Jurisdiction and Forum Non Conveniens: Part I

A recent post had led to an interesting discussion on the appropriateness and applicability of the principle of ‘forum non conveniens’ in domestic law. Usually, the principle is applied in the context of private international law. Within a domestic system, the principle is applied in cases where the judicial structure is federal and not unified in structure. The debate assumes importance given the expansions in jurisdiction under certain legislations which allow the plaintiff a choice to file a suit in his place of residence, as opposed to the principle in the Code of Civil Procedure which requires filing of suits in the defendant’s place of residence. Now, if a Court does have the jurisdiction under either the CPC or under the specific provisions such as S. 62(2) Copyrights Act or S. 134(2) Trademarks Act, can it refuse to hear the case on the ground that a more alternative forum is available? Does the private international law principle of forum non conveniens extend to the jurisdiction of Courts within India in a solely domestic context? The Delhi High Court decision in St. Ives Laboratories v. Arif Perfumers, [CS (OS) No. 78/2009, decided by Justice S.N. Dhingra] suggests that it does.

The case involved allegations of trademark infringement. It was not the case of the plaintiff that it resided in Delhi. Thus, for the purposes of the case, the special jurisdictional sections were irrelevant. The question had to be decided in accordance with the rules of the Civil Procedure Code. In particular, the issue was whether part of the cause of action arose in Delhi, so that the Delhi Courts could assume jurisdiction.

There was a clear allegation in the plaint that the defendants were surreptitiously and clandestinely trading their goods under the impugned trademark and labels in Delhi and in other parts of the country. The trademark was registered in Delhi, and the plaintiff alleged that it was suffering losses in Delhi too. In deciding jurisdiction, a Court usually satisfies itself with the averments made in the plaint. In the facts of the case, those averments indicated that part of the cause of action did arise in Delhi. It was argued that in view of this, Delhi Courts would have jurisdiction under Section 20(c) of the CPC.

The Court held:

Looking at the entire plaint, it only seems that the plaintiff had filed this suit at Delhi only as a device of harassment calculated to force the defendant to come to Delhi, engage a Counsel at enormous expense and contest litigation. The plaintiff, who was resident of USA could have easily filed this suit at Courts at Bombay/Maharashtra and pursued the matter. Filing of suit in Delhi on the basis of vague allegations that the goods of defendants were being sold clandestinely throughout the country including Delhi makes no sense. No cause of action can be said to have arisen in Delhi. Such allegations of clandestine sale can be made against any person without any foundation and the plaintiff even during trial can always escape giving proof of such clandestine sale saying that he has stated in the plaint that the sale was clandestine and no bills were being issued. The Court cannot be used as a tool to put such a burden on the defendant that the defendant is unable to even defend the suit. The plaintiff cannot be given absolute liberty to choose the place of suing a defendant out of entire country on the basis of unfounded and vague allegations. In such a case CPC provisions regarding jurisdiction stand rendered useless.

(Emphasis added)

Now, it might well be possible to hold that the Court had concluded that no part of the cause of action arose in Delhi. There are at least three reasons, however, for believing that the Court was in fact applying the doctrine of forum non conveniens.

First, on the averments made in the plaint, it was not possible to say that no part of the cause of action arose in Delhi. The veracity of those averments cannot be gone into for the purposes of determining jurisdiction. Secondly, if indeed no part of the cause of action arose in Delhi, there was no reason to make observations concerning the hardship and burden faced by the defendant. Thirdly, in its reasoning, the Court referred to a Supreme Court decision – Kusum Ingots v. Union of India – holding that a Court is not bound to entertain a plaint if a small part of the cause of action arose within its jurisdiction. This indicates that the Court was holding that even though a part of the cause of action arose in Delhi, the Delhi Courts were not the most appropriate forum for adjudication.

The judgment in Kusum Ingots itself appears to accept the forum non conveniens principle. That case was concerned not with private law disputes but with the public law question regarding the appropriate High Court in cases of writ jurisdiction under Article 226 of the Constitution. Nonetheless, it was held that the CPC principles of jurisdiction were equally applicable to writ proceedings. The Supreme Court went on to say that “indisputably” even if a small fraction of the cause of action arises within the jurisdiction of a particular Court, that Court shall have jurisdiction in the matter. Yet, on appropriate cases, the Court could refuse to exercise that jurisdiction on the ground of forum non conveniens. Thus, the Court recognised the distinction between the existence of jurisdiction and the exercise of jurisdiction.

The principle of Kusum Ingots has been followed subsequently. In Jayaswals Neco, the decision was analysed in depth; and was held to be authority for the proposition that when a cause of action arises partly in one jurisdiction and partly in the other, it is ordinarily for the petitioner to choose his forum. Yet, “in appropriate cases” the Court concerned may refuse to hear the matter because of forum non conveniens. The Delhi High Court decision in St. Ives seems to now settle the issue that the doctrine would also apply outside writ jurisdiction to an ordinary civil suit between two private parties.

A question which arises in such a scenario is, “What are the principles which would determine the application of the doctrine of forum non conveniens?” A subsequent post will try to answer that question.