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Timestamp: 2019-04-22 16:19:33+00:00

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The Global network of internet is transnational in nature  and defies the territoriality concept of jurisdiction. Hence the concept of Transnational Jurisdiction has been evolved in the Cyberspace. In the global internet world the issues pertaining to, which country’s law is applicable to resolve a dispute; which court has jurisdiction; and how far a court can enforce a foreign judgment; exists since its advent.
E-commerce transactions, there can arise issues relating to jurisdiction if it is not mentioned in the agreement. Jurisdictional grounds in contractual disputes often point to the court in one of the contractual parties home state, the same relating to torts are extremely wide when applied Internet context. Thus it is the need of the hour that a solution should be ascertained to the issues relating to jurisdiction in the e-commerce world.
Thus there are different issues in different areas of law in the electronic market. Let us take a look how the private international law is applicable in the e-commerce world.
Jurisdiction to prescribe which enables a country to apply its legal norms to conduct.
Jurisdiction to adjudicate means the tribunals of a given country may resolve the dispute in respect to a person or thing where the country has jurisdiction to prescribe the law that is sought to be enforced.
The concept of Personal Jurisdiction exercised by the U.S Courts over a period of time, pre-internet and post-internet era is discussed below.
Recently in Attaway v. Omega No. 11A01-0712-CV-608  , the Court applied the ‘minimum contacts’ rule and established personal jurisdiction against the defendants who purchased a used car from the plaintiffs through eBay. The defendant rescinded the payment alleging that the car was not as described after the transaction was completed, and took the defence of lack of personal jurisdiction when the plaintiff brought suit for damages.
Legislative Sanction – This step inquires whether there is any statutory authority granting the court jurisdiction over the defendant.
In Burger King Corp. v. Rudzewicz  the defendant had entered into a franchise contract with Florida based, Burger King. Although the defendant argued that his contacts had been with the Michigan District office and that he never had been to Florida, the Supreme Court found that he had intentionally affiliated himself with a Florida entity in a way that satisfied the requirements of minimum contacts.
Later in Calder v. Jones  , “the effects test” was formulated which can be used in the internet context. This test requires (a) an intentional action, that was (b) expressly aimed at the forum state, (c) anticipating that the brunt of the injury would be felt in the forum state. This “effects test” was applied in the case of Dudnikov v.Chalk &Vermilion  which involved interaction via internet services on a copyright dispute over an eBay auction. The personal jurisdiction was applied as the “effects test” conditions were satisfied.
If a Website provides “two-way online communication” there is active interaction, ie repeated transaction of files over the internet, between the parties fostering the business, the personal jurisdiction can be applied.
When the website provides just information which can be available to interested viewers, there is passive usage and the personal jurisdiction cannot be exercised.
It was held it is appropriate to exercise personal jurisdiction over the Defendant. The Sliding Scale test evolved is an important turning point in the case of online activities.
Further in Scarcella v. America Online Inc.  the Court held ISP AOL’s choice of forum clause requiring litigation in Virginia invalid. The Appellate Court affirmed the lower court’s decision that the choice of forum clause is unenforceable noting that Plaintiff will be deprived of his preferred choice of forum, the New York Small Claims Courts which can award up to $5000, when Virginia allows only $2000.
Thus it can be seen that United States adopt a very flexible approach towards jurisdiction in internet contract disputes.
which the court held that a forum state could properly exercise jurisdiction over a defendant who had advertised over the Internet.
The governing laws in the internet contract and internet tort areas of the European Union are Brussels Regulation Rules  , Rome I  and Rome II  .
According to the conservatives in England traditional rules of jurisdiction can be applied to the online disputes. On the other hand revolutionists are asking for a new set of laws for the resolution of internet cross- border disputes.
The Brussels Regulation  is the controlling document for jurisdictional issues within the European Union.  It has provided general and specific grounds of jurisdiction for civil and commercial matters, including provisions for consumer contracts.  The Regulation provides specific grounds of jurisdiction in Articles 5, and in particular for consumers, Article 13-15 inclusive.
In matters relating to tort, delict or quasi- delict, in the courts for the place where the harmful event occurred.
Article 17 of the Regulation states that a consumer may be sued only in a consumer’s country of domicile, while a consumer may elect to bring an action in either his domicile or in the other party’s domicile, so long as the consumer was subject to a specific solicitation or advertising in the consumer’s domicile. In Business Contracts (B-B), the parties can agree on a forum for disputes.
The European Union took initiative in several areas of electronic commerce. The Directive on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market’ and the Directive on the Protection of Consumers in respect of Distance Contracts are the recent initiatives. The European Union has also formulated E-commerce Directive 2000/31/EC  and the EC Directive Regulations 2002  specifically to deal with e- commerce transactions.
The Brussels Regulation amendment made the provision for rules of jurisdiction in electronic consumer contracts. Usually in e-commerce contracts the choice of forum must have been provided in the agreement.
In Shevill v. Press Alliance  , in an international defamation case, France, in relation to the entire circulation of the publication, or in any place where the allegedly defamatory publication is distributed, including England but solely in relation to the damage to reputation caused by the distribution of the publication in that jurisdiction. The Court gave an autonomous interpretation of the ‘place of the event giving rise to the damage’ for the purpose of a libel by a newspaper article distributed in several Contracting States. The European Court of Justice held that an English domiciliary was able to sue a French domiciled newspaper either in the place where the defendant is established.
Extra-territorial jurisdiction will involve restraint on actions in another country, which a foreign judge should avoid.
If national courts of different countries all assume jurisdiction there is too much room for forum-shopping.
Those concerned with international agreements about copyright have refrained from putting in place a regime for the international litigation of copyrights by the courts of a single state.
The considerations which have lead the courts to decline jurisdiction over foreign patent claims apply equally to enforcement of a foreign copyright.
On breach of contract Joltid intended to terminate the contract. The Skype Technologies initiated legal proceedings in the UK against them. Later on, eBay in U.S which owned the Skype group, declared the selling of its shares in Skype Technologies to various investors. After registering its copyright in US Joltid commenced proceedings against various parties including Skype Technologies.
In Football DataCo Ltd & Othrs v. Sportradar GmbH & Anr  the Court had to consider a jurisdiction application of defendants relating to webservers. The Jugde “came to a conclusion that the act of making available to the public by online transmission is committed and committed only where the transmission takes place. It is true that the placing of data on a server in one state can make the data available to the public of another state but that does not mean that the party who has made the data available has committed the act of making available by transmission in the State of reception. I consider that the better construction of the provisions is that the act only occurs in the state of transmission.” It was held that the Court has jurisdiction over the claim of authorizing and other matters.
It is understood that in the US and in the European Union, the Courts rely on existing national laws, international laws and Conventions to tackle the issue of jurisdiction on internet disputes. Apart from that, the Courts could formulate new test and principles for determining jurisdiction from various Case laws. Thus in every new case arising with the issue to determine the Cyberspace jurisdiction is evolving a new rule. The important points to be noted is that its always safe to include jurisdiction clauses and to specify the governing law of their online contracts.
Above we have discussed how the United States and the European Union are dealing the internet disputes across- borders. Now let us focus on other novel resolution systems and new modes of resolution existing like the Alternative Dispute Resolution (ADR) system and Online Dispute Resolution (ODR) system.
“ADR is a collective expression for all disputes resolution mechanisms that interpose a neutral third party but which are outside the courts, and is a synonym for extra- judicial or ‘out- of court’ dispute resolution.”  The two forms of ADR that exist Mediation and Arbitration.
Arbitration is a form of private adjudication whereby a neutral third party, the arbitrator, chosen and paid by the parties, makes a binding and enforceable award as to how the dispute should be resolved.  The arbitration agreement is the basis of arbitration. Arbitration award is enforceable like a judgment. An arbitration award is bound by the principle of res-judicata.
Thus Arbitration is the true alternative to the litigation due to its binding and enforceable nature to redress the internet disputes.
Parties are free to select a national law to determine their rights and obligations under the e-commerce contract and/or to be applicable to any dispute that may arise under this contract. In the absence of choice by the parties, the arbitrators are free to apply a national law either indirectly pursuant to a conflict of laws method, or directly if they deem that law to be appropriate for the particular dispute.  The selection of a national law is stable as it is already well developed and provides answer for the legal problems. Then another applicable law can be the general principles of international law or international conventions. Further the applicable law maybe transnational law, such as the UNDROIT  Principles, the Lando Principles  , CISG  , or Lex Maercatoria.
It is understood that compared to normal litigation, in which courts are bound to apply a law of a particular jurisdiction, the arbitration gives wider options, including international and transnational law, providing the tribunal greater discretion and flexibility.
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