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Suit filed in California court

(Querist) 15 July 2009 This query is : Resolved 
My client exported dehydrated powder of onion and garlic from India to California. The importer at California is a Trader. He sold the goods to another manufacturer. The manufacturer used this material in its final products. He then found that material used by him was conemplated having other material such as hair, pin, etc., He destroyed the whole products and claimed with Insurance company there.

Thereafter Insurance company has filed a suit against Indian exporter at California court for compensation.

Query - Whether Insurance company, who has no connection with Indian exporter can file a suit?

How it can be defended ?
Prakash Yedhula (Expert) 15 July 2009
A foreign judgment can be enforced in India in one of two ways:

1. Judgments from Courts in "reciprocating territories" can be enforced directly by filing before an Indian Court for execution.

A "reciprocating territory" is defined in explanation 1 to Section 44A of India's Civil Procedure Code as: "Any country or territory outside India which the Central Government may, by notification in the Official Gazette, declare as a reciprocating territory."

The United Kingdom and Canada are among the list of countries which has been declared as "reciprocating territories."

Presently, the United States of America is not declared as a "reciprocating territory" by the Government of India.

2. Judgments from "non-reciprocating territories," such as the United States, can be enforced only by filing a law suit in an Indian Court for a Judgment based on the foreign judgment. The foreign judgment is considered evidentiary.

The time limit to file such a law suit in India is within three years of the foreign judgment.

A foreign judgment is considered conclusive by an Indian Court if such judgment:

(a) where it has not been pronounced by a Court of competent jurisdiction;

(b) where it has not been given on the merits of the case;

(c) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the law of 1[India] in cases in which such law is applicable;

(d) where the proceedings in which the judgment was obtained are opposed to natural justice;

(e) where it has been obtained by fraud;

(f) where it sustains a claim founded on a breach of any law in force in India.

So even if the judgment is passed uncontested, still a fresh suit has to be filed in India, where teh same can be contested.
Kiran Kumar (Expert) 16 July 2009
well i think the exporter was not privy to the contract between the insurance and the manufacturer.....since the agreement is not infront of us, so we are presuming this circumstance.

question is whether the exporter was made party to the claim?

what were the terms of contract between the exporter and the manufacturer?

Whether the exproter was aware of the insurance clause?

Where the contract concluded?

though in my opinion otherwise the suit filed in US is without any jurisdiction.

better take ur papers to some local lawyer, only then some proper advise can be made out for u.
Sudhir Mehta (Querist) 16 July 2009
I am really thankful to you for your very important and fruitful advice.

My client is at Bhavnagar, Gujarat state, where no proper lawyer is available to advice in this case.

Hence in this case, I am asking for further queries as under :

1. The Insurance company have sent summons of California court on all partners of the company to local Bhavnagar court through Home Ministry .

Please advise whether summons is to be accepted or not. We have yet not accepted the summons. The bailiff of the court informed that if you do not accept the summons, we will affix it on your door.

2. The material exported were certified by independent agencies as under :

(a) Phytosanitary Certificate issued by Directorate of Plant Protection, Quarantine & Storage, Department of Agriculture & Co-operation, Ministry of Agriculture, Government of India.wherein they certified that products described have been inspected accordance to appropriate procedures and are considered to be free from quarantine pests and practically free from other injurious pests and they are considered to conform with the current phytosanitary regulations of the importing country.

(b) Fumigation certificate issued by Pest Morten (India) Private Ltd., Entomologists & Exterminators.

3. There is no sale/purchase contract between exporter and importer. The material supplied only against their Purchase orders.

4. The importer is a trader and importing materials from various suppliers. How he can prove that the other articles found from our material only.

5. In the summons, it is mentioned that we have reply directly or through our lawyer within 30 days. Please advice whether we have reply anything or not.

6. Whether we can file writ in High court mentioning there in that California Court have no jurisdiction for this case.

sudhir mehta
Khaleel Ahmed (Expert) 24 July 2009
Appoint a local lawyer at California, and defend the case.
The case filed by the Insurance company is maintainable or not will be at the description of the Court.

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