Extraterritorial jurisdiction in Civil Wrongs - An international law perspective

When an extra territorial wrong is committed, which can be the forum for adjudicating the dispute? This is no more a novel issue, but still debatable. In domestic torts, the law is settled that a wrong is done either where the wrongful act takes place or where its effects are experienced​[1].

A suit for compensation with respect to a tort committed aboard is maintainable in Indian Court, provided that the defendant resides, carries on business or personally works for gain in India[2]. Residence may not be a full residence but it includes a minimum presence[3], as recognised by the US courts by adopting the principles of minimum contact[4]. A non-resident defendant may have minimum contacts with the forum state, if he has direct contact with the State or at least has a deal with the resident of the State[5].

If the wrong is in such a nature that it is actionable under the domestic law and if the said act is not be a justifiable act under the domestic law of the country at where the act is committed, dispute can be entertained in India[6]  

Nevertheless, universal jurisdiction cannot be asserted to the civil wrongs and it is in the exclusive domain of the criminal jurisdiction[7]. In civil wrong, jurisdiction matter is important, as it implies and even in such cases that a forum court may hear a complaint filed by a foreign plaintiff against a foreign corporation for foreign harm[8]. True, there are arguments that the right of access to justice is a predominant right and universal jurisdiction in civil suits between foreigners and law of nations traditionally includes the public and private international law[9] and associated with torts and crimes[10]. 

Kiobel[11] is a case concerning to violation of physical integrity rights of Kiobel and others, the inhabitants of Nigeria. The US Court was asked to decide a question that whether and under which circumstances the Alien Tort Statute, allows courts to recognize a cause of action for violation of the law of nations occurring within the territory of a sovereign other than the United States.

 An Anglo Dutch business entity was proceeded for damages on the ground of human rights claim under the Alien Tort Statute[12] on the allegation that the Nigerian Government brutally crush peaceful resistance to aggressive oil development in the Ogoni Niger River Delta colluded with the said company and its Nigerian subsidiary company. A foreign Dutch company was sued on the allegation of a foreign harm in the Courts of United States on the reason that the act of foreign company amounts to violation of customary international law. However US Supreme Court, without going to the merits of the case has decided the maintainability of the suit under ATS and held that the presumption against extraterritoriality[13] applies to the claim under ATS and there is nothing in the Statute to rebut the presumption. Hence it was decided that the claims at issue in the case are not actionable for the reason that they were brought by foreigners against foreigners for their conduct in a foreign country.

The decision in Kiobel was widely criticised on the ground that it restricts the scope of universal jurisdiction, yet, the critics found that even after the decision, there are other bases of extraterritorial jurisdiction in international law, including jurisdiction over activity abroad that has effects within a State (objective territoriality), activity by State’s nationals abroad (active personality), activity against a State’s nationals abroad (passive personality) and activity that threatens the State and its official functions (protective principles)[14]

However, the Dutch Civil Court answered the issue differently in Akpan[15]. A transnational tort case against multinational corporations for an overseas environmental harm was decided on merit, accepting the jurisdiction under the European Union law, since the form State is one among the EU countries, though the cause of action was reported at an African country; i.e. Nigeria.

To decide the law of jurisdiction, the Dutch court adopted its EU regulations in Brussels I[16] and Rome II[17] which provides that person domiciled in a Member State shall, whatever their nationality, be sued in the Courts of that Member Country.

The law in EU countries permits extra territorial jurisdiction and allows a foreign litigant to submit under their jurisdiction, who alleges a foreign harm against a domestic corporation in the EU country. However, the lex loci delicti, the law of the State where the damage has occurred is applicable to decide the dispute in the transnational tort case, in EU countries and thus foreign law will apply for a foreign harm in the domestic courts of EU countries.

Akpan v. Shell is a suit for compensation for the environmental damages caused by Shell Petroleum, in Nigerian territory. The farmers who suffered huge loss as a result of oil spills alleged that the local subsidiary of Dutch multinational had failed to exercise its diligence and breached its duty of care to prevent oil leaks. They are bound under a tort of negligence and equally, the parent Dutch company is responsible for their negligence to enact sufficient guidelines to prevent and react to the oil leaks adequately. Domestic jurisdiction was assumed to Dutch Court by holding that the collective negligence by a domestic Nigerian company and its Dutch parent company is sufficient to constitute jurisdiction since the claims against both the companies are closely related and it justifies joint treatment.

Unlike in US jurisprudence[18], which mandates a contact of a foreign corporation with a domestic partner must be so continuous and systematic as to render it essentially at home in the forum state, in European law, it requires establishing a mere connection between two companies. Apart from the connected claim principles, as adopted in Akpan, under European law, as a rule of forum necessities, it asserts jurisdiction on local courts if there is a sufficient connection with local legal sphere and where it would be unacceptable to require the litigant to submit the case to the decision of the foreign court[19]. Sometimes it may expanded further to states that even in some case an EU country court would be allowed to exercise jurisdiction if no other forum guarantees the right to a fair trial and the dispute has sufficient connection with a local state in the European Union[20]. 

In the matters of extra territorial jurisdiction of domestic courts, in relation to civil wrongs, the rigid approach in US law and flexible approach in European law are evident from the case analysis of Kiobel and Akpan. Like in Kiobel reasoning, the US court adopted the reasoning of minimum contact; in the series of cases relating to Bhopal tragedy compensation, also. In Janki Bai Sahu v. Union Carbide[21], the reliefs sought against the UCC were rejected by the US Courts; on the ground that liability clause cannot be imposed against the company by reason of want of proof. But the US courts, in Sahu’s case as well as in the previously decided Bano v UCC[22], have entertained the litigations for damages, on the aspect of jurisdiction, but refused to grant relief, though the civil wrong committed by UCC and its counter partner UCIL was a foreign wrong, committed in India.

Exclusion of jurisdiction of civil courts must either be explicitly expressed or clearly implied. A civil court in India has jurisdiction to entertain a suit of civil nature except when its cognizance is expressly barred or barred by necessary implications[23]. The adjudicative jurisdiction of the Courts in India in extra territorial civil wrong is simply based on the residence principles in relation to defendant[24] and minimum presence prescription, as seen in the US jurisprudence. Honouring the sovereign role of the nations in international law, India adopts a pragmatic approach by virtue of the guidelines in the permissive rule; derived from international customs or conventions or from diplomatic missions. 

India has a definite approach in the matters of acceptability of the foreign judgment for execution in India. In Section 13[25] of the Code of Civil Procedure, definite situations are enumerated in the matters of enforceability of international judgments in national legal system. The enforceability clause[26] and the exclusion clause[27] in 1971 Hague Convention has made a similar approach in the matters of execution of foreign judgments in the national judicial system of the contracting states.

[1] State of Maharashtra v. Sarvodaya Industries Ltd, AIR 1975 Bom. 197

[2] Private International Law in India; Agrawal K.B., Wolters Kluwer, The Netherlands, 2010; at p 139

[3] Haveli Shah v. Painda Khan, (1926) 96 IC 887

[4] “Minimum contacts” is a term used in the United States Law of Civil Procedure to determine when it is appropriate for a court in one State to assert personal jurisdiction over a defendant from another State. See International Shoe Co.  V. Washington, 326 U.S. 310 (1945)

[5] McGee v. International Life Insurance Co., 355 U.S.220 (1957)

[6] Kotah Transport Ltd. v. Jhalawar Bus Service Ltd., AIR 1960 Raj.224.; Followed the ratio in Philips v. Eyre, (1870) L.R. 6. Q.B.1.

[7] Universal jurisdiction allows States or International Organizations to claim Criminal jurisdiction over an accused person regardless of where the alleged crime was committed and regardless of the nationality of the accused, his country of residence,  or any other relation with the prosecuting entity.  See Polyukovich v The Commonwealth (1991) 172 CLR 501. 

[8] See “Lessons from the Akpan v Shell Litigations in the Netherlands”, Cedric Ryngaret.

[9] Sosa, 542 U.S. at 715.

[10] See “The Distinction between Crime and Torts in the Early Common Law”, David J.Seipp, 76 B.U.L.Rev 59 (1996)

[11] Kiobel et al v. Royal Dutch Shell Petrolem Co. Et al, 569 US   (2013) (17-04-2013)

[12] The Alien Tort Statute of United States is also called the Alien Tort Claims Act is a section of the United States Code that reads: "The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." The US courts have interpreted this statute to allow foreign citizens to seek remedies in U.S. courts for human-rights violations for conduct committed outside the United States.

[13] Presumption against extraterritoriality is cannon of statutory interpretation that provides when a statute gives no clear indication of an extraterritorial application, in has none.

[14] “The Alien Tort Statute and the Law of Nations in Kiobel and Beyond”, Anthony J. Colangelo, Georgetown Journal of International Law Vol. 44 (2013) P 1329 at 1346. The author contradicts the decision in Kiobel referring to the provisions of the Restatement (Third) of Foreign Relations Law of the United States (1987). 

[15] Akpan and others v. Royal Dutch and Shell Petroleum Development Company of Nigeria Ltd, (2013) LJN BY9854 (Netherlands)

[16] European Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters;

Brussels I Article 2

1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.

2. Persons who are not nationals of the Member State in which they are domiciled shall be governed by the rules of jurisdiction applicable to nationals of that State. 

[17] European Council Regulations (EC) No 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations;

Rome II Article 4

(1) Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.

(2) However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.

(3) Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.

[18] Goodyear Dunlop Tires Corporation v. Brown, 131 S Ct. 2846 (2011).

[19] See “Lessons from the Akpan v Shell Litigations in the Netherlands”, Cedric Ryngaret.

[20] New proposal before European Commission, Brussels, EC, 2010.

[21] Sahu 1, 418 F.Supp.2d.407 and Sahu II, 475 F.3d. 468

[22] See 361 F.3d 696-702 (2d Cir.2004), 2005 U.S. Dist LEXIS 22871, 198 Fed.Appx.32 (2d Cir.2006) etc.

[23] See section 9 of the Civil Procedure Code, 1908.

[24] See section 19 of the Civil Procedure Code, 1908

[25] See Section 13 of the Civil Procedure Code, 1908.

[26] See Article 4 of Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, 1971

[27] See Article 5 of Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, 1971


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