Indian companies facing litigation in England

By Gautam Khurana, India Law Offices and Jeremy Lederman, Harold Benjamin

As India received its legal structure from England, it is not surprising that many India companies in international disputes choose the jurisdiction of England and English law as the governing law. Language and legacy may be the reasons.

Gautam Khurana, India Law Offices
Gautam Khurana
Managing Partner
India Law Offices

The key principles in English litigation are that parties must follow the overriding objective of dealing with cases justly, proportionately and cost-effectively. They must consider the value, importance and complexity of the case; the parties’ positions, and the need to deal with cases speedily and fairly. Litigation and arbitration are the last resort; courts expect the parties to disclose their cases in sufficient detail, with supporting documents, for each other to understand. Parties are expected to try to settle disputes by other means, such as negotiation, conciliation and mediation.

English law respects the right of parties to arbitrate as an alternative to litigation. Under the Arbitration Act 1996 the law may fill gaps where there is no agreement on procedure and courts may make orders and directions.

Court proceedings start by filing with the court a claim form and particulars of claim, setting out full details. These are then served on the defendant. Arbitration proceedings are commenced according to the rules and procedure agreed by the parties, failing which the tribunal decides.

In court proceedings the defendant has at least 14 days to state whether they intend to defend all or some of the claim or challenge the court’s jurisdiction. If the defendant contests the claim they must file and serve within 14 days a defence to the claims of the claimant. A claimant may but is not obliged to serve a reply to a defence. The defendant may counterclaim against a claimant or make a claim against a different party. That does not need the court’s permission if served with the defence but does need it subsequently. The claimant or another party opposing such claims must file and serve a defence. A signed personal statement, confirming all claims and defence statements and other documents are true, is mandatory. If no defence is filed, the other party can apply for judgment in default without a trial.

Jeremy Lederman, Harold Benjamin
Jeremy Lederman
Harold Benjamin

In arbitration responses and counterclaims are in the rules and procedures agreed by the parties, failing which the tribunal decides. A claim against a third party is outside the scope of the arbitration, unless all agree that they be joined, there is an assignment or novation of rights or a claim is made against the insurer of an insolvent party.

Parties may apply for summary judgment for part or all of a claim without a full trial where they can persuade the court a claim or defence has no real prospect of succeeding or there is no other compelling reason for the matter to be dealt with at full trial. The court can also strike out claims. There may be similar avenues in arbitration if the parties agree to them.

The court’s view is that it manages the claims, not the parties. Once defences are filed the court oversees case management. The parties must complete questionnaires and supply information on disclosure of documents, including electronic documents, witness statements of fact, evidence, the proposed timetable and possible settlement. At this stage defendants often apply for security for their costs if they were successful. Grounds include a claimant being overseas in a jurisdiction with no reciprocal treaty for enforcement of judgments, being impecunious or being a nominal party. The pre-trial review process includes necessary hearings to ensure the case is ready for trial.

In arbitration proceedings, what the parties have agreed prevails. Unless agreed otherwise, the tribunal still has various powers.

In court proceedings, disclosure depends on the type of claim and court, each with their own rules. Parties identify what documents, whether favourable or not, may be relevant to the claim. This is usually done by list with statements signed on behalf of each party. In arbitration, disclosure accords with what the parties have agreed. However, unless otherwise agreed, the tribunal retains powers over this.

Courts try to ensure that trial dates are kept. Judges may give their decisions at the end of the hearing or reserve them to another date. The loser usually pays the reasonable costs of the winner. This is also so in arbitration unless the parties agree otherwise.

Gautam Khurana is the managing partner of India Law Offices and Jeremy Lederman is a partner at Harold Benjamin.

India Law Offices
D-19 (GF) & D-31, South Extension – 1
New Delhi – 110 049
Mumbai | Bengaluru
Contact details:
T: +91 11 2462 2216 / +91 11246 2218