Recently, the Mumbai City Civil and Sessions Court (Dindoshi) issued directions to register a Lawsuit against London-based cruise shipping company Lincoln Royale Cruise LLP. The order was issued after a detailed hearing on the point of territorial jurisdiction. The case will offer guidance to small, medium-sized businesses, which have suffered loss after performing functions for foreign-based companies.
Mumbai-based consultancy, Pushpa Enterprises, has claimed that they conducted recruitment drives in various cities between May 2017 and August 2017 on behalf of Lincoln Royal Cruise LLP, London, to shortlist 3000 candidates for working in multiple departments on passenger ships. However, the London based firm failed to fulfill its initial commitment. Now, the Indian consultant is facing fire from all sides. Even after several months of negotiations, their 1, 400 selected candidates have not yet been deployed, neither has it been paid the expenses incurred for carrying out bulk requirement.
“The complainant firm viz., M/s Pushpa Enterprises, Mumbai alleged that the London based company had alluded it to enter into a contract for bulk employment of 3000 candidates. Interviews were conducted in multiple cities, including Goa, Mumbai, on condition that the complainant Indian company shall bear the cost of the said recruitment. My client, M/s Pushpa Enterprises, spent lakhs in the form of charges for interview venues, airfare for interview panelists, publishing advertisements, and other expenses. Candidates were recruited as per eligibility requirements of the foreign client. However, the London based company recently unilaterally rescinded the bulk requirement and failed to reimburse the money spent by Pushpa Enterprises for the interview drives. It also promised to depute 1400 Indian candidates on cruise ships by August 2018. In spite of several requests and correspondence, Lincoln Royale Cruise LLP is reluctant to deploy any of the Indian candidates on board, and make payment to the complainant company prompting the firm to send a Legal Notice and file a Lawsuit for recovery of damages against the London based entity,” said Advocate Anand Pande while sharing details about the case.
Initially, the Department of City Civil Court Mumbai objected to registering the said lawsuit against the UK based company on the grounds of international territorial jurisdiction. However, Advocate Anand Pande, who appeared for Indian Complainant Company, argued before the court on the point of territorial jurisdiction. He pointed out to the court that under section 20(c) of the Civil Procedure Code 1906, an aggrieved litigant was entitled to file a lawsuit in India if the full or part of the cause of the action had arisen within the jurisdiction of the local Indian Court.
Further, he also submitted that his client had suffered a massive loss since the foreign-based company was not abiding by the contract by paying his client for the expenditures and appointing the selected candidates on cruise ships. Thus, the client also faces possibilities of facing undue harassment from the selected candidates who are waiting for the promised employment opportunities.
On January 23, after hearing the said arguments, the Principal Judge, Honorable S.C.More directed the suit to be registered against the London based company for the recovery of damages.
"There is a provision of an authority viz; Protector General of Emigrants as per Emigration Act 1983 to protect the rights of an Indian candidate who goes to a foreign country for employment. However, there is no provision of arbitration security for recruiting agencies to recover their expenditures from the foreign employer in the event of any dispute. As a result, several Indian small/medium sized recruiting agencies are left at the mercy of international arbitration authorities (primarily based in London and Singapore) that have extremely high fees. Thus, it becomes next to impossible for a small recruitment firm or an individual to fight the case while bearing his traveling, accommodation, and Lawyer expenses required while seeking justice from an international arbitration institution. I believe this case will offer guidance to individuals as well as small, medium-sized businesses, which have suffered loss after performing functions for foreign-based companies but are confused whether they can file lawsuits in India to claim damages,” said the Mumbai-based advocate.
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