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Sail Labs Technology Ag v/s International Business Software Solutions Inc.

    O.P.No.2 of 2008

    Decided On, 06 November 2008

    At, High Court of Andhra Pradesh

    By, THE HONOURABLE MR. JUSTICE V. AFZULPURKAR

    For the Petitioner : ---- For the Respondent: Advocate General.



Judgment Text

1. The present OP is registered pursuant to the letter of request received from the Government of India, Ministry of Law and Justice, Department of Legal Affairs, Judicial Section, New Delhi, dated 25.9.2008. The said letter of request was addressed to the Registrar of this Court, forwarding therewith a request of Government of Austria for Judicial Assistance.


2. The letter of request of the Government of Austria briefly states as follows, Plaintiff-M/s. Sail Labs Technology AG, Operngasse 20 B, 1040 Vienna instituted proceedings seeking recovery of US $ 384,450.00 from defendant International Business Software, Solutions, Inc. 399, Thornall Street, 5th Floor, US-08837, Edison, NJ. The said proceedings were instituted by the plaintiff on the allegations that the plaintiff had delivered to the defendant Media Mining Distribution Start-up Package with 17 software licenses as per invoice, the cost of which was payable within 90 days from the date of receipt of invoice with penal interest. The said invoice is said to be based on the Distribution Agreement between the parties dated 9.7.2003 and the Strategic Partner Business Plan attached to it which contains an agreement on Vienna as the place of jurisdiction. The plaintiff alleges that they delivered the software to the defendant who set it up on several computers and installed it on a server. The plaintiff alleges that they had not guaranteed the defendant the exclusive right to distribute its software in the countries of the Middle East. The plaintiff had only excluded the conclusion of new partner agreements for this area on the condition that the defendant should purchase and pay for 17 licenses upon signing the agreement. The defendant had known already at the time of concluding the agreement in July, 2003 that Sakhr Software was a distribution partner of the plaintiff and that the defendant was thus a competitor of this established partner. The plaintiff had already handed over its software to the defendant in April, 2003. There were licenses limited in time for advertising and demonstration purposes and unlimited licenses which the plaintiff would provide only after payment by the defendant. In this transaction, an unlimited license key was provided at the request of the defendant due to technical circumstances.


3. As against the aforesaid allegations of the plaintiff, the defendant disputed the jurisdiction clause and alleged that the plaintiff never delivered the Start-up Package to the defendant and the defendant had notified the plaintiff that the invoice was not justified. The defendant further alleged that the plaintiff had guaranteed the defendant exclusive right to distribute the plaintiff's software in the countries of middle east and had not informed the defendant that Sakhr Software was an authorized partner of the plaintiff. Ultimately the defendant alleged that it had not ordered the 17 licenses referred to in the Strategic Partner Business Plan and the plaintiff was said to be under an obligation to physically deliver the software on a storage medium by DHL.


4. In the aforesaid proceedings, the plaintiff claimed that the evidence of a witness residing in Hyderabad, Andhra Pradesh, India is necessary and on that basis, the Embassy of Austria transmitted the translated letter regatory by the Vienna Commercial Court, including assurance of reciprocity and Austrian code of procedure and requested the Ministry of External Affairs to forward it to the competent authorities. In pursuance of the same, the Government of India, Ministry of Law and Justice, Department of Legal Affairs, Judicial Section, New Delhi, by its letter dated 25.9.2008, forwarded the request of the Embassy of Austria to the Registrar of this Court together with documents.


5. The learned Advocate General has appeared in support of the letter regatory, which is numbered by the Registry of this Court as OP No. 2 of 2008 seeking appropriate directions from this Court. Since the exercise of jurisdiction in this OP does not involve any adjudicatory process, it is not necessary to issue any notice to the representatives of the parties in this OP and in any case, the learned Commissioner would give notice to them to be present at the time of recording of evidence of the said witness.


6. The substantive provisions for exercise of this power is found under Section 78 of the Code of Civil Procedure (hereinafter referred to as "the Code"), which reads as under,


"78. Commissions issued by foreign Courts:- Subject to such conditions and limitations as may be prescribed, the provisions as to the execution and return of commissions for the examination of witnesses shall apply to commissions issued by or at the instance of, -


(a) Courts situate in any part of India to which the provisions of this Code do not extend; or


(b) Courts established or continued by the authority of the Central Government outside India; or


(c) Courts of any State or country outside India."


7. Order XXVI, Rules 19 to 22 of the Code specifically deal with procedural part of jurisdiction. Rule 19 prescribes as follows,


"19. Cases in which High Court may issue Commission to examine witness:- (1) If a High Court is satisfied-


(a) that a foreign Court situated in a foreign country wishes to obtain the evidence of a witness in any proceeding before it,


(b) that the proceeding is of a civil nature, and


(c) that the witness is residing within the limits of the High Court's appellate jurisdiction, it may, subject to the provisions of Rule 20, issue a commission for the examination of such witness.


(2) Evidence may be given of the matters specified in clauses (a), (b) and (c) of sub-rule (1),-


(a) by a certificate signed by the consular officer of the foreign country of the highest rank in India and transmitted to the High Court through the Central Government, or


(b) by a letter of request issued by the foreign Court and transmitted to the High Court through the Central Government, or


(c) by a letter of request issued by the foreign Court and produced before the High Court by a party to the proceeding."


Clause (1) of Rule 19 provides that if a High Court is satisfied, it may issue a commission for the examination of such witness. The satisfaction of the High Court is subject to three conditions under clause (a), (b) & (c) as above and the foreign court wishes to obtain evidence in civil proceedings and such witness is residing within the limits of the High Court's appellate jurisdiction. In the present case, the request has emanated from the Vienna Commercial Court in Austria and it is with reference to civil proceedings pending before the said Court between the plaintiff and the defendant, as briefly referred to above and the witness is said to be residing at Banjara Hills, Hyderabad which is within the limits of appellate jurisdiction of this Court. Rule 19 (1) is, therefore, satisfied in the present case.


Clause (2) (a) of Rule 19 provides that such a request may emanate from the Central Government, based upon the certificate signed by the consular officer of the foreign country. Clause (2) (b) of Rule 19 deals with a letter of request issued by foreign Court and transmitted to the High Court through the Central Government and sub-clause (2) (c) of Rule 19 deals with a letter of request issued by the foreign Court and produced before the High Court by a party to the proceeding. The present case would fall under Clause (2) (b) of Rule 19 as the letter of request was issued by the foreign Court and transmitted to this Court through the Central Government. The request is, therefore, in compliance of the Rule 19 (1) and (2) of the Code.


7. Rule 20 of Order XXVI of the Code provides as follows,


"20. Application for issue of Commission:- The High Court may issue a Commission under Rule 19-


(a) upon application by a party to the proceeding before the foreign Court, or


(b) upon an application by a law officer of the State Government acting under instructions from the State Government."


It is evident that in the present case clause (b) of Rule 20 is attracted as the learned Advocate General has pursued the request before this Court.


8. Then Rule 21 of Order XXVI of the Code provides as follows,


"21. To whom Commission may be issued:- A commission under Rule 19 may be issued to any Court within the local limits of whose jurisdiction the witness resides, or where the witness resides within the local limits of the ordinary original civil jurisdiction of the High Court, to any person whom the Court thinks fit to execute the commission."


The above Rule provides that a commission may be issued by the High Court to any court subordinate to it within the local limits of whose jurisdiction the witness resides and in case the High Court exercises ordinary original civil jurisdiction, such commission may be issued to any person which the High Court thinks fit and competent to execute the commission. In the present case, since this Court does not exercise the ordinary original civil jurisdiction, the issuance of commission would fall within the local limits of jurisdiction of Chief Judge, City Civil Court, Hyderabad as the witness is said to be residing at Banjara Hills, Hyderabad.


9. Then Rule 22 of Order XXVI of the Code provides as follows,


"22. Issue, execution and return of Commissions, and transmission of evidence to foreign Court:- The provisions of Rules 6, 15. sub-rule (1) of Rules 16-A, 17, 18 and 18-B of this Order in so far as they are applicable shall apply to the issue, execution and return of such commission, and when any such commission has been duly executed it shall be returned, together with the evidence taken under it, to the High Court, which shall forward it to the Central Government, along with the letter of request for transmission to the foreign Court."


10. According to this Rule, the provisions of Rules 6, 15. Sub-rule (1) of Rules 16-A, 17, 18 and 18-B of this Order may be applied and after execution of the commission, it shall be returned, together with the evidence taken under it, to the High Court, which shall forward it to the Central Government, along with the letter of request for transmission to the foreign Court.


11. The address of the witness Mr. Kamal Kuchana, A-302, Asian Manor, behind ING Vysya Bank, Road No.2, Banjara Hills, Hyderabad-34, AP is, therefore, sufficiently identifiable and as per the letter of request the evidence of the said witness is to be recorded as an unsworn witness on the disputed allegations, after reminding him of his duty to tell the truth. The questions which are required to be put to the said witness are also mentioned in the letter of request and in the last paragraph, it also provides that representatives of the parties are to be notified of the evidentiary hearing in due time. If the parties or the parties' representatives attend the evidentiary hearing, their rights under clause 289 of the Austrai

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n Code of Civil Procedure are to be protected. 12. Having been satisfied that the letter of request is in accordance with Order XXVI, Rule 19 of the Code referred to above, I deem it fit and proper to appoint the learned Chief Judge, City Civil Court, Hyderabad as Commissioner to execute the said letter of request in the terms indicated above. The Commissioner shall return the commission after execution together with the evidence taken under it and the connected documents. He shall submit his report within four weeks from the date of receipt of warrant of commission. The Registrar (Judicial) shall issue an appropriate warrant of commission to the learned Chief Judge, City Civil Court, Hyderabad accordingly by enclosing entire set of papers filed in this OP to enable him to execute the commission in accordance with letter regatory and after receipt of the report, the Registrar (Judicial) shall forward the same to the Government of India, Ministry of Law and Justice, Department of Legal Affairs, Judicial Section, New Delhi, in response to its letter No. F.No. 12 (418)/2008-Judl., dt. 25.9.2008, to enable them to further forward the same to the Embassy of Austria, New Delhi. 13. The OP accordingly stands disposed of as above.
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