Whenever a court is confronted with a case that contains a foreign element, there are two issues which need to be addressed before court can resolve conflicts. A common problem arises when the parties reside in different countries, and whether the court then has jurisdiction to adjudicate upon the cases. If not, then the case must be moved to a court having that jurisdiction. And, if the court does have jurisdiction, it must determine what rules shall apply to the case (Michael, 2001).
The final issue is to solve the question of recognition and enforcement of judgment. The rules and principles a court will use to determine these questions constitute the field of law usually referred to as either Private International Law or the conflict of laws. Unlike uniform law, Private International Law is in fact national law (Lawrence Collins, 2000) hence the forum will always apply its domestic Private International Law to determine applicable law to the contracts and to decide whether it has the jurisdiction over the cases.
However, a number of International conventions to harmonize private International Law exists; Private International Law conventions are to be implemented by national legislators, hence their provisions are national law and thus subject to the differing interpretations. Jurisdiction Technological innovations on the Internet has promoted globalization trend and spawned an industry of "E-commerce” which has forever changed the way companies provide goods and services. Company web sites are accessible to virtually any of the Internet user in the world.
It is a unique global character of the Internet to develop, however, which has prevented the uniform approach to jurisdiction over cases involving the consumer transactions via web. "Jurisdiction is the power and authority of a court to hear and determine a judicial proceeding. " (X. M. Frascogna, 2001). The lack of the uniform legal framework for jurisdiction regarding internet transactions between different countries impacts a company’s vulnerability to foreign legal judgments in which their web sites can be accessed.
The unpredictability of the jurisdiction makes it difficult for the companies with web sites to limit their legal liability and inhibits the growth of e-commerce. In Europe, little law concerning Jurisdiction on internet has so far been established and the main body for establishing Jurisdiction in Europe has been the Brussels Convention which was later superseded by the Brussels Regulation which accommodates the issues as pertaining to E-commerce. This section aims at describing the general principles of Jurisdiction according to the Brussels Convention and Regulation relevant to consumer contracts in the Internet environment.
According to the Brussels Convention, and the Brussels Regulation in a typical commercial transaction, core standard is that authority is delegated by the Member State in which case the person on the defensive is to be domiciled, apart from of his or her country standing. (Brussels Regulation, 2001) Residence grant is decided compliant with home rule of the Member State where judiciary has been detained. In the instance of lawful individuals or the companies, the state decides their home where they entertain their constitutional place, fundamental administration or major position of the company.
In the instance of organizations being run as trusts, domicile is explained by the adjudicator of the Member State whose judiciary has been detained; law brings into effect its imposition of the Private worldwide law (Brussels) Section 2 provides for special jurisdiction in some specific situation contained in Article 5-6(a). The bases set out in these Articles may be applied alternatively with the general rule of the defendant’s domicile. The plaintiff may, thus, choose either to sue the defendant in the Contacting State where he is domiciled or in a court pointed out by the alternative bases in Article5-6 (a).
For example, the plaintiff, in matters relating to a contract, may sue the defendant in courts for the place of performance, of the obligation in question (Brussels Regulation, 2001). Another example is where the dispute arise out of the operations of a branch, agency or the establishment, in which case the plaintiff may sue in the courts of the place in which the branch, agency or other establishment is situated (Atr 5(5), Brussels Regulation, 2001). Section 3 and 4 provide for special jurisdiction in matters relating to insurance (Art 7-12(a), Brussels Regulation) and certain consumer contracts (Art 13-15, Brussels Regulation).
As the aim of these rules is to protect usually weaker parties, they do not serve as alternative bases for the benefit of the plaintiff, or rather as mandatory rules which take precedence when applicable. For practical reasons Section 5 provides for exclusive jurisdiction in certain situations. The defendant in these cases shall be sued in the courts of a Contracting State to which the subject matter of the conflict has a specific close connection. The exclusive jurisdictional bases are mandatory and, thus, when applicable, take precedence over all the other bases provided for the Convention.
Prorogation is also possible, which allows the parties to sometimes agree upon the jurisdiction (Art 17(1), Brussels Regulation). This is provided for in Section 6, which also sets out requirements for such an agreement to be valid (Art 13(3), Brussels Regulation). Expressly prohibited are agreements which are contrary to rules set out in Articles 12, 15 and 16, concerning insurance contracts, consumer contracts and the exclusive jurisdiction. Article 18, finally, deals with defendant’s submission to the forum by appearing before courts.