CHAPTER 2

The Legal regime of Jurisdiction:

A Study of its Changing Archetype in Cyberspace

2.0 Introduction:

Undeniably, the principles underlying the state jurisdiction

has been reshaped to some extent by the cyberspace. The
cyberspace rejects the idea of territory centric concept of jurisdiction.
The cyberspace introduced the hitherto unknown idea of
jurisdictionless’ as its qualification even though it stands much '
akin to a tangible place. But whether the cyberspace has been able
to draw a separate class of jurisdiction is a matter of much debate.
From the viewpoint of working principles of jurisdiction in the
national^ international as well as transnational commercial
activities, the discussion under this chapter highlights that the
working of state jurisdiction particularly in the area of cyber crime,
underwent a shift towards an international order based on mutual
co-operation. But main framework of state jurisdiction remained
largely unaffected primarily due to the fact that while enacting
their computer specific laws, the states generally have been guided
by its sovereign law making authority. The countries also basically
intend to regulate cyberspace and allotted jurisdiction over Internet
based activities by the laws and regulations which had applied for

68
 • J

the real’space. Thus the states demonstratively showed reluctance

to assign a separate identity for cyberspace. The cyberspace failed
to develop the distinct jurisdictional character of its own .But the
legal regime of jurisdiction having confronted multi-jurisdictional
i • ■

facets of cyberspace slowly changing its pristine attributes. The

jurisdiction is the. creation by a statute or any other legally
5
enforceable subordinate legislations. The enforcement of the
statute and legislations are further referenced to determinable
area where such laws could be operative . When the locale of
operation suffers from indeterminacy and the particular law is not
responsible for creating the doubt, the conflicts of jurisdictions
come to the fore side by side with the other issues. Thus the
conflict of interests, forming the part of the disputes, merges with
the supplementary issues of disputes. Because of the delocalized
character cyberspace , the localized foundation of jurisdiction has
i i

been perceptively debased compelling the jurists , lawyers and

nation states to rethink whether the working jurisprudence of '
classical form of jurisdiction needs a redefinition in the context of
de-localized character of cyberspace. The discussion under the
present, chapter at the outset, discussed the jurisprudential
background of jurisdiction. In the second part , the working
< ■

principles of jurisdiction both under the domestic law and.

international law have been highlighted. These discussions were
found ^necessary to understand the magnitude of uncertainty
from which the traditional concept of, jurisdiction suffers under
the cyberspace. In this backdrop, the jurisdictional nature tff
cyberspace had been discussed. ‘ The discussion , concludes
asserting that the main tenets of the traditional jurisdiction being
latent the cyberspace, needs no separate classified law even

I
though the archetype of traditional jurisdiction underwent
i
changes under cyberspace.
2.1 The conceptual foundation of Jurisdiction:
The jurisdiction although often is described as the central
concept of domestic law but it plays an important role under
public international .law. The jurisdiction as an aspect of State
sovereignty has been described as "the power of a sovereign to
affect the rights of persons, whether by legislation, by executive
decree, or by the judgment of a court."81. The inherent sovereign
power of the state is the sole determinant for deciding
whether the Sale can exercise jurisdiction over the subject matter.
In the matter of the criminal jurisdiction , the public International
law have recognized a few principles . It is to be noted that the
recognition has not been reflected in any international agreement
as to the acceptability of those principles. The principles are ;

a) The, territorial principle , 82 active nationality principle f

passive personality principle, the protective 1 principle 83 and
universality principle . The territorial principles allows a state to
exercise its jurisdiction over all crimes within geographic borders
without .■ any consideration a to the nationality pf the criminal or
)

the victim of the criminal act. In tune with the territorial principle
a "sovereign nation has exclusive jurisdiction to punish offenses
against its laws committed within its borders, unless it expressly or
impliedly''consents to surrender its jurisdiction."84 Under the

81 Joseph H. Beale, The Jurisdiction ofa Sovereign State, 36 HARV. L. REV. 241, 241
(1923).
82MacLeod vAG for New South Wales (1891) AC 455 - ‘ all crime is local’, ‘extra
territorium jus dicenti impune non paretur’, per Lord Halsbury LC; see, also Compania
Naviera Vascongado v SS Cristina (1938) AC 485.
83 Joyce vDPP(1946) AC 347 \
84 Wilson v. Girard, 354 U.S. 524, 529 (1957)

1
70
protective principle a State can exercise jurisdiction when the
national interest is threatened by an act, regardless of where that
act occurs. ( italics added) The justifying principle of the
protective principle is that every nation has a right to defend
against assaults on its sovereignty. But' the what • should be the
nature of assaults is much debatable because every nation enjoys
the prerogative to decide the grounds and circumstances could be
deemed to the assault on its sovereignty. The universal principle
allows jurisdiction over certain crimes, such as genocide, that are
threatening to the humanity.

In the matter of civil jurisdiction , no difficulty generally

arises as long as the domestic court is called upon to decide the
dispute in respect of persons or property governed by its own legal
system. But problem arises when the court is seized with dispute
having foreign element requiring decisions from the view point of
foreign law or legal system. The foreign element in the dispute
however does not erode the jurisdiction of the court.

Tb(e state is competent frame laws fpr its own and the
statute further confers the jurisdiction to the court to give judicial
effect of the statute. The jurisdiction for any statute determines
primarily the extent of its effectiveness with reference to
particular geographical area. This determining power includes
authority of any arbitral forum within the state to decide the cause
of action enabling it further to resolve the issues in dispute and
secure enforcement of its decisions. The discussion on theconcept
of jurisdiction is to be approached from the viewpoint of public and
private international law and constitutional law because all three
zones are intimately interlinked.
■ :i
i,
I

: 71

i
 The "jurisdiction "according to Halsbury, "is meant authority
by which a court has to decide the matters that are litigated before
it or to take cognizance of matters in a formal way for its decision
"85. Cheshire holds that the jurisdiction depends upon physical
power and since the right exercise power ..... of issuing process
(rests) only within the territory of the sovereign whom the court
represents, the rule of law has always been that jurisdiction is
confined to persons who are within reach of the process of the court
at the time of service of the Writ . A court can not extend its process
and so exert sovereign power beyond its territorial limits.86{ italics
added). The classical definition of jurisdiction was succinctly
expressed as “ as essential attribute of sovereignty of this realm
States ,that it could possess jurisdiction over all persons and things
within its territorial limits and in all causes civil and criminal
arising within its limits”87
In the wider perspective and from the working point of view ,• in
conformity with the jurisdiction, the power of a state to bring in the v
matters within the fold of her own legal system, can broadly be
divided1 into three categories, namely, prescriptive, legislative and
enforcement. The exercise of jurisdiction by domestic law under
the given legal framework is restricted by various parameters like
territoriality with reference to areas within the state,, locus standij|Of
disputants, amount or the value of the subject matter falling within
pecuniary jurisdiction of the court in particular^, situs of immovable
____________________ /_______________________________________ 1.
85 Halsbury’s Laws of England 4th ed. vol 10 para 715 . .. .
86 Cheshire , Private International Law 10th ed. Referred to in Andhra Bank Ltd v.
Srinivsan AIR 1962 SC 232 (234)
i . •.
87 The observation of Lord Macmillan in Compania Naviera Vascongado v Cristima SS
[1938] AC 485 at 496-7

72
property, nature of the relief soft by the parties, status of the parties,
place of the crime , nationality or any other fink between the party
and the internal legal system. The internal law expressly may frame
the conditions or legal requirements for the domestic court for taking
judicial cognizance of the subject matter of the dispute before it. The
L

jurisdiction under the henceforth accepted doctrine is essentially

geographically defined, allowing no infraction or encroachment by
any foreign legal system in the absence of reciprocity, and principles
of international law. Reference can be drawn to the decision of
Permanent Court of justice in which the court held that "the fast and
foremost restriction imposed by international law upon the State is
that failing the existence of the permissive rule to the contrary, it
may not exercise its power in any form in the territory of another
state ."m ‘*

2.2 The Legal sources of jurisdiction:

The legal source of jurisdiction of state flows from its
sovereign will. A state exercises its jurisdiction through the '
various arbitral forums which are created under its sovereign power.
Therefore the jurisdiction is an essential incidence, of sovereignty
and expression of the uncircumcised power attached to the judicial
authority of a state to examine, determine the facts., interpret , apply
the law and make orders in respect of rights and liabilities of the
parties,. The jurisdiction is creature of the statue even when an.
arbitral forum decides its authority to determine its own
jurisdiction89. The creating statute, as the expression of sovereign
thus, determines the extent of the vulnerability of its jurisdiction,
and limitations. From this it follows that withdrawal of the authority
\ •

88 Lotus case (1927) PCIJ Service Provider. A No 10

89 Sec 16 The Arbitration And Consolation Act 1996

73
for exercising jurisdiction invalidates its legal justification
instantaneously. The exercise of extra-territoriality of jurisdiction,
under the idealist point of view is apt to be challenged and
rendered nullity in absence of agreement between the states. Tjie
cardinal requirement for the determination of jurisdiction of an
arbitral institution is that whether the given court is statutorily
competent to decide the case before it. The jurisdictional question
i '

may include jurisdiction over the person, ( in personam),

jurisdiction over the subject matter, or res, and jurisdiction to
render the particular judgment sought. The term jurisdiction is thus
to a large extent is synonymous of the word “power” the power
statutorily conferred. A court possesses jurisdiction over matters
onfy to the extent granted to it by the Constitution, or legislation of
the sovereignty on behalf of which it functions.
The operative philosophy of jurisdiction embraces the essential
principles of public international law, private international law and
the constitutional law of state. All these three function singly or \
jointly depending upon the circumstances . The fountain source is
the territorial principles under which the state has power to exercise
its jurisdiction within its territorial borders subject to the principles
of customary international law. Lord Ellenborough asked the
fundarpental question “can island of Tobago pass a law to bind the
rights Of the whole world? Would the world submit to such an
assumed jurisdiction ?”90 The answer is negative obviously. The
enforceability of the judicial action rests on the single fact whether
3 . *' ‘ •

the court has the jurisdiction to pass the order base on the subject
matte or the persons concerned and so far as the ; subject matter is
concerned it is divided into territorial or subjective. The courts are

90 Buchanan vs. Rucker (1988) 9 Est 1921

74
created by the statue on the basis of the public policy with defined
jurisdiction and therefore the individuals are precluded from
changing the defined limit.
2.3 The principles of jurisdiction under domestic legal
order
The domestic legal systems of all sovereign countries are built
upon the basic premise that the ' municipal laws must be
enforceable over the parties in dispute. The enforceability is
conditioned by a number of factors. However/barring a few minor
situations the territoriality constitute the non-separable legal
foundation of domestic legal order states in general. From the
following discussion it would be clear that the working principles
in exercising jurisdiction by a state is no different from each other.
2.3.1 India
In India, the jurisdictional limit of any Act is decided by either
State or Central while making such Act Legislatures91 and the
enactment itself indicates the extent and scope its application. The
Indian Courts below High Courts and Supreihe Court statutorily
exercise jurisdiction mainly in three fields. First, in the area of civil
justice when the court decides suits of civil disputes and determine
the rights and liabilities of the parties.92 The acts enacted by
Parliament is applicable within the territory (j>f India and do not
extra-territorial operation. In other words the domestic courts and
arbitral forums will apply at the first instance the law enacted by

91 Article 245(1) of Constitution oflndia lays down that subject to the provisions to the

Constitution Parliament may make law for whole or any part of the territory oflndia, and
the Legislature of State may make laws for the whole or any part of the State.
92 Section 9 of e Code of Civil Procedure 1908. The Code as adjective law regulates the

procedures and powers of civil courts with prohibitive and permissive provisions.
■li • ;
Parliament and delegated legislations. All , laws India contains
specific provisions under 'title, commencement, extent or operation
indicating clearly that the Act shall extent to the whole of India
except a State of Jammu and Kashmir, or any other State with or
without permissive provisions that the State governments of the
States, concerned .excluded from the operation of the Acts may be
notification in official Gazette may extend the provisions of the Act.93
Under the Indian legal system, the domestic courts can assume the
jurisdiction only when permitted by the law framed by Parliament.
The jurisdiction is therefore inherently permissive as well as
restrictive. The jurisdiction is the power of the court to hear and
determine a cause, to anticipate and exercise any judicial power in
\

relation to it .In other words by jurisdiction is meant the authority

which court has to decides matters that are regulated before it or to
the competence of matter presented the informal way for its decision.
An examination of the cases in the books disclose numerous
attempts to define the term “jurisdiction” which has been stated to ' -
be the power to hear and determine issues of the law and facts or
authority by which he judicial officers take cognizance of an decides
the cases for the authority to hear and decide legal controversy over
the power to hear and determine the subject matter between
parties to a suit and to adjudicate or exercise any judicial power
over them, power to hear, determine the issues before the court, the
power, or authority which is conferred upon a court by the
legislature to hear and the determine causes between the parties
and to carry judgments into facts, to apply the law to pronounce the

93 For Instance Section 1 (3) of the Code of Civil Procedure 1908 is indicative of the extent
of application of the Code.

76
judgments and carrying into execution. 91 The issue of jurisdiction
in so far as competence of the courts is concerned it may be
classified in three categories (1) jurisdiction over subject matter (2)
territorial jurisdiction with reference to local limit of the court
concerned and (3) pecuniary jurisdiction. Thus certain courts are
competent to an issue jurisdiction under the particular statute, on
specified classes of suits and are barred from trying other cases.
5

Likewise every court cannot exercise jurisdiction beyond certain

territorial limit fixed by the Act or certain courts are empowered to
trying .to cases of hear- appeals or pass adjudicatory orders of
different amounts. Comparing to a limited pecuniary jurisdiction of
ill
other courts, the High Court and courts of district Judge enjoy
greater pecuniary jurisdiction. Second, in the branch of criminal
cases the courts discharge criminal justice and pass the orders of
punishment against the offender in compliance with the laid down
procedures under the Code of Criminal Procedure 1973 another
adjective law. The Code prescribes the procedural part of criminal '
proceeding and lays down the jurisdictions of different classes of
court in the hierarchy with territorial reference. The prosecution can
be instituted under the Indian Panel Code under which every person
is made liable to punishment without distinction of nation, rank,
cast or creed, provided the offence with which he is charged has
been committed in some part India95 on the principle of Crimen
trahit personam. Crime carries the person.96 Section 2 of the Code

94 Hirday;Naih v. Ram Chandra (AIR 1921 Cal.34) The court elaborated the conception of

jurisdiction of domestic courts referring to the case Sukhlal v.T.arachand 1(2)(1905)33

Cal68]
95 MobarikAli Ahmed AIR 1957 SC 857 : (1958) SCR 328
96 Kubic Dariusz v Union ofIndia AIR 1990 SC 605

77
provides that “every person shall be liable to punishment under this
Code, and not otherwise for eveiy act or omission contrary to the
provisions thereof, of which shall be guilty within India (italics
added). Within India signifies that if the offence is committed
outside India it is not punishable under this Penal Code. The
jurisdiction over the crime belongs to the country where the crime is
committed, and, except over its own subjects, the legislature has the
power whatever.97 In summary the Indian court in the criminal
matters had jurisdiction on the offence committed within India and
not beyond the territorial limit. The servicing of summons, warrant
for arrest, a search warrant or summons to any person requiring
him to attend or produce a document can only be executed in the
country outside India with which the reciprocal arrangement is
made Indian government, called the contracting State98. Likewise
Indian court cannot serve and order attaching or forfeiting the
property, suspecting to be in a State outside India without having
reciprocal arrangement with the States concerned for the purpose of
/ .

execution. In regard the power of Indian court to order punishment

of offences committed beyond India shall be dealt with according to
the provisions of the subject Code for, any act committed beyond
India in the same manner such act had been committed within
India.99 The. applicability of the Section is restricted to the case of a
person who at the time of committing the offence charged, was
amenable to the Indian courts.100

97 Jefferys v Boosey (1854) 4 HLC 815

98 Sec 105(11) read with section 105 (a) of Code of Criminal Procedure 1973
i' t

99 Section 3 of Indian Penal Code

100 Pirati (1873) 10 BHC (CrC) 356; Roda (189) PR no. 30 of 1893

78
 I

The third area is where civil court is called upon to decide the
enforcement of foreign judgment, e judgments of the court situated
outside India. The Indian court assumes the jurisdiction partly
under domestic law and largely on the principles of international
law but not according to the law of the foreign court. Dicey
enumerates the rule of competent jurisdiction in the following
manner. In the action in personam in respect of any cause of action
the courts of foreign country have jurisdiction in the following cases :
First case is where at the time of commencement of the
action the defendant was resident or present in such country so as
to have the benefit, and be under protection of the laws thereof. The
second situation arises where the dependent at the time of
judgments in the action, subject or citizen of such country. Third
situation arises where the party objecting to the jurisdiction of the
courts of such country has by is own conduct, submitted to such
jurisdiction has precluded from objecting there to
I ■ •

1), By appearing as plaintiff in the action on counter "

claiming or
2) By voluntarily appearing as defendant in such action, or
3),,By having expressly or impliedly contracted to submit to
the jurisdiction of such courts. While giving the effect of
‘ the foreign judgment the Indian court exercise the
;; jurisdiction within the territorial limit and not related to
(
such matter enforcement of which , -
will effect in
accordance with foreign law. ^
Under the Indian law, the working concept of jurisdiction is not
explicitly categorized under prescriptive ^judicial and enforcement
heads t>ut from the legislative and judicial practices it could be
inferred, that these principles directly work.. Another interesting
aspect of the jurisdiction under Indian law is that it any cause of

79

1
action which is judicially cognizable does not cease to exist gcnerely
because the local court- statutorily is incofnpetent to exercise
jurisdiction over it.
2.3.2 USA

Under the US Constitution in every respect the Federal Courts

and State courts except where the Acts of the Congress have made
special provision, the courts of the State of the United States enjoy
the distinct and independent status in the exercise of the powers as
the courts of the two separate and independent nations.101 The
personal jurisdietionis the most relevant to the jurisdictional
problems of Internet based transactions . The approaches differ
between the common law and civil law countries. In contrast to the
statute-centric jurisdictional principles of common law countries ,ii)
United States those principles are developed through the case law
and broad concepts applied are to specific fact patterns102. The
traditional doctrine of jurisdiction under U.S. legal system assumes
that to have jurisdiction over the defendant , he is required to be '
physically entered and contacted state forum. “When a defendant
purposefully conducts his activities in a chosen State, he inherently
benefits from all the privileges and protections of laws found in this
jurisdiction”103. The assertion of the jurisdiction was considered
'reasonable’ UM when the claims related to services are provided
by defendant in a State by virtue of which the defendant
i • i ' % '

becomes legally connected to the State’s protection via its assert of

I* •

101 Thomas M. Cooley The General Principles of Constitutional Ixiw In the United States

ofAmerica p-II5 ed. Reprinted in India 1994 by Hindustan Law Book Co. Calcutta
102 ABA jurisdiction--
103 Hanson v. Denckla, 357 U.S 235, 253 (1958)
104 International Shoe Co.v. Washington, 326, U.S: 310 (1945)

80
jurisdiction over the dispute. Under US laws a court can not validly
exercise jurisdiction on a dispute without having personal
jurisdiction over the parties in the suits. An US court can be also
subjected in terms of the kinds of disputes for which it enjoys the
power to adjudicate. The personal jurisdiction, has been defined |.s
the power of the court over the person of a defendant.
Concomitantly the court exercises the personal jurisdiction over
the parties , subject matter and over the claims involved. When
the court lawfully assumes the jurisdiction it pass enforceable
judgment against the parties in the suits.
The jurisdiction is two fold - general jurisdiction and specific
jurisdiction1or>. A Court can exercise jurisdiction when a defendant’s
overall contacts with a forum are 'systematic and continuous’. In
regard to the specific jurisdiction the court enjoys adjudicative
power where the plaintiffs cause of action arises out of or relates to
defendant’s contacts with the forum. Under accepted principles • of
laws the US court while exercising jurisdiction, over a non-resident
defendant, mainly follow two tests first, the amenability of the
defendant to suit under the State’s long - arm statute and whether
the exercise of the jurisdiction conforms to Constitutional Due
Process Clause106. Great Britain pays primary allegiance to the
territorial principles of jurisdiction, under which the state might
exercise jurisdiction over property and persons in, or acts or events
occurring within the territory107. Under US law, the Court in

105 Helicopteros Nacionales de Colombia v. Hall, 466 U.S.408 415-16 (1984).;

106 Westermeier J T, 'Personal Jurisdiction : Today’s Hoi Issue in E-Commerce’, The

Journal of Information, Law and Technology (JIL.T). <http//elj.warwick.ac.uk/jill/98-

3Avestermeier.html. >
107 JG Starke Introduction to International Law - 10111 Edition, p-201

81
exercising personal jurisdiction over a defendant must be primarily
authorized by the statue- and exercise should not contravene the
Constitutional limitations. The Supreme Court held that Due
Process Clause of 14th Amendment restricts exercise of personal
jurisdiction over non-residence by elaborating that first 'every state
possesses exclusive, jurisdiction and sovereignty over persons and
property within its territory and second 'non State can exercise
direct jurisdiction and authority over persons or property without its
territory108.
2.3.3 UK
\

The English court exercises is jurisdiction iin international law

on the basis of territory, nationality109 or allegiance, domicile,
presence habitual an ordinary residence. In criminal matters the
general principle is that the State exercises jurisdiction over the
crimes committed within its territory though the extent of personal
jurisdiction is not limited to the persons within .its territory”. It has
been recognized from time immemorial that there . is a strong N
presumption that when Parliament, in an Act applying to England,
creates an office by making
intend this to apply to any act done by anyone in any country other
than England”110. The majority of House of Lnrds held that the
triable offence had been committed in England by. the accused who
had written and posted in England a letter addressed to the person
in Germany demanding money by menaces. It was held sufficient for
jurisdiction if either the act of its harmful consequences occurred in
England: Since the judicial jurisdiction is the legal power and

m Pennoyer v...Neff, 95 U.S.714(1877). .. .

109 Blackmer v. U.S. 284b us 421 (1931)
110 The observation of Lord Reid in R... v. Tracy (1971) A.C. 53t at p.551

82

•i
authority of Court to make a valid decision binding on the-;parties
concerned in any matter properly propped before it, the English
court is always concerned as to whether the court can make its
judgment effective implying thereby whether the judgment can e
enforced effectively. But the jurisdiction of English court is
I

territorial essentially and confined to property situated in England,

obligations arising in England from contract or trust, or persons
resident or domiciled in England. The territorial principle of
jurisdiction is subjected to exception under the provisions of
European convention on jurisdiction in which jurisdiction j.s
determined on the principle of .defendant’s domicile and
long=standing exception of submission and assumed jurisdiction, in
which the jurisdiction is extra territorial.111
2.3.4 New Zealand
Under the domestic law of New Zealand the courts in New
Zealand have power only over the persons and things having some
relationship with New Zealand, Under New Zealand the personal
jurisdiction depends solely on the basis on ‘valid service of the
defendant. A foreigner resident abroad will not be subjected to local
jurisdiction. High Court can set aside a service of proceeding, validly
effected in New Zealand if the defendant can establish. that there
exists another forum having e jurisdiction to hear the.claim and that
the cas.e can more suitably tried in that forum in the interest of all
parties and for the ends of justice and lastly where the defendant as
little or.no connection with New Zealand forum.,
k 1 * •

The different approaches to the issue, of the jurisdiction

between US & common law countries however create no difficulty to
assert jurisdiction over a person because of the inherent

115 Graveson R.H, Conflict ofLaws p 96-971974 edition

83

1 ,
commonalities between two approaches. Both approaches
essentially determine the jurisdiction over a person of the defendant
on the basis of his physical presence or his conduct of business in
the forum country. Under both systems, the jurisdiction of court
over person or subject matter of the suit basically flow from the
authority reposed on the court through enactment. The power of
the court is limited with reference either to constitutional limitation,
or subject matter o the dispute otherwise the judgment of the court
will be lacking enforceability or rendered nullity under law. On the
principle of territoriality the court under the both legal systems are
not competent to assert jurisdiction in respect of the cause of action
arising outside the territorial limit of the State. The State only has
the exclusive authority to enact laws on jurisdiction.
2.3.5 Jurisdiction under International law
A state may exercise its jurisdiction by agreements and
treaties with other states over persons not otherwise amenable to
jurisdiction under its own legal system or on such acts not
committed within its geographical border but by nationals of the
contracting states. The purpose is to provide the legal structure
common to the contracting states either to facilitate trade or such
matters vital to common the interests. To achieve the aim , there
has to be harmonization of the principles of jurisdiction among the
h ‘

contracting states.112 The contracting states also undertake to the

effect Ojf the agreement among the parties the domiciled in the
member states in regard to choice of the jurisdiction of the courts to

112 Reference to be made to the Brussels Convention on Jurisdiction and Enforcement of

Judgments in Civil and Commercial Matters 1968. Article I of the Convention declares
that "This Convention shall apply in simple and commercial matters whatever the nature
of the court or tribunal"

84
Li

i’
which the parties intend to submit in case of dispute provided the
court or courts enjoyed the jurisdiction to settle any disputes which
had arisen or which may arise in connection with the particular
legal relationship. In order to avoid particular rules of the more
obvious legal system applying to the agreement among the parties a
group of states can also allocate jurisdiction among themselves in
regard to particular subject matter and frame the rules ,lay down
the different conditions under which the domestic courts of the
contracting states will be capable to exercise their jurisdictions on
the specified matters on the basis of applicable laws agreed
mutually113. Under the International law the territorial efficacy of
the internal law is not rendered redundant or overlapped by
extraterritorial compulsions since the international law without
being subservient to the state orders, presupposes the existence of
the state order as relevant to it114 . . ..
The material foundation of jurisdiction :• is physical locations
and geographical determinacy of the subject matter on which the N
jurisdiction is asserted. The physical location of disputed act formed
the basis of exercising extra territorial jurisdiction under the
classical principle of jurisdiction. The domestic court of a country
under municipal law or State in International arena at the . first
stance (.address themselves to the location of the property, place of
the commission of infracting act, presence of the actor or intention
of the parties in dispute in regard to the choicjj of the forum or law.
All these determinant factors are nothing, but tangible and

113 Rome Convention on the Law Applicable to Contractual Obligations

114 Stone J , Social Dimensions of Law and Justice First Indian Reprint 1999 Universal
I

Law Publishing Delhi p- 529

J 85
physically determinable with reference to occurrence, presence and
situation.
2.4 Dilution of the classical base of jurisdiction
The classical concept of the jurisdiction however underwent
dilution by the reason of technological development, trans-national
criminal activities by which the States, in the international plain
had to come closure to each other for safe guarding in the national
interests. Therefore the states consensually accepted not to effect
the territorial principles of domestic rules ' of law beyond its
geographic border unless the conduct originating beyond the
geographic limit is found to be prejudicial to the national interest.
Permanent court of International justice however lent its support to
the assumption115 accepting that there is no restriction on the
exercise of jurisdiction by any States unless that restriction can be
shown by the most conclusive evidence to exist as a principle of
International law. The court also held the onus lay on the State
claiming that such exercise of jurisdiction was unjustified to show v
that it was prohibited by International law116. This power of the
i ‘

state was restricted by prohibitive assertion that a State is not

empowered to exercise jurisdiction over the matters, persons with
which it has no concern. In the International field this States
gradual started to exercise the territorial jurisdiction on the ground
of convenience and protection of the social order resulting from
commission of crime within its territory. Under protective principle
State is, authorized to exercise jurisdiction over crime against its
security and integrity as well as its economic interest. Under British
' ■' • '

legal systehi, an alien having allegiance to the crown can be tried foi4

115 Lotus Case (1927)

116 mm. P-202

86
the crime of treason committed abroad because the act squarely
went against the security'and integrity of the country.117 Similarly
the prosecution of aliens for giving false statement in the application
concerning immigration was justified.118 The principle of universal
jurisdiction authorized all the States to exercise jurisdiction in
regard to the offences contrary to the interest of the International
community like piracy, vrar crimes an hi-jacking of Aircraft but not
political crimes. The sovereign countries due to various reasons,
were no longer able to retain their insulin characters . The reasons
are economic inter-dependence among the states , growing
international character of criminal activities in the field of the
narcotic drugs, rate of flow of trans-national communication.
Since the Internet aided commerce gave rise to issue of
determining the residence of a company transacting business
through the website only the jurisdiction of the court in respect of
company is of much importance and needs a brief discussion.
The issue becomes complicated for the purpose of exercising
jurisdiction in e-commerce related areas particularly sell !jl
advertising, publication of materials through website, infringement
of trade through the electronic, online defamation , . sell of. service
through internet etc. The court is often called upon the place of
business of the registered company to serve notices. The jurisdiction
of the Indian court over a company with exercised if a company is
either registered under Companies Act 1956 (amended time to time)
or companies registered under some previous Acts and carrying
business in India.
i .

117 (1946) AC 347.

118 United Siates v Rodriquez 182 F Supp 479 (1960)
 Under Indian law, the jurisdiction of the court over the
compani.es incorporated outside India (foreign companies), is
determined primarily with reference to its establishment of a place
of business within India. Opening of branches/offices in India by
banks incorporated abroad (foreign banks) requires permission of
Reserve Bank of India under section 22 of Banking Regulation Act
1949. A company will be deemed to have established a place of
business in India, if it has a specified or identifiable place at which
it carries on business, such as an office, storehouse , godown or
other premises having some concrete connection between thef

locality and its business 119 but not the ‘foreign controlled company’
meaning a company in which the majority and shareholding and
voting power is in the hands of foreign individuals or body corporate
. The word ‘establish’ indicates more than occasional connection. If
a company has a share transfer office or share registration office ,
such office will be construed that the company has established a
place of business in that location where such office is existing.120.
However, if foreign company cannot be. debarred under the India law
to file suits in India although it may not have complied with the
some of the provisions of Companies Act.121 Under English law the
court will exercise its jurisdiction over a company if it is registered
under Companies Act 1985 in England which will enable the court
to serve the writ to the registered office of the company concerned.

119 Ramaiya A Guide to the Companies Act 14th ed.p-3277 Referring to fJeverall v.
Grant Advertising Inc. (1954) 3 All ER 389 :1955
120 Employer's Liability Assurance Corporation v. Sedgwick, Collins and Co, 1927 AC
95: HieMadrid (1927 ) All ER :216
f i

121 Shamrao v. United House Building & Engineering Soceily of Bangalore (1937) 7
Com Cases 78

88
In regard to the foreign companies which are incorporated outsidejj
Great Britain, after the commencement of the Act will come under
the jurisdiction of the English court if such company establishes a
place of business in Great Britain having a degree of continuity and
recognisability with respect to its business activities and not by
holding property alone . For the determination of presence of a
company in England like Indian law the prime requirement under
i

common law is that the company concerned is engaged in

transaction of business in England even from a private residence of
one of the directors of the company or the rented office in England
by the pompany , incorporated outside Great Britain. vn The
■ underlying rationale is that, the English court should be capable of
servicing the summon to the defendant which can only be possible if
the company has the corporate presence in England. Therefore in
the ordinary course of business with the. corporate presence ,there
appears . no difficulty in determining the actual location of the
company concerned to serve summons in exercise of jurisdiction by
the competent court. The website has not been conferred a status
of registered office for the purpose of exercising jurisdiction under
laws of any country. The permanent establishment in physical
form is considered to be an office of a company in the eye of law..
2.5 Jurisdictional character of Cyberspace:
The cyberspace begs for the answers of very puzzling
questions. Can the shapeless be shaped ? Is it possible to bind the
boundless and regulate unflawed and seamless by any law? Before
discussing the legal regime of jurisdictional ambiguity of
cyberspace in contradistinction to the real spacp, it is necessary to

122 South India Shipping Corporation v Export-Import Bank of Korea (1985) 1 WLR 585,
(1985) ALL''ER 219, CA

89
encapsulate in brief the polymorphism in the concept jurisdiction
in relation to the power of the domestic court under a national legal
system. The fundamental legal principle is that in order to have
jurisdiction the trying court under domestic legal order, must have
the opportunity to service the summons over the defendant . The
Indian Constitution does not provide any exhaustive principles of
jurisdiction based on which the State can not enact laws and the
different laws generally prescribe jurisdiction under the
applicability clause of the law and the jurisdiction123. The laws of
the U.K are also enacted in the same manner. But the
Reinstatement section 402 of US constitution , indicative of the
issues and subject matters on which the State will be competent
of the State to frame laws, categorizes broadly under three
heads namely, territoriality principle, the nationality principle, the
effects principle, and the protective principle. The principles are
harmonious to principles of International law and commonly
practiced, by the States in the international and national arena.
With the development of comity among the nations and principle of
reciprocity, lately the role of conflict of laws among the multiple legal
systems of the world is gradually narrowing, down. Therefore,
domestic courts do not find difficulty in selecting the applicable
laws for exercising the jurisdiction. The territorial basis of the
national law does not face confounding challenge either from the
method of committing harmful acts or multiple foreign legal
systems,; while attempting to exercise jurisdiction on particular
subject matter invoking extra- territorial operation of municipal
legal system. In the arena of international legal relations ,the
international legal order does not interfere with the operation of
i '' ■ :
123 A distinct departure is allowed in I.T Act 2000 which is discussed under Chapter 7

90
the separate national legal orders and the tangible recourses
available to the sovereign states to enforce its legal sanctions
1
within the respective territorial units. Summarily, The principle of
reciprocity, regional treaties or international agreements singly or
combined have largely contributed in building up fairly effective ,
practicable and least contentious legal regime of jurisdiction.
The Internet, without any dispute, substantially debased the
territorial foundation of the domestic law and enforcement
mechanism of national law12'5 because the cyberspace is boundless
i.■

having no exit or entry points in physical sense and on-line world is

not respecter of any national law . The inextricable dimensions of
legal regime of jurisdiction in real space as stated above, are
conspicuously faded out in cjherspace because its geographical
indeterminacy renders the physical presence of the defendant for
the purpose of enforcing the jurisdiction insignificant if not
redundant. Seemingly therefore , the Cyberspace, refuses to
accept ;j law or the legal order of any specific:country exclusively.
The reason is that the a specific country-centric conduct of
defendant concerned in the Cyberspace has the capability to affect
the laws of other countries and therefore the overlapping multiply
jurisdictions may come to play in mutually. conflicting terms..
With reference to territorially- defined laws, t;he Internet, for its
porous character, appears to be stripped off the functional aspects
of jurisdiction as practiced so long. The novel,, prohibited for
publication under national law of a countiy under prescriptive
jurisdiction , may not see the light of the day within the territorial
t ' ’’

border , of the countiy concerned and state. will take . punitive

-------------------k------------------------------- ■ f -.
124 ‘On-Line Boundaries Unclear internet tramples Legal Jurisdictions '(1995)
T
Computerworld, June 3 News
i'

k 91

u
measures under its law under enforcement jurisdiction, \ if the
book is found to be circulation or possessed by any one within the
country^ irrespective of his nationality. Another country can prohibit
the physical entry of the said published book within its country in
the national interest both under prescriptive and legislative
jurisdiction. But enforcement of the measures so taken will be
, <■
limited within their geographic boundaries of the countries
concerned as the states can not remove the book from the Net if
its contents are hosted . Illustratively, the attempt of a U.S. agency
officials in August 1996 to apply the Helms-Burton Act to Internet
links from Austria to Iran >2!> was considered unlawful under
international law. Even a Web publisher is not capable under the
present technology to restrict access to its site based on the
geographic locale of each particular Internet user. An user with the
computer in his home linked with modem can travel from one
jurisdiction to another by surfing the websites which are the
governed potentially and materially by multiple laws enacted by '■
different countries. When the user residing in a particular country,
copies the Web design of particular website in his computer which
is registered under copyright law in another country and uses it for
commercial profit, he thereby infringes the intellectual property
rights of someone. The manner of infringement is performed not
by the conventional method of copying but with the help, of Internet
architecture from geographically different locale . The act is
extraterritorial with harm on local copyright owner. But the
complex issue is whether the territorial law on he copyright in th|

125 Declan McCulIagh, Banning■ Iran,■ HotWired (Aug. 28, 1996)

<hUp://\vy/w. eff.org/~declan/global/iran/hw. iran.082896.txt visited on 30.06.97

i ' V ■

. ., .. . 92
i •' . .i

ii •
conventional form could be applied to such infringing^ act.
Similarly when a hacker damages the stored data in the computer
by unauthorised^ gaining an access to a computer network
spreading at different countries having different legal systems , he
commits breaches under different legal systems even though he is
physically present in .one country or he prepared a software program
that ran automatically from a location , different from where he is
physically present. In such situations, the territorially defined law
of a single country cannot negotiate the offence by exercising
jurisdiction over the person. A country can prescribe the laws
deterrent to infringing conduct of originating from outside effecting
results of consequences prejudicial to the interests of the country
concerned. But it would not be possible for the country to give
effect of the laws so prescribed beyond the territorial border .
There appears divergent opinions among the American
scholars as to the exact character of the jurisdiction in the
cyberspace. Jack Goldsmith ,partially supported by Peter Swire 126

holds that the issue is exaggerated suggesting, that so called

cyberanarchy is the figment of imagination.127 For David R Johnson
Internet ^.calls for a rethinking about the working of the
jurisdiction.128
2.6 Conclusion:
Fundamentally, the main principles of jurisdiction adopted,
under national legal system or international order remain operative ! ■ ‘

in cyberspace although it would be. appropriate to mould the

traditional analysis of jurisdiction in the context of cyberspace129.
..... . ..............r............ ................. ........................ _

126 Peter P. Swire, Of Elephants, Mice, and Privacy: International Choice Of Law and the Internet, 32 Int'l
Law. 991 (1998). . .
127 Juck L. Goldsmith, Against Cybcranarchy, 65 U. Chi. L. Rev. 1199 (1998).
128 David Jolmpon Law and Borders .
129 Henry Perrit) Jurisdiction and the Internet: Basic Anglo-American perspective Internet Law and Policy
Forum Jurisdiction Budding Confidence in borderless Medium .Montreal Canada July. 1999

93
In the following chapters it will be discussed that the jurisdictional
problems in cyberspace have been bolstered by the controversy over
applicable laws for the protection of the free speech, privacy and
controlling up obscene and harmful materials^ posted on the net.
Most of. the jurisdictional issues in the Internet activities do not
materially differ from the issues in the real space and it would be
seen from the following chapters that the laws of the country and
the judiciary evolved the principles of jurisdiction for regulating the
cyberspace activities mostly in the line practiced in the transactions
in the real world. The States in general, as it appears from the
decided cases adopted prescriptive, legislative and enforcement
jurisdictions in controlling the activities of the Internet by adopting
such recourses suitable for the Internet. The judiciary and the
Internet 130jurists do not consider the cyberspace as the figment of
imagination or an idea only. " The Internet is considered as a. unique
and wholly new medium of worldwide human communication"....
and “entering into the cyberspace is possible by having an access to
a computer with the ability to reach the Internet and direct the
computer to connect with the access provider"
131
!s ’
That the inevitable conflict among .the different legal systems,
as argued by some jurists and academicians, makes it difficult for a
single legal system to have a control over the activities in cyberspace,
cannot be supported for more than one, reason. i The trans-national
v • • ,

activities, in the modern world primarily in the area of commerce

bring forth multi-jurisdictional legal systems bu^ the States in order
to facilitate the trans transnational activities avoided the conflicts, of
i. 1 *.

130 ACLU v Reno I US DC Penn (1996)

131 Supra 130
1

94.
laws and adopted the local regulations on the basis of the consent.
On the basis of the reciprocity and comity, the nations avoided the
issues of conflict arising out of multi-jurisdictional approach by
adopting certain basic norms in order to give effect of the foreign
laws and where it is found expedient acceded the principles of
international conventions and agreements132.

('

132 For example most of the countries in the world enacted E-Commerce legislations

on the basis ;of UN1C1TRAL model.

:Ji
95