent to entertain a cross-border dispute and apply the laws of the place where they are located; and </li></ul><ul><li>(ii) When should a court or tribunal is entitled to assert jurisdiction as a result of a dispute arising between private parties. </li></ul>
  4. 4. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>When something goes wrong with contracts between parties in different countries, there is often confusion as to where a court action should be brought. </li></ul><ul><li>Should it be in the country of the purchaser? </li></ul><ul><li>Or that of the seller or service provider? </li></ul><ul><li>And how can you enforce a court ruling when each party is in a different country? </li></ul>
  5. 5. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>These questions are of great concern to companies when they are making business decisions. </li></ul><ul><li>There is fear is that until there is an international agreement to clarify matters then business will be reluctant to take full advantage of the opportunities put forward by the internet. </li></ul>
  6. 6. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Contracts made over the internet are based largely on the terms and conditions contained on the web site in question, and may frequently contain a 'choice of law' clause, which indicates the country in which a dispute will be decided. </li></ul><ul><li>But an important consideration is whether or not the terms and conditions are actually brought to the attention of the customer. </li></ul>
  7. 7. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>In any dispute the choice of court can be critical. </li></ul><ul><li>Naturally everyone wants to sue in their home court. </li></ul><ul><li>That leads to jurisdictional disputes and uncertainty. </li></ul><ul><li>International treaties will help to remove that uncertainty. </li></ul>
  8. 8. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>In general, courts applying the rules of jurisdiction to cyberspace have required ‘something more’ than mere electronic contacts to support an exercise of jurisdiction. </li></ul><ul><li>In addition to electronic contacts, there must be some act purposefully directed towards the residents of the country, where action is initiated. </li></ul><ul><li>Though, in exceptional cases, courts have conferred jurisdiction in the absence of any connection beyond a web site, this is unlikely to be sustained in the long run. </li></ul>
  9. 9. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>First, it is, impossible to enforce decisions of this nature in every case, considering that often the web site owner may be in a hostile country, or in a jurisdiction that simply refuses to recognize the jurisdiction of the court issuing the original decree. </li></ul><ul><li>Second, such an approach would cause considerable inconvenience to any large-scale form of e-business, and could contribute to stagnation of the Internet – which is something that should be avoided at all costs. </li></ul>
  10. 10. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>The issue of jurisdiction cannot be solved by any objective standard as to contact, but rather requires an analysis of both quality & quantity of Internet contacts. </li></ul><ul><li>Physical borders can no longer function as ‘signposts’ to individuals since users are unaware of the existence of any borders in cyberspace. </li></ul><ul><li>Courts need to develop a hierarchy of different internet contacts in order to evaluate the totality of a defendant’s contacts with residents of a Country. . </li></ul>
  11. 11. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Suggestions for a new system </li></ul><ul><li>One of the suggestions that has been made towards the resolution of this problem, is the evolution of a new and entirely independent rules to govern jurisdiction on the Internet. </li></ul><ul><li>By developing a uniform law governing cyberspace transactions, it will be much easier to determine which rules regulate one’s online activities, rather than deciding which territory’s laws apply. </li></ul>
  12. 12. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>The new question that arises from this suggested approach is who is to develop and enforce these rules. </li></ul><ul><li>It is suggested that the Internet community can, ‘develop its own effective legal institutions.’ </li></ul><ul><li>It is suggested that since the Internet was implemented through a system of self-governance, it can establish a system to govern itself. </li></ul><ul><li>Yet, they concede that determination of those who would have the ‘ultimate’ right to control the policies remain uncertain. </li></ul>
  13. 13. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Another criticism of this suggestion is its sheer impracticability. </li></ul><ul><li>Ultimately, courts must decide jurisdiction if only to regulate their sphere of influence and decision-making power. </li></ul><ul><li>An independent set of rules, ignoring geographical factors, is unlikely to be workable in this context. </li></ul>
  14. 14. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Another suggestion has been the creation of some mechanism for alternative dispute resolution. </li></ul><ul><li>In this regard, there has emerged the Virtual Magistrate Project . Like other arbitration schemes, the Virtual Magistrate must obtain jurisdiction over parties by consent. </li></ul><ul><li>This consent can be obtained in at least two ways, consent by explicit agreement and implied in fact consent. </li></ul>
  15. 15. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Under this first method, parties may manifest consent entirely through electronic means. </li></ul><ul><li>The implied consent would involve consenting to jurisdiction through a term of the contract between the service providers and subscribers. </li></ul><ul><li>As a result, once an event had been noticed for Virtual Magistrate Resolution, the service provider could compel participation. If successful, the Virtual Magistrate would be a big step toward the establishment of a cyberspace jurisdiction. </li></ul>
  16. 16. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Recent online experiments have brought alternative dispute resolution to the Internet. </li></ul><ul><li>In certain modes of dispute resolution, such as mediation and ombudsman processes, jurisdiction does not matter because coercion plays no role in the effort to resolve disputes. </li></ul><ul><li>Arbitration is different, as arbitration awards are meant to be enforceable by coercive powers if necessary. </li></ul><ul><li>While coercion is available at the end stage of dispute resolution, it is not available at the initial stage, when personal jurisdiction is at issue in arbitration systems. </li></ul><ul><li>The source of jurisdiction in arbitration is consent. </li></ul>
  17. 17. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Common law courts around the world have applied different criteria to determine whether they have jurisdiction over Internet disputes. </li></ul><ul><li>Some courts have simply applied existent traditional rules, while others have tried to develop new criteria to accommodate the uniqueness of the electronic commerce. </li></ul><ul><li>As a result, it is difficult to find consistency in the application of rules to determine whether a particular court has jurisdiction over an Internet dispute. </li></ul>
  18. 18. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>In the United States, the rules on applicable law and jurisdiction are based on notions of “reasonableness” and “fundamental fairness” to both plaintiffs and defendants. </li></ul><ul><li>Disputes are determined on a flexible case by case basis rather than by only applying straight codified rules. </li></ul><ul><li>The fairness of subjecting a defendant to a particular country’s jurisdiction and laws is determined by applying a variety of factors to the concrete facts of a particular case. </li></ul>
  19. 19. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>As a general matter, jurisdiction for cases brought by consumers is determined as follows: </li></ul><ul><li>(i) in the absence of a choice of forum clause in a contract, businesses are subject to specific jurisdiction in places where they target to sell consumer goods; </li></ul><ul><li>(ii) many American courts have refused to uphold choice-of forum clauses in consumer contracts on the ground that they are unfair and unreasonable. </li></ul><ul><li>In addition, US courts have generally held that consumer protection authorities can assert jurisdiction over foreign businesses harming American consumers. </li></ul>
  20. 20. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Europe has specific rules relating to jurisdictional issues arising of e-commerce activity. </li></ul><ul><li>The Brussels Convention on Jurisdiction and Recognition of Enforcement of Judgements in Civil and Commercial Matters (known as “the Brussels Convention”) govern the issue of jurisdiction; and </li></ul><ul><li>The EC Convention on the Law Applicable to Contractual Obligations (known as “the Rome Convention”) govern the issue of applicable law for consumer contracts concluded over the Internet. </li></ul>
  21. 21. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Under these conventions, jurisdiction and applicable law for consumer contracts are based on whether consumer is “active” or “passive”. </li></ul><ul><li>The consumer is considered “passive” when he executes a contract where he is domiciled, and such contract was preceded by a specific invitation or by advertising. </li></ul><ul><li>A passive consumer can bring a lawsuit arising out of that contract in his or her country and the laws of the consumer’s country would apply. </li></ul><ul><li>A choice of forum clause in a contract would not change this result and a choice of law clause in a contract could not override the mandatory protections afforded in a consumer’s country. </li></ul>
  22. 22. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li> OECD* Consumer Protection Guidelines prescribe: </li></ul><ul><li>“ In considering whether to modify the existing framework, governments should seek to ensure that the framework provides fairness to consumers and businesses, facilitates electronic commerce, results in consumers having a level of protection not less than that afforded in other forms of commerce, and provides consumers with meaningful access to fair and timely dispute resolution and redress without undue cost or burden”. </li></ul><ul><li>*Organisation for Economic Co-operation and Development </li></ul>
  23. 23. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Furthermore, the Hague Conference on Private International Law (HCPIL) has issued a Convention on Exclusive Choice of Court Agreements concluded in Civil and Commercial Matters. </li></ul><ul><li>It aims to create an international legal regime that ensures the effectiveness of exclusive choice of court agreements concluded by private parties in civil and commercial transactions. </li></ul>
  24. 24. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Let’s consider the issues associated with application of private international law to online activities. In doing so, the following elements of private international law should be considered: </li></ul><ul><li>Jurisdiction; </li></ul><ul><li>Choice of law; </li></ul><ul><li>The courts’ option of declining jurisdiction; and </li></ul><ul><li>Recognition and enforcement. </li></ul>
  25. 25. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>The rules regulating jurisdictional claims are mainly location focused. For example, the court might query: </li></ul><ul><li>Where the disputed contract was formed; </li></ul><ul><li>Where the contract was broken; </li></ul><ul><li>Where the contract was performed; </li></ul><ul><li>Where the tort was committed; </li></ul><ul><li>Where the damages were suffered; </li></ul><ul><li>Where the server is located; and </li></ul><ul><li>Where the defendant is located, domicile or habitually residing. </li></ul>
  26. 26. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>The jurisdictional grounds in contractual disputes often points to the court in one of the contractual parties’ home state. </li></ul><ul><li>The jurisdictional grounds relating to torts are extremely wide when applied in the Internet context. </li></ul><ul><li>For example damages stemming from the tort of defamation can occur virtually anywhere, which means that a defendant in a defamation proceeding might be subjected to a wide range of jurisdictional claims. </li></ul>
  27. 27. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>I T Act, 2000 </li></ul><ul><li>Section 75. Act to apply for offence or contravention committed outside India. (1) Subject to the provisions of sub-section (2), the provisions of this Act shall apply also to any offence or contravention committed outside India by any person irrespective of his nationality. </li></ul><ul><li>(2) For the purposes of sub-section (1), this Act shall apply to an offence or contravention committed outside India by any person if the act or conduct constituting the offence or contravention involves a computer, computer system or computer network located in India. </li></ul>
  28. 28. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>IPC Section 3. Punishment of offences committed beyond, but which by law may be tried within, India. </li></ul><ul><li>Any person liable, by any Indian law to be tried for an offence committed beyond India shall be dealt with according to the provisions of this Code for any act committed beyond India in the same manner as if such act had been committed within India. </li></ul>
  29. 29. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>IPC Amended Section 4 . </li></ul><ul><li>Extension of Code to extra-territorial offences </li></ul><ul><li>The provisions of this Code apply also to any offence committed by </li></ul><ul><li>(1) Any citizen of India in any place without and beyond India; (2) Any person on any ship of aircraft registered in India wherever it may be. </li></ul><ul><li>(3) Any person in any place without and beyond India committing offence targeting a computer resource located in India . Explanation.—In this section— </li></ul><ul><li>(a) The word “offence” includes every act committed outside India which, if committed in India, would be punishable under this Code. </li></ul>
  30. 30. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>CPC 19. Suits for compensation for wrongs to person or movables. </li></ul><ul><li>Where a suit is for compensation for wrong done to the person or to movable property, if the wrong was done within the local limits of the jurisdiction of one Court and the defendant resides, or carries on business, or personally works for gain, within the local limits of the jurisdiction of another Court, the suit may be instituted at the option of the plaintiff in either of the said Courts. Illustrations (a) A, residing in Delhi, beats B in Calcutta. B may sue A either in Calcutta or in Delhi. (b) A, residing in Delhi, publishes in Calcutta statements defamatory of B. B may sue A either in Calcutta or in Delhi. </li></ul>
  31. 31. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>CPC 20. Other suits to be instituted where defendants reside or cause of action arises. </li></ul><ul><li>Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction- (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or </li></ul><ul><li>(c) the cause of action, wholly or in part, arises. </li></ul>
  32. 32. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>Explanation.-A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. </li></ul><ul><li>Illustrations (a) A is a tradesman in Calcutta, B carries on business in Delhi. B, by his agent in Calcutta, buys goods of A and requests A to deliver them to the East Indian Railway Company. A delivers the goods accordingly in Calcutta. A may sue B for the price of the goods either in Calcutta, where the cause of action has arisen or in Delhi, where B carries on business. (b) A resides at Simla, B at Calcutta and C at Delhi A, B and C being together at Benaras, B and C make a joint promissory note payable on demand, and deliver it to A. A may sue B and C at Benaras, where the cause of action arose. He may also sue them at Calcutta, where B resides, or at Delhi, where C resides; but in each of these cases, if the non-resident defendant object, the suit cannot proceed without the leave of the Court. </li></ul>
  33. 33. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>CPC Section 13. When foreign judgment not conclusive. </li></ul><ul><li>A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except- </li></ul><ul><li>(a) where it has not been pronounced by a Court of competent jurisdiction; (b) where it has not been given on the merits of the case; (c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law of India in cases in which such law is applicable; (d) where the proceedings in which the judgment was obtained are opposed to natural justice; (e) where it has been obtained by fraud; (f) where it sustains a claim founded on a breach of any law in force in India. </li></ul>
  34. 34. JURISDICTIONAL ISSUES IN INTERNET DISPUTES <ul><li>CPC Section 14. Presumption as to foreign judgments. </li></ul><ul><li>The Court shall presume upon the production of any document purporting to be a certified copy of a foreign judgment that such judgment was pronounced by a Court of competent jurisdiction, unless the contrary appears on the record; but such presumption may be displaced by proving want of jurisdiction. </li></ul>
  35. 35. THANKS <ul><li>TALWANT SINGH </li></ul><ul><li>ADDL. DISTT. & SESSIONS JUDGE: DELHI </li></ul><ul><li>[email_address] </li></ul>

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