Anti-suit Injunctions: Practice and Procedure

Anti-suit Injunctions: Practice and Procedure

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INTRODUCTION:

The Code of Civil Procedure, 1908 neither defines nor deals with anti-suit injunctions. When a court restrains a party to a suit/proceeding before it from instituting or prosecuting a case in another court including a foreign court, it is called anti-suit injunction. An anti-suit injunction can be issued on the ground of equity and good conscience and to avoid injustice. International anti-suit injunction though operates between parties, it effectively restricts jurisdiction of the foreign sovereign court. International anti-suit injunction can be granted where there is duplication of parties and issues and prosecution of simultaneous proceedings would affect speedy and effective determination of the case.[1]

No specific rules govern the grant of anti-suit injunction. Discretion in the matter of granting anti-suit injunction can be exercised only where compelling circumstances exist and to prevent irreparable miscarriage of justice. The courts in India like the courts in England are courts of both law and equity. The principles governing the grant of injunction, which is in the nature of an equitable relief, by the court will also govern the grant of an anti-suit injunction which is but a species of injunction. It is a common ground that the courts in India have power to issue an anti-suit injunction to a party over whom it has personal jurisdiction in an appropriate case.

DOCTRINE OF ANTI-SUIT INJUNCTION AND THE PRINCIPLE OF FORUM NON CONVENIENS:

An anti-suit injunction involves a restraint on a party seeking to approach a foreign court. As against this, wherein an Indian Court is approached by a party for stay of its own proceedings, then, the Indian Court necessarily delves into issues such as: forum conveniens, that is, which would be the appropriate forum- the Indian Court or the foreign court; the jurisdictional clause as to the choice of court in the event the dispute emanates from a contract; and in some cases it is called upon to deal with an arbitration agreement obtaining between the parties. In determining, which would be the appropriate forum, that is, Indian Court or the foreign court- it necessarily takes into account the forum with which the dispute has a “real” and “substantial” connection.

In a situation where an Indian Court is moved for an anti-suit injunction, possibly, two situations arise so far as the defendant is concerned: one, where a party against whom an anti-suit injunction is sought is an Indian party or resident in India; and the other, where defendant is a foreign party or resident abroad. Insofar as a party is Indian or resident in India, it presents no difficulty; however, in case of a foreign party or those resident abroad, the court in India will necessarily have to tread carefully in issuing an anti-suit injunction as in such circumstances it will have to base it on the principle of sufficiency of connection in the context of appropriateness of the forum. Courts in India will have to be even more circumspect where the foreign party has already instituted an action in a foreign court. An Indian Court will necessarily bear in mind that if summons are issued outside the territorial jurisdiction of Indian Courts, it may not be complied with or, that the foreign party may attempt to seek remedy in the jurisdiction of the court where it is resident. However, subsistence of such situation should not deter an Indian Court to issue an injunction if it otherwise finds that it has jurisdiction.[2]  An anti-suit injunction is directed against a person and hence, acts in “personam” and not against a court in which the defendant proposes to institute an action, although, no doubt, the result in effect would be, which is unavoidable, that proceedings cannot be initiated in the foreign court by the defendant.

An anti-suit injunction cannot be issued by a domestic forum against another domestic forum in India in view of the specific bar contained in Section 41(b) of the Specific Relief Act, 1963, which states that, an injunction cannot be granted to restrain any person from instituting or prosecuting in a court not subordinate to that from which the injunction is sought. Law confers on every person an inherent right to bring a suit of civil nature of one’s choice, at one’s peril, howsoever frivolous the claim may be, unless barred by a statute. There may be more than one court which may have jurisdiction in the matter but so long as a particular court has the jurisdiction, the privilege is of the plaintiff. The principle of forum non conveniens has no application to domestic forums in India.[3]

TESTS FOR ISSUANCE OF ANTI-SUIT INJUNCTION:

The tests for issuance of the anti-suit injunction to a person amenable to the jurisdiction of the court in person has been varying; firstly, it was the test of ‘equity and good conscience’, later, the test adopted was that of, ‘to avoid injustice’. The test adopted in the recent cases is whether the foreign proceedings are ‘oppressive or vexatious’. Some foreign courts (such as the Supreme Court of Canada) have adopted the test of the requirement of ‘the ends of justice’. Thus, the essence or the ultimate objective is to enquire how best the interests of justice will be served, that is, whether grant of anti-suit injunction is necessary in the interest of justice.[4] Regard being had to the grant of an anti-suit injunction, a party to a contract containing the 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 a “forum non conveniens”. It is important to note that, the burden of establishing that the forum of 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.

In sum and substance, the principle of forum non conveniens applies to foreign forums, and Indian Courts can apply the said principle vis-à-vis foreign forums, or, while exercising discretionary jurisdiction under Article 226 of the Constitution of India, 1950. The principle of forum non conveniens does not apply to civil suits in India which are governed by the Code of Civil Procedure, 1908. For there being no provision under the Code of Civil Procedure, 1908, recourse to Section 151 of Code of Civil Procedure, 1908 is not permissible for application of the principle of forum non conveniens to domestic forums especially keeping in mind that it is the other side of the coin of the doctrine of anti-suit injunction. An aggrieved party can, none the less, approach the Supreme Court of India under Section 25 of the Code of Civil Procedure, 1908 for the grant of necessary relief in this behalf.

PRINCIPLES GOVERNING THE GRANT OF AN ANTI-SUIT INJUNCTION:

In exercising the grant of an anti-suit injunction the court must be satisfied of the following aspects: (1) the defendant, against whom injunction is sought, is amenable to the personal jurisdiction of the court; (2) if the injunction is declined, the ends of justice will be defeated and injustice will be perpetuated; and (3) the principle of comity i.e. respect for the court in which the commencement or continuance of action/proceeding is sought to be restrained must be borne in mind.

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 i.e. forum conveniens, having regard to the convenience of the parties and may grant anti-suit injunction in regard to proceedings which are oppressive or vexatious or in a forum non conveniens. Moreover, where jurisdiction of the 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 and fair interpretation of the contract based on the facts and in the circumstances of each case.

A court of natural jurisdiction will not normally grant an anti-suit injunction against a defendant before it, where parties have agreed to submit to the exclusive jurisdiction of a court (including a foreign court), save in exceptional cases for good and sufficient reasons, with a view to prevent injustice. Further, where parties agree under a non-exclusive jurisdiction clause, to approach a neutral foreign forum and be governed by the law applicable to it for resolution of their disputes arising under the contract, ordinarily, no anti-suit injunction will be granted, as it will be presumed that the parties have agreed after thinking over their convenience and all other relevant factors before submitting to such a forum.

EXCURSUS:

From the above discussion, following conclusions can be drawn:

  1. In an anti-suit injunction, one court grants an injunction, restraining the parties from approaching another court. It must be kept in mind that the court granting an anti-suit injunction must otherwise have jurisdiction over the matter. Similarly, the court refraining from entertaining the matter on the principle of forum non conveniens must also have jurisdiction to entertain the matter, however, it refrains from entertaining the matter because it considers itself to be an inappropriate forum;
  2. The doctrine of forum non conveniens is invoked by a court to not entertain a matter presented before it in view of the fact that there exists a more appropriate court of competent jurisdiction which would be in a better position to decide the lis between the parties;
  3. Doctrine of forum conveniens requires the parties to agitate issues before a court of competent jurisdiction which is also a convenient court apropos all the parties to the dispute;
  4. Doctrine of anti-suit injunction which is premised on the doctrine of forum non-conveniens, has to be applied with due care and caution as it involves issues as regards, respect for corresponding international forums;
  5. Rule of comity of courts requires that exercise of this power, that is, grant of anti-suit injunction, must be exercised sparingly because an anti-suit injunction though is directed against a person, in effect, it causes interference in exercise of jurisdiction by another court;
  6. Fundamental principle behind the grant of an anti-suit injunction is to choose that forum in which the case can be tried more properly/suitably, keeping in mind the interest of all the parties to the dispute.

[1] See: PPN Power Generating Co. Ltd. v. PPN (Mauritius) Co., 2004 SCC Online Mad 668

[2] See: Board of Control for Cricket in India v. Essel Sports (P) Ltd., 2010 SCC Online Del 443

[3] See: Horlicks Ltd. v. Heinz India (P) Ltd., 2009 SCC Online Del 3342

[4] See: Modi Entertainment Network v. W.S.G. Cricket Pte. Ltd., (2003) 4 SCC 341

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Shivam Goel
Shivam Goel; B.Com (H), LL.B. (Delhi University), LL.M. (NUJS, Kolkata); Author of: Corporate Manslaughter and Corporate Homicide: Scope for a New Legislation in India, Partridge India, 2015; Associate, S.G. & Co. (New Delhi); advocate.shivamgoel@gmail.com