CONTRACT BETWEEN AN INDIAN & OVERSEAS COMPANY
dareson
(Querist) 07 April 2008
This query is : Resolved
Hi all! A Private Limited Company incorporated in India has entered into a Contract with a 'Foreign company' to provide 'software services'. When the project was nearing the final stage, the 'foreign company' which has utilised the services of the Indian Company has stopped the project and did not pay the balance amount due. The Indian company has recruited and made payment to the computer labourers for the project and thus incurred loss. The 'foreign company' said that it is the fault of the Indian company as the project did not run as per its' expectations. Now, what are the options available to the Indian Company? (1) Can a Police Complaint be lodged against the Foreign company for (a) 'BREACH OF TRUST', (b) 'Having committed Fraud' on Indian Company by non-payment of its' legitimate dues? (2) Can a 'Leave to Sue' application be filed at the HIGH COURT for claiming the money due? I shall be much obliged if anyone clarifies the above and also suggest any new methods for recovering the dues. Thanks.
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Dhrumil
(Expert) 08 April 2008
It is depend upon terms and condition stateout in the contract. you need to check whether Arbitration clause is stated in the contract or court juridiction are stated.
dareson
(Querist) 08 April 2008
No arbitration clause, but, if the dispute remains unsolvable, a 3rd neutral party can be considered as a mediator before the matter is referred to Indian legal process. So, indian courts jurisdiction can be invoked. The other terms are ok.
Manish Singh
(Expert) 08 April 2008
mediation clause does not confer any jurisdiction on the courts of law. You can only go for mediation under the terms of the Contracts and if it get fails, you can not challenge it. BUT if succeeded and signed then it is treated as an award.
Manish Singh
(Expert) 09 April 2008
since it was not asked initially I did notput it down here but now I am providing here the jurisdictional explanation.
A contract is generally governed by the jurisdiction (country or territory) in which it is entered into or where it is performed. So, your rights and obligations are determined by the laws of the jurisdiction.In the case of a violation of intellectual-property rights, the place where such infringement takes place becomes the jurisdiction for pursuing legal remedies. In most other cases, traditional principles embodied in section 20 of the Civil Procedure Code come into play. They provide that you can file a case in a jurisdiction where either the cause of action arose or where the party against whom you are filing is located.
And you can file a suit for specific perfomance or damages.]
Apart from that you go for money recovery suit.
dareson
(Querist) 11 April 2008
dear Manish, Thanks for the reply.
manmeet singh arora
(Expert) 13 April 2008
DEAR DARESON,
THE BEST OPTION WOULD BE TO FILE MONEY SUIT
2.TO APPOINT A NEGOTIATOR TO OPEN CHANNELS OF COMMUNICATIOPN BETWEEN THE TWO COMPANIES AND CLEAR ALL THE LEGAL DOUBTS AND SEARCH FOR A LEGAL OPTION.
dareson
(Querist) 16 April 2008
This querry is still open for members to post their answers, please.
dareson
(Querist) 03 June 2008
Police authorities are in dilemma as to how a foreign resident (though he is of indian origin, but presently stays at abroad as well as the company is also established overseas)could be called for enquiry.
Complaint is pending with the Central Crime Branch and moving in a snail phase.
Any further suggestions, please?
Manish Singh
(Expert) 06 June 2008
ask them to give summons to the concerned embassy.
KamalNayanSaxena
(Expert) 17 June 2008
Dear Mr. Dareson
Dont be confused and waste time. Your matter is very simple. Civil remedy is not barred in the absence of exclusive arbitration clause in the contract. No prosecution can be made as the matter is purely based on contract, Facts of your case does not meet with the ingredients of Sec. 406, 420 IPC. In my opinion you must file a suit under specific performance, where you can claim dues and damages also. Territorial jurisdiction of the court is specified under Sec. 20 of CPC
