17 Jan 2010

Anti-Suit Injunction: The concept revisited

In a recently reported decision the Delhi High Court has taken stock of the various decisions of the Supreme Court and English, American, Canadian and Australian courts on the issue to elaborate upon the doctrine of anti-suit injunction as meaning one wherein a court can direct a party not to pursue the matter before another court. 

The High Court inter alia explained the principles relating to anti-injunction suit in its decision in HORLICKS LTD. AND ANR. v. HEINZ INDIA (PVT.) LIMITED in the following terms;

17. The doctrine of anti suit injunction as applicable to international forums is not disputed by the learned counsel for the parties. However, this doctrine has to be applied with care and caution as it involves the issue of respect for corresponding international forums.
18. The aforesaid legal position is abundantly clear in view of the judgment of the Supreme Court in Modi Entertainment Network and Anr. v. W.S.G. Cricket Pte. Ltd.; AIR 2003 SC 1177. It was observed in the said judgment that the courts in India like the courts in England are courts of both law and equity and thus the principles governing grant of injunction an equitable relief by the court would also govern grant of anti suit injunction, which is a species of injunction. However, the rule of Comity of Courts require this power to be exercised sparingly because such an injunction though directed against a person in effect causes interference in exercise of jurisdiction by another court. The test adopted by the House of Lords in Castanho v. Brown and Root (U.K.) Ltd and Anr; (1981) AC 557 'to avoid injustice' was noted. A reference was also made to SNI Aerospatiale v. Lee Kui Jak and Anr; (1987) 3 All ER 510 and it was noticed that in recent cases the test is whether the foreign proceedings are “oppressive or vexatious”. Although, Lord Goff explained, in SNI Aerospatiale v. Lee Kui Jak and Anr‟s (supra) that these words could have a different meaning in different contexts, he was inclined, in Airbus Industrie GIE v. Patel and Others; {(1998) 2 All ER 257}, to agree, albeit obiter, with Judge Sopinka in Amchem Products Incorporated v. British Columbia (Workers‟ Compensation Board); 1993 CanLII 124 (SCC)., who preferred to use, simply, „ends of justice‟. However, Lord Goff did not expressly abandon those words. The High Court of Australia in CSR Ltd v. Cigna Insurance Australia Ltd. and Ors.; 146 A.L.R. 402 used them in the sense that only if there is nothing which can be gained by them over and above what may be gained in local proceedings.

20. The principles governing anti suit injunction were set out in para 23 of the Modi Entertainment Network and Anr. v. W.S.G. Cricket Pvt. Ltd‟s case (supra), which are as follows:
“From the above discussion the following principles emerge:

(1) In exercising discretion to grant an anti-suit injunction the court must be satisfied of the following aspects:- (a) the defendant, against whom injunction is sought, is amenable to the personal jurisdiction of the court; (b) if the injunction is declined the ends of justice will be defeated and injustice will be perpetuated; and (c) the principle of comity -- respect for the court in which the commencement or continuance of action/proceeding is sought to be restrained -- must be borne in mind;
(2) in a case where more forums than one are available, the Court in exercise of its discretion to grant anti-suit injunction will examine as to which is the appropriate forum (Forum conveniens) having regard to the convenience of the parties and may grant anti-suit injunction in regard to proceedings which are oppressive or vexations or in a forum non-conveniens;
(3) Where jurisdiction of a court is invoked on the basis of jurisdiction clause in a contract, the recitals therein in regard to exclusive or non-exclusive jurisdiction of the court of choice of the parties are not determinative but are relevant factors and when a question arises as to the nature of jurisdiction agreed to between the parties the court has to decide the same on a true interpretation of the contract on the facts and in the circumstances of each case;
(4) a court of natural jurisdiction will not normally grant anti-suit injunction against a defendant before it where parties have greed to submit to the exclusive jurisdiction of a court including a foreign court, a forum of their choice in regard to the commencement or continuance of proceedings in the court of choice, save in an exceptional case for good and sufficient reasons, with a view to prevent injustice in circumstances such as which permit a contracting party to be relieved of the burden of the contract; or since the date of the contract the circumstances or subsequent events have made it impossible for the party seeking injunction to prosecute the case in the court of choice because the essence of the jurisdiction of the court does not exist or because of a vis major or force majeure and the like;
(5) where parties have agreed, under a non- exclusive jurisdiction clause, to approach a neutral foreign forum and be governed by the law applicable to it for the resolution of their disputes arising under the contract, ordinarily no anti- suit injunction will be granted in regard to proceedings in such a forum conveniens and favoured forum as it shall be presumed that the parties have thought over their convenience and all other relevant factors before submitting to non-exclusive jurisdiction of the court of their choice which cannot be treated just an alternative forum;
(6) a party to the contract containing jurisdiction clause cannot normally be prevented from approaching the court of choice of the parties as it would amount to aiding breach of the contract; yet when one of the parties to the jurisdiction clause approaches the court of choice in which exclusive or non-exclusive jurisdiction is created, the proceedings in that court cannot per se be treated as vexatious or oppressive nor can the court be said to be forum non-conveniens; and
(7) the burden of establishing that the forum of the choice is a forum non- conveniens or the proceedings therein are oppressive or vexatious would be on the party so contending to aver and prove the same.”
21. We may notice that the aforesaid judgment is relies on the earlier judgment of the Supreme Court in Oil and Natural Gas Commission v. Western Company of North America; (1987) 1 SCC 496. The said judgment was almost the first case where exercising jurisdiction under Section 151 of the said Code, the power of anti suit injunction was exercised.
The High Court, relying upon the decision of the Supreme Court in Cotton Corporation of India Limited v. United Industrial Bank Limited and Ors; (1983) 4 SCC 625 went on to declare that the principles for grant of anti-suit injunction applied in respect of domestic courts as well but only in a limited sense and thus even though the court had inherent power to direct a party not to pursue remedies before another Indian court as well, it cannot do so when the other court is one of co-ordinate or superior jurisdiction in view of the provisions of Specific Relief Act wherein the Parliament has provided otherwise.

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