Introduction

No doubt can be posed to the fact that technology has helped our world grow but, it is even more
clear that it has even created more chaos in our lives. One such chaotic facility today we have is
of e-commerce transactions. Electronic commerce or e-commerce is a term for any type of
business, or commercial transaction that involves the transfer of information across the Internet.

E-commerce is the trend today and many business transactions are going online. Individuals and
business houses now do not deal directly with other business houses or individuals. Industrial
revolution began with the end of 18th century but, it does not seem that it has ended till now
because industries of all kind are undergoing a revolution these days- the revolution of internet
and computers. Business communities as well as individuals are increasingly using computers to
create, transmit and store information in the electronic form instead of the traditional paper
documents. Information stored in electronic form is very cheap, easier to store and retrieve,
speedier, and long lasting, unlike paper documents. Now, business people have realized the
advantages of business transaction in electronic form.

Another thing to be noted here is that whenever something new is introduced in society, it brings
with itself its proc as well as cons. So, this age of internet revolution too has its proc and cons.
To regulate these cons, our society needs law related to cyber space. One such law is IT Act,
2000 but, it is not at all enough. For the first time, a model law on e-commerce was adopted in
1996 by United Nations Commission on International Trade and Law (UNCITRAL). It was
further adopted by General Assembly of United Nations by passing a resolution on 31st January,
1997. Further, India was also a signatory to this model law, and had to revise its national laws as
per the said model law. Therefore, India also enacted the Information Technology Act, 2000

We need more regulations so that e-commerce transactions can work effectively and any dispute
regarding these can be solved without any ambiguity. Through this article, I dont want to
highlight what problems the new technology of e-commerce has created for us but, what I want
to highlight is the first step while deciding any dispute that needs to be taken effectively, that is,
Jurisdiction. Before solving a dispute, it is very important to determine as to which court is
competent to solve the particular problem.

Usually, in civil cases, the jurisdiction of the court is determined by various provisions of CPC,
1908. It is either where the defendant resides or where the cause of action lies. But, that is the
exact impediment we face while deciding the cyber jurisdiction. The term cyber-jurisdiction
refers to the jurisdiction of those matters which were in conflict while parties contacted with
each other through cyber space.

It is worth to be noted that cyber space is not a physical world that its place of jurisdiction can be
easily decided. Instead, its a virtual world and that is why its jurisdiction too lies in space and
thus, becomes too difficult to be determined. There is no street address and cant be seen by eyes.
What till now has been decided regarding jurisdiction of ecommerce disputes?

Delhi High Court has many times tried to determine the jurisdiction of any disputes on the virtual
space of World Wide Web. One such endeavor was done by the Honble court in Banyan Tree
Case in 2009. The preliminary objection in the present case is the jurisdiction of the Delhi High
Court. Interestingly, the Plaintiffs here did not rely on Section 134 of the Trademark Act to
establish the jurisdiction of the Courts, but instead used Section 20 of the Code of Civil
Procedure. The Plaintiffs averred in the plaint that the Court possessed the requisite jurisdiction
since the services of the Defendants were being offered to residents of Delhi through brochures.
Secondly, that the defendants website is interactive and is accessible from anywhere in India,
and that universality, ubiquity, and utility of the Internet and the World Wide Web, all are
indicative that the High Court possessed the jurisdiction to hear the matter. However, the court
held that For the purposes of a passing off action, or an infringement action where the Plaintiff is
not carrying on business within the jurisdiction of a court, and in the absence of a long-arm
statute, in order to satisfy the forum court that it has jurisdiction to entertain the suit, the Plaintiff
would have to show that the defendant purposefully availed itself of the jurisdiction of the
forum court. For this it would have to be prima facie shown that the nature of the activity
indulged in by the Defendant by the use of the website was with an intention to conclude a
commercial transaction with the website user and that the specific targeting of the forum state by
the Defendant resulted in an injury or harm to the Plaintiff within the forum state. Mere hosting
of a website which can be accessible from anyone from within the jurisdiction of the court is not
sufficient Also a mere posting of an advertisement by the Defendant depicting its mark on a
passive website which does not enable the Defendant to enter into any commercial transaction
with the viewer in the forum state cannot satisfy the requirement of giving rise to a cause of
action in the forum state.

Another judgment regarding jurisdiction of ecommerce transactions came in 2014 from Delhi
HC only. It was in WWE v. M/S Reshma Collections. The Division Bench at the very outset
agreed with the WWE that the issue of territorial jurisdiction is a mixed question of fact and law,
and therefore, ought to be adjudicated at the final stage of the suit, and not at a preliminary stage
of admission. Adding to this, the Division Bench held that the learned single Judge erred in
returning the Plaint, as at the preliminary stage, only the averments of the Plaint should be seen,
and if, on a demurrer, a case for territorial jurisdiction is made out, the plaint ought not to be
returned. In my opinion, the judgment of division bench had fundamental and basic errors. It is
as simple as that we cannot climb the cliff with our first step directly on its peak. Similarly, when
any case is decide, we need to go step by step and the first step. How can we first let the court
solve decide the dispute and then determine if it was competent to do so or not? If it was
incompetent then, what was the need to waste the courts as well as parties time in arguing the
case before a court which the court was not even eligible to hear. This is nothing but, logically
senseless.
The Division Bench further clarified the law in relation to territorial jurisdiction by pointing out
that in the Dhodha House v. S.K. Maingi, case itself, the Supreme Court had clearly observed
that for the purpose of carrying on business, the presence of the person concerned at a particular
place is not necessary, and must only conform with the three conditions to be fulfilled, namely
that the agent must be a special agent who attends exclusively to the business of the principal;
that the person acting as agent must be an agent in the strict sense of the term; and that to
constitute carrying on business at a certain place, the essential part of the business must be
performed at that place. Acknowledging the growing concept of e-commerce models and the
possibility of an entity conducting business only through a virtual presence rather than brick and
mortar sales through a physical presence in a place, the Division Bench refined the applicability
of this judgment, with emphasis on how to interpret what is actually meant by carrying on
business.

The Division Bench, while extending the principles with respect to conclusion of contracts over
the telephone to the facts of the case at hand, stated just how the Supreme Court in the Bhagwan
Goverdhandas Kedia v. Girdharilal Parshottamdas & Co. held that as the draftsman of the
Indian Contract Act had not envisaged the use of the telephone as a means of personal
conversation between parties, they had not intended to make any rule on those grounds.
Similarly, This applies with greater vigour insofar as commerce and business over the internet
is concerned. In deciding this, the Division Bench held that a contract formed over the Internet,
just like a telephonically concluded contract, would not have been envisaged by the legislature.
Thus, the legislature could not have intended to make any rule in that regard. The Division
Bench accordingly interpreted the interactive website of WWE to constituteinvitation to an
offer for the sale of the Appellant/Plaintiffs goods. The acceptance of this invitation by a
customer in Delhi becomes an offer made by the customer.

It is only when the transaction is confirmed and the payment is made to WWE through its
website that WWE accepts the offer. Thus, under the provisions of the Indian Contract Act, 1872
read with the principles expounded in the Bhagwan Goverdhandas case, since the transaction
between the two parties takes place instantaneously, the acceptance of the offer by WWE is
communicated to the customer in Delhi, meaning that the contract is concluded in Delhi.

Consequently, the Division Bench found that since the offer is made in Delhi, the contract is
concluded in Delhi and the money would emanate from Delhi, WWE is carrying on business
within Delhi as the essential part of the transaction takes place there. Accordingly, the Division
Bench held that When the shop in the physical sense is replaced by the virtual shop because of
the advancement in technology, in our view, it cannot be said that the appellant/plaintiff would
not carry on business in India, and therefore found that territorial jurisdiction may still be
invoked by the Delhi High Court.

As per this decision (WWE v. Reshma Collections), the Plaintiff can institute the case where sales
are made by it. Hence, the choice of forum is now as per the choosing of the Plaintiff if it makes
sales across India. It means that it can now institute a suit in a civil court or a high court having
original jurisdiction in such matters across India which is quite absurd because filing a suit
anywhere in India might trouble the defendant and would defeat the very purpose of CPC. Also,
this decision is limited to cases of copyright and trademark infringement and does not extent to
passing off matters. For passing off matters (in which the trademark is not registered but has
acquired secondary meaning), the High Court decision in Banyan Tree still holds the field.

Another point is that the number of available forums for the Plaintiff, especially an ecommerce
retailer is large. The criticism by the Single Judge of this indicating the possibility of forum
shopping by the Plaintiff seems credible. Many ecommerce and online retailers have forum
selection clauses with customers. Usually they will be inapplicable to such cases since an alleged
infringer is usually a third party and not a customer bound by the contract and hence the clause.
However, if given a peculiar fact situation where this does occur, there is uncertainty how the
Division Benchs decision in WWE v. Reshma Collections will be applicable.

In the same year, there came an another case- Christian Louboutin v Nakul Bajaj where the
defendant sold the plaintiffs products without permission through its website
www.darveys.com, thus creating doubts as to the quality of those products in the minds of
consumers. The plaintiff alleged that the defendants activities also affected the reputation of its
brand and consumer goodwill towards it, and that continued use of its name would cause its
luxury brand irreparable harm. The court granted an interim injunction restraining the defendant
from selling unauthorized products.

The Delhi High Court recently restrained online retailer Brandworld from using the brand name
LOreal to sell or supply any goods, on any website or in any other manner, after the cosmetics
company alleged that counterfeit products bearing its trademark were being sold by the merchant
on its shopping website www.ShopClues.com.

Solution and conclusion

As the present field we talked about is an emerging field in itself and so, it is quite obvious that
the law related to it will also take some time to emerge and develop. Though India has started
dealing with it by enacting IT Act, 2000 but, it still lacks a lot as no specific legislation governs
online transactions and IP issues in India. The Information Technology Act, 2000 provides for
the admissibility of electronic records and sets out offences and penalties for cybercrimes, etc.
But, this is just an enabling statute to facilitate online transactions and thus has to be read in
conjunction with the Contract Act in order to determine whether an online transaction constitutes
a valid contract or not. the present Act too is not complete in itself and indicates that our
legislature still requires to work a lot on this

Further, when ecommerce takes place as B2C that is, business to consumer, then Consumer
Protection Act, 1986 obviously has its role to play but, alas! It too does not talk about online
transactions and on account of jurisdiction of various consumer forums, it gives only the brief
account of pecuniary jurisdiction of the forums. There is a dire need for specific provisions for
online transactions where directly consumer is involved. All businesses engaged in e-commerce
should ensure that they take account of consumer protection issues.

Despite all the discussions, the gist of the article is that our country needs a specific law to
decide the jurisdiction of Courts where dispute related to ecommerce transaction arises. This is
so because a website can be accessed anywhere in India and thus, according to the precedents till
now, plaintiff can institute the suit anywhere he wants without taking into account any of the
defendants convenience thus infringing his right to fair, convenient and speedy justice.

Jurisdictional Issue

Jurisdiction in general refers to A governments general power to exercise authority over all
persons and things within its territory. Same situation with regards to courts jurisdiction also, it
is the geographical area within which the judiciaries have the authority to adjudicate the disputes.
If we talk about cyberspace jurisdiction the situation is different from physical world. The term
cyber jurisdiction generally encompasses the system operators or users power to frame rules
and enforce them in an apparent virtual community interacting in cyberspace, or virtual space
in the cyber world which is perceived as a place on the Internet and is independent from the
normal government regulations. In this virtual world the cyber jurisdiction can be exercised. As a
result of internet a market place has developed in the virtual world. The users of any computer
connected through internet can access to the website and enter into contract anywhere in the
world. Such a contract is called econtract. The e-contract is entered in the e-commerce. It means
that all the obligation of valid contract is there in e-commerce. The existed of offer from one side
and acceptance from the other side is there in a business transactions through internet. All the
obligations in e-commerce need not be in only electronic form, there may be a situation where
one party may perform their obligation in a physical form. It is not so important, the only thing is
important is the conclusion of contracts is to be done throng an online medium only. In such a
case the question regarding the time when and the place where where the contract was
actually concluded is inevitably arises.

The jurisdictional issue in e-commerce is very important to discuss. For instance, an Indian
company accepts an offer from an American company over the internet to render certain service
in Singapore and the ISP of the Indian Company (and its server) is in London and that of the
American company is in Colombo, the determination of the choice of law would indeed be a
challenging task, leading to consequences not intended by the contracting parties. In the cyber
space quite often parties physically located in different countries may enter into a contract. A
legal issue which arises is: which country (or which state within in a country) will have
jurisdiction. One possible solution that would be given is: it will be decided on the basis of the
choice of forum clause. But it is no simple there also the problem arises related to choice of
forum court having the jurisdiction to decide arises under the e-contract, otherwise the clause
related to forum would be invalid and hence, unenforceable.
The main trouble and problem about the internet jurisdiction is the presence of multiple parties in
various parts of the world who have a virtual nexus with each other. The question arises in such
cases that if one party wants to sue the other, then where can one sue? The municipal laws
traditionally require two areas, the place where the defendant resides, and where the cause of
action arises. However, in the context of internet, both these are difficult to establish with any
certainty. In addition to this a situation of conflict of laws among nations may also arise. For
example some websites may be obscene in India but legal in US. They can be viewed in India by
assessing the websites & may amount to an offence under the Indian Law, but they are not illegal
in US where these sites are hosted. How can these situations be handled is a serious concern.

In determining the personal jurisdiction of a court over a foreign defendant is to be applicable or

not, the minimum contracts rule is to be followed in US courts. This rule was developed in US
by US Supreme Court in the leading judgment, International Shoe Co. v Washington. This
minimum contract test allows for the jurisdiction over a non-resident when such contract exists
between the defendant and the Forum State such that maintenance of the suit does not offend
traditional notions of fair play and substantial justice. This Courts minimum contracts test for
specific jurisdiction abandons more formalistic tests that focus on a defendant presence within a
state in favour of a more flexible inquiry into whether a defendants contracts with the forum
made it reasonable, in the context of the US federal system of government, to require it to defend
the suit in that state.

In US, the reasonableness requirement is captured in the minimum contacts or purposeful

availment test. The principle being that a defendant cannot be bought before a court of a
particular State unless that person has minimum contacts, so that maintenance of the suit does
not offend traditional notion of fair play and substantial justice. In order to achieve the balance
between the two main object behind the entering into e-commerce i.e. first, cost effectiveness
and the second one is that it allows the business providers to insulate themselves against the
jurisdiction in every state, except the place where they are physically located, would be
troublesome and unreasonable to the consumers situated across the globe, who have lesser
bargaining power and resources to litigate in foreign country. The US courts have applied the
principle of minimum contact, effective functions and the theory of long arm statute, with
necessary adaptations to e-contracts.

Indian Position

With regards to the Indian position related to the internet disputes, the jurisdiction is
theoretically matches with United States minimum contact. The jurisdiction aspect of the courts
in civil matter is governed by, the Code of Civil Procedure Code, 1908. Territorial jurisdiction in
India granted by the CPC on the basis of place of residence of the defendant and secondly, the
place where the cause of action arises. The cause of action can also arise at various places. The
places can be domestic places and also international places. Section 20 of the CPC deals with the
situation where cause of action arises in more than one place. This section through interpretation
applies to transnational issues as well as private international law.

E-commerce through its nature, especially in its business to business or business to consumer
model, to be looked in relations to the jurisdictional aspect, from the two possible sources:

Jurisdiction based on Forum of Choice- in this situation parties have decided there choice of
jurisdiction beforehand. Parties can decide any courts at national jurisdiction as well as to decide
the dispute neutral forum in the foreign country. But the thing to be kept in mind that the court
which have been decided by the parties to settle their future dispute should have the jurisdiction
to entertain the case.

Jurisdiction based on Choice of Law- in this case the private international law principles are
very important, so as to identify in case of parties belonging to different country, which country
law will apply in order to settle their dispute. It is to be noted that the modern theory of conflict
of Laws recognizes the jurisdiction of the state, which has the most ultimate contact with the
issue arising in the case. There are some limitations on the parties while going for this rule, and
they are; the choice of law must be bona fide and should not be opposed to public policy, in the
absence of express choice, law which have closest and more real connection to be taken and in
the absence of any arbitration law to be applicable then choice of law country law will be
applicable.

CONCLUSION

Jurisdiction issue is a major factor while doing e-commerce through internet without any
geographical or national boundary. In every territory consumers are protected through their own
territorial law. It means that one nation law is applicable within the boundary of that nation only.
In e-commerce doing business is not limited to one nation only; it can sometime be doing
business in two different territories. In such a situation the degree of consumer protection in e-
commerce comes into picture. It can be solved by entering into a bilateral agreement with the
countries around the globe with regard to settling the disputes.

With regards to a situation where the parties to an electronic contracts are from different
countries, the court will apply the law of that country which has the closest and most substantial
connection to the contract, unless there is no express mentioning regarding the governing law.
This concept is introduced in order to protect the consumers. In India section 28 of the Indian
Contract Act, 1872 and section 11(2) of the Consumer Protection Act, 1986 provides for the
rights and remedies which Indian Law provides to its consumers, and allows the court to
disregard the agreement between the consumer and the seller in so far as the choice of forum and
governing law are concerned.

Consumer protection issue in e-commerce transaction is very important today from all the
perspective. So without effective consumer protection e-commerce cannot be flourished.
Regarding the suggestion, the authors suggest that in such e-commerce environment there is a
strict need of strong and pervasive laws at the international level, both for determining the
governing law of the contract and also for establishing the proper forum for settling the disputes
and the recognition and compulsory enforcement of such forum decisions in other territorial
jurisdiction.