Anti Suit meaning.
Anti-suit injunction refers to an extraordinary procedure
where a court issues an order to the effect that proceedings in a second
jurisdiction should not precede. Anti-suit injunction is necessary to prevent
an irreparable miscarriage of justice.
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 vexatious or in a forum non-conveniens.
… (7) The burden of establishing that the forum of choice is a forum non-convenience
or the proceedings therein are oppressive or vexatious would be on the party so
contending to aver and prove the same.
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IN THE HIGH COURT OF DELHI AT NEW DELHI
SUBJECT : DISPUTE REGARDING SUPPLY
CS (OS) No.1705 of 2002
Date of decision : 25.04.2007
M/S SWATI ALUMINIUM LTD & ORS ...PLAINTIFFS
Through:
Mr.K.T.S.Tulsi, Sr. Adv with
Mr.Gaurav
Bhargava, Advocate
- VERSUS -
M/S MULLINS STEERING GEARS & ORS ...DEFENDANTS
Through: Defendants have been
proceeded ex
parte vide
Order dated
14.03.2007.
SANJAY KISHAN KAUL, J. (ORAL)
(1)Plaintiff no.1 is a public limited company engaged in
business of supplying
steering boxes.
Plaintiff no.2 is a director of plaintiff no.1 and is stated to have
represented plaintiff
no.1 in the negotiations with defendants for supply of such
steering boxes.
Plaintiff nos 3 & 4 are stated to the proprietor firms.
(2)The aforesaid negotiations are stated to have done on or
about 20.01.1999 which
resulted in the plaintiff no.2 receiving a memorandum from
one Mr. Bill Mullins of
defendant no.1/Company
regarding steering boxes and blue prints along with
drawings and specifications for the steering boxes which the
defendant no.1 wanted
to procure. The
supply is stated to have started some time in July, 2000. The
invoices expressly state declaration of exclusive
jurisdiction of Delhi Courts.
Plaintiff no.1 is also agreed to have invested $ 60,000 vide its letter dated
16.07.2001 to get the tooling of Vega Boxes ready but
subject to the condition of
defendant no.1 procuring at least 150 boxes per month for
the next five years. (3)The dispute
started between the parties on 24.04.2002 almost a year after supply
on account of the allegation of defendant no.1 that there
were problems with the
consignments received.
Defendant no.1 even initiated recall proceedings before the
National Highway Traffic and Safety Administration categorizing the consignment
as hazardous for use in USA.
Thereafter the defendants on 09.08.2002 are stated to
have approached the District Courts in Arizona for grant of
injunction in favour of
the said defendants against the plaintiffs to prevent the
continued distribution of the
product being supplied by the plaintiffs as also for
damages.
(4)The plaintiffs have thus filed the present suit in the
nature of anti suit injunction in
view of the exclusive jurisdiction conferred on the Delhi
Courts by reason of
agreement between the parties. Summons in the suit and notice in the
application
were issued by the Court but no interim injunction orders
were granted in favour of
the plaintiffs. This
resulted in the plaintiffs filing an appeal before the Division
Bench which granted such an interim order on 18.11.2002 and
confirmed the same
on 19.08.2003 in FAO (OS) No.382/2002. Defendants herein did not put in
appearance before the Division Bench. In the present suit also, the defendants
have
also not put in appearance
and have been proceeded ex parte.
(5)The plaintiffs have filed the affidavits of evidence of
Mr. Vivek Lakhotia, plaintiff
no.2 who has proved the relevant resolutions authorizing
institution of the suit on
behalf of plaintiff nos 1, 3 & 4 as ExPW1/A, ExPW1/B
& ExPW1/C respectively.
The memorandum dated 20.01.1999 has been proved as ExPW1/D
and the copy of
the initial invoice dated 11.07.2000 has been proved as
ExPW1/E. Another set of
invoices has been proved as ExPW1/H. The affidavit affirms to what has been set
out in the plaint and it is not necessary to get into greater detailed discussion in this
behalf since the matter only relates to an anti suit injunction. The initial invoice
dated 11.07.2000 and other invoices contained the following
declaration:
“We declare that this invoice shows the actual price of the
goods described and that
all particulars are true and correct. All dealings
are subject to Delhi Jurisdiction.”
(6)A reading of the afore-declaration shows that the parties
have agreed to confer
exclusive jurisdiction on the Delhi Courts. It is trite to say that the parties are not
precluded from conferring exclusive jurisdiction on any Court
which would be one of
the Courts having territorial jurisdiction to try and
determine the suit. The bar
comes into play only on conferring the jurisdiction on a
Court which has no
jurisdiction in respect of the subject matter. The exception to this is where parties
agree to confer jurisdiction on a foreign court in a neutral
territory. (7)Learned senior counsel
for the plaintiff contends that the anti suit injunction
prayed for in the present suit is liable to be granted by
this Court in view of the Delhi
Courts certainly being one of the Courts having
jurisdiction, the plaintiffs being
based and the goods being supplied from Delhi. Thus the Delhi Courts alone would
have the jurisdiction in the matter.
(8)Learned counsel for the plaintiff has relied upon the
judgment of the Modi
Entertainment Network v. WSG Cricket Pte. Ltd; (2003) 4 SCC
341 dealing with the
ambit and scope of an anti suit injunction to restrain proceedings
in a foreign court.
It has been observed that Courts in India are both Courts of
law and equity and the
principles governing grant of injunction – an equitable
relief – by a Court will also
govern grant of anti suit injunction which is but a species
of injunction. It has further
been observed that Courts in India have power to issue anti
suit injunction to a party
over whom it has personal jurisdiction, in an appropriate
case though the power
ought to be exercised sparingly. The relevant principles have been extracted
in Para
24 as under:
“ 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 perpetrated; 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 vexatious
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 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 part 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 heir 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 the non exclusive
jurisdiction of the court of
their choice which cannot be treated just as 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
crated, 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.
7)The burden of establishing that the forum of choice is a
forum non conveniens or
the proceeding therein are oppressive or vexatious would be on the party so
contending to aver and prove the same. “
(9)A perusal of the aforesaid principles shows that while
examining the question of
grant of anti suit injunction, the aspect of forum conveniens would have to be
considered. However, where jurisdiction of a court is invoked on the basis of a
jurisdiction clause in a contract, anti suit injunction would not normally be
granted
to restrain proceedings before said exclusive jurisdiction
of a Court including of a
foreign court.
(10)In the present case, if this principle is applied then
it would equally mean that if
the courts in India have been granted exclusively
jurisdiction in the matter, especially
where the Court is at least one such court of a competent
jurisdiction, then an anti suit injunction must necessarily follow. The exception to this would be where the
other party is still able to establish that the forum of
choice is not forum conveniens,
the proceedings are oppressive and vexatious, but on the condition that the
parties so
contending would have to prove the same. This would have required in the present
case the defendants to appear and establish such a plea.
The defendants have,
however, chosen to absent themselves.
(11)In view of the aforesaid, a decree for permanent
injunction is passed in favour of
the plaintiffs and against the defendants restraining the
defendants from initiating or
continuing any legal proceedings against the plaintiffs in
the courts of United Status
of America in respect of the business transaction and goods
delivered in pursuance to
the invoices proved in the present suit.
(12)Plaintiffs shall also be entitled to costs.
(13)The decree sheet be drawn up accordingly.
Sd/-
SANJAY KISHAN
KAUL, J.
