Report No. 62

Need for Amendment

1B.22. Whether it is desirable to cover extra-territorial accidents.-

The next question therefore is whether (a) besides the case of ships (which is already covered, though in an indirect way),1 it is necessary to cover other extra-territorial accidents, and (b) whether as regards ships, the position should be changed. Opinion on the subject of competence from the point of view of international law2 is very much in a fluid state. One has, therefore, to proceed cautiously before extending the scope of the Act. As the Supreme Court of the United States has put it:3

"In dealing with international commerce we cannot be unmindful of the necessity for mutual forbearance if retaliations are to be avoided; nor should we forget that any contact which we hold sufficient to warrant application of our law to a foreign transaction will logically be as strong a warrant for a foreign country to apply its law to an American transaction."

If at all the extra-territorial application of the Act is to be further extended, it can be confined to Government servants, or to cases where the employer as well as the employee is a citizen of India. From the point of view of international law, there may not be a very serious dispute about the exercise of legislative power where both the parties are the citizens of the country. Hence, if extra-territorial application is extended to those two situations, no serious objection from the point of view of international law is likely to arise. The moment, however, one crosses these boundaries, and tries to regulate compensation for accidents occurring abroad where only one of the parties is a citizen of India, difficulties are bound to arise-both legal and practical.

1. Section 15.

2. See discussion, supra.

3. Lauritzen v. Larsen, (1953) 345 US 57.