The Jurisdiction of the civil courts in India is determined through the provisions of Code of Civil Procedure 1908. When it comes to suits or cases, issues pertaining to foreign elements arise comparatively in few cases, namely whether and when foreigners and foreign corporations can sue, or be sued in an Indian Court, and who enjoy immunity from suits.

There would also be situation when the Indian court despite having jurisdiction may refuse to entertain suits having foreign element, like in case of contracts with pre-determined jurisdiction, arbitration etc. In certain circumstances Indian Courts in a particular case decline to entertain suits by applying the rule known as forum non conveniens.

Who can file Suits in Indian Courts

In India, the locus standi of suits filed by foreigner and foreign state is governed by section 83 and 84 of the code of civil procedure.

Section 83 provides thus:

Alien enemies residing in India with the permission of the Central Government, and alien friends, may sue in any Court otherwise competent to try the suit, as if they were citizens of India, but alien enemies residing in India without such permission, or residing in a foreign country, shall not sue in any such court.

Explanation-Every person residing in a foreign country, the Government of which is at war with India and carrying on business in that country without a licence in that behalf granted by the Central Government, shall, for the purpose of this section, be deemed to be an alien enemy residing in a foreign country.

Section 84 provides thus:

A foreign State may sue in any competent Court:

Provided that the object of the suit is to enforce a private right vested in the Ruler of such State or in any officer of such State in his public capacity.

As per the above sections, the legal position is that:

Immunity from suits to foreigners in India

In private international law, foreign states are immune from being proceeded against in the national courts of other countries. However, there is exception against same under the International Convention against Torture and other Inhuman or Degrading Treatment or Punishment. A “foreign state” means any state outside India recognized by the Central Government.

In India, the sovereignty of foreign states is generally recognized, but an exception is carved out under Section 86 of the Code of Civil Procedure, 1908 where any person may sue a foreign state in any court with the consent of the Central Government. The provision starts with the general rule, that no foreign state may be sued in any court, and then carves out the exception of the consent of Central Government by a Certificate in writing by the Secretary of the State.

Another exception carved out is that a tenant of an immovable property may sue the foreign state from which he holds the property.

The section further goes on to discuss the conditions under which the Central Government may give permission, which are as follows:-

• If the foreign state has instituted a suit in the court against the applicant.
• If the foreign state, by itself or another, trades within the local limits of the Indian court.
• If the foreign state’s immovable property, in respect of which the applicant want to sue is situated in India.
• If the foreign state has waived privilege of Section 86.

The bar in the section is not only against suing, but also against execution of any decree against the property of a foreign state.

When and How to take permission of the Central Government?

Before filing a suit against a foreign state a party in India must file application before the Central Government under Section 86 of CPC. The permission document from the central government is required to filed as an annexure in the case documets. In case permission is refused by the CG then as per the Hon’ble Supreme Court of India as held in Veb Deautfracht Seereederei Rostock (D.S.P. Lines) vs. New Central Jute Mills Co. Ltd. and another AIR 1994 SC  then the refusal should state breifly the reasons for such refusal. Merely citing vague reasons such as “unable to give permission on political grounds” will not suffice. The Supreme Court has further settled that although an order under s. 86 is in the nature of an administrative order, but to pass such order the principles of natural justice must be followed because such orders decide the rights of the parties. 

For the foreign state respondent it is advisable that the bar of Section 86 can be taken at the earliest opportunity and court concerned is expected to examine the same.⁴

Waiver of Privilege

In various cases, it has been recognized by the Indian courts that permission from central government may not be required in every case as there may waiver of privilege by foreign state-owned entities either expressely or implied.

In the case of Ethiopian Airlines vs. Ganesh Narain Saboo  the Hon’ble Supreme Court of India observed that under specific statutes there may be a waiver of foreign state immunity as it was found that the Consumer Protection Act, 1986 and the Carriage by Air Act, 1972 being specific statutes would supersede the general statute of Code of Civil Procedure, 1908. The Court held that Carriage by Air Act, 1972 was passed to give effect to the Warsaw Convention, 1929, to which Ethiopia is also a party. In effect reading of the Warsaw Convention, 1929 and the Carriage by Air Act, 1972 makes it evident that these provisions apply to Airlines of any nationality.

With such reasoning the Hon’ble Supreme Court made it clear that the implication of the Convention and the Act were  as below:-

• The Central government had already given consent under Section 86 by having enacted the Carriage by Air Act, 1972.
• The Foreign State of Ethiopia had impliedly waived privilege by signing the Warsaw Convention, 1929.

Any ‘Foreign State’ can sue in a competent Court in India to enforce a private right vested in the Ruler or in any or its officers in his public capacity (Section 84). The Central Government can appoint recognised agents for such Foreign Rulers by whom appearances, acts and applications under the Code may be made on behalf of such Ruler. The appointment can be for a specified suit or suits for all such suits in which the Ruler may be a party. A recognised agent so appointed by the Central Government can authorise or appoint any other person to perform the above acts as if he were himself a party to such suit(s) (Section 85)

The United Nations (Privileges and Immunities) Act, 1947 provides inter alia immunity from the suits to the United Nations and its agencies such as the WHO and some of its personnel when they act in their official capacity.

The Diplomatic Relations (Vienna Convention) Act 1972, gives statutory effect in India to the Vienna Convention on Diplomatic Relations adopted in 1961 under which specified diplomats enjoy immunity from suits in India.  

An Indian having business transaction with a foreigner can sue the foreigner any breach of contract occurs. In determining jurisdiction under the Indian law the nationality of the defendant is irrelevant. If the cause of action, or a part of cause of action has arisen in India, the Indian Court can proceed against non-resident foreigners. Even if cause of action arose outside India but if defendants are residing in India, the Indian Court has jurisdiction to try such cases and pass order.