Tort liability and the importance of governing law in cross-border claims

Somesh Tiwari
Vardharma Chambers, New Delhi
tiwari.somesh96@gmail.com

Kinnery Patel
Mozingo & Patel, Irvine
kpatel@mozingoandpatel.com

The growth of cross-border trade, digital commerce and transnational corporate activity has reshaped tort litigation. A wrongful act today often spans several jurisdictions: the conduct originates in one country, the injury occurs in another and the parties are connected to legal systems in yet another jurisdiction. Claims of this kind turn on a single threshold question: which jurisdiction’s law governs the dispute? This question is rarely neutral because legal systems differ on liability, damages, limitation periods and remedies.

The body of rules known as the ‘conflict of laws’, also known as private international law, supplies the framework through which courts allocate jurisdiction, identify the applicable law, and recognise and enforce foreign judgments. In a cross-border tort claim, that choice of law shapes the rights and liabilities of every party.

This article examines tort liability and the role of governing law in cross-border claims from the perspectives of India and the United States. The US has developed flexible tools including the ‘most significant relationship’ test, governmental interest analysis and the doctrine of forum non conveniens. India, by contrast, continues to work largely from common law doctrine, territorial jurisdiction and judicial precedent when addressing transnational tort disputes.

This article considers how courts in each jurisdiction weigh fairness, judicial efficiency, public policy, sovereignty and comity, and how product liability, environmental harm, cyber torts and global supply chains have complicated that exercise. The comparison shows the growing weight that governing law carries in securing consistency, accountability and access to justice.

The Indian perspective

Indian private law increasingly meets tort disputes with a foreign element. Transnational supply chains, cross-border financing, digital commerce and multinational regulatory exposure have given a once largely domestic field a substantial private international law dimension. A pharmaceutical company headquartered in Switzerland, manufacturing in India, distributing through a Delaware-registered platform and causing harm to a consumer in Nigeria simultaneously raises questions of liability, applicable law and competent forum – and no single legal system answers them on its own.

As people, capital and communications move across borders, the harmful act, the parties and the resulting loss often lie in different jurisdictions. A road accident abroad, an online defamation or negligence in a cross-border supply chain each raises the same threshold question: which law governs the tort? The answer is no technicality: it determines whether a cause of action exists, the scope of liability, the heads and quantum of damages, the available defences and whether any judgment can be enforced elsewhere.

Indian courts address these issues through statute, principally the Code of Civil Procedure 1908 (the CCP) and its rules on place of suing and foreign judgments, read together with the common law doctrines of lex loci delicti, lex fori, double actionability and most significant relationship tests. The Indian case law shows both doctrinal coherence and a growing attention to comparative developments.

Tort liability under Indian law

The uncodified character of Indian tort law

Indian tort law remains, in its foundations, an uncodified, common law system. The Supreme Court of India in Subramanian Swamy v Union of India[1] expressly endorsed M C Setalvad’s description of the law relating to civil wrongs as ‘an important branch of law which has remained uncodified in India’, outlined by Setalvad in the 1960 Hamlyn Trust Lectures.

Several of the most important civil rights – personal security, domestic relations, property and reputation – are vindicated through that uncodified law. On the English model, the Court noted, the action for damages has been ‘fashioned by lawyers, judges and juries’ into a body of rules ‘constantly growing in response to new concepts of right and duty and new needs and conditions of advancing civilisation’, reflecting the judge-made character of the field.

On that view, tortious liability in India is not the product of a comprehensive statute but of the judicial development of common law principles – negligence, nuisance, trespass, defamation and strict liability – supplemented piecemeal by sector-specific statutes such as the Consumer Protection Act 2019 and the Motor Vehicles Act 1988. The Court in Subramanian Swamy also confirmed that a civil action existing at common law, though uncodified, may be pursued under the general jurisdiction of the civil courts conferred by Section 9 of the CCP, provided no statute bars the suit[2]. This leaves a wide field in which judge-made tort principles operate, including in novel contexts with a cross-border element.

The absence of codification brings both flexibility and uncertainty, and the courts have used that latitude to adapt tort doctrine. The Supreme Court’s ruling in M C Mehta v Union of India[3] illustrates this creative capacity: the Court departed from the Rylands v Fletcher[4] rule of strict liability and articulated a distinctly Indian doctrine of absolute liability, under which an enterprise carrying on a hazardous or inherently dangerous activity is absolutely liable for the harm it causes, without the exceptions the English rule allows – an independent common law development rather than a borrowed one.

In a cross-border case, the court must first decide which country’s law governs the tort. That may be the law of the place where the accident happened (lex loci delicti) or, in some situations, another law that has the closest and most real connection to the dispute (‘proper law of the tort’).

The Punjab and Haryana High Court’s decision in Sona Devi v Anil Kumar[5], which arose from a bus accident in Nepal involving Indian parties and an Indian vehicle, illustrates the point. The Court began from the general rule that the law of Nepal, as the place of the accident, applied, but examining how Nepalese law capped and channelled compensation, it set that against the Indian position under the Motor Vehicles Act and applied the ‘most significant relationship’ principle.

Finding that nearly every real connection lay with India, it applied Indian law to both liability and quantum – choosing not merely between two jurisdictions but between two competing, largely judge-made tort systems to govern a transnational wrong.

A parallel development, albeit in the arbitral rather than tort context, is the Supreme Court’s decision in PASL Wind Solutions Pvt Ltd v GE Power Conversion India Pvt Ltd[6], which concerned two Indian companies that had chosen Zurich as the seat of an International Chamber of Commerce arbitration. When an award was made in GE’s favour, the debtor resisted enforcement in India, arguing that Indian parties could not validly choose a foreign seat and that the award was not a ‘foreign award’ under the Arbitration and Conciliation Act 1996. The Supreme Court rejected those objections: absent an express statutory bar, Indian parties enjoy full autonomy to choose a foreign seat; the seat fixes the juridical home and curial law of the arbitration; and an award made there is enforceable in India as a ‘foreign award’, subject only to the limited grounds in Section 48.

PASL Wind reinforces, in a different procedural setting, the structural theme of Sona Devi: Indian private international law works through an uncodified blend of statute and judge-made principle, allocating a dispute to its governing system – whether the proper law of the tort or the law of the chosen foreign seat – rather than through any comprehensive code.

Indian commentators and practitioners have increasingly favoured a ‘closest connection’ or ‘most significant relationship’ approach to complex cross-border tort disputes, in line with the American Restatement (Second) of Conflict of Laws[7] and the European Union’s Rome II Regulation[8]. The approach asks for a closer analysis than the mechanical application of lex loci delicti: the court instead weighs a range of connecting factors – the place of injury, the place of the wrongful conduct, the domicile and nationality of the parties, and the jurisdiction in which their relationship is centred.

Recognition and enforcement of cross-border tort judgments

The recognition and enforcement of cross-border tort judgments in India is governed mainly by the CCP. Sections 13 and 14 treat a foreign judgment as conclusive between the same parties on the same matter, save where a narrow statutory exception applies – want of jurisdiction, the absence of a decision on the merits, fraud, a denial of natural justice, a refusal to recognise applicable Indian law or a conflict with public policy[9]. Section 44A provides a streamlined route for money decrees, including tort damages, from the superior courts of notified ‘reciprocating territories’: such a judgment may be filed in an Indian court and executed as a domestic decree would be, subject only to re-examination on the Section 13 grounds. A judgment from a non-reciprocating state requires a fresh suit in India on the judgment or the underlying cause of action, again facing only those limited grounds of challenge.

In practice, India will enforce a foreign money judgment in tort where three conditions are met: the foreign court was competent, having a genuine connection to the dispute; it decided the case finally and on the merits after hearing both sides; and none of the Section 13 and 14 exceptions is attracted. So applied, cross-border tort damages are not re-litigated on the merits but given effect within a structured and relatively narrow framework.

Tort liability in the United States

Cross-border tort claims raise particular difficulties in the US, because tort law varies appreciably between countries and between US states. Jurisdictions differ on negligence, product liability, damages, limitation periods and defences, so the choice of governing law can shape, and sometimes decide, the outcome – in many cases determining whether the plaintiff recovers at all. It is not a procedural detail but often the central question in the dispute.

US courts once relied on the doctrine of lex loci delicti, under which the dispute was governed by the law of the place where the tort occurred.[10] An injury abroad automatically attracted the law of that country. The rule offered predictability, since the governing law followed from geography alone; but as commerce grew more international and corporate activity more complex, a rigid territorial test increasingly produced unfair results.

A defective product may be designed in the US, made in China, distributed through Europe and cause injury in South America. Applying only the law of the place of injury can disregard the stronger interest of a jurisdiction more closely connected to the parties or the conduct complained of. American courts have, for that reason, moved towards more flexible approaches better suited to modern transnational litigation.

The most influential is the ‘most significant relationship’ test in the Restatement (Second) of Conflict of Laws.[11] Under it, the court weighs several factors – the place of injury, the place of the conduct causing it, the domicile or nationality of the parties and the seat of their relationship – to identify the jurisdiction with the closest connection and the greatest interest in regulating the conduct, rather than applying the law of the place of injury by default.

The approach reflects a wider preference for flexibility and fairness in transnational litigation. Cross-border disputes often engage competing governmental interests: one state may shield local business by limiting liability, while another gives priority to consumer protection and corporate accountability. Conflict-of-laws principles allow the court to balance those interests consistently with justice, predictability and international comity.

The weight of governing law is clearest in product liability litigation. US tort law is generally more favourable towards plaintiffs than many foreign systems: US courts permit strict liability, punitive damages, extensive discovery and substantial awards for emotional distress, whereas many foreign jurisdictions require proof of negligence and cap recoverable damages. Plaintiffs injured abroad therefore often seek to sue in the US to secure the American standard.

That incentive drives forum shopping, filing a claim wherever it is thought to offer a tactical advantage. US courts have developed tools to check abusive forum shopping, the most important being the doctrine of forum non conveniens, which permits a court to dismiss a case where another forum is clearly the more appropriate place to resolve it.[12] In deciding whether to dismiss, the court weighs the convenience of witnesses, access to evidence, the local interest in the dispute, judicial efficiency and respect for foreign sovereign authority.

The US Supreme Court’s decision in Piper Aircraft Co v Reyno remains one of the leading authorities on this principle.[13] There, Scottish plaintiffs sued in the US after an air crash in Scotland involving American aircraft manufacturers. Although US law was the more favourable, the Supreme Court held that the Scottish courts were the more appropriate forum, stressing that the prospect of a less favourable foreign law does not by itself bar dismissal on forum non conveniens. The decision treats fairness, convenience and international judicial cooperation as central to the resolution of cross-border tort claims.

Governing law also matters greatly in claims against multinational corporations. A corporation operating across many jurisdictions makes it hard to fix where liability lies and which law governs. Environmental disasters, defective products, labour abuses and supply-chain misconduct often produce claims in which the conduct and the injury lie in different countries, and victims turn to US courts where the local system offers limited compensation or weak enforcement.

US courts must, however, balance corporate accountability against concerns of international sovereignty and judicial overreach. That tension is sharpest in litigation under the Alien Tort Statute (ATS)[14], which once allowed foreign plaintiffs to bring certain international law claims in the federal courts. Recent Supreme Court decisions – Kiobel v Royal Dutch Petroleum Co.[15] and Jesner v Arab Bank[16] – have sharply narrowed the extraterritorial reach of the ATS, the Court emphasising that US courts should not intrude unduly into foreign affairs and should respect the sovereignty of other jurisdictions.

Newer forms of harm test these principles further. Cyber torts, online defamation, data breaches and internet fraud involve conduct occurring at once in several jurisdictions, and a territorial rule is difficult to apply where the conduct takes place in cyberspace rather than within identifiable borders. Climate and environmental litigation pose the same difficulty: pollution originating in one country may cause harm across borders, raising hard questions of jurisdiction, causation and applicable law. In each context, courts are required to adapt conflict-of-laws doctrine to conditions its traditional rules did not anticipate.  

The Indian and US experiences together illustrate a shared insight in cross-border tort litigation: the choice of governing law is not a procedural technicality but the foundation on which the entire claim rests.

Under the Indian approach, where a tort dispute is connected to more than one country and India is among them, the threshold question is which country's law applies. That answer largely settles whether a valid claim exists, how far liability extends, the heads and quantum of damages, the available defences, and the prospects of enforcement abroad. Because both Indian tort law and the Indian rules on foreign elements are largely judge-made rather than codified, they remain able to adapt to new forms of cross-border harm. The courts can weigh the connecting factors, give effect to the parties' choices where the law permits, and enforce foreign judgments under Sections 13, 14 and 44A of CPC without retrying the case. Uncodified but principled, the Indian model keeps governing law at the centre of cross-border tort litigation.

Within the US system, the conflict-of-laws doctrine provides the framework for resolving these transnational disputes. The choice of governing law affects every part of a tort claim – the standard of liability, the available remedies, the defences and the procedural rights of the parties – and its importance will grow as international dealings expand. Modern US choice-of-law doctrine seeks fairness, predictability and respect for foreign sovereignty while keeping a meaningful path to justice. No system can remove the difficulty of cross-border litigation, but the development of that doctrine is a sustained effort to fit established principles to an interconnected world – one in which governing law is not a technicality but a foundation of justice in international tort litigation.