Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.
Why it matters
It is the Indian authority on the limits of party autonomy, and it delivers a lesson from Module 2 inside Module 4: a jurisdiction clause is not self-executing. Students who can state Vita Food and stop lose marks here.
Facts
Bills of lading for cashew nuts shipped to Cochin carried a clause providing that the contract should be governed by English law and disputes determined in England or, at the carrier's option, at the port of destination according to English law, to the exclusion of the jurisdiction of the courts of any other country. The consignee sued at Cochin for short-landing.
Held
Three contributions.
On the instrument. It is a settled principle of private international law governing bills of lading that the consignee or endorsee derives the same rights and title in respect of the goods covered by the bill as the shipper had.
On the limits of autonomy. In English law there are limitations on the freedom to choose the governing law: the choice must be bona fide and legal and not against public policy; it may not be permissible to choose a wholly unconnected law which is not otherwise a proper law of the contract; the courts have a residual power to strike down, for good reason, a choice-of-law clause totally unconnected with the contract; and where there is no express choice it is open to the court to determine whether there is an implied or inferred choice in the parties' contract.
On submission. Although on the jurisdiction clause only the English court had jurisdiction and Indian law would not apply, the appellant had nonetheless submitted to the Indian court: no ground as to jurisdiction had been taken in the memorandum of appeal below or in the special leave petition.
Reasoning
Step one — autonomy is the rule, not a licence. Vita Food Products Inc. v. Unus Shipping Co. Ltd. is often quoted for absolute freedom, but the conditions travel with it, and this Court states them in terms.
Step two — a residual power is needed because a wholly unconnected choice is a device. Allowing parties to attach any law at all to any transaction would let them escape every mandatory rule by drafting.
Step three — a clause must be asserted. The Court quoted the rule that an appearance merely to protest that the court lacks jurisdiction is not submission, even coupled with an application for a stay pending proceedings abroad — and then found that the objection had simply not been taken, and was waived.
Exam use
It opens: To what extent may parties choose the law governing their contract? — and it is the Indian authority to cite alongside Vita Food.
Write the sequence. Vita Food for the rule and its three conditions — bona fide, legal, not against public policy; this case for the Indian statement and the residual power; NTPC v. Singer Company for the three-tier ladder of express, implied and imputed choice, and for the exclusion of renvoi in contract.
Draw the practitioner's moral from the submission point. A jurisdiction clause must be pleaded, and pleaded at once, or it is lost — Re Dulles' Settlements and S.A. Consortium v. Sun and Sand supply the same rule in Module 2.
It does not decide that a wholly unconnected choice is always void; the power to strike down is residual and exercised for good reason.