Principles Governing Anti Suit Injunctions in India: Modi Entertainment Network v. WSG Cricket Pte. Ltd.
TUSHAR BEHL
Advocate, Delhi High Court
BACKGROUND: ANTI-SUIT INJUNCTIONS
MODI ENTERTAINMENT NETWORK & ANR. V. W.S.G. CRICKET PTE LTD. (2003) 4 SCC 341
Meaning and Nature
An anti-suit injunction (“ASI”) operates as both, a sword and shield in the hands of one party who seeks to restrain the other party from pursuing their remedies in cases where more than one forum has jurisdiction to entertain the issue.[1] Essentially, courts are inclined to grant an ASI to avert the risk of parallel proceedings going on in multiple forums surrounding the same issues and involving the same parties.[2] Despite being granted with such noble intentions, the grant of ASIs, particularly in cases where two foreign courts are pitted against each other, has been heavily criticized as being against the spirit of international comity and mutual respect for judicial systems.[3]
An ASI, no matter whether given in a domestic or international context, essentially seeks to do away with the evil of forum shopping.[4] As has been observed, an ASI is usually granted in certain situations, for instance, an ASI may be granted when a party to an arbitration agreement approaches the court seeking to restrain the other party from either restraining or discontinuing from proceeding with arbitral proceedings [5], or an ASI may be sought by a defendant when the plaintiff has brought an action in a foreign court causing inconvenience to the former [6]; or an ASI may be sought when parties have designated a particular court as a court of exclusive jurisdiction but other party has filed suit in some other court [7]; or when the parties have not designated any court has a court of exclusive jurisdiction, making two or more courts as courts of natural jurisdiction.
Differentiating Anti-suit injunctions from Anti-arbitration injunctions
The talk of ASIs essentially involves discussion on anti-arbitration injunctions (hereinafter AAI) too, given their co-relation and sometimes, co-existence. The nature of both these kinds of injunctions is essentially similar in essence, the difference being with regards to the forum from which the party seeks to injunct. While ASIs are granted to prevent the institution or continuation of proceedings before a court, whether domestic or foreign, AAIs are granted to prevent the institution or continuation of proceedings before arbitral tribunals. Secondly, while ASIs can be granted either by a court or arbitral tribunal[8], as the case may be, AAIs are granted only by the courts.
II. THE GENESIS OF THE DISPUTE: UNDERSTANDING THE FACTUAL MATRIX AND THE ARGUMENTS ADVANCED
The roots of the dispute between the parties lay in the contract between them. By way of the contract, the respondents (W.S.G. Cricket), who had the exclusive right to grant commercial rights relating to the tournament organized by International Cricket Conference (ICC), granted an exclusive license to telecast the Event on Doordarshan and to sell advertisement slots thereon. As per the assignment agreement, Doordarshan was to show feed by terrestrial free-to-air television on Doordarshan only and the satellite broadcast license for India was granted to "ESPN - Star Sports. However, there arose certain technical issues with regard to the telecast by Doordarshan the result being that feed was showing in the Middle East too, which was viewed by the respondents as a breach of the agreement. Despite repeated requests, which later turned into threats, Doordarshan failed to rectify the error. The appellants complained that on account of the open threats of the respondent the advertisers who had committed their advertisements on Doordarshan, pulled their advertisements out and switched them to ESPN and which caused a tremendous loss of revenue to them.
High Court of Bombay
The respondents thus sought damages for the breach while the appellants sought damages for loss of advertising revenue. While the respondents moved to the High Court of Justice, Queen’s Bench Division (hereinafter “English Court”), the appellants filed suit before the Bombay High Court. The jurisdictional clause of the agreement provided that it will be the English law, which shall govern the parties.
When the appellants approached the single judge bench of the Bombay High Court to obtain ASI restraining proceedings from being continued in English Court, the learned judge granted the same, which was later vacated by the Division Bench of the same High Court. This prompted the appellants to seek recourse to the Supreme Court.
Essentially, the court was therefore asked to deliberate on the issue that, of “whether the Division Bench of the High Court erred in vacating the anti-suit injunction granted by a learned Single Judge restraining the respondent from proceeding with the action between the same parties pending in the English Court, the forum of their choice.” What the court was required to ponder upon was the principles governing grant of an ASI by a court of natural jurisdiction against a party to restrain such party from either instituting or continuing with a suit in a foreign court of choice of parties.
From the side of the appellants, the counsel argued that courts in India were courts of natural jurisdiction and therefore appropriate forums for adjudicating the disputes. He went on to argue that proceedings in English court were vexatious and oppressive and therefore the learned Single Judge had rightly granted ASI. The counsel then made reference to Rules 31(5) [9] and 32(5) [10] of Dicey & Morris’s “The Conflict of Laws”[11] and argued that it is Rule 31(5) and not the latter rule which would be applicable here. He then stated that the English court was “forum non-conveniens” and it would be prejudicial, inconvenient and financially difficult to the appellant to be made to defend the suit there. Apart from being “forum non-conveniens”, the English court had no real nexus or relation with either the parties or the subject matter to give it jurisdiction.
On the other hand, the counsel for respondents primarily relied on the agreement and the dispute resolution clause therein to support his arguments. He argued that English court as a forum for the resolution of the dispute was a court of choice of the parties as they have beforehand agreed so in the agreement itself. The parties have expressly agreed that the resolution of their disputes would be in accordance with English Law and in the English Court and therefore, naturally, the appropriate forum would be the English Court. The essence of his argument was that an ASI at the instance of one party cannot be granted when another party has approached the court/forum agreed to by the parties in the contract.
III. THE DECISION AND THE PRINCIPLES ENUNCIATED THEREIN
To decide whether an ASI could or could not be granted in the present case, the court placed its reliance on several authorities, both, Indian and English. The court iterated that the grant of an ASI is essentially an equitable relief and Indian courts, like English counterparts, beings courts of both law and equity are well competent to grant ASIs. Though competent to grant ASIs, the court cautioned that this equitable remedy should be granted keeping in mind the rule of comity so as to not interfere with the exercise of jurisdiction of another court. After discussing the principles of jurisdiction under the Code of Civil Procedure (CPC) and generally, the court noted that, parties may by agreement agree to have their disputes resolved by the foreign court which would be a ‘neutral court’ or ‘court of choice’ with either exclusive or non-exclusive jurisdiction. Court then proceeded to refer to to Rules 31(5) and 32(5) of Dicey & Morris’s “The Conflict of Laws” and held that principles governing the court’s discretion to grant an ASI where a party has bound himself by contract not to bring proceedings which he threatens to bring or has brought in foreign court are different from principles governing grant of ASI where there is no contract or prior agreement as to the selection of court as such.
The court then proceeded to discuss certain tests regarding the issuance of ASI. The court referred to the House of Lords decision in Carron Iron Company v. Maclaren [12] where the test for granting an ASI was ‘equity and good conscience’ which later was replaced by the test of ‘to avoid injustice’[13]. Another test vis-à-vis restraining proceedings in a foreign court has been evolved in SNI Arospatiale v. Lee Kui Jak [14] which contemplates that an ASI may be granted if the foreign proceedings are ‘vexatious and oppressive’.
Reference was also made to certain Indian pronouncements. For instance, in Oil and Natural Gas Commission v. Western Company of North America [15] the court stated that an ASI would be granted by Indian courts when proceedings are threatened in foreign courts only when it was necessary, expedient or to meet the ends of justice. After placing reliance on several authorities, the Court ultimately culled out certain general principles which must guide the courts while dealing with the grant of ASI. The principles are reproduced below:
“(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 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 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 an 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 the non-exclusive jurisdiction of the court of their choice which cannot be treated just an alternative forum;
(6). A party to the contract containing a 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 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.”
After enunciating these principles, the Court then reverted back to the dispute at hand. It observed that parties have agreed to be governed by English law and submitted themselves to non-exclusive jurisdiction. Ultimately, to give effect to the intention of the parties, the Court here declined to restrain the defendants to proceed in English court. To arrive at this conclusion, the Court observed that it cannot be taken as a general principle that if parties have agreed to submit to the jurisdiction of a foreign court, then proceedings brought either in a court of natural jurisdiction or court of choice would be per se vexatious and oppressive. Other factors have to be kept in mind.
IV. ROAD DOWN THE JUDGEMENT: DEVELOPMENT OF JURISPRUDENCE AND THE APPLICATION OF PRINCIPLES LAID DOWN IN MODI ENTERTAINMENT
The judgment and the principles enunciated therein still hold the ground even after all these years. The Supreme Court followed these principles in Dinesh Singh Thakur v. Sonal Thakur [16] where it was noted that the principles to grant ASIs are similar to those which are applicable in granting usual injunctions. However, the court put a word of caution against the use of discretion to grant ASIs as they tend to interfere with a foreign court’s jurisdiction. The principles have since been followed in various other pronouncements. The principles to grant ASIs have been deployed by certain courts to grant even AAIs. This has been witnessed in Calcutta High court judgments in Devi Resources Ltd v. Ambo Exports Ltd.[17] and Balasore Alloys Ltd. v. Medima LLC [18] where the court granted an AAI by employing the same principles as are applicable to the grant of an ASI.
In the former verdict, the court noted that,
“Despite no law providing for an anti-suit or an anti-arbitration injunction, the general equitable jurisdiction of granting an injunction encompasses the authority to grant an anti-suit or anti-arbitration injunction or even an anti-anti-suit injunction. But such an injunction is issued only in the most extreme of cases where the refusal of the injunction may result in palpable and gross injustice in the meanest sense.”[19]
Hon’ble Supreme Court of India
A further step was taken by the Delhi High court in Interdigital Technology Corporation v. Xiaomi Corporation[20] which is famously known as India’s first “anti-anti-suit injunction” (“AASI”). The Delhi High Court seemingly noted that principles to grant ASIs and AASIs are essentially similar in nature and clarified the principles governing anti-enforcement injunctions (“AEI”).
Since no specific rules govern the grant of ASIs exist in India, often courts issue injunctions on the grounds of equity to prevent the miscarriage of justice while also considering that the court does not impinge on the jurisdiction of another court.[21] The decision in Modi Entertainment[22] has brought about a welcome development in the Indian jurisprudence regarding the grant of cross-border anti-suit injunctions in the absence of a long-arm statute in India, however, it must be noted that the test laid down in Modi Entertainment cannot be applied to cases of anti-arbitration injunctions, the two being fundamentally distinct from each other as laid down in the cases of Mcdonald’s India Pvt Ltd v. Vikram Bakshi and Ors[23] and Bina Modi v. Mr. Lalit Modi & Ors [24].
Several questions do arise, “whether the principles of ASIs apply to AASIs?” and “whether the tribunals have the power to grant AASIs?” mainly because the law in respect of ASIs and AASIs is still in its infancy in India[25] and the jurisprudence on this issue is developing slowly, however, the decision in Modi Entertainment is a weighty addition and it will be interesting to see the approach taken by other courts in India while approaching similar questions in the time to come.
REFERENCES
Olga Vishnevskaya, 'Anti-suit Injunctions from Arbitral Tribunals in International Commercial Arbitration: A Necessary Evil?', Journal of International Arbitration, (© Kluwer Law International; Kluwer Law International 2015, Volume 32 Issue 2) pp. 173 - 214
Bernardo Cremades & Ignacio Madalena, Parallel Proceedings in International Arbitration, 24(4) Arb. Int’l 507, 508 (2008).
Stephen Schwebel, Anti-suit Injunctions in International Arbitration – An Overview, in Anti-suit Injunctions in International Arbitration 15 (Emmanuel Gaillard ed., Juris Publishing 2005).
George A. Bermann, The Use of Anti-Suit Injunctions in International Litigation, 28 Colum. J. Transnat'l L. 589, 617 (1990).
Margaret Moses, Barring the Courthouse Door? Anti-Suit Injunctions in International Arbitration, (available at http://kluwerarbitrationblog.com/blog/2011/11/14/barringthe-courthouse-door-anti-suit- injunctions-in-international-arbitration.)
Daniel Tan, Anti-Suit Injunctions and the Vexing Problem of Comity, 45 Va. J. Int'l L. 283, 3 (2005).
INSIDE ARBITRATION: ASIS TO THE RESCUE USING ANTI-SUIT INJUNCTIONS TO PROTECT AN ARBITRATION AGREEMENT, (available at: https://www.herbertsmithfreehills.com/latest-thinking/inside- arbitration-asis-to-the-rescue-using-anti-suit-injunctions-to-protect-an.)
Emmanuel Gaillard, Anti-suit Injunctions Issued by Arbitrators, (available at: http://www.shearman.com/files/Publication/35f7fd87-ad7e-4c38-9c56-8fe2d400410f/Presentation/PublicationAttachment/f5dfaabd-d06f-4c2c-9112- 95202f32762e/IA_Anti%20Suit%20Injunctions%20issued%20by%20Arbitrators_ICCA_04 0308_13.pdf.)
31(5). “An English Court may restrain a party over whom it has personal jurisdiction from the institution or continuance of proceedings in a foreign court, or the enforcement of foreign judgments, where it is necessary in the interests of justice for it to do so."
32(4). “An English Court may restrain a party over whom it has personal jurisdiction from the institution or continuance of proceedings in a foreign court in breach of a contract to refer disputes to an English (or, semble, another foreign) court."
Dicey & Morris, THE CONFLICT OF LAWS, Sweet & Maxwell, 14th Ed. (20060.
1885 5 HLC 416.
Castanho v. Brown & Root (U.K.) Ltd., 1981 Appeal Cases 557.
(1987) 3 All. ER 510.
1987 (1) SCC 493.
(2018) 17 SCC 12.
2019 SCC OnLine Cal 7774.
2020 SCC OnLine Cal 1698.
Devi Resources Ltd v. Ambo Exports Ltd, 2019 SCC OnLine Cal 7774.
2021 SCC OnLine Del 2424.
Essenese Obhan & Taarika Pillai, “Anti-Suit Injunction and Cross-Border Reputation of Trademarks in India”, available at: https://www.obhanandassociates.com/blog/anti-suit-injunction-and-cross-border-reputation-of-trademarks-in-india/.
(2003) 4 SCC 341.
2016 (4) ArbLR 250.
2020 (2) ArbLR 446.
Aaditya Vijaykumar & Prachi Dutta, “The quandary in granting “anti-anti” suit injunctions: Application in Indian Law (08 Dec 2020), available at: https://www.barandbench.com/columns/the-quandary-in-granting-anti-anti-suit-injunctions- application-in-Indian-law.
