REGULATING AND RESOLVING DISPUTES IN E-COMMERCE TRANSACTIONS: INDIAN CONSUMER PROTECTION PERSPECTIVE
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Abstract
Information and communication technology has made the world flat with no geographical boundaries. Businesses across the world finding e-commerce convenient for selling products and providing services. Businesses and transactions in the businesses always involve disputes. Law is geographical boundary based which also limits jurisdiction of courts in resolving disputes. Thus, territorial limitations are imposed on implementation of law and judicial power to decide disputes. In business to business transactions, parties to the contract mutually plan, design and execute contracts with the help of legal experts; hence, confusion with respect to applicable laws and jurisdiction of courts in case of a dispute is less likely. However, in e-commerce consumer transactions, consumers do not design, plan and execute contracts with the help of legal experts. Therefore, it has always been an issue of concern about the applicable laws and courts jurisdiction in the event of e-commerce transaction where a seller and a consumer may be in different jurisdiction and sometimes may be in different country. This paper is an attempt to analyse the Indian legislative and judicial approach with respect to jurisdiction in internet activities in general and e-commerce in particular.
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References
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According to “Purposeful Availment Test” to avail the jurisdiction the court the plaintiff has to establish that the defendant purposefully directed it activities in the forum state. It is also known as “minimum contact” test. (International Shoe Co v Washington [1945] 326 US 340). This test was further explained in Burger King Corp v Rudzewicz [1985] 471 US. In this case, the court modified the “purposeful test” and stated that “purposeful availment would not result from ‘ransom’ or ‘fortuitous’ contacts by the defendant in the forum state, it requires the plaintiff to show that such contracts resulted from the ‘action by the defendant himself that created a substantial connection with the forum state. He must have engaged in ‘significant activities’ within the forum state or have created ‘continuing obligation’ between himself and residents of the forum state”. See also Ballard v Savage [1995] 65 F.3d 1495. Under this test, even a passive website could attract the jurisdiction of the court in Inset System Inc v Instruction Set Inc 937 F Supp 161 (D Conn 1996). In this case, the defendant used its website for advertisement of its goods or services. The plaintiff, a company situated in Connecticut had brought an action for infringement. The court held that through advertisement the defendant directed its activity in the forum state. However, in Bensusan Restaurant Corp v King [1996] 937 F Supp 295 (SDNY), the court held that “creating a site, like placing a product into the stream of commerce, may be felt nationwide or even worldwide but, without more, it is not an act purposefully directed towards the forum state”.See also Asahi Metal Industries v Superior Court [1987] 480 US .In Neogen Corp v Neo Gen Screening Inc [2002] 282 F3d 883, 890 it was held by court of appeal that “purposeful requirement is satisfied if the website is interactive to a degree that reveals specifically intended interaction with residents of the state”.
The ‘Zippo’ sliding scale test was developed in the case of Zippo Mfg Co v Zippo Dot Com, Inc [1997] 952 F Supp 1119. In this case court observed that “General Jurisdiction permits a court to exercise personal jurisdiction over a non-resident defendant for non-forum related activities when the defendant has engaged in ‘systematic and continuous’ activities in the forum state. In the absence general jurisdiction, specific jurisdiction permits a court to exercise personal jurisdiction over a non-resident defendant for forum-related activities where the ‘relationship between the defendant and the forum falls within the ‘minimum contract framework’”. Finally, the court developed three tests to determine specific personal jurisdiction over a non-resident defendant: “1) ‘minimum contacts’ with forum state, 2) the claims of the plaintiff must arise out of those contacts, 3) it must be reasonable to exercise jurisdiction.” See also Cyber sell, Inc v Cyber sell. Inc [1997] 130 fF.3d 414.
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