Indian Jurisdictional Case Laws for International Contracts

Jurists and Courts have begun to give more and more prominence to the international trade and commerce. They have consequently been considering despite the agreement between the parties to limit the choice of the forum for settlement of disputes to a Court in a particular country, as to which of the forums which have jurisdiction to entertain the cause, would be more convenient to the parties to adjudicate upon the dispute. The concept of balance of convenience has thus been projected into the course of international trade and commerce and in enforcing the terms of agreement between the parties. Following are the various case laws showing the development and practice of jurisdictional rules in India.

Importance of Balance of Convenience

A clause in the bill of lading could not oust the order of the High Court to try the suit if it was otherwise triable in the High Court of Calcutta. At the same time, it was held in the decision that the clause limiting the jurisdiction could be invoked for the purpose of applying for and securing stay of the suit filed in contravention of the condition. The learned Judge held that it was more convenient to try the suit in Calcutta than in the foreign court and consequently it could refuse to exercise its discretion to stay the suit.

Enforcement of Contractual Preferences

Ordinarily the courts will try to enforce the contract between the parties preferring a particular court. Such a clause could, however, be invoked for the purpose of the stay of the suit filed in contravention thereof. The court had to find out whether taking into consideration the entire facts placed before it the courts mentioned in the bill of lading were the Courts of convenience. Applying that principle to the facts of the case before him, it was found that it was more convenient to have the suit tried in Calcutta than in Holland and consequently the court would refuse to exercise the discretion for stay of the suit.

Jurisdictional Stipulations

The Bill of Lading contained a stipulation which said: "All claims and disputes arising under and in connection with this bill of lading shall be Judged in the U. S. S. R." The court held that there is no stipulation in the bill of lading that the Courts in the U. S. S. R. alone had exclusive jurisdiction to try the suits and the Courts in India were excluded from entertaining such disputes.

Choice Among Multiple Forums

Also, when more than one forum is available to the contracting parties, they had freedom to choose by agreement, one such forum and such restriction does not come within the ambit of Section 28. It is perfectly open to the court to consider the balance of convenience, the interests of justice and like circumstances, when it decides the question of jurisdiction of a Court in the light of a clause in the agreement between the parties choosing one of several courts or forums which were available to them. Indeed such a consideration is essential in the interests of international trade and commerce for better relations between countries and people around world.

Case Analysis: The Black Sea Steamship Case

A similar stipulation, as in the case of The Black Sea Steamship U. L. Lastochkina Odessa, Union of Soviet Socialist Republic and Anr. v. The Union of India was contained in an agreement between parties. The court held that matter rested on balance convenience in particular circumstances and exigencies justice.