Introduction
Anti-suit injunctions are a feature of private international law. It is a species of injunctions by which the court of a given jurisdiction (India for the purpose of this article) will restrain a party defendant in the proceedings before it from pursuing a remedy of suit in a foreign jurisdiction. It is essentially a restraining order, restraining the party to the litigation, from taking an action or from pursuing an action in a foreign jurisdiction and not any kind of restraining order against the foreign court seized of the proceedings. In a separate article at https://rdlawchambers.com/research-articles/ , we have dealt with the topic of Anti-Arbitration injunctions.
When does the Court exercise Jurisdiction
The jurisdiction to restrain a litigant is exercised only if the court has general or specific personal jurisdiction against such a litigant.
Circumstances in which Anti-suit injunction Proceedings will be relevant and useful
Commercial Disputes
Trade and commerce often give rise to commercial disputes between parties located in different jurisdictions, and this raises the question of which country should have jurisdiction to try and entertain the cause giving rise to the dispute in a commercial transaction. If a suit or proceeding is instituted in a jurisdiction which is either ousted by agreement between the parties or not otherwise proper looking at the nature of transaction and surrounding factors, party facing such proceedings may initiate an anti-suit injunction proceeding.
Matrimonial Disputes
Anti-suit injunction is also relevant in matrimonial matters in times when many a couples from India get married in India in terms of provisions of the Hindu Marriage Act and later on shift to foreign countries for work or permanent immigration giving birth to a child in a foreign jurisdiction. In these set of circumstances, when a dispute arises between a husband and a wife relating to marriage or custody of a child, one of the parties may initiate litigation in a foreign country and another party to the marriage may return to India and might initiate proceedings pertaining to divorce or custody of a child in India. In such a situation, an anti-suit injunction against the party living in a foreign country is a possibility, if various propositions laid down by the Indian courts relating to the grant of such injunctions are met.
IMPLICATIONS AND EFFECT OF ANTI-SUIT INJUNCTION
It is important to understand that in either a commercial or matrimonial matter, when an anti-suit injunction is issued by the Indian court, there is no real way of enforcing such an injunction if, despite the injunction order, a party chooses to continue pursuing the proceedings before the foreign court.
The benefit of an anti-suit injunction, however, will be that the holder of such an injunction can resist an action for enforcement of any judgment or order passed by the foreign court. It may be a possibility to take out an action for contempt of court against the party pursuing the proceedings in a foreign court after being issued with anti-suit injunction by the Indian court (the remedy of contempt will be effective only if the foreign party has connections with India necessitating it to keep visiting India).
Grounds for Issuance of Anti-suit Injunction
Oppressive, Vexatious or Unconscionable Proceeding
In terms of the principles of common law evolved on the subject, the anti-suit injunction could be granted against the defendant pursuing a proceeding in a foreign country if it can be shown the defendant has acted in a vexatious oppressive or unconscionable way in the process of commencing the proceedings in a foreign court.
No court has found it fit to undertake the exercise of exactly defining what is meant by vexatious, oppressive, or unconscionable conduct regarding a foreign proceeding. However, in determining this aspect, the Indian court will take into consideration whether an action in a foreign country is initiated in bad faith or with the intent of harassing the plaintiff before the Indian court, whether the proceeding is bound to fail, having been initiated with a view to harass the plaintiff before the Indian court, whether the plaintiff before the Indian court will lose any rights or advantages in a proceeding before the foreign court and whether the foreign court is a forum non-conveniens.
In determining this aspect, the courts will take into consideration the facts of the case, the procedural safeguards, where the evidence gathering process is easier and can be carried out more effectively etc.
Breach of Agreement
Another ground on which the court could grant the Antisuit injunction would be a breach of the agreement.
If the jurisdiction clause in an agreement provides for exclusive jurisdiction of a particular court or a court in a particular jurisdiction, issue becomes much simpler and normally a party bringing an action in a foreign court in violation of the agreement for exclusive jurisdiction will be restrained from pursuing such action by way of an anti-suit injunction.
A non-exclusive jurisdiction clause, however, can provide for the jurisdiction of the courts in different jurisdictions. In case of such a clause, the court will seek to determine whether the intention of the parties to a contract appears to be to confer exclusive jurisdiction on a particular court, although the clause might, on the face of it and at first blush, appear to be a non-exclusive jurisdiction clause. For determining this, the court will again take into consideration the contextual background, and facts concerning the matter, place of transaction between the parties, place of payment and any correspondence between the parties on the subject matter of the finalisation of the contract etc.
In some cases, it may be that the parties may not have explicitly specified the exclusive jurisdiction of a particular court, however, they may have made an agreement for the choice of law and an argument will be available that choice of the governing law will essentially reflect an agreement between the parties to have the dispute adjudicated under the jurisdiction of the court that has the expertise of the governing law.
Indian judgments on the subject matter of Anti-suit Injunction
While there are many judgments on the subject matter, the most renowned one on the subject that frequently keeps getting referred to in subsequent judgments is the judgment in the case of Modi Entertainment Network v. WSG Cricket Pte. Ltd.[i] delivered by the Supreme Court of India. The Supreme Court deduced the principles regarding the grant of injunction and has held that:-
- 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;
- 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 vexatious or in a forum non-conveniens;
- 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;
- A court of natural jurisdiction will not normally grant 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, 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;
- 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;
- 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
- 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.
Who is a defendant who can be said to be Amenable to Personal Jurisdiction?
While the rest of the principles of the judgment are self-explanatory, it is important to note that in terms of this decision, the anti-suit injunction could be granted against the defendant who is amenable to personal jurisdiction of the concerned court. The court in the state will normally exercise general personal jurisdiction over the subjects of the country. However, when the court is to satisfy itself about having personal jurisdiction over the foreign resident defendant, what is required to be looked at is whether the court has specific personal jurisdiction as against the general personal jurisdiction.
The American courts determine the defendant’s amenability to specific personal jurisdiction by looking at whether the defendant purposefully availed himself of the privilege of conducting activities within the jurisdiction of the court through an act or transaction within the forum state, whether the cause of action arises out of the forum related activities of the defendant and whether the acts of the defendant or its consequences have substantial enough connection with the forum to make the exercise of jurisdiction over the defendant reasonable. The US courts have assumed specific personal jurisdiction even based on the presence of the website of a given corporation in the US.
The principles under Indian law pertaining to finding specific personal jurisdiction could be subject to the provisions of the Code of Civil Procedure,1908 and relevant sections regarding jurisdiction. Another important decision in the subject matter explaining the concept of personal jurisdiction is in the case of M/S Indiabulls Real Estate Ltd. vs M/S Veritas Investment Research.[ii] by Delhi High Court.
Author: Ravish Bhatt, Managing Partner, R&D Law Chambers LLP.
Email: ravish@rdlawchambers.com
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