The law of anti-suit injunctions in India - Litigation Committee newsletter article, April 2020

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Tulip De

SS Rana & Co, New Delhi

litigation@ssrana.com

Priya Adlakha

SS Rana & Co, New Delhi

litigation@ssrana.com

An anti-suit injunction order is made against a party in personam restraining them from instituting a legal action or from continuing with proceedings that have already been instituted. This injunction can be granted in respect of proceedings in both the local and foreign courts. In other words, anti-suit injunctions prohibit a party from taking or continuing a case in another jurisdiction. Anti-suit injunctions are used to enforce exclusive jurisdiction clauses and to prevent forum shopping.

Anti-suit injunctions in India broadly fall into two main categories: to prevent a contractual breach, or to prevent a non-contractual breach.

The important considerations when granting an anti-suit injunction to prevent a contractual breach includes:

  • the court must have jurisdiction in relation to the party against whom an anti-injunction is granted;
  • if the proceedings have advanced to a stage where it is not equitable to grant an anti-suit injunction, then the court will dismiss the application for anti-suit injunction;
  • the court can grant an anti-suit injunction only in respect of a valid agreement;
  • normally, the court will give effect to the intention of the parties as expressed in the agreement entered into by them.

The Hon’ble Supreme Court in Modi Entertainment Network and Anr v WSG Cricket PTE Ltd[1] has propounded the principles for granting anti-suit injunctions. They are as follows:

  1. In exercising discretion to grant an anti-suit injunction, the court must be satisfied of the following aspects –
  2. the Defendant, against whom injunction is sought, is amenable to the personal jurisdiction of the court;
  3. if the injunction is declined the ends of justice will be defeated and injustice will be perpetuated; and
  4. the principle of comity – respect for the court in which the commencement or continuance of action/proceeding in sought to be restrained – must be borne in mind.
  5. In a case where more than one forums are available, the court will examine which is the forum conveniens having regard to the convenience of the parties and may grant an anti-suit injunction in regard to proceedings which are oppressive or vexatious or in a forum non-conveniens.
  6. 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.
  7. 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, 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.
  8. 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.
  9. 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.
  10. 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.

In Board of Control for Cricket in India v Essel Sports (Pvt) Ltd[2] the Hon’ble Delhi High Court held that:

‘In a situation where an Indian Court is moved for an anti-suit injunction, two possible 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 if summons are issued outside 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.’

Furthermore, in (India TV) Independent News Service Pvt Ltd v India Broadcast Live LLC & Ors,[3] the Hon’ble Delhi High Court held that while deciding an application for anti-suit injunction, held that ‘factors such as convenience of parties, expenses involved and law governing the transaction are important while determining the appropriate forum’.

However, there have been instances where the courts have refused to grant anti-suit injunction orders, and the Supreme Court has also observed that anti-suit injunctions should be granted sparingly and not as a matter of routine and that before passing the order of anti-suit injunction, courts should be extremely cautious.[4]

In another instance, the High Court of Calcutta in Rotomac Electricals Pvt Ltd v National Railway Equipment Company,[5] while refusing to grant an anti-suit injunction, the Hon’ble Court observed that: ‘when two parties to a contract belong to two different countries and proceedings are initiated in the country of origin of one of the parties to the contract, it cannot be said that the proceedings are initiated in a forum non conveniens, if the forum is competent otherwise. When the parties to a suit belong to different countries thousands of miles away from each other, one or the other of the parties would be inconvenienced. Proceedings in India would not be convenient to the party from the United States and proceedings in United States would not be convenient for the party from India.’

Therefore, the question of whether or not an anti-suit injunction may be granted by an Indian court varies from case to case, as the facts of each case may be peculiar to one but not to the other.


Notes

[1] Modi Entertainment Network and Anr v WSG Cricket PTE Ltd, (2003) AIR SC 1177.

[2] Board of Control for Cricket in India v Essel Sports (Pvt) Ltd, (2010) 167 DLT 176.

[3] (India TV) Independent News Service Pvt Ltd v India Broadcast Live LLC & Ors, (2007) 35 PTC 177 (Del).

[4] Dinesh Singh Thakur v Sonal Thakur, (2018) AIRSC 2094.

[5] Rotomac Electricals Pvt Ltd v National Railway Equipment Company, CS No 10 of 2011.

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