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E-COMMERCE CONTRACTS: JURISDICTIONAL AND ENFORCEMENT CHALLENGES

Introduction

We live in a very technical world where most of the work is done through the use of electronic devices. In recent years, rapid development has been seen in the technology field. It has changed the way of operation of businesses. We can easily witness the same. In the time of COVID, when everything is shut down, technology is the only thing that helps not only to run the big businesses but also to keep us together. In past years, the trend of online shopping has increased at a very fast rate. One of the major reasons for that is that vendors, by using e-commerce websites, can easily sell their goods from any part of the world. This saves them money, so they are able to sell for less money, which the customer finds the product at a cheaper rate compared to that brand store. As the trend of online shopping from different e-commerce sites has increased, the probability of disputes arising between the parties has also increased as it is unavoidable. But the main issue while dealing with the dispute is jurisdiction.

Jurisdiction is the power of the court to hear and decide cases. It is important to determine which law is applied and which court has authority to hear the case, whether its decision is binding or not. Most of the time, the bone of contention is that some of the foreign decrees are enforced in India, but India does not have the jurisdiction to hear the same. There are great challenges in enforcing the verdict and deciding the jurisdiction of the court.

Defining E-commerce

The term E-commerce stands for ‘Electronic Commerce’. According to the definition by the WTO, E-commerce is understood to mean “the production, distribution, marketing, sale, or delivery of goods and services by electronic means”. The concept of e-commerce includes selling & purchasing goods solely online, without using any kind of paper document. It covers all business activity conducted through electronic networks.

There are different categories of e-commerce, each of which may be classified into different application areas and problems they address. The most prevalent group of e-commerce transactions is referred to as B2C. It includes transactions between businesses and consumers. An example of this is online shopping through Amazon, Flipkart, etc. The second group of e-commerce transactions is referred to as B2B. It includes transactions between two business entities. The last group of e-commerce transactions includes the e-commerce transactions between government and business entities. This is referred to as B2G e-commerce. Its example includes online tax submission etc.

Issues of Jurisdiction & Enforcement in E-commerce

Registering orders, organising delivery, and accepting payments are the main parts of the business. If and when issues develop in such transactions, the consequences can be permanent and must be addressed quickly. Dispute resolution in the B2C sector, in particular, is difficult. The main question that arises in such disputes is where the contract is concluded, as the parties come under contract through the internet, and the internet is borderless. These are some of the main legal issues which create concern in a borderless environment:

  • Whose Jurisdiction?
  • Where to take action?
  • What tests and legislation must be adhered to?
  • Which country’s laws apply to a specific e-commerce transaction?
  • Which country’s courts should be contacted for rights enforcement?

It becomes so difficult to determine the contract territorial jurisdiction and it is so challenging to resolve such disputes where to hear a query, the statute is silent and the parties are geographically distant. The determination of jurisdiction is critical to understand for transactions because it is a primary and fundamental question in matters relating to dispute resolution, consumer protection, data protection, and the enforcement of the parties’ rights.

In India, jurisprudence on questions of jurisdiction and enforcement in e-commerce is still in its early stages. The Information Technology Act, 2000, by the force of its Section 75, is extended to the whole of India and thus, ‘this act shall apply to any offence or contravention committed outside India by any person irrespective of his nationality, and  this Act shall apply to an offence or contravention committed outside India by any person if the act or conduct constituting the offence or contravention involves a computer, computer system, or computer network located in India.’

Section 3 of the Indian Penal Code (IPC), 1869 provides that ‘any person who is liable, by any Indian law, to be tried for an offence committed beyond India shall be dealt with according to the provisions of the IPC for any act committed beyond India in the same manner as if such act had been committed within India.’

Section 20, of the Civil Procedure Code, gives power to the civil courts to try all cases unless barred by law. In the case being tried by the court, the cause of action should arise within the limits of the court. The courts have delved into the aspects of the jurisdiction governing e-contracts.

Thus, there does not appear to be too much jurisprudence in India on the issue of jurisdiction in e-commerce matters.

Conclusion

Currently, India does not have any proper e-commerce regulatory law except for the IT Act. This is the reason that people and e-commerce industries face numerous obstacles in creating a consumer-friendly and business-friendly e-commerce environment. It is also necessary that legal awareness should be disseminated among consumers to save them from falling into the trap of e-commerce websites’ product general rules. It should ensure that the benefits of technology are fully realised without being hampered by the judicious evolution of law through skilled judicial interpretation until a consensus emerges that a specialised law to govern and regulate some parts of e-commerce is an absolute necessity.

 The rapid growth of e-commerce has created a dire need for specific legislation to regulate the issues involving jurisdiction for e-commerce disputes. It is also crucial for the success of e-commerce in India. It is also required that it’s made mandatory for all e-commerce websites to lay down product specific details like the nature of the good and service they offer, in order to avoid unauthorised transactions.

Author(s) Name: Kumud Tomar (Dr. B.R. Ambedkar National Law University, Sonipat)

 

 

 

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