Court : IN THE HIGH COURT OF DELHI AT NEW DELHI
Brief : i) The though may be applicable both in foreign forums and domestic forums in different countries has no place in India regarding another
domestic forum in view of the specific bar created by Section 41(b) of the said Act as interpreted in Cotton Corporation of India Limited v. United Industrial Bank Limited and Orss case (supra). It would apply only in
case of a foreign forum or in a situation where an injunction is sought against a domestic court which is subordinate to the one where such an application is made.
ii) The principle of forum non convenience applies to foreign forums and Indian courts can apply the said principle vis−a−vis foreign forums or while exercising discretionary jurisdiction under Article 226 of the
Constitution of India.
iii) The principle of forum non convenience does not apply to civil suits in India which are governed by the said Code, there being no provision under the Code for the same and recourse to Section 151 CPC is not permissible for application of the principle of forum non convenience 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, however, approach the Supreme Court under Section 25 of the said Code.
iv) The impugned judgment of the learned Single Judge rejecting and returning the plaint cannot be sustained and is thus set aside.
v) In the given facts of the case, even otherwise, if the principle of forum non convenience had been applicable, then
there was no reason not to proceed with the suits on merits.
vi) The interlocutory applications for injunction would be required to be heard on merits by the learned Single
Judge and decided in accordance with law.
Citation :
OS) No. 86 of 2009
HORLICKS LTD. AND ANR. APPELLANTS
Through : Mr.C.M. Lall,
Mr. Dushyant K. Mahant and
Ms. Kripa Pandit, Advocates.
−VERSUS−
HEINZ INDIA (PVT.) LIMITED ... RESPONDENT
Through : Mr.C.A.Sundaram, Sr.Adv. with
Ms.Anuradha Salhotra,
Ms.Bhavna Gandhi,
Ms.Rohini Musa,
Mr.Rahul Chaudhary,
Mr. Sumit Wadhwa,
Mr.Amritesh Mishra,
Mr.Abhishek Gupta and
Mr.Zafar Inayat, Advocates.
AND
(OS) NO. 87 OF 2009
GLAXOSMITHKLINE CONSUMER HEALTHCARE LIMITED .. APPELLANT
Through : Mr.C.M.Lall,
Mr.Dushyant K.Mahant and
Ms.Kripa Pandit, Advocates.
−VERSUS−
HEINZ INDIA (PVT.) LIMITED ... RESPONDENT
Through : Mr.C.A.Sundaram, Sr.Adv. with
Ms.Anuradha Salhotra,
Ms.Bhavna Gandhi,
(OS) NOs. 86/2009 and 87/2009 Page 1 of 97 Ms.Rohini Musa,
Mr.Rahul Chaudhary,
Mr. Sumit Wadhwa,
Mr.Amritesh Mishra,
Mr.Abhishek Gupta and
Mr.Zafar Inayat, Advocates.
CORAM :
HON’BLE MR. JUSTICE SANJAY KISHAN KAUL
HONBLE MR. JUSTICE SUDERSHAN KUMAR MISRA
1. Whether the Reporters of local papers may be allowed to see the judgment? YES
2. To be referred to Reporter or not? YES
3. Whether the judgment should be YES reported in the Digest?
SANJAY KISHAN KAUL, J.
1. The principle of forum non convenience emerged as a
concept primarily applicable to a foreign forum. The
important question whether it will apply to domestic forum
in India governed by Code of Civil Procedure, 1908
(hereinafter referred to as the said Code) has given rise to
the present appeals since the appellants have been non
suited by the learned Single Judge applying the said
principle.
2. The doctrine of forum non convenience which originated in
Scotland and thereafter brought to England and United
State of America simply put means that if legal proceedings
are initiated in a particular forum and that forum is of the
opinion that there is a more convenient forum where such
lis should be tried, it desists from trying the particular lis. The meaning to be given to "convenience", and as to
whether other parameters also come into play, is another
aspect which has developed in respect of this doctrine over
a period of time making its application more stringent.
The factual background
3. M/s Glaxo Smithkline Consumer Healthcare Limited is a
company incorporated and registered under the Companies
Act, 1956 while Horlicks Limited, United Kingdom is a
foreign company which owns the registered trade mark
Horlicks (hereinafter referred to as appellants). M/s Heinz
India Pvt Limited (hereinafter referred to as respondent) is
the licensed user of the trademark Complan. There is a
commonality in the products to the extent that both these
products are positioned as a complete planned food for
better growth of the children. The products manufactured
under the two brand names became competing products in
the market.
4. The appellants being the owners of the trademark Horlicks
filed a civil suit in the Calcutta High Court in August, 2004 alleging the disparagement of their product by an
advertisement of the respondent who are the licensed users
of the trade mark Complan. The Complan advertisement
had depicted the two cups including one cup with the
alphabet H. In the said advertisement, Complan cup was
shown as growing in height as compared to the cup with the (OS) NOs. 86/2009 and 87/2009 Page 3 of 97 alphabet H. The appellants succeeded in getting injunction
orders against the respondent restraining the respondent to
continue with the said advertisement or any other
advertisement which reflected adversely on the appellants
product Horlicks. It was, however, clarified that the order
would not prevent the respondent from publishing the
advertisement of its product without showing the cup
marked with alphabet H in the said advertisement.
5. The respondent introduced another advertisement replacing
the alphabet on the second cup with the alphabet X which
gave rise to contempt proceedings where the judge once
again found that the act of the respondent was in disregard
of the intent of the injunction and thus directed for deletion of even the brown cup/mug from the disputed
advertisement. The matter is stated to be pending in
appeal.
6. The second set of litigation was instituted in the same year in the Madras High Court by the appellants alleging that a series of advertisements had been issued throughout the country in August, 2004 disparaging the products Horlicks and Boost with false and misleading comparison with the product Complan. The advertisement showed two cups on either side bearing alphabets X and Y with white colour
liquid and chocolate colour liquid which was suggested to be
indicative of Horlicks and Boost. The children consuming
Complan were shown to grow taller. The Madras High Court vide a detailed order held that the appellants were entitled
to the temporary injunction restraining the respondent from
using the two cups with the alphabets X and Y along with
Complan cup and that the respondent was not entitled to
use the words largest selling brand.
7. The third suit was instituted by the respondent against the appellants in the Bombay High Court in respect of a moving advertisement of the appellants.
8. This suit was filed in the year 2008 titled Heinz India (P) Ltd
v. Glaxosmithkline Consumer Healthcare Limited before
Bombay High Court in Suit(L) No.3308/2008. The
advertisement showed the two products Complan and
Horlicks visible in the baskets held by two mothers with
their sons. The maximum retail price of the two products is
stated and it is highlighted that the product of the
appellants is lower in price. The respondent further
claimed that there were disparaging remarks against
Complan in regard to nutrients and health value comparison
to the appellants product. In the said proceedings a
statement was made by the counsel for the appellants that
while showing the costs of the products and their
comparison relevant flavour would be mentioned so that the
comparison of price is flavour to flavour. Subject to
compliance of this, interim relief was rejected. The
respondent went in appeal but the appeal was ultimately
withdrawn.
9. In December, 2008, the respondent introduced an
advertisement in the print media which according to the
appellants sought to give an impression to the readers that
Horlicks was a cheap and ineffective product which did not
give balanced complete planned nourishment to the child.
The lower price of Horlicks is sought to be attributed to use of cheaper and inferior quality ingredients and the question posed to a mother of a child is whether the cheaper price or a childs complete growth is important while choosing a health drink.
10. The appellants thus contended that the advertisement
sought to convey that though Horlicks was cheaper in price
it also compromised on a childs growth. Such a
comparison was sought to be made more apparent by
putting a choice to the mother as to whether she knew the
difference between what is good or what is cheap.
11. There are other aspects also alleged of
disparagement, it is not necessary to go into the details of
the same. Suffice to say that this gave rise to the institution
of the suit by the appellants. The respondent subsequently
even came up with a televised version of the advertisement
and the appellant sought to amend the plaint, but thereafter
withdrew the same with leave to file a fresh suit. It is
thereafter that the second suit was instituted in Delhi.
Hearing of these two suits was taken up together.
The fate of the Delhi suits
12. The hearing on the interlocutory applications of these
two suits were taken up by the learned Single Judge. The
learned Single Judge also considered the question of
maintainability of the suit at Delhi within the parameters of
the principle of forum non convenience. The learned Judge
in terms of the impugned judgment after considering the
scope of the subject matter of the two suits and the
provisions of the said Code, came to a finding that the
proceedings before the Bombay High Court and the
proceedings now initiated before the Delhi High Court were
intertwined and interrelated, if not, a counter blast by the
respondent. The plaints were directed to be returned and
rejected giving liberty to the appellants if they were so
advised to file fresh suits before the Bombay High Court. It
may be noticed at this stage that the finding of the learned
Single Judge is not that the Delhi Court has no territorial
jurisdiction to try the suits and the plaint is being returned
to be presented before the appropriate court. In fact, it is
clearly recorded that it is not even disputed that the Delhi
Court would have jurisdiction.
13. The suit has also not been stayed on the ground that
the subject matter of the suit involves matters which are
directly and substantially an issue in a previously instituted
suit. No preliminary issue has been framed. The suit has
been simultaneously returned and rejected. The appellants
have thus filed the present appeals against the said order.
The principle
question, as noticed above, of course is as to
whether the suits could have been returned and rejected on
the principle of forum non convenience. There are,
however, other linked issues also about whether at all the
subject matter of the Bombay suit itself can be stated to be
interlinked and intertwined with the Delhi suits.
Are the Delhi suits interlinked with the Bombay suits
14. We cannot lose sight of the fact that litigation between
the parties is pending in three courts. The first two
litigations were initiated by the appellants in Calcutta and
Madras while the third litigation was initiated by the
respondent at Bombay. There is an interlinkage between
the first and second litigation to the extent that the
advertisement was of a similar nature though in a different
language and the appellants chose to institute the litigation
in respect of the published advertisement in the area
concerned. The learned Single Judge in the impugned
judgment has sought to make a distinction between the
scope of these two litigations and the one instituted at
Bombay while discussing these aspects in para 10 of the
impugned judgment. In the opinion of the learned Single
Judge, the product of the competitor was not displayed but
reference was made to the other product. While in the
Bombay suit, there was specific reference to the two
products. We are unable to accept this factual reasoning
because the very principle of disparagement has to satisfy a
dual test of the
identification of the competitors product
and the disparagement of the plaintiffs product. The
injunction would not have been granted by the Calcutta and
Madras High Courts if there was no identification of the
product of the appellants. It is only because the product
sought to be disparaged was perceived in the
advertisement to be indicative enough to be identified as
the appellants product, did the courts proceed to grant
injunction on specific parameters. The dual test was thus
satisfied in those two proceedings.
15. Undoubtedly in the Bombay suit, there was a direct
comparison but limited to the aspect of the price of the two
products. The appellants agreed to compare the price
product to product in respect of the identical flavours.
Once this was conceded by the appellants, the court did not
prima facie find that there was any disparagement of the
product of the respondent. The appeal filed by the
respondent also failed inasmuch as the respondent
withdrew the appeal and sought to raise the issues before
the learned Single Judge. The advertisements in question
in the Delhi suits identify the product of the appellants and
make a comparison with the same. The comparison is not
on pricing but on the quality of the products based on its
ingredients clearly giving an impression that the pricing
cannot be a real yardstick and that the quality of their
product is superior. The question whether such a
comparison can be
made or not would be an aspect to be
adjudicated on weighing the material produced by both the
sides to form a prima facie view for grant or refusal of
injunction. However, that endevour has not been made by
the learned Single Judge since the learned Single Judge has
really proceeded only on the issue of forum non
convenience to non suit the plaintiffs. The factual dispute
thus remains to be decided.
16. The advertisement in question is a different
advertisement from the one in challenge before the Bombay
High Court. In fact, in Bombay, it is the respondent who
have sought to allege disparagement by an advertisement
of the appellants. The suits in Calcutta and Madras are by
the appellants alleging disparagement by the respondent.
The suits in Delhi are in respect of a completely different
advertisement of the respondent where the appellants
allege disparagement. Thus the factual matrix of the suit at
Delhi is neither intertwined nor interlinked in any manner
with the litigation in the Bombay High Court. The matter
however cannot rest at this since elaborate arguments have
been advanced by learned counsel for the parties on the
applicability of the principle of forum non convenience to
domestic forums and that issue would have to be examined
in the appeal.
Doctrine of anti suit injunction and the principle of forum non convenience
as applicable to foreign forums
17. The doctrine of anti suit injunction as applicable to
international forums is not disputed by the learned counsel
for the parties. However, this doctrine has to be applied
with care and caution as it involves the issue of respect fo
corresponding international forums.
18. The aforesaid legal position is abundantly clear in view
of the judgment of the Supreme Court in Modi
Entertainment Network and Anr. v. W.S.G. Cricket Pte. Ltd.;
AIR 2003 SC 1177. It was observed in the said judgment
that the courts in India like the courts in England are courts
of both law and equity and thus the principles governing
grant of injunction an equitable relief by the court would
also govern grant of anti suit injunction, which is a species
of injunction. However, the rule of Comity of Courts require
this power to be exercised sparingly because such an
injunction though directed against a person in effect causes
interference in exercise of jurisdiction by another court.
The test adopted by the House of Lords in Castanho v.
Brown and Root (U.K.) Ltd and Anr; (1981) AC 557 to avoid
injustice was noted. A reference was also made to SNI
Aerospatiale v. Lee Kui Jak and Anr; (1987) 3 All ER 510 and
it was noticed that in recent cases the test is whether the
foreign proceedings are "oppressive or vexatious".
Although, Lord Goff explained, in SNI Aerospatiale v. Lee Kui
Jak and Anrs (supra) that these words could have a
different meaning in different contexts, he was inclined, in
Airbus Industrie
GIE v. Patel and Others; {(1998) 2 All ER
257}, to agree, albeit obiter, with Judge Sopinka in Amchem
Products Incorporated v. British Columbia (Workers
Compensation Board); 1993 CanLII 124 (SCC)., who
preferred to use, simply, ends of justice. However, Lord
Goff did not expressly abandon those words. The High
Court of Australia in CSR Ltd v. Cigna Insurance Australia
Ltd. and Ors.; 146 A.L.R. 402 used them in the sense that
only if there is nothing which can be gained by them over
and above what may be gained in local proceedings.
19. The plea of the respondent is that the principle of
forum non convenience is nothing but the other side of the
same coin of the doctrine of anti suit injunction. It was thus
contended that if the court is entitled to pass an anti suit
injunction restraining a party from proceeding in another
court, which actually tantamounts to the other court not
proceeding further, then certainly that court is also entitled
to stay its own hands. Learned counsel submitted that in
fact almost all the judgments in question have dealt with
both the principles of anti suit injunction and forum non
convenience parallely and the judgment in Modi
Entertainment Network and Anr. v. W.S.G. Cricket Pvt. Ltds
case (supra) is no exception to it. Leaned counsel
emphasized that the observations of the House of Lords in
Spiliada Maritime Corporation v. Cansulex Ltd; (1987) AC
460 were cited with approval in para 18 of Modi
Entertainment
Network and Anr. v. W.S.G. Cricket Pvt. Ltds
case (supra), which are as follows:
"18.
The fundamental principle applicable to both the stay of English
proceedings on the ground that some other forum was the appropriate forum and
also the grant of leave to serve proceedings out of the jurisdiction was that
the court would choose that forum in which the case could be tried more suitably
for the interests of all the parties and for the ends of justice".
20. The principles governing anti suit injunction were set
out in para 23 of the Modi Entertainment Network and Anr.
v. W.S.G. Cricket Pvt. Ltds case (supra), which are as
follows:
"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 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
vexations 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 it where parties have
greed 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;
(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 non− exclusive jurisdiction of the court of their choice
which cannot be treated just an
alternative forum;
14 of 97 (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 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 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."
21. We may notice that the aforesaid judgment is relies on
the earlier judgment of the Supreme Court in Oil and
Natural Gas Commission v. Western Company of North
America; (1987) 1 SCC 496. The said judgment was almost
the first case where exercising jurisdiction under Section
151 of the said Code, the power of anti suit injunction was
exercised.
22. We would now proceed to discuss from all the other
judgments referred to in this context.
English View
23. The court of appeal in Castanho v. Brown and Root
(UK) Limited and Anr.; 1980 (3) All ER 72 had three judges
giving separate opinions. The relevant discussion is as
under (in the opinion of Brandon L.J.) :
"So far as the jurisdiction of the court generally in matters of
this kind is concerned, it has long been established that there may be
(OS) NOs. 86/2009 and 87/2009 Page 15 of 97 circumstances in which an
English court will (i) compel a plaintiff, who desires to sue in England, to sue
in another forum elsewhere instead, or (ii) compel a plaintiff, who desires to
sue in another forum elsewhere, to sue in England instead. In case (i) the court
achieves its purpose by staying any proceedings which the plaintiff has brought
here, so leaving him with the only practical alternative of beginning or
continuing proceedings in the other forum. In case (ii) the court achieves its
purpose by granting an injunction restraining the plaintiff from beginning or
continuing proceedings in the other forum, leaving him with the only practical
alternative of beginning or continuing proceedings here.
It follows that, when on 1st May 1979 the defendants in the
action here applied for an injunction restraining the plaintiff from proceeding
against his employers in Texas or elsewhere outside England, the court certainly
had jurisdiction to intervene in the manner sought. Difficult questions arise,
however, as to the effect on that jurisdiction of the discontinuance of the
action by the plaintiff on 15th May 1979. Did the discontinuance, by brining the
action to an end, also bring to an end the courts jurisdiction to intervene? If
so, does the court have power to restore that jurisdiction, as it were, by
striking out the notice of discontinuance as an abuse of its process? If so,
ought the court to exercise that power in the circumstances of the case?
These questions do not need to be answered unless the court
considers that, if it had jurisdiction to intervene by granting the injunction
sought, it ought to do so. I propose therefore to leave them on one side for the
time being, to assume that the necessary jurisdiction exists and to consider
whether on that
assumption it ought to be exercised.
The circumstances in which an English court will compel a
plaintiff, who desires to sue in England, to sue in another forum elsewhere
instead were examined in two recent cases in the House of Lords: The Atlantic
Star (1973) 2 All ER 175, (1974) AC 436 and Macshannon v. Rockware Glass Ltd
(1978) 1 All ER 625, (1978) AC 795.
16 of 97 In the second of
these two cases Lord Diplock, stated the criteria applicable in this way
({1978})1 All ER 625 at 630, (1978) AC 795 at 812):
In order to justify a stay, two conditions must be satisfied,
one positive and the other negative: a) the defendant must satisfy the court
that there is another forum to whose jurisdiction he is amenable in which
justice can be done between the parties at substantially less inconvenience or
expense, and b) the stay must not deprive the plaintiff of a legitimate personal
or jurisdical advantage which would be available to him if he invoked the
jurisdiction of the English Court.
It is clear from The Atlantic Star that, if the positive
condition at a) above is satisfied, but the negative condition b) above is not,
the court has to carry out a balancing operation. It has to weigh in the one
scale the advantage to the plaintiff of suing in England, and in the other scale
the disadvantage to the defendant of being sued there, and then decide which of
the two should, as a matter of justice, prevail. In carrying out that balancing
operation the court must have regard to all the relevant circumstances of the
particular case.
It was submitted for the defendants on this appeal that there is
no difference, in principle, between compelling a plaintiff, who desires to sue
in England, to sue in another forum
elsewhere (as was done in the two House of Lords cases referred
to above), and compelling a plaintiff, who desires to sue in another forum
elsewhere, to sue or go on suing in England (as it is sought to compel the
plaintiff to do in the present case); and that the same criteria should
therefore apply, mutatis mutandis, to the exercise of the courts power of
compulsion in either case.
I would accept this submission as a broad proposition. In my
opinion, however, some qualification of it is necessary for this reason. Where a
stay is granted of an action here, the English court is doing no more than
exercising control over its own proceedings. By contrast, where an injunction is
granted restraining a person from suing in another forum elsewhere,
17 of 97 the English court
is interfering, albeit indirectly, with proceedings in another jurisdiction.
This distinction led Scrutton LJ to say, in Cohen v. Rothfield
(1919) 1 KB 410 at 413, (1918−19) All ER Rep 260 at 261, that the power to grant
injunctions in such cases should be exercised with great caution to avoid even
the appearance of undue interference with another Court. I agree with that
observation and consider that, while the power to compel a plaintiff to sue in
another forum elsewhere by staying proceedings here should itself (as the
authorities show) be exercised with caution, the power to compel a plaintiff to
sue here by restraining him from proceeding in another forum else where should
be exercised with ever greater caution.
Bearing this qualification in mind, I propose to consider first
whether the criteria laid down by Lord Diplock in MacShannon v. Rockware Glass
Ltd are satisfied, mutatis mutandis, in the present case."
24. The matter was taken up to the House of Lords. The
House of Lords in Castanho v Brown & Root (UK ) Ltd & Anr.;
[1981] AC 557 was of the view that there was really no
majority ratio decidendi in the court of appeal judgment.
The legal principle set out by the House of Lords is as
under:
"I turn to consider what criteria should govern the exercise
of the court’s discretion to impose a stay or grant an injunction. It is
unnecessary now to examine the earlier case law. The principle is the same
whether the remedy sought is a stay of English proceedings or a restraint upon
foreign proceedings. The modern statement of the law is to be found in the
majority speeches in The Atlantic Star [1974] A.C. 436. It had been thought that
the criteria for staying (or restraining) proceedings were two−fold: (1) that to
allow the proceedings to continue would be oppressive or vexatious, and (2) that
to stay (or restrain) them would not cause injustice to the plaintiff: see Scott
L.J. in St. Pierre v. South American Stores (Gath and
(OS)
NOs. 86/2009 and 87/2009 Page 18 of 97 Chaves) Ltd. [1936] 1 K.B. 382, 398. In
The Atlantic Star this House, while refusing to go as far as the Scottish
doctrine of forum non conveniens, extended and re−formulated, the criteria,
treating the epithets "vexatious" and "oppressive" as illustrating but not
confining the jurisdiction. My noble and learned friend Lord Wilberforce put it
in this way. The "critical equation," he said at p. 468, was between "any
advantage to the plaintiff" and "any disadvantage to the defendant." Though this
is essentially a matter for the court’s discretion, it is possible, he said, to
"make explicit" some elements. He then went on, at pp. 468−469:
"The cases say that the advantage must not be ’fanciful’ −
that a ’substantial advantage’ is enough... A bona fide advantage to a plaintiff
is a solid weight in the scale, often a decisive weight, but not always so. Then
the
disadvantage to the defendant: to be taken into account at all
this must be serious, more than mere disadvantage of multiple suits;... I think
too that there must be a relative element in assessing both advantage and
disadvantage − relative to the individual circumstances of the plaintiff and
defendant." (Emphasis supplied.)
In MacShannon v. Rockware Glass Ltd. [1978] A.C. 795, 812 my
noble and learned friend, Lord Diplock, interpreted the majority speeches in The
Atlantic Star [1974] A.C. 436, as an invitation to drop the use of the words
"vexatious" and "oppressive" (an invitation which I gladly
accept) and formulated his distillation of principle in words which are now very
familiar:
"In order to justify a stay two conditions must be satisfied,
one positive and the other negative: (a) the defendant must satisfy the court
that there is another forum to whose jurisdiction he is amenable in which
justice can be done between the parties at substantially less inconvenience or
expense, and (b) the stay must not deprive the plaintiff of a legitimate
personal or juridical advantage which would be available to him if he invoked
the jurisdiction of the English court."
19 of 97
25. In Smith Kline & French Laboratories Ltd and Ors. v.
Bloch; (1983) 2 All ER 72, Lord Denning MR. penned down
one of the opinions of the court of appeal. All the three
learned Judges came to the same conclusion and dismissed
the appeal. It may be noticed that one of the opinions in
Castanho v. Brown and Root (UK) Limited and Anr.; 1980(3)
All ER 72 was of Lord Denning M.R. and his view did not find
favour with the House of Lords. He noticed this aspect and
thereafter proceeded to observe as under:
"The law
It often happens that a plaintiff is entitled to bring
proceedings in two or more jurisdictions. Sometimes it is said that the choice
is his. He can choose whichever of them suits him best. If he can get more
damages in one than he can in the other, then good luck to him. Let him go
there. If he will be met by a time bar in one and not in the other, let him go
to the one where he is not barred. If it is more convenient for the plaintiff in
one than it is for the defendant, then the plaintiff can choose. You need not
spin a coin between the two
contestants. It always comes down in favour of the plaintiff,
so it is said, unless the defendant can prove that it would work an injustice to
him. That was the way the English Court of Appeal approached the problem in St
Pierre v South American Stores (Gath & Chaves) Ltd [1936] 1 KB 382, [1935] All
ER Rep 408 and the Supreme Court of Illinois approached it in James v Grand
Trunk Western Railroad Co
(1958) 152 NE 2d 858. Once a plaintiff institutes an action in
accordance with this prior claim of his, then no court in a rival jurisdiction
should grant an injunction to prevent the plaintiff from exercising and pursuing
his action to its determination. This is the only way, it is said, to avoid
unseemly conflict and to ensure comity.
The basis of all this reasoning has now been removed. In
England by the House of Lords in
(OS) NOs. 86/2009 and 87/2009
Page 20 of 97 MacShannon v Rockware Glass Ltd [1978] 1 All ER 625, [1978] AC
795. In the United States by the Supreme Court in Piper Aircraft Co v Reyno
(1981) 454 US 235. The plaintiff has no longer an inborn right to choose his own
forum. He no longer wins the toss on every throw. The decision rests with the
courts. No matter which jurisdiction is invoked, the court must hold the balance
between the plaintiff and the
defendant. It must take into account the relative advantages
and disadvantages to each of them: not only the juridical advantages and
disadvantages, but also the personal conveniences and inconveniences: not only
the private interests of the parties but also the public interests involved. The
court decides according to which way the balance comes down. This was the
approach of the House of Lords in MacShannon v Rockware Glass Ltd, where it was
much to the juridical advantage of the plaintiff to bring his action in England,
where he would get higher damages, but the natural forum was Scotland. It was in
the public interest that a Scottish case should be tried in Scotland. So he was
bound to go to Scotland. His action in England was stayed. It was also the
approach of the Supreme Court of the United States in Piper Aircraft Co v Reyno,
where it was much to the juridical advantage of the plaintiffs that they should
sue in
Pennsylvania, where they would get higher damages and the
lawyers would get contingency fees. But the public interest was against trial in
the United States. If claims such as these aircraft claims were all to be
brought in the United States, it would involve far too great a commitment of
judicial time and
resources. Scotland was the natural forum. The public interest
favoured Scotland. So the trial should take place there.
By contrast, in Castanho v Brown & Root (UK ) Ltd [1981] 1 All
ER 143, [1981] AC 557 the plaintiff had an undisputed claim for damages against
a Texan−based group of companies. The only question at issue was quantum. The
plaintiff had a legitimate advantage in suing in Texas where he could get such
damages as a Texan court thought appropriate. Although I took the other view,
the House of Lords held that the balance came down clearly in the
21 of 97 plaintiff ’s
favour (see [1981] 1 All ER 143 at 152, [1981] AC 557 at 577)."
26. In SNI Aerospatiale v. Lee Kui Jak and Anr; (1987) 3 All
ER 510, the question of restraining foreign proceedings in
Texas was discussed in the context of whether the same
principles would apply in restraining foreign proceedings as
applicable to stay of English proceedings. The injunction
was granted restraining the plaintiffs from continuing their
Texas proceedings. The relevant observations are as under:
"Mr. Commissioner O’Connor delivered a
concurring judgment to the same effect.
The President of the Court, Sir Geoffrey Briggs, agreed.
It is plain from their judgments that the Court of Appeal were
concerned, and
understandably concerned, about the
relationship between the decisions of the House of Lords in
Castanho’s case [1981] A.C. 557 and Spiliada’s case [1987] A.C.
460. Since a proper identification of the applicable legal
principles lies at the heart of the present case, their Lordships
consider that their first duty is to identify those principles,
giving due consideration to those two decisions. That they should
undertake this task is, they consider, all the more necessary
because certain observations of Lord Scarman in Castanho’s case [1981] A.C. 557
are substantially
founded on the much−quoted dictum of Lord Diplock in MacShannon
v. Rockware Glass
Ltd. [1978] A.C. 795, 812, which has to a considerable extent
been overtaken by the subsequent development of the law in
Spiliada’s case [1987] A.C. 460, 475−478, and 482−484. For this
purpose, no material distinction is to be drawn between the law of Brunei and
the law of England.
The law relating to injunctions restraining a party from
commencing or pursuing legal
proceedings in a foreign jurisdiction has a long history,
stretching back at least as far
(OS) NOs. 86/2009 and 87/2009
Page 22 of 97 as the early 19th century. From an early stage, certain basic
principles emerged
which are now beyond dispute. First, the jurisdiction is to be
exercised when the "ends of justice" require it: see Bushby v. Munday (1821) 5
Madd. 297, 307, per Sir
John Leach V.−C.); Carron Iron Co. v.
Maclaren (1855) 5 H.L. Cas. 416, 453, per Lord St. Leonards (in
a dissenting speech, the force of which was however recognised by Lord Brougham,
at p. 459). This
fundamental principle has been reasserted in recent years,
notably by Lord Scarman in Castanho v. Brown & Root (U.K.) Ltd. [1981] A.C. 557
and by Lord Diplock in British
Airways Board v. Laker Airways Ltd. [1985] A.C. 58, 81. Second,
where the court
decides to grant an injunction restraining proceedings in a
foreign court, its order is directed not against the foreign court but against
the parties so proceeding or
threatening to proceed. As Sir John Leach V.−C. said in Bushby
v. Munday, 5 Madd.
297, 307:
"If a defendant who is ordered by this court to discontinue a
proceeding which he has commenced against the plaintiff, in some other Court of
Justice, either in this country or abroad, thinks fit to disobey that order, and
to prosecute such proceeding, this
court does not pretend to any interference with the other
court; it acts upon the
defendant by punishment for his contempt in his disobedience to
the order of the
court; ..."
There are, of course, many other
statements in the cases to the same effect. Third, it follows
that an injunction will only be issued restraining a party who is
amenable to the jurisdiction of the court, against whom an
injunction will be an
effective remedy: see, e.g. In re North
Carolina Estate Co. Ltd. (1889) 5 T.L.R. 328, per Chitty J.
Fourth, it has been emphasised on many occasions that, since such an
order indirectly affects the foreign court, the jurisdiction is
one which must be
exercised with caution: see e.g., Cohen v. Rothfield [1919] 1
K.B. 410, 413,
perScrutton L.J., and, in more recent times,
(OS) NOs. 86/2009 and 87/2009 Page 23 of 97 Castanho v. Brown & Root (U.K.) Ltd.
[1981] A.C. 557, 573, per Lord Scarman. All of this is, their Lordships think,
uncontroversial; but it has to be recognised that it does not provide very much
guidance to judges at
first instance who have to decide whether or not to exercise
the jurisdiction in any particular case."
27. The learned Judges thereafter discussed the concept
of vexatious or oppressive proceedings and concluded as
under:
"For all these reasons, their Lordships are of the opinion that
the long line of English cases concerned with injunctions restraining foreign
proceedings still provides useful guidance on the circumstances in which such
injunctions may be granted; though of course the law on the subject is in a
continuous state of development. They are further of the opinion that the fact
that the Scottish principle of forum non conveniens has now been adopted in
England and is applicable in cases of stay of proceedings provides no good
reason for departing from those principles. They wish to observe that, in
Spiliada Maritime Corporation v. Cansulex Ltd. [1987] A.C. 460, care was taken
to state the principle of forum non conveniens without reference to cases on
injunctions: see especially, at p. 480, per Lord Goff of Chieveley. They cannot
help but think that the suggestion in Castanho v. Brown & Root (U.K.) Ltd.
[1981] A.C. 557, 574, that the principle is the same in cases of stay of
proceedings and in cases of injunctions finds its origin in the fact that the
argument of counsel before the House of Lords appears to have proceeded very
substantially upon that assumption. In the opinion of their Lordships, in a case
such as the present where a remedy for a particular wrong is available both in
the English (or, as here, the Brunei) court and in a foreign court, the English
or Brunei court will, generally speaking, only restrain the plaintiff from
pursuing proceedings in the foreign court if such pursuit would be vexatious or
oppressive. This presupposes that, as a general rule, the English or Brunei
court must conclude that it provides the natural forum for the trial of the
action; and
24 of 97
further, since the court is concerned with the ends of justice, that account
must be taken not only of injustice to the defendant if the plaintiff is allowed
to pursue the foreign proceedings, but also of injustice to the plaintiff if he
is not allowed to do so. So the court will not grant an injunction if, by doing
so, it will deprive the plaintiff of advantages in the foreign forum of which it
would be unjust to deprive him. Fortunately, however, as the present case shows,
that problem can often be overcome by appropriate undertakings given by the
defendant, or by granting an injunction upon appropriate terms; just as, in
cases of stay of proceedings, the parallel problem of advantages to the
plaintiff in the domestic forum which is, prima facie, inappropriate, can
likewise often be solved by granting a stay on terms."
28. The judgment in Spiliada Maritime Corporation v.
Cansulex Ltds case (supra), known as the Spiliada
Judgment, is noticed in the aforesaid judgment. A detailed
discussion took place on the principle of forum non
convenience. The principle and its application have been
discussed in the following terms:
"(5) The fundamental principle
In cases where jurisdiction has been founded as of right, i.e.
where in this country the defendant has been served with proceedings within the
jurisdiction, the defendant may now apply to the court to
exercise its discretion to stay the proceedings on the ground which is usually
called forum non conveniens. That principle has for long been recognised in
Scots law; but it has only been recognised comparatively recently in this
country. In The Abidin Daver [1984] A.C. 398, 411, Lord Diplock stated that, on
this point, English law and Scots law may now be regarded as indistinguishable.
It is proper therefore to regard the classic statement of Lord Kinnear in Sim v.
Robinow (1892) 19 R. 665 as expressing the principle now applicable in both
jurisdictions. He said, at p. 668:
25 of 97 "the plea can
never be sustained unless the court is satisfied that there is some other
tribunal, having competent jurisdiction, in which the case may be tried more
suitably for the interests of all the parties and for the ends of justice."
For earlier statements of the principle, in similar terms, see
Longworth v. Hope (1865) 3 Macph. 1049, 1053, per Lord President McNeill, and
Clements v. Macaulay (1866) 4 Macph. 583, 592, per Lord Justice−Clerk Inglis;
and for a later statement, also in similar terms, see Soci t du Gaz de Paris v.
Soci t Anonyme de Navigation "Les Armateurs Fran ais," 1926 S.C.(H.L.) 13, 22,
per Lord Sumner.
I feel bound to say that I doubt whether the Latin tag forum non
conveniens is apt to describe this principle. For the question is not one of
convenience, but of the suitability or appropriateness of the relevant
jurisdiction. However the Latin tag (sometimes expressed as forum non conveniens
and sometimes as forum conveniens) is so widely used to describe the principle,
not only in England and Scotland, but in other Commonwealth jurisdictions and in
the United States, that it is probably sensible to retain it. But it is most
important not to allow it to mislead us into thinking that the question at issue
is one of "mere practical convenience." Such a suggestion was emphatically
rejected by Lord Kinnear in Sim v. Robinow, 19 R. 665, 668, and by Lord Dunedin,
Lord Shaw of Dunfermline and Lord Sumner in the Soci t du Gaz case, 1926
S.C.(H.L.) 13, 18, 19, and 22 respectively. Lord Dunedin, with reference to the
expressions forum non competens and forum non conveniens, said, at p. 18:
"In my view, ’competent’ is just as bad a translation for
’competens’ as ’convenient’ is for ’conveniens.’ The proper translation for
these Latin words, so far as this plea is concerned, is ’appropriate.’"
Lord Sumner referred to a phrase used by Lord Cowan in Clements
v. Macaulay (1866) 4 Macph. 583, 594, viz. "more convenient and preferable for
securing the ends of justice," and said, at p. 22: "one cannot think of
convenience apart from the convenience of the pursuer or the defender or the
court, and the convenience of all these three, as the cases show, is of little,
if any, importance. If you read it as ’more convenient, that is to say,
(OS) NOs. 86/2009 and 87/2009 Page 26 of 97 preferable, for securing
the ends of justice,’ I think the true meaning of the doctrine is arrived at.
The object, under the words ’forum non conveniens’ is to find that forum which
is the more suitable for the ends of justice, and is preferable because pursuit
of the litigation in that forum is more likely to secure those ends."
In the light of these authoritative statements of the Scottish
doctrine, I cannot help thinking that it is wiser to avoid use of the word
"convenience" and to refer rather, as Lord Dunedin did, to the appropriate
forum.
(6) How the principle is applied in cases of stay of proceedings
When the principle was first recognised in England, as it was
(after a breakthrough in The Atlantic Star [1974] A.C. 436) in MacShannon v.
Rockware Glass Ltd. [1978] A.C. 795, it cannot be said that the members of the
Judicial Committee of this House spoke with one voice. This is not surprising;
because the law on this topic was then in an early stage of a still continuing
development. The leading speech was delivered by Lord Diplock. He put the matter
as follows, at p. 812:
"In order to justify a stay two conditions must be satisfied,
one positive and the other negative; (a) the defendant must satisfy the court
that there is another forum to whose jurisdiction he is amenable in which
justice can be done between the parties at substantially less inconvenience or
expense, and (b) the stay must not deprive the plaintiff of a legitimate
personal or juridical advantage which would be available to him if he invoked
the jurisdiction of the English court."
This passage has been quoted on a number of occasions in later
cases in your Lordships’ House. Even so, I do not think that Lord Diplock
himself would have regarded this passage as constituting an immutable statement
of the law, but rather as a tentative statement at an early stage of a period of
development. I say this for three reasons. First, Lord Diplock himself
subsequently recognised that the mere existence of "a legitimate personal or
juridical advantage" of the plaintiff in the English jurisdiction would not be
decisive: see The Abidin Daver [1984] A.C. 398, 410, where he recognised that a
balance must be struck. Second, Lord
(OS) NOs. 86/2009 and
87/2009 Page 27 of 97 Diplock also subsequently recognised that no distinction
is now to be drawn between Scottish and English law on this topic, and that it
can now be said that English law has adopted the Scottish principle of forum non
conveniens: see The Abidin Daver [1984] A.C. 398, 411. It is necessary therefore
now to have regard to the Scottish authorities; and in this connection I refer
in particular, not only to statements of the fundamental principle, but also to
the decision of your Lordships’ House in the Soci t du Gaz case, 1926 S.C.(H.L.)
13. Third, it is necessary to strike a note of caution regarding the prominence
given to "a legitimate personal or juridical advantage" of the plaintiff, having
regard to the decision of your Lordships’ House in Trendtex Trading Corporation
v. Credit Suisse [1982] A.C. 679, in which your Lordships unanimously approved
the decision of the trial judge to exercise his discretion to stay an action
brought in this country where there existed another appropriate forum, i.e.,
Switzerland, for the trial of the action, even though by so doing he deprived
the plaintiffs of an important advantage, viz. the more generous English
procedure of discovery, in an action involving allegations of fraud against the
defendants.
In my opinion, having regard to the authorities (including in
particular the Scottish authorities), the law can at present be summarised as
follows.
(a) The basic principle is that a stay will only be granted on
the ground of forum non conveniens where the court is satisfied that there is
some other available forum, having competent jurisdiction, which is the
appropriate forum for the trial of the action, i.e. in which the case may be
tried more suitably for the interests of all the parties and the ends of
justice.
(b) As Lord Kinnear’s formulation of the principle indicates, in
general the burden of proof rests on the defendant to persuade the court to
exercise its discretion to grant a stay (see, e.g., the Soci t du Gazcase, 1926
S.C.(H.L.) 13, 21, per Lord Sumner; and Anton, Private International Law (1967)
p. 150). It is however of importance to remember that each party will seek to
establish the existence of certain matters which will assist him in persuading
the court to exercise its discretion in his favour, and that in respect of any
such matter the evidential burden will rest on the
(OS) NOs.
86/2009 and 87/2009 Page 28 of 97 party who asserts its existence. Furthermore,
if the court is satisfied that there is another available forum which is prima
facie the appropriate forum for the trial of the action, the burden will then
shift to the plaintiff to show that there are special circumstances by reason of
which justice requires that the trial should nevertheless take place in this
country (see (f), below).
(c) The question being whether there is some other forum which
is the appropriate forum for the trial of the action, it is pertinent to ask
whether the fact that the plaintiff has, ex hypothesi, founded jurisdiction as
of right in accordance with the law of this country, of itself gives the
plaintiff an advantage in the sense that the English court will not lightly
disturb jurisdiction so established. Such indeed appears to be the law in the
United States, where "the court hesitates to disturb the plaintiff’s choice of
forum and will not do so unless the balance of factors is strongly in favor of
the defendant,": see Scoles and Hay, Conflict of Laws (1982), p. 366, and cases
there cited; and also in Canada, where it has been stated (see Castel, Conflict
of Laws (1974), p. 282) that "unless the balance is strongly in favor of the
defendant, the plaintiff’s choice of forum should rarely be disturbed." This is
strong language. However, the United States and Canada are both federal states;
and, where the choice is between competing jurisdictions within a federal state,
it is readily understandable that a strong preference should be given to the
forum chosen by the plaintiff upon which jurisdiction has been conferred by the
constitution of the country which includes both alternative jurisdictions.
A more neutral position was adopted by Lord Sumner in the Soci t
du Gaz case, 1926 S.C.(H.L.) 13, 21, where he said:
"All that has been arrived at so far is that the burden of proof
is upon the defender to maintain that plea. I cannot see that there is any
presumption in favour of the pursuer."
However, I think it right to comment that that observation was
made in the context of a case where jurisdiction had been founded by the pursuer
by invoking the Scottish principle that, in actions in personam, exceptionally
jurisdiction
29 of 97 may
be founded by arrest of the defender’s goods within the Scottish jurisdiction.
Furthermore, there are cases where no particular forum can be described as the
natural forum for the trial of the action. Such cases are particularly likely to
occur in commercial disputes, where there can be pointers to a number of
different jurisdictions (see, e.g., European Asian Bank A.G. v. Punjab and Sind
Bank [1982] 2 Lloyd’s Rep. 356), or in Admiralty, in the case of collisions on
the high seas. I can see no reason why the English court should not refuse to
grant a stay in such a case, where jurisdiction has been founded as of right. It
is significant that, in all the leading English cases where a stay has been
granted, there has been another clearly more appropriate forum − in The Atlantic
Star [1974] A.C. 436 (Belgium); in MacShannon’s case [1978] A.C. 795 (Scotland);
in Trendtex [1982] A.C. 679 (Switzerland); and in the The Abidin Daver [1984]
A.C. 398 (Turkey). In my opinion, the burden resting on the defendant is not
just to show that England is not the natural or appropriate forum for the trial,
but to establish that there is another available forum which is clearly or
distinctly more appropriate than the English forum. In this way, proper regard
is paid to the fact that jurisdiction has been founded in England as of right
(see MacShannon’s case [1978] A.C. 795, perLord Salmon); and there is the
further advantage that, on a subject where comity is of importance, it appears
that there will be a broad consensus among major common law
jurisdictions. I may add that if, in any case, the connection of
the defendant with the English forum is a fragile one (for example, if he is
served with proceedings during a short visit to this country), it should be all
the easier for him to prove that there is another clearly more appropriate forum
for the trial overseas.
(d) Since the question is whether there exists some other forum
which is clearly more appropriate for the trial of the action, the court will look first to see what factors there are which point in the direction of another forum. These are the factors which Lord Diplock described, in MacShannon’s case [1978] A.C. 795, 812, as indicating that justice can be done in the other forum at "substantially less inconvenience or expense." Having regard to the anxiety expressed in your Lordships’ House in the Soci t du Gaz case, 1926 S.C. (H.L.) 13 concerning the use of the word (OS) NOs. 86/2009 and 87/2009 Page 30 of 97 "convenience" in this context, I respectfully consider that it may be more desirable, now that the English and Scottish principles are regarded as being the same, to adopt the expression used by my noble and learned friend, Lord Keith of Kinkel, in The Abidin Daver [1984] A.C. 398, 415, when he referred to the "natural forum" as being "that with which the action had the most real and substantial connection." So it is for connecting factors in this sense that the court must first look; and these will include not only factors affecting convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction (as to which see Cr dit Chimique v. James Scott Engineering Group Ltd., 1982 S.L.T. 131), and the places where the parties respectively reside or carry on business.
(e) If the court concludes at that stage that there is no other available forum which is clearly more appropriate for the trial of the action, it will ordinarily refuse a stay; see, e.g., the decision of the Court of Appeal in European Asian Bank A.G. v. Punjab and Sind Bank [1982] 2 Lloyd’s Rep. 356. It is difficult to imagine circumstances where, in such a case, a stay may be granted.
(f) If however the court concludes at that stage that there is some other available forum which prima facie is clearly more appropriate for the trial of the action, it will ordinarily grant a stay unless there are circumstances by reason of which justice requires that a stay should nevertheless not be granted. In this inquiry, the court will consider all the circumstances of the case, including circumstances which go beyond those taken into account when considering connecting factors with other jurisdictions. One such factor can be the fact, if established objectively by cogent evidence, that the plaintiff will not obtain justice in the foreign jurisdiction; see the The Abidin Daver [1984] A.C. 398, 411, perLord Diplock, a passage which now makes plain that, on this inquiry, the burden of proof shifts to the plaintiff. How far other advantages to the plaintiff in proceeding in this country may be relevant in this connection, I shall have to consider at a later stage." American View
29. In Gulf Oil Corporation v. Gilbert; 330 U.S. 501, there is a discussion on the power of the court to decline jurisdiction in exceptional circumstances and one such reason cited is where for kindred reasons, the litigation can be more appropriately conducted in a foreign tribunal. The principle of forum non convenience is set out to simply mean that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute since a plaintiff sometimes is under temptation to resort to a strategy of forcing the trial at a most inconvenient place for an adversary, even at someinconvenience to himself. The court went on to say that :
"It is often said that the plaintiff may not, by choice of an inconvenient forum, vex, harass, or oppress the defendant by inflicting upon him expense or trouble not necessary to his own right to pursue his remedy. But unless the balance is strongly in favour of the defendant, the plaintiffs choice of forum should rarely be disturbed."
30. In Koster v. (American) Lumbermens Mutual Casualty Co.; 330 US 518, it was observed that the ultimate enquiry is where trial will best serve the convenience of the parties and the ends of justice. It was also observed that:
"Where there are only two parties to a dispute, there is good reason why it should be tried in the plaintiff’s home forum if that has been his choice. He should not be deprived of the presumed advantages of his home jurisdiction except upon a clear showing of facts which either (1) establish such oppressiveness and vexation to a defendant as to be out of all proportion to plaintiff’s convenience, which may be shown to be slight or nonexistent, or (2) make trial in the chosen forum inappropriate because of considerations affecting the court’s own administrative and legal problems. In any balancing of conveniences, a real showing of convenience by a plaintiff who has sued in his home forum will normally outweigh the inconvenience the defendant may have shown."
31. In a comparatively recent judgment in Sinochem International Co.Ltd v. Malaysia International Shipping Corporation; 549 U.S. 422, it was observed that forum non convenience was a threshold, non merits ground for dismissal since resolving such a motion did not entail any assumption by the court of substantive law−declaring power. The dismissal for forum non convenience was opined to reflect the courts assessment of a range of considerations most notably the convenience to parties and the practical difficulties that can attend the adjudication of a dispute in a certain locality. It was observed :
"The common−law doctrine of forum non conveniens "has continuing application [in federal courts] only in cases where the alternative forum is abroad," American Dredging, 510 U.S., at 449, n 2, 114 S. Ct. 981, 127 L. Ed. 2d 285, and perhaps in rare instances where a state or territorial court serves litigational convenience best."
32. Thus, it was held to be "a supervening venue provision, permitting displacement of the ordinary rules of venue when, in light of certain conditions, the trial court thinks that jurisdiction ought to be declined." American Dredging, 510 U.S., at 453; cf. In re Papandreou, 139 F.3d, at 255 (forum non conveniens "involves a deliberate abstention from the exercise of jurisdiction"). (OS) NOs. 86/2009 and 87/2009.
3. The principle of forum non convenience was observed to be a common law doctrine which has a continuing application only in cases where alternative forum is abroad and perhaps in rare instances where a State or territorial court serves litigational convenience best. For the federal court system, the Congress had codified the doctrine and had provided for transfer, rather than dismissal, when a sister federal court is the more convenient place for the trial of an action. Canadian View
34. The Canadian viewpoint is reflected in Amchem Products Incorporated v. British Columbia (Workers Compensation Board); 1993 CanLII 124 (SCC). The Supreme Court of Canada was hearing an appeal from the Court of Appeals for British Columbia. A tort action had been initiated by 194 persons who claimed to have suffered injury by exposure to asbestos or by dependents of such persons and damages were sought from the asbestos company. Most of the claimants were residents of British Columbia when the injuries were sustained had been paid compensation in the form of disability or death benefits for those whose health had been affected by the Workers Compensation Board of British Columbia. The respondent− Companies did not have any connection with British Columbia and were located in United States of America. The companies, though not incorporated in Texas, were carrying on the business in the form of asbestos manufacturing plants in Texas. The action was commenced in Texas where the defendants challenged the jurisdiction and venue on the ground that Texas was forum non convenience. This motion of the respondent−companies was dismissed and the appeals also met the same fate. However, the companies successfully applied in the Supreme Court of British Columbia for anti suit injunction to prevent continuation of Texas actions and the said injunction was upheld in appeal. The Texas in turn issued an "anti−anti−suit" injunction prohibiting seeking of such injunction in British Columbia. The result was that the principles for grant of anti suit injunction and the principle of forum non convenience both came into question in the facts of the case. The companies succeeded in their action before the Supreme Court of Canada.
35. The Canadian Supreme Court emphasized that while choosing the forum in modern litigation, the business of litigation had become increasingly international and frequently there is no single forum that is clearly the most convenient or appropriate for trial of action but rather several which are equally suitable alternatives. The discussion on the various aspects is so lucid that we consider it appropriate to reproduce the same rather than endeavour to put them in different words. The same is as follows:
Choosing the Forum in Modern Litigation This Court has not considered this question since its decision in Antares Shipping Corp. v. The Ship "Capricorn", [1977] 2 S.C.R. 422. Meanwhile, the business of litigation, like commerce itself, has become increasingly international. With the increase of free trade and the rapid growth of multi−national corporations it has become more difficult to identify one clearly appropriate forum for this type of litigation. The defendant may not be identified with only one jurisdiction. Moreover, there are frequently multiple defendants carrying on business in a number of jurisdictions and distributing their products or services world wide. As well, the plaintiffs may be a large class residing in different jurisdictions. It is often difficult to pinpoint the place where the transaction giving rise to the action took place. Frequently, there is no single forum that is clearly the most convenient or appropriate for the trial of the action but rather several which are equally suitable alternatives. In some jurisdictions, novel principles requiring joinder of all who have participated in a field of commercial activity have been developed for determining how liability should be apportioned among defendants. In this climate, courts have had to become more tolerant of the systems of other countries. The parochial attitude exemplified by Bushby v. Munday (1821), 5 Madd. 297, 56 E.R. 908, at p. 308 and p. 913, that "[t]he substantial ends of justice would require that this Court should pursue its own better means of determining both the law and the fact of the case" is no longer appropriate. This does not mean, however, that "forum shopping" is now to be encouraged. The choice of the appropriate forum is still to be made on the basis of factors designed to ensure, if possible, that the action is tried in the jurisdiction that has the closest connection with the action and the parties and not to secure a juridical advantage to one of the litigants at the expense of others in a jurisdiction that is otherwise inappropriate. I recognize that there will be cases in which the best that can be achieved is to select an appropriate forum. Often there is no one forum that is clearly more appropriate than others. The courts have developed two forms of remedy to control the choice of forum by the parties. The first and more conventional device is a stay of proceedings. This enables the court of the forum selected by the plaintiff (the domestic forum) to stay the action at the request of the defendant if persuaded that the case should be tried elsewhere. The second is the anti−suit injunction, a more aggressive remedy, which may be granted by the domestic court at the request of a defendant or defendants, actual or potential, in a foreign suit. In the usual situation the plaintiff in the domestic court moves to restrain the defendant or defendants from launching or continuing a proceeding in the courts of another jurisdiction. Occasionally, as in this case, the defendants in a foreign jurisdiction who allege that the plaintiff in that jurisdiction has selected an inappropriate forum seek an injunction from the courts of the alleged appropriate forum, in which no proceeding is pending, to restrain continuation of the foreign proceedings. While the restraining order operates in personam on the plaintiff in the foreign suit and not on the foreign court itself, it has the latter effect and therefore raises serious issues of comity. Although both the remedy of a stay and an injunction have as their main objectives the selection of an appropriate forum for the trial of the action, there is a fundamental difference between them which is crucial to the development of the principles which should govern each. In the case of the stay the domestic court determines for itself whether in the circumstances it should take jurisdiction whereas, in the case of the injunction, it in effect determines the matter for the foreign court. Any doubts that a foreign court will not regard this as a breach of comity are dispelled by reading the reaction of Wilkey J. of the District of Columbia Circuit of the United States Federal Court of Appeal in Laker Airways v. Sabena, Belgian World Airlines, 731 F.2d 909 (1984), in which the British courts restrained Laker from continuing an anti−trust suit in United States courts against British airlines. In assessing the role of comity in the formulation of the principles which should inform the exercise of this power, I adopt the definition of (OS) NOs. 86/2009 and 87/2009 Page 37 of 97 comity approved by La Forest J.in Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, at p. 1096: "Comity" in the legal sense is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws . . . . It has been suggested that by reason of comity, anti−suit injunctions should either never be granted or severely restricted to those cases in which it is necessary to protect the jurisdiction of the court issuing the injunction or prevent evasion of an important public policy of the domestic forum. See Richard W.Raushenbush, "Antisuit Injunctions and International Comity" (1985), 71 Va. Law Rev. 1039, and Laker Airlines, supra. A case can be made for this position. In a world where comity was universally re spected and the courts of countries which are the potential fora for litigation applied consistent principles with respect to the stay of proceedings, anti−suit injunctions would not be necessary. A court which qualified as the appropriate forum for the action would not find it necessary to enjoin similar proceedings in a foreign jurisdiction because it could count on the foreign court’s staying those proceedings. In some cases, both jurisdictions would refuse to decline jurisdiction as, for example, where there is no one forum that is clearly more appropriate than anoth r. The consequences would not be disastrous. If the parties chose to litigate in both places rather than settle on one jurisdiction, there would be parallel proceedings, but since it is unlikely that they could be tried concurrently, the judgment of the first court to resolve the matter would no doubt be accepted as binding by the other jurisdiction in most cases. While the above scenario is one we should strive to attain, it has not yet been achieved. Courts of other jurisdictions do occasionally accept jurisdiction over cases that do not (OS) NOs. 86/2009 and 87/2009 Page 38 of 97 satisfy the basic requirements of the forum non conveniens test. Comity is not universally respected. In some cases a serious injustice will be occasioned as a result of the failure of a foreign court to decline jurisdiction. It is only in such circumstances that a court should entertain an application for an anti suit injunction. This then indicates the general tenor of the principles that underlie the granting of this form of relief. In order to arrive at more specific criteria, it is necessary to consider when a foreign court has departed from our own test of forum non conveniens to such an extent as to justify our courts in refusing to respect the assumption of jurisdiction by the foreign court and in what circumstances such
assumption amounts to a serious injustice. The former requires an examination of
the current state of the law relating to the stay of proceedings on the ground
of forum non
conveniens, while the latter, the law with respect to
injunctions and specifically anti−suit injunctions.
Forum Non Conveniens
The law of Canada and other common law
countries on this subject evolved from the law of England which
was most recently restated by the House of Lords in Spiliada Maritime Corp. v.
Cansulex Ltd., [1987] A.C. 460. In setting out the principles which should guide
a British court, Lord Goff, who delivered the main judgment, stated at p. 477
that "on a subject where comity is of importance, it appears that there will be
a broad consensus among major common law jurisdictions". The English
approach has gone through several stages of evolution tending
to a broader acceptance of the legitimacy of the claim of other jurisdictions to
try actions that have connections to England as well as to such other
jurisdictions. Other common law jurisdictions have either accepted the
principles in Spiliada, or an earlier version of them.
Earlier English cases declined to apply the principle of forum
non conveniens, which was a Scottish principle, preferring a rule which required
a party who had been served within the jurisdiction to establish: (1) that the
continuation of the action would cause an
(OS) NOs. 86/2009
and 87/2009 Page 39 of 97 injustice to him or her because it would be oppressive
or vexatious or constitute an abuse of the process, and (2) that stay would not
cause an injustice to the plaintiff. The foundation for this rule was not
balance of convenience for the trial of the action but rather abuse of the
rights of the parties. A different test applied with respect to cases in which
service outside the jurisdiction was necessary. In such a case an order for
service ex juris was required and the plaintiff had to show that England was the
appropriate forum and that the rule authorizing such service was otherwise
complied with. In The Atlantic Star, [1973] 2 All E.R. 175, the House of Lords
was urged to adopt the principle of forum non conveniens from the Scottish law
and to
discontinue the test which required proof that the action was
oppressive or vexatious as a prerequisite to a stay. The House of Lords declined
to adopt the Scottish doctrine but opined that since the words "oppressive and
vexatious" were flexible (indeed they had never been satisfactorily defined),
liberalization of the English rule could be achieved in the
application of those terms. In Rockware Glass Ltd. v.
MacShannon, [1978] 2 W.L.R. 362, those words were discarded in favour of a more
liberal and flexible test which required the defendant to establish: (1) that
there is another forum to which the defendant is amenable in which justice can
be done at substantially less inconvenience or expense, and (2) that the stay
did not deprive the plaintiff of a legitimate personal or juridical advantage if
the action continued in the domestic court. This was substantially the same as
the Scottish rule of forum non conveniens.
In Spiliada, supra, the House of Lords restated the rule and
elaborated on its application. In particular, the court dealt with its
application in what it considered two different circumstances. In the "as of
right" cases in which the
defendant was served in the jurisdiction, the burden of proof
that a stay should be granted was on the defendant who was required to show that
there is another forum which is clearly more appropriate for the trial of the
action. This so−called "natural forum" is the one with which the action has the
most real and substantial connection. If this first condition is
(OS) NOs. 86/2009 and 87/2009 Page 40 of 97 established, a stay will be
granted unless the plaintiff establishes special circumstances by reason of
which justice requires that the trial take place in England. Mere loss of a
juridical advantage will not amount to an injustice if the court is satisfied
that substantial justice will be done in the appropriate forum. In cases in
which service is effected ex juris, the burden is on the plaintiff throughout
and is the obverse of that applicable in cases as of right; that is, the
plaintiff must show that England is clearly the appropriate forum. Lord Goff
provided some guidance with respect to the relevant factors that determine the
appropriate forum. While not intending to provide an exhaustive list, His
Lordship referred to the principal factors in his reasons at p. 478:
So it is for connecting factors in this sense that the court
must first look; and these will include not only factors affecting convenience
or expense (such as availability of witnesses), but also other factors such as
the law governing the relevant transaction (as to which see Credit Chimique v.
James Scott Engineering Group Ltd., 1982 S.L.T. 131), and the places where the
parties respectively reside or carry on business.
These principles were reaffirmed in de
Dampierre v. de Dampierre, [1987] 2 W.L.R. 1006 (H.L.). The
case provides an interesting illustration of the application of the second
branch of the rule. The petitioner wife resisted a stay of her divorce
proceedings in England on the ground that in France, where her husband had also
commenced proceedings, she would be deprived of support if her conduct was found
to be the exclusive cause of the break−up of the marriage. Having found that the
husband had satisfied the first condition establishing France as the appropriate
forum, the loss of this juridical advantage was considered not sufficient to
work an injustice in that
substantial justice would still be done under the matrimonial
regime obtaining in France.
In Australia, the High Court, while not adopting all of the
wording of Spiliada, has enunciated principles that the court acknowledged would
likely yield the same results in the majority of cases. See Voth v. Manildra
Flour Mills Pty Ltd.
41 of
97 (1990), 65 A.L.J.R. 83, at p. 90. The test for a stay is whether the forum
selected by the plaintiff is clearly inappropriate rather than whether there is
another forum that is clearly more appropriate. The same test applies in "as of
right" and "service ex juris" cases. In New Zealand the applicable test is the
Spiliada test which was adopted in Club Mediterranee NZ v. Wendell, [1989] 1
N.Z.L.R. 216 (C.A.) The United States Federal Courts apply similar principles in
actions in those courts. In Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981),
the Supreme Court of the United States approved of the decision of the District
Court which dismissed an action brought in California by the administratrix of
the estates of Scottish citizens involved in an air crash in Scotland against
the American manufacturers of the aircraft. The test applied by the District
Court judge was whether the relevant factors clearly pointed to a trial in the
alternative jurisdiction. The test was applied on the basis of a presumption in
favour of the plaintiff’s choice of forum, the impact of which was lessened when
the home forum was not selected.
The current state of the law in Canada is summed up adequately
by Ellen L. Hayes in "Forum Non Conveniens in England, Australia and Japan: The
Allocation of Jurisdiction in Transnational Litigation" (1992), 26 U.B.C. Law
Rev.41, at pp. 42−43:
The status of the doctrine of forum non
conveniens in Canada is unclear. In general terms the Canadian
courts have looked to English authorities when considering forum non conveniens
issues. Their specific approach, however, is not consistent. The most recent
cases from the Western provinces refer to the current English test, but at the
same time resist adopting a comprehensive test or rule which would result in an
"overly legalistic approach." The Ontario courts, on the other hand, have fallen
behind the English courts’ development of the doctrine and continue to apply a
test which has now been replaced by the House of Lords. There is confusion in
many of the cases as to whether the test is different when the defendant is
served within the jurisdiction rather than ex juris, where the burden of proof
lies and the weight to be given personal or
(OS) NOs. 86/2009
and 87/2009 Page 42 of 97 juridical advantages to the plaintiff of proceeding in
the home jurisdiction.
The only recent decision of this Court on the subject is
Antares, supra, which, while an admiralty case in the Federal Court, discusses
the general principles relating to forum non conveniens. At p. 448, Ritchie J.,
for the majority, stated the test that should be applied when the court is asked
to stay an action on this ground:
In my view the overriding consideration which must guide the
Court in exercising its discretion by refusing to grant such an application as
this must, however, be the existence of some other forum more convenient and
appropriate for the pursuit of the action and for securing the ends of justice.
This case was decided before Spiliada and MacShannon. It is
significant that there is no mention in the statement of general principles of
any requirement that the domestic
proceeding be shown to be oppressive or
vexatious. There is no specific discussion of the second
condition of the English rule but it is clear from the judgment that a principal
factor in the determination that there was no
alternative forum more convenient than
Canada was the fact that it was the only jurisdiction in which
the plaintiff could obtain an effective judgment. The ship, which was the
subject of the suit, had been arrested in Quebec and the bond posted to obtain
its release was security for enforcement of any judgment obtained in Canada. No
such security was available in the other jurisdictions which were potential
appropriate fora for the action. Accordingly, Canada was the most convenient
forum for both "the pursuit of the action" and "for securing the ends of
justice".
In my view there is no reason in principle why the loss of
juridical advantage should be treated as a separate and distinct condition
rather than being weighed with the other factors which are considered in
identifying the appropriate forum. The existence of two
conditions is based on the historical development of the rule
in England which started with two branches at a time when
(OS)
NOs. 86/2009 and 87/2009 Page 43 of 97 oppression to the defendant and injustice
to the plaintiff were the dual bases for granting or refusing a stay. The law in
England has evolved by reworking a passage from the reasons of Scott J. in St.
Pierre v. South American Stores (Gath & Chaves), Ltd., [1936] 1 K.B. 382, which
contained two conditions. In its original formulation the second condition
required the court to ensure that there was no injustice to the plaintiff in
granting the stay. No doubt this was because the oppression test concentrated
largely on the effects on the defendant of being subjected to a trial in
England. When the first condition moved to an examination of all the factors
that are designed to identify the natural forum, it seems to me that any
juridical advantages to the plaintiff or defendant should have been considered
one of the factors to be taken into account. The weight to be given to juridical
advantage is very much a function of the parties’ connection to the particular
jurisdiction in question. If a party seeks out a jurisdiction simply to gain a
juridical advantage rather than by reason of a real and substantial connection
of the case to the jurisdiction, that is ordinarily condemned as "forum
shopping". On the other hand, a party whose case has a real and substantial
connection with a forum has a legitimate claim to the advantages that that forum
provides. The legitimacy of this claim is based on a reasonable expectation that
in the event of litigation arising out of the transaction in question, those
advantages will be available.
Finally, I observe that Antares, supra, was a case in which
leave to serve ex juris was required. The Court did not, however, consider this
an important matter in formulating the test. It seems to me that whether it is a
case for service out of the jurisdiction or the defendant is served in the
jurisdiction, the issue remains: is there a more appropriate
jurisdiction based on the relevant factors. If the defendant
resides out of the jurisdiction this is a factor whether or not service is
effected out of the jurisdiction. Residence outside of the jurisdiction may be
artificial. It may have been arranged for tax or other reasons notwithstanding
the defendant has a real and substantial connection with this country. The
special treatment which the English courts
(OS) NOs. 86/2009
and 87/2009 Page 44 of 97 have accorded to ex juris cases appears to be based on
the dictates of Ord. 11 of the English rules which imposes a heavy burden on the
plaintiff to justify the assertion of jurisdiction over a foreigner. In most
provinces in Canada, leave to serve ex juris is no longer required except in
special circumstances and this trend is one that is likely to spread to other
provinces. This phenomenon was considered by the High Court of Australia in
Voth, supra, in reaching its conclusion that the test should be the same for
service ex juris cases and others. Whether the burden of proof should be on the
plaintiff in ex juris cases will depend on the rule that permits service out of
the jurisdiction. If it requires that service out of the jurisdiction be
justified by the plaintiff, whether on an application for an order or in
defending service ex juris where no order is required, then the rule must
govern. The burden of proof should not play a significant role in these matters
as it only applies in cases in which the judge cannot come to a determinate
decision on the basis of the material presented by the parties. While the
standard of proof remains that applicable in civil cases, I agree with the
English authorities that the existence of a more appropriate forum must be
clearly established to displace the forum selected by the plaintiff. This was
the position adopted by McLachlin J.A. (as she then was) in Avenue Properties
Ltd. v. First City Dev. Corp. (1986), 7 B.C.L.R. (2d) 45. She
emphasized that this had particular application where there
were no parallel foreign
proceedings pending.
This review establishes that the law in common law
jurisdictions is, as observed by Lord Goff in Spiliada, remarkably uniform.
While there are differences in the language used, each
jurisdiction applies principles designed to identify the most
appropriate or appropriate forum for the litigation based on factors which
connect the litigation and the parties to the competing fora. A review of the
law of Japan by Ellen L. Hayes in the study to which I refer above (supra, at p.
63) led her to conclude that similar principles are applied there. Regard for
the principles of international comity to which I have referred suggests that in
considering an anti−suit injunction the fact that a foreign court has assumed
jurisdiction in circumstances
(OS) NOs. 86/2009 and 87/2009
Page 45 of 97 which are consistent with the application of the above principles
is an important factor
militating against granting an injunction.
Anti−Suit Injunctions
England
The English courts have exercised jurisdiction to restrain
proceedings in a foreign court and to stay domestic actions since 1821. Leach
V.−C. in Bushby v. Munday, supra, at p. 307 and p. 913, stated the rule as
follows:
Where parties Defendants are resident in England, and brought
by subp{oe}na here, this Court has full authority to act upon them personally
with respect to the subject of the suit, as the ends of justice require; and
with that view, to order them to take, or to omit to take, any steps and
proceedings in any other Court of Justice, whether in this country, or in a
foreign country.
The sentiment expressed at that time was that the relief
sought, whether an injunction or a stay, operated in personam and was not
intended to interfere with the other court. Thus viewed, the
question to be determined was whether the ends of justice required the issuance
of an injunction or a stay. In deciding that an injunction should be granted in
Bushby v. Munday, supra, the Vice−Chancellor made findings that the English
Court was a more convenient jurisdiction; and, that the proceedings in Scotland,
due to procedural law, were less likely to elicit the truth. Leach V.−C.
concluded (at p. 308 and p. 913) that the English court should pursue its
superior means for determining both law and fact.
The same test evolved for anti−suit injunctions and stays,
based on the judgment of Scott L.J. in St. Pierre v. South American Stores (Gath
& Chaves), Ltd., supra. Where these requirements were met, the court would
exercise its
discretion in granting the stay or enjoining the foreign
proceedings. The principles governing the issuance of a stay and an anti−suit
injunction remained identical until the House of Lords’
decision in The Atlantic Star, supra,
(OS) NOs. 86/2009 and
87/2009 Page 46 of 97 when the English jurisprudence regarding stays of domestic
proceedings underwent the first of the modifications to which I have referred.
In The Atlantic Star, the House of Lords held that the words "oppressive" and
"vexatious" should be interpreted liberally. After the decision in The Atlantic
Star, it was unclear whether the principles governing the issuance of an anti−
suit injunction remained the same or whether they evolved along with the
principles
governing a stay of domestic proceedings. The House of Lords
directly considered this
question in Castanho v. Brown and Root (U.K.) Ltd., supra,
which involved an application for an anti−suit injunction. Lord Scarman
pronounced, at p. 574, that "[t]he principle is the same whether the remedy
sought is a stay of English proceedings or a restraint upon foreign
proceedings". Lord Scarman approved the
reformulation of the principles as set out by Lord Diplock in
The Atlantic Star, supra, and concluded, at p. 575, that:
. . . to justify the grant of an injunction the defendants must
show: (a) that the English court is a forum to whose jurisdiction they are
amenable in which justice can be done at substantially less inconvenience and
expense, and (b) the injunction must not deprive the plaintiff of a legitimate
personal or juridical advantage which would be available to him if he invoked
the American jurisdiction. [Emphasis in original.]
Lord Scarman emphasized that the "critical equation" in an
application for a stay or an anti− suit injunction was between the advantage to
the laintiff and the disadvantage to the defendants. For the purposes of this
determination, the prospect of higher damages in the foreign jurisdiction was a
legitimate juridical advantage for a plaintiff. The House of Lords applied the
law as set out in Castanho, supra, in two succeeding cases involving
applications to enjoin foreign proceedings (British Airways Board v. Laker
Airways Ltd., [1985] A.C. 53, and South Carolina Insurance Co. v. Assurantie
Maatschappij "De Zeven Provincien" N.V., [1987] A.C. 24).
This test, in so far as it regarded anti−suit injunctions, did
not withstand the scrutiny of
(OS) NOs. 86/2009 and 87/2009
Page 47 of 97 the Judicial Committee of the Privy Council. In 1987, the Privy
Council overturned the
liberalized principles that the House of Lords enunciated. The
definitive statement of the law was pronounced in SNI, supra: an anti−suit
injunction will not be issued by an English court unless it is shown that the
foreign proceedings will be oppressive or vexatious. It was made clear that the
traditional principles as summarized in St. Pierre v. South American Stores
(Gath & Chaves), Ltd., supra, were to govern applications to restrain foreign
proceedings. Thus, the liberalized principles formulated in Spiliada, supra, in
the context of an application for a stay of domestic
proceedings were not to apply to anti−suit injunctions because
to do so would be
inconsistent with the principles of comity and would disregard
the fundamental requirement that an injunction will only be available where it
is required to address the ends of justice.
In coming to his conclusion on the law in SNI, Lord Goff
considered the long history of English law as well as American and Scottish
authorities. He stated, at p. 519, that the following basic
principles were beyond dispute:
First, the jurisdiction is to be exercised when the ‘ends of
justice’ require it. . . . Second, where the court decides to grant an
injunction restraining proceedings in a foreign court, its order is directed not
against the foreign court but against the parties so proceeding or threatening
to proceed. . . . Third, it follows that an injunction will only be issued
restraining a party who is amenable to the jurisdiction of the court against
whom an injunction will be an effective remedy. . . . Fourth, it has been
emphasised on many occasions that, since such an order indirectly affects the
foreign court, the jurisdiction is one which must be exercised with caution. . .
. [Cites omitted.]
In considering the above principles, Lord Goff set out the
following test (SNI, supra,at p. 522):
In the opinion of their Lordships, in a case such as the
present where a remedy for a particular wrong is available both in the English
(or, as here, the Brunei) court and in a foreign court,
(OS)
NOs. 86/2009 and 87/2009 Page 48 of 97 the English (or Brunei) court will,
generally speaking, only restrain the plaintiff from pursuing proceedings in the
foreign court if such pursuit would be vexatious or oppressive. This presupposes
that, as a general rule, the English or Brunei court must conclude that it
provides the natural forum for the trial of the action, and further, since the
court is
concerned with the ends of justice, that account must be taken
not only of injustice to the defendant if the plaintiff is allowed to pursue the
foreign proceedings, but also of injustice to the plaintiff if he is not allowed
to do so. So, as a general rule, the court will not grant an injunction if, by
doing so, it will deprive the plaintiff of advantages in the foreign forum of
which it would be unjust to deprive him.
This analysis represents the current test for issuance of an
anti−suit injunction in England.
The United States of America
Although American courts have exercised the equitable power to
restrain parties subject to their jurisdiction from litigating in another forum
(see Cole v.Cunningham, 133 U.S. 107 (1890)), most American jurisdictions allow
parallel foreign proceedings for in personam actions. Anti−suit injunctions are
used only when "necessary to protect the jurisdiction of the enjoining court, or
to prevent the litigant’s evasion of the important public policies of the forum"
(Laker Airways v. Sabena, Belgian World Airlines, supra, at p. 927). As in the
case of other jurisdictions, the power to issue such injunctive relief must be
exercised with extreme caution because, although in theory the order operates in
personam, an antisuit injunction "effectively restrict[s] the foreign court’s
ability to exercise its jurisdiction" (Laker Airways, supra, at p. 927).
In American jurisprudence there are no precise rules governing
the issuance of anti−suit injunctions; rather, the equitable circumstances are
examined to determine whether the
injunction is required to prevent an irreparable miscarriage of
justice. A court is to be guided by two tenets. Firstly, the fundamental
49 of 97 corollary to
concurrent jurisdiction must be respected: parallel proceedings in concurrent in
personam actions are allowed to proceed
simultaneously. Second, impedance of the foreign jurisdiction
is to be avoided. (See Laker Airways, supra, at pp. 926−27.)
As noted by one author, when faced with
foreign courts of concurrent jurisdiction, not all American
courts abide by the rule favouring parallel proceedings. Richard W. Raushenbush,
"Antisuit Injunctions and International Comity", supra, at pp. 1049−50,
describes two distinct approaches which have developed. Under the "liberal"
approach to anti−suit injunctions, a court will be willing to grant an
injunction where the proceedings are duplicative in nature, and they "(1)
frustrate a policy of the forum issuing the injunction; (2) [are] vexatious or
oppressive; (3) threaten the issuing court’s in rem or quasi in rem
jurisdiction; or (4) . . . prejudice other equitable considerations" (per
Unterweser Reederei, GmbH v. M/S Bremen, 428 F.2d 888 (5th Cir. 1970), at p.
890). The "conservative" approach, as exemplified by Wilkey J. in Laker Airways,
supra, advances the view that issuing anti−suit injunctions to prevent
duplicative litigation is inconsistent with the rule permitting parallel
proceedings in concurrent in personam actions. In the
application of the "conservative" approach (at p. 927), anti−
suit injunctions are only deployed when it becomes "necessary to protect the
jurisdiction of the enjoining court, or to prevent the litigant’s evasion of the
important public policies of the forum". Often an applicant is additionally
required to establish the conventional requirements for issuance of an
injunction: a likelihood of success on the merits, a risk of irreparable injury,
a lack of significant harm to the defendant, and a public interest in issuing an
injunction. (See Gau Shan Co., Ltd. v. Bankers Trust Co., 956 F.2d 1349 (6th
Cir. 1992).)
As observed by Lord Goff in SNI, there is no suggestion in
American jurisprudence that applications for stays of proceedings and anti− suit
injunctions are governed by the same principles.
50 of 97 Australia
The Federal Court − General Division has discussed the English
and American authorities regarding anti−suit injunctions: Gummow J. in National
Mutual Holdings Pty. Ltd. v. Sentry Corp. (1989), 87 A.L.R. 539, at p. 563,
concluded that:
The conduct of foreign proceedings which have a tendency to
interfere with the due process of the domestic court may, in the circumstances
of a particular case, generate the necessary equity to enjoin those foreign
proceedings as vexatious or oppressive. . . .
He added three observations. First, "[i]n Australia, there is
the further consideration that where a court has begun to exercise the
judicial power of the Commonwealth in relation to a particular
matter, it has the exclusive right to exercise or control the exercise of the
functions which form part of that power or are incidental to it: cf Pioneer
Concrete (Vic) Pty Ltd v Trade Practices Commission (1982) 152
C.L.R. 460 at 471−3, 474. . . ." Secondly, "[i]t is also to be
asked whether effectual relief can be obtained in the courts of the foreign
country . . .: cf White and Tudor’s Leading Cases in Equity [9th ed., vol. 1],
pp 635−6". And lastly, "[a] relevant consideration is the existence of
substantial reasons of benefit for the plaintiff in bringing the foreign
proceedings: [SNI] (at 893− 4)".
The High Court of Australia has not specifically considered the
principles upon which an anti− suit injunction will be granted.
Canada
Canadian jurisprudence is not widely developed on this subject
matter. Even the early cases, however, admonished that the power to
restrain foreign proceedings should be
exercised with great caution and that the strict purpose of
such injunctions was to prevent the abuse of the courts by vexatious actions.
There is no decision of this Court on the point.
51 of 97 Two recent Nova
Scotia decisions dealt with anti−suit injunctions. Canadian Home Assurance Co.
v. Cooper (1986), 29 D.L.R. (4th) 419 (N.S.S.C. App. Div.), predated the English
judgment of SNI. In that case, an injunction was granted upon MacKeigan J.A.’s
findings that the foreign action involving the same parties was of no value to
the respondents since, if its resolution was the same as the domestic
action, it would not add to the domestic judgment, and, if the
judgment were not the same, it would not be recognized in the
domestic jurisdiction because of what would be considered to be
a jurisdictional error. Without discussion of the governing principles, the
injunction was granted. In the later Nova Scotia case of Rowan Companies, Inc.
v. DiPersio (1990), 69 D.L.R. (4th) 224, which was decided after SNI, an anti−
suit injunction was refused by the Court of Appeal. Jones J.A., delivering the
judgment for the court, stated that the balance of convenience favoured the
respondent. The factors he relied on were that the action was brought in the lex
loci delicti which was the appropriate forum and that the applicant carried on
business in the foreign jurisdiction where, presumably, some of the witnesses
resided. He found, at p. 240, that the action could not be termed "frivolous or
vexatious".
In the recent Alberta Queen’s Bench decision in Allied−Signal
Inc. v.Dome Petroleum Ltd. (1988), 67 Alta. L.R. (2d) 259, Medhurst J. purported
to apply the English principles enunciated in SNI in an action for an anti−suit
injunction. He stated, at p. 266:
After considering all of the submissions that have been made,
it is my view that these applications before me should be decided on the basis
of which forum is more suitable for the ends of justice in determining the
issues in dispute. This includes a consideration of the tripartite test for
obtaining interlocutory injunctions in other proceedings.
Medhurst J. concluded that on the basis of the forum non
conveniens test the injunction should be granted. He added that the
injunction might also be justified on two further grounds: (1)
the foreign action is oppressive
(OS) NOs. 86/2009 and 87/2009
Page 52 of 97 due to the risks of inconsistent findings and subsequent actions
for contribution and
indemnity, and (2) the tripartite test for granting interim
injunctions which includes consideration of the public interest and private
interests of the parties was satisfied.
Kornberg v. Kornberg (1990), 30 R.F.L. (3d) 238 (Man. C.A.)
(leave to appeal refused, [1991] 1 S.C.R. x), is a case which applied the SNI
principles. The majority of the Court of Appeal recognized that the principles
applicable to an antisuit injunction were not the same as those applicable to a
stay of domestic proceedings. Philp J.A., writing for the majority, held that an
anti−suit injunction should not be granted unless continuing the foreign
proceedings would lead to injustice to the other party or the pursuit of the
foreign proceedings was
vexatious and oppressive. This decision was in contrast to the
Manitoba Court of Appeal decision in Aikmac Holdings Ltd. v. Loewen, [1989] 6
W.W.R. 759, which applied the English approach in Castanho, supra, which was
overruled in 1987 by the Privy Council in SNI.
No consistent approach appears to emerge from these cases other
than recognition of the principle that great caution should be exercised when
invoking the power to enjoin foreign litigation.
The Test
In my view, the principles outlined in SNI should be the
foundation for the test applied in our courts. These principles should be
applied having due regard for the Canadian approach to private international
law. This approach is exemplified by the judgment of this Court in Morguard,
supra, in which La Forest J. stressed the role of comity and the need to adjust
its content in light of the changing world order. I now turn to the formulation
of the test in light of the foregoing.
First, it is useful to discuss some preliminary aspects of
procedure with respect to anti−suit injunctions. As a general rule, the domestic
court should not entertain an application for an injunction if there is no
foreign proceeding pending. While quia timet injunctions are
(OS) NOs. 86/2009 and 87/2009 Page 53 of 97 granted by the courts, that is done
only if the applicant establishes that some threatened action by the defendant
will constitute an actionable civil wrong. In general, an injunction is a remedy
ancillary to a cause of action. See Case Comment by Elizabeth R. Edinger (1992),
71 Can. Bar Rev. 117, at p. 127. In this respect the anti−suit injunction is
unique in that the applicant does not have to establish that the assumption of
jurisdiction by the foreign court will amount to an actionable wrong. Moreover,
although the application is heard summarily and based on affidavit evidence, the
order results in a permanent injunction which
ordinarily is granted only after trial. In order to resort to
this special remedy consonant with the principles of comity, it is preferable
that the decision of the foreign court not be pre−empted until a proceeding has
been launched in that court and the applicant for an injunction in the domestic
court has sought from the foreign court a stay or other termination of the
foreign proceedings and failed.
If the foreign court stays or dismisses the action there, the
problem is solved. If not, the domestic court must proceed to entertain the
application for an injunction but only if it is alleged to be the most
appropriate forum and is potentially an appropriate forum. In any case in which
an action has been commenced in the domestic forum, it can be expected that the
domestic forum is being put forward as an appropriate forum by the plaintiff. In
resisting a stay, the plaintiff will also contend that there is no other forum
which is clearly more
appropriate and that, therefore, the defendant has not complied
with the test which I have outlined above. If no action has been
commenced in the domestic forum, it has no juridical basis for
entertaining an application for an injunction unless it is contended by the
applicant that the action should have been commenced in the domestic forum as
the more appropriate place of trial and it is potentially an appropriate forum.
The first step in applying the SNI analysis is to determine
whether the domestic forum is the natural forum, that is the forum that on the
basis of relevant factors has the closest
(OS) NOs. 86/2009
and 87/2009 Page 54 of 97 connection with the action and the parties. I would
modify this slightly to conform with the test relating to forum non conveniens.
Under this test the court must determine whether there is another forum that is
clearly more appropriate. The result of this change in stay applications is that
where there is no one forum that is the most appropriate, the domestic forum
wins out by default and refuses a stay, provided it is an appropriate forum. In
this step of the analysis, the domestic court as a matter of comity must take
cognizance of the fact that the foreign court has assumed jurisdiction. If,
applying the principles relating to forum non conveniens outlined above, the
foreign court could reasonably have concluded that there was no alternative
forum that was clearly more appropriate, the domestic court should respect that
decision and the application should be dismissed. When there is a genuine
disagreement between the courts of our
country and another, the courts of this country should not
arrogate to themselves the decision for both jurisdictions. In most cases it
will appear from the decision of the foreign court whether it acted on
principles similar to those that obtain here, but, if not, then the domestic
court must consider whether the result is consistent with those principles.
In a case in which the domestic court concludes that the
foreign court assumed jurisdiction on a basis that is inconsistent with
principles relating to forum non conveniens and that the foreign court’s
conclusion could not reasonably have been reached had it applied those
principles, it must go then to the second step of the SNI test.
I prefer the initial formulation of that step without reference to the terms
"oppressive or vexatious". At p. 522, Lord Goff states:
This presupposes that, as a general rule, the English or Brunei
court must conclude that it provides the natural forum for the trial of the
action, and further, since the court is concerned with the ends of justice, that
account must be taken not only of injustice to the defendant if the plaintiff is
allowed to pursue the foreign proceedings, but also of injustice to the
plaintiff if he is not allowed to
(OS) NOs. 86/2009 and
87/2009 Page 55 of 97 do so. So, as a general rule, the court will not grant an
injunction if, by doing so, it will deprive the plaintiff of advantages in the
foreign forum of which it would be unjust to deprive him. [Emphasis added.]
That case was decided on the basis of the injustice to SNI by
reason of the loss of juridical advantages in Brunei but not available to it in
Texas. The characterization of this loss as oppressive added nothing to the
analysis. This is especially so since neither "oppressive" nor "vexatious" was
satisfactorily defined in SNI nor, from my reading of the cases, anywhere else.
If flexibility is the desired objective, it is achieved by the use of the term
"injustice" which, in addition, is more in keeping with the language of the
statutes which provide for injunctive relief. For example, the British Columbia
Law and Equity Act, R.S.B.C. 1979, c. 224, s. 36, authorizes an injunction when
"it appears to the court to be just or convenient."
When will it be unjust to deprive the plaintiff in the foreign
proceeding of some personal or juridical advantage that is available in that
forum? I have already stated that the
importance of the loss of advantage cannot be assessed in
isolation. The loss of juridical or other advantage must be considered in the
context of the other factors. The appropriate inquiry is whether it is unjust to
deprive the party seeking to litigate in the foreign jurisdiction of a judicial
or other advantage, having regard to the extent that the party and the facts are
connected to that forum based on the factors which I have already discussed. A
party can have no reasonable expectation of advantages available in a
jurisdiction with which the party and the subject matter of the litigation has
little or no connection. Any loss of advantage to the foreign plaintiff must be
weighed as against the loss of advantage, if any, to the defendant in the
foreign jurisdiction if the action is tried there rather than in the domestic
forum. I pointed out in my discussion of the test for determining the forum non
conveniens that loss of juridical advantage is one of the factors and it will
have been considered in step one. It will also be
56 of 97 considered in the
second step to determine whether, apart from its influence on the choice of the
most appropriate forum, an injustice would result if the plaintiff is allowed to
proceed in the foreign jurisdiction. The loss of a personal or juridical
advantage is not
necessarily the only potential cause of injustice in this
context but it will be, by far, the most frequent. Indeed most of the
authorities involve loss of juridical advantage rather than personal advantage.
Nonetheless, loss of personal advantage might amount to an injustice if, for
example, an individual party is required to litigate in a distant forum with
which he or she has no connection. I prefer to leave other possible sources of
injustice to be dealt with as they arise.
The result of the application of these principles is that when
a foreign court assumes
jurisdiction on a basis that generally conforms to our rule of
private international law relating to the forum non conveniens, that decision
will be respected and a Canadian court will not purport to make the decision for
the foreign court. The policy of our courts with respect to comity demands no
less. If, however, a foreign court assumes jurisdiction on a basis that is
inconsistent with our rules of private
international law and an injustice results to a litigant or
"would−be" litigant in our courts, then the assumption of jurisdiction is
inequitable and the party invoking the foreign jurisdiction can be restrained.
The foreign court, not having, itself, observed the rules of comity, cannot
expect its decision to be respected on the basis of comity.
Austrialian View
36. In CSR Limited v. Cigna Insurance Australia Limited
and Orss case (supra), which was referred to in the
judgment of Modi Entertainment Network and Anr. v. W.S.G.
Cricket Pvt. Ltds case (supra), the principles relating to
forum non convenience were emphasized by reference to
the Judgment in Voth v.Manildra Four Mills Pty.Ltd, (1990)
(OS) NOs. 86/2009 and 87/2009 Page 57 of 97 65 A.L.J.R. 83, which has been
dealt with in detail by the
Canadian Supreme Court in Amchem Products Incorporated
v. British Columbia (Workers Compensation Board)s case
(supra). The test which governs the stay of proceedings in
favour of proceedings in another country is that if a finding
is reached that the Australian Court is clearly the
inappropriate forum. It was observed that every court must
have to prevent its own processes being used to bring about
injustice and the principles of equity, vexation or oppression
are applied while granting anti suit injunction including in a
foreign court.
37. The view taken was that the test is that "the equitable
power to grant injunction in a restraint of litigation exists to
serve equity and good conscience. It is not a power which
involves a determination that proceedings instituted in a
foreign court are vexatious or oppressive in the sense that
they are an abuse of that courts processes or, even in the
sense that they should be stayed by a foreign court on
forum non conveniens grounds."
Some other Indian Judgments
38. We had at the inception itself referred to the judgment
of the Supreme Court in Modi Entertainment Network and
Anr. v. W.S.G. Cricket Pvt. Ltds case (supra) dealing with
the principle of anti suit injunction relating to foreign
forums. One of us (Sanjay Kishan Kaul, J.) had the occasion
to consider the principle of anti suit injunction and forum
58 of 97 non convenience in
(India TV) Independent News Service
Pvt. Limited v. India Broadcast Live Llc and Ors; 2007 (35)
PTC 177 (Del.) where the plaintiff had adopted the mark
"INDIA TV" and domain name "indiatvnews.com". The
defendant was the owner of the domain name
"indiatvlive.com" registered in Arizona. The plaintiff filed
the suit at Delhi seeking restraint order against the
defendant from using the words "INDIA" and "TV" in
combination as a domain name. It was held that the
defendant−company had a global presence and the website
being accessible in India as such courts in India can exercise
personal jurisdiction over the defendants. It was observed
that in order to grant an anti suit injunction, one of the
conditions is amenability of the defendant to the personal
jurisdiction of the court. The position in the United States
was slightly different where jurisdiction could be exercised
under the long arm statute of the State and the second
condition in respect of finding of the jurisdiction satisfying
the constitutional requirements of due process was
satisfied. The plaintiffs channel being primarily an Indian
news channel intended for Indian audiences, any damage
alleged to have been caused or alleged to be likely to arise
to the goodwill, reputation etc. of the plaintiff would be in
India and would be the consequence of the fact that the
impugned website was accessible in India and the services
provided can be availed of in India. It was also observed
59 of 97 that the
plaintiffs choice of forum is usually not disturbed
unless the balance of convenience is strongly in favour of
the defendant and in determining which of the available
forums is the forum convenience in a given matter, the
convenience of all the parties had to be seen. The
defendant had instituted a subsequent suit in Arizona after
institution of the suit by the plaintiff and the defendant was
restrained from proceeding with the said suit.
39. Another learned Single Judge of this Court in Moser
Baer India Ltd. V. Koninklijke Philips Electronics NV. and Ors;
(151) 2008 DLT 180 has observed as under:
"The concepts of anti−suit injunction and forum non conveniens
require some examination. An anti−suit injunction is granted by a court
preventing the parties before it from instituting or continuing with proceedings
in another Court. On the other hand, 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. So, in a
sense the principle on which an anti−suit injunction is invoked is just the
reverse of the principle on which the doctrine of forum on conveniens is
employed. To
make it absolutely clear, an example would be appropriate.
Assuming that there are two courts A and B at different places and both having
jurisdiction in a particular matter, a party may approach court A for an anti−
suit injunction against the other party preventing them from instituting a suit
or other
proceedings in court B. Of course, while considering the grant
of an anti−suit
injunction, court A would take into account as to which of the
two courts is the more
convenient forum. However, when a party
approaches court A and the defendants take up the plea that
court A is a forum non
60 of 97 conveniens and
that the matter ought to be more appropriately dealt with by court B, then court
A, invoking the principles of forum non conveniens, may refuse jto entertain the
matter presented to it and direct the parties to approach court B being the more
convenient forum. Thus, it is seen that in an anti−suit
injunction, one court grants an injunction restraining the parties from
approaching another court. Whereas, in the case of the doctrine
of forum non
conveniens, the court before whom the
matter is presented, itself refuses to
entertain the same and directs the parties to approach the
other court being the more
appropriate and convenient forum. It must also be kept in mind
that the court granting an anti−suit injunction must otherwise have jurisdiction
over the matter. Similarly, the court rejecting a matter on the principle of
forum on conveniens, must otherwise also have jurisdiction to entertain the
same. This is so because if the court in either case does not have jurisdiction
then, it cannot deal with the matter and, consequently, it can neither grant an
anti−suit injunction nor pass an order refusing to hear the matter on the plea
of forum non conveniens.
Legal position
40. The legal position arising from the conspectus of the
aforesaid judgments is thus abundantly clear that the
principle of anti suit injunction and forum non convenience
do apply to the foreign forums/courts once the test laid
down for exercise of such jurisdiction is satisfied and this
legal position is prevalent in UK, USA, Australia, Canada as
also in India.
The option under the Civil Procedure Code, 1908
41. The legal philosophy behind the impugned judgment is
that the power under Section 151 of the said Code permits
the Civil Court to apply the principle of forum non
(OS) NOs. 86/2009 and 87/2009 Page 61 of 97 convenience, the same being in the
nature of a residuary
power. The learned Single Judge has thus observed that in
exceptional circumstances, the court can exercise the
power ex debito justitiae to prevent a proceeding from
becoming vexatious or oppressive. The aforesaid line of
reasoning is sought to be challenged by learned counsel for
the appellants by referring to different provisions of the said
Code to advance the plea that Section 151 of the said Code
being in the nature of a residuary power, recourse cannot
be taken to the said provision where specific provisions are
contained in the said Code. The plea is based on the
incorporation of the provisions under Sections 16 to 20 of
the said Code. The said Sections fall under the heading
"place of suing". Section 16 of the said Code requires a
suit to be instituted where the subject matter is situate
while Section 17 refers to suits for immovable property
situate within jurisdiction of different courts. Section 18 of
the said Code refers to uncertainty about local limits of
jurisdiction of Courts while Section 19 deals with suits for
compensation for wrongs to person or movables. Section
20 of the said Code provides for other suits to be instituted
where defendant resides or cause of action arises. The plea
of the learned counsel for the appellants is thus that in
respect of instituting a suit of the nature in the present
case, the plaintiff can be guided by Section 20 of the said
Code.
62 of 97
42. An objection to the jurisdiction is to be taken in the
Court of first instance at the earliest opportunity as provided
under Section 21 of the said Code. Section 22 of the said
Code refers to powers to transfer suits which may be
instituted in more than one court and as to in which court
such an application for transfer would lie is provided in
Section 23 of the said Code. The application can in turn be
entertained only by the appellate court which is common to
the subordinate courts or in the absence thereof to the High
Court. Section 24 of the said Code refers to general power
of transfer and withdrawal but the principle behind both
Section 23 and 24 of the said Code is that it would lie to the
superior court having jurisdiction in the matter. The power
under Section 25 of the said Code is much wider and is
conferred on the Supreme Court for transfer of suits from a
High Court or other Civil Court in one State to a High Court
or other Civil Court in any other State. The plea thus is that
it is only the Supreme Court which can transfer a matter
from one State to another and when such power has been
conferred on the Supreme Court this power cannot be
usurped by a High Court to itself by exercise of this power
indirectly on the principle of forum non convenience.
43. In Durgesh Sharma v. Jayshree; (2008) 9 SCC 648, it
was held that after amendment of the said Code in 1976,
Section 25 is a self−contained code and comprises
substantive as well as procedural law and thus Section 23
63 of 97 must be read
subject to Section 25 of the said Code. The
powers under Section 151 of the said Code cannot be
exercised in contravention or conflict of or ignoring express
and specific provisions of law. It was thus observed that
Section 151 of the said Code cannot be invoked for
transferring a case from one court to another as exhaustive
law relating to transfer of cases is contained in Sections 22
to 25 of the said Code.
44. In Indian Overseas Bank, Madras v. Chemical
Construction Company and Ors; (1979) 4 SCC 358, it has
been observed that the principle governing the general
power of transfer and withdrawal under Section 24 of the
said Code is that the plaintiff is the dominus litis and, as
such, entitled to institute a suit in any forum which the law
allows him and the court should not lightly change that
forum and compel him to go to another Court, Thus a mere
balance of convenience in favour of proceedings in another
court, albeit a material consideration, may not always be a
sure criterion justifying transfer. However, as compared
with Section 24 of the said Code, the power of transfer of
civil proceedings to another court, conferred under Section
25 on the Supreme Court, is far wider.
45. The moot question which would thus arise for
consideration would be whether exercising the principle of
forum non convenience actually amounts to exercising the
power of transfer and thus is not permissible in view of the
64 of 97 aforesaid
observations. It is not in doubt, in our considered
view, that the power of transfer has to be exercised in the
mode and manner prescribed under the said Code and we
find support for such a view in view of the observations of
the Supreme Court in the aforesaid two judgments. It is in
that context that the question of evoking the principle of
forum non convenience arises which will, however, be dealt
with in detail while referring to this principle as applicable to
domestic forums/courts hereinafter.
46. Learned counsel for the appellants also drew our
attention to the relief granted by the learned Single Judge in
the impugned order whereby the plaints have been returned
and rejected. In this context, learned counsel has referred
to the provisions of Order 7 Rule 11 of the said Code which
stipulates as to when a plaint can be rejected. Thus, a plaint
can be rejected only if it fails to adhere to sub paragraphs
(a) to (f) of Order 7 Rule 11 of the said Code. We may also
refer to Order 7 Rule 10 of the said Code which provides for
return of plaint to be presented in a court in which the suit
should have been instituted. Learned counsel for the
appellants thus rightly contends that rejection or return of
the plaint can only take place within the purview of the said
provisions. However, distinct from the same, dismissal of a
suit is directed if the suit is not diligently prosecuted and
the same is incorporated under Order 9 Rules 2,3,5 and 8
which are the eventualities that arise on the failure of the
65 of 97 plaintiff to pay
the court fees or postal charges, or where
none appears for the parties when the suit is called for
hearing, failure of the plaintiff to apply for fresh summons
when earlier summons are unserved and where the
defendant alone appears.
47. Learned senior counsel for the respondent, in fact, did
not even contend to the contrary that the final directions, as
passed in the suit, need not have been so worded. The
plaint has been rejected and returned. The rejection of
plaint can only occur if the test of Order 7 Rule 11 of the
said Code is satisfied; and the plaint is returned under Order
7 Rule 10 of the said Code. Undisputedly, the parameters
of the aforesaid provisions are not applicable to the plaint in
question. It is not a case for dismissal of a suit for not being
prosecuted diligently as envisaged under Order 9 Rules 2,3
5 and 8 of the said Code. In fact, Order 10 Rule 4 of the
said Code provides for consequences of refusal or inability
of the pleader to answer any question relating to the suit
which the court may pose. In such a situation, the party
would have to appear in person and if the party also fails to
appear, the court can pronounce judgment. Similarly,
under Order 12 Rule 6 of the said Code, if there are
admissions in the written statement, a judgment can be
pronounced in favour of the plaintiff based on such
admissions. In case the parties are not at issue or there is
failure to produce evidence, the court may at once
66 of 97 pronounce the
judgment as envisaged under Order 15 Rules
1, 2 and 4 of the said Code.
48. The bedrock of the case of the appellants is that the
orders of this nature can be passed only if the test laid down
under the provisions of the Code are satisfied. The
additional exception is where in suits for injunction there are
wide powers to decline relief in case of unclean hands of
any of the parties.
49. Learned counsel for the respondent has referred to
the judgment in Manohar Lal Chopra v. Rai Bahadur Rao
Raja Seth Hiralal; AIR 1962 SC 527. In the said judgment,
the Supreme Court while dealing with rival contentions in
respect of grant of interim injunction under Order 39 of the
said Code, accepted the view that interim injunctions can be
issued even under the circumstances which are not covered
under Order 39 of the said Code as the Code cannot be
exhaustive since the legislature is incapable of
contemplating all the possible circumstances which may
arise in future litigation. The inherent powers of the court
were held to be in addition to the powers specifically
conferred on the court and are not controlled by the
provisions of the said Code. Such exercise of power
should, however, be not in conflict with what is expressly
provided in the said Code or against the intention of the
legislature. There is also discussion of the provisions of
Section 22 of the said Code but then that was the prevalent
67 of 97 position prior to
the amendment to the said Code. A
reference has also been made in respect of power of the
court to restrain a party in proceeding in another court
where such proceedings are vexatious.
50. We may also refer to the other judgments in this
behalf which have been cited by both the learned counsel
for the parties. The first is the judgment in M/s.Ram Chand
and Sons Sugar Mills Private Ltd., Barabanki, UP v.
Kanhayalal Bhargava and Ors; AIR 1966 SC 1899. Once
again the observations made by the Supreme Court are that
powers under Section 151 of the said Code are to be
exercised in the manner referred to aforesaid. The second
is the judgment in Shipping Corporation of India Ltd. v.
Machado Brothers and Ors.; (2004) 11 SCC 168 where the
opinion of the Court was that subsequent events could be
taken into account to decide whether a pending suit should
be disposed of or kept alive and that the courts below had
erred in continuing an infructuous suit just to keep the
interlocutory order alive which in a manner of speaking
amounts to putting the cart before the dead horse.
51. The ratio which arises from the aforesaid judgments is
that the power of a court under Section 151 of the said Code
is distinct and is not constrained if any of the eventualities
as specified under the said Code do not arise. The theme is
that such residuary power can be utilized by the court to
deal with any non−envisaged circumstance but in case the
68 of 97 said Code itself
provides for something, such exercise of
power cannot be utilized contrary to the said Code as that
would be in violation of the statute and the intent of the
legislature. No doubt, the said Code has provided for
situations where a plaint can be returned or rejected, the
suit dismissed and a judgment pronounced. However,
certain other situations have been dealt with as in Shipping
Corporation of India Ltd. v. Machado Brothers and Orss
case (supra) to put an end to the litigation which has
become infructuous by passage of time. Further, in
equitable reliefs the power to throw out a suit is wider, trial
of which would be an abuse of process of court. The
impugned order proceeds on the basis that such a power
exists under Section 151 of the said Code especially if the
proceedings are vexatious or oppressive.
52. The moot point, however, remains as to whether the
exercise of power of anti suit injunction in respect of
another domestic forum or of the principle of forum non
convenience is something which is permissible under
Section 151 of the said Code as being matters which are not
envisaged. Once again as noticed above, there is really no
dispute that Section 151 of the said Code is the fountain
from which flows the power to stay another suit or to give a
finding that the court where the suit is filed is not the forum
convenience in respect of matters where litigation has been
instituted in foreign forums. However, its application to
69 of 97 domestic forums
would have to be dealt with separately as
there are pronouncements dealing with this aspect in
different situations as also legislative enactments taking
into consideration the earlier legal perspective and
providing for a change in the legal position by specific acts
of the legislature.
Doctrine of anti suit injunction and the principle of forum non
convenience as applicable to domestic fourms
53. The crux of the issue in the present case is the
applicability of the principles of forum non convenience i.e.
whether the court in which the suit is filed and which would
otherwise have jurisdiction under the said Code can non suit
the plaintiff on the ground that there is a better situated
forum to decide the matter in issue and the court where the
suit is filed is forum non convenience. The learned Single
Judge in the impugned judgment has taken a view that this
is permissible. The contention of the respondent that the
principle of forum non convenience being the other side of
the coin of the doctrine of anti suit injunction and having
been applied to domestic forums of the Indian courts, there
could be no doubt that the principle of forum non
convenience would equally apply. It would thus be
appropriate to consider the issue of applicability of the
doctrine of anti suit injunction to domestic forums.
54. In this behalf, learned counsel for the respondent has
relied upon the judgment of the Calcutta High Court in
70 of 97 Mungle Chand v.
Gopal Ram; (1907)ILR 34 Cal 101 where
Sale, J. was of the view that the court had acted for a long
series of years on the view that its powers of control over
persons within its jurisdiction, by injunctions operating in
personam, are not restricted by the provisions of the Civil
Procedure Code and thus the Court had the power to
restrain the defendant from proceeding with the suit at
Bareilly if justice requires the step. This view was followed
once again by the Calcutta High Court in A.Milton and Co. v.
Ojha Automobile Engineering Co.; AIR 1931 Cal 279. In
Durgaprasad v. Kantichandra Mukerji; AIR 1935 Cal 1, the
plea of the respondent that it would be more convenient to
have the suit tried in Calcutta rather than in Delhi was
accepted on the ground that the court had the jurisdiction to
restrain the defendant from litigating in another court on
the ground of convenience. These judgments came to be
once again discussed in Bhagat Singh Bugga v. Dewan
Jagbir Sawhney; AIR 1941 Cal 670. The court took the view
that an injunction may be granted restraining the defendant
from proceeding in the suit filed in another domestic forum
on the ground of convenience alone in spite of the
provisions of Section 10 of the said Code. It may be noticed
at this stage itself by us that in case the matters in issue are
directly and substantially in issue in a previously instituted
suit then undoubtedly the subsequent suit can be stayed by
71 of 97 the court seized
of the matter exercising powers under
Section 10 of the said Code.
55. The aforesaid legal position as existing at the relevant
stage of time is not disputed by learned counsel for the
appellants, but it is his submission that the legal position
has changed as the legislature, conscious of the aforesaid
judicial view, brought a material change in the statute. The
Specific Relief Act of 1887 was repealed by the Specific
Relief Act of 1963 (the said Act for short) which came into
force. In the Specific Relief Act of 1887, the relevant
provision was as under:
"56. An injunction cannot be granted:
a) .
b) To stay proceedings in a court not
subordinate to that from which
injunction is sought.
The aforesaid provision has been replaced by Section
41 of the said Act, which reads as under:
41. An injunction cannot be granted:
a) .
b) To restrain any person from
instituting or prosecuting any
proceedings in a court not subordinate
to that form which the injunction is
sought."
56. It was thus contended that since the judicial
interpretation was permitting anti suit injunction in domestic
forums, the legislature taking note of this judicial
72 of 97 interpretation
materially altered the language of the
succeeding provision in the said Act.
57. Insofar as the aforesaid plea is concerned, our task is
made simple in view of the lucid elucidation of the
background in which such legislative change took place and
the consequent legal position which emerged from the
same in the pronouncement of the Supreme Court in Cotton
Corporation of India Limited v. United Industrial Bank
Limited and Ors; (1983) 4 SCC 625. The controversy which
was examined in the said judgment was set out in para 5,
which is as under:
"5. A very narrow question which we propose to examine in this
appeal is: Whether in view of the provision contained in Section 41(b) of the
Specific Relief Act, 1963 (Act for short), the court will have jurisdiction to
grant an injunction restraining any person from instituting any proceeding in a
court not subordinate to that from which the injunction is sought? The
contention may be elaborated thus: Can a person be restrained by an injunction
of the court from instituting any proceeding which such person is otherwise
entitled to institute in a court not subordinate to that from which the
injunction is sought? In the facts of the present case, the narrow question is
whether the Corporation can be restrained by an injunction of the Court from
presenting a winding up petition against the Bank? The High Court seems to hold
that the court has such powers in view of the provisions contained in Order 39
of the Code of Civil Procedure read with Section 37 of the Specific Relief Act,
1963 or in exercise of the inherent powers of the court under Section 151 of the
Code of Civil Procedure. This position is seriously contested by the appellant
in this appeal."
58. After referring to the earlier provision and the
subsequent provision, it was observed as under:
73 of 97 "A glance at the
two provisions, the existing and the repealed would reveal the legislative
response to judicial interpretation. Under Section 56(b) of the repealed Act,
the court was precluded by its injunction to grant stay of proceeding in a court
not subordinate to that from which the injunction was sought. In other words,
the court could stay by its injunction a proceeding in a court subordinate to
the court granting injunction. The injunction granting stay of proceeding was
directed to the court and the court has to be the court subordinate to the one
granting the injunction. This is postulated on the well recognised principle
that the superior court can regulate proceedings in a court subordinate to it.
It is implicit in this assumption and the language used in Section 56(b) that
the court could not grant injunction under Section 56(b) of the repealed Act to
stay proceeding in a court superior in hierarchy to the court from which
injunction is sought. But by judicial interpretation, a consensus was reached
that as injunction acts in personam while the court by its injunction cannot
stay proceedings in a Court of superior jurisdiction, it could certainly by an
injunction restrain a party before it from further prosecuting the proceeding in
other courts may be superior or inferior in the hierarchy of courts. To some
extent this approach not only effectively circumvented the provision contained
in Section 56 of the repealed Act but denuded it of its content. The legislature
took notice of this judicial interpretation and materially altered the language
of the succeeding provision enacted in Section 41(b) replacing Section 56(b) of
the repealed Act while enacting Specific Relief Act of 1963. The legislature
manifestly expressed its mind by enacting Section 41(b) in such clear and
unambiguous language that an injunction cannot be granted to restrain any
person, the language takes care of injunction acting in personam, from
instituting or prosecuting any proceeding in a court not subordinate to that
from which injunction is sought. Section 41(b) denies to the court the
jurisdiction to grant an injunction restraining any person from instituting or
prosecuting any proceeding in a court which is not subordinate to the court from
which the injunction is sought. In other words, the court can still grant an
injunction restraining a person from instituting or prosecuting any proceeding
in a court which is
74 of 97 subordinate to the
court from which the injunction is sought. As a necessary corollary, it would
follow that the court is precluded from granting an injunction restraining any
person from instituting or prosecuting any proceeding in a Court of coordinate
or superior jurisdiction. This change in language deliberately adopted by the
legislature after taking note of judicial vacillation has to be given full
effect.
8. It is, therefore, necessary to unravel the underlying
intendment of the provision contained in Section 41(6). It must at once be
conceded that Section 41 deals with perpetual injunction and it may as well be
conceded that it has nothing to do with interim or temporary injunction which as
provided by Section 37 are dealt with by the Code of Civil Procedure. To begin
with, it can be said without fear of contradiction that anyone having a right
that is a legally protected interest complains of its infringement and seeks
relief through court must have an unhindered,
uninterrupted access to law courts. The
expression court here is used in its widest amplitude
comprehending every forum where relief can be obtained in accordance with law.
Access to justice must not be hampered even at the hands of judiciary. Power to
grant injunction vests in the court unless the legislature confers specifically
such power on some other forum. Now access to court in search of justice
according to law is the right of a person who complains of infringement of his
legally protected interest and a fortiori therefore, no other court can by its
action impede access to justice. This principle is deducible from the
Constitution which seeks to set up a society governed by ride of law. As a
corollary, it must yield to another principle that the superior court can
injunct a person by restraining him from instituting or prosecuting a proceeding
before a subordinate court. Save this specific carving out of the area where
access to justice may be impeded by an injunction of the court, the legislature
desired that the courts ordinarily should not impede access to justice through
court. This appears to us to be the equitable principle underlying Section
41(b). Accordingly, it must receive such interpretation as would advance the
intendment, and thwart the mischief it was enacted to suppress, and to keep the
path of access to justice through court unobstructed.
75 of 97
9. Viewed from a slightly different angle, it would
appear that the legal system in our country envisages obtaining of redressal of
wrong or relief against unjust denial thereof by approaching the court set up
for the purpose and invested with power both substantive and procedural to do
justice that is to grant relief against invasion or violation of legally
protected interest which are jurisprudentially called rights. If a person
complaining of invasion or violation of his rights is injuncted from approaching
the court set up to grant relief by an action brought by the opposite side
against whom he has a claim and which he wanted to enforce through court, he
would have first to defend the action establishing that he has a just claim and
he cannot be restrained from approaching the court to obtain relief. A person
having a legal right and complains of its violation or infringement, can
approach the court and seek relief. When such person is injuncted from
approaching the court, he has to vindicate the right and then when injunction is
vacated, he has to approach the court for relief. In other words, he would have
to go through the gamut over again: when defending against a claim of injunction
the person vindicates the claim and right to enforce the same. If successful he
does not get relief but a door to court which was bolted in his face is opened.
Why should he be exposed to multiplicity of proceedings? In order to avoid such
a situation the legislature enacted Section 41(b) and statutorily provided that
an injunction cannot be granted to restrain any person from instituting or
prosecuting any proceeding in a court not subordinate to that from which the
injunction is sought. Ordinarily a preventive relief by way of prohibitory
injunction cannot be granted by a court with a view to restraining any person
from instituting or prosecuting any proceeding and this is subject to one
exception enacted in larger public interest, namely, a superior court can
injunct a person from instituting or prosecuting an action in a subordinate
court with a view to regulating the proceeding before the subordinate courts. At
any rate the court is precluded by a statutory provision from granting an
injunction restraining a person from instituting or prosecuting a proceeding in
a Court of coordinate jurisdiction or superior jurisdiction. There is an
unresolved controversy whether a court can grant an injunction against a person
from instituting or prosecuting a proceeding before itself but that is not
relevant in the present circumstances and we do not propose to enlarge the area
of
controversy."
76 of 97
59. The innovative plea of the counsel for the respondent
that perpetual injunction or interim injunction are regulated
by the said Code separately and thus at least temporary
injunctions can be granted was rejected by observing that
the power to grant temporary injunction was conferred in
aid or as auxiliary to the final relief that may be granted and
thus where final relief cannot be granted in terms as prayed
for, temporary relief in the same terms can hardly if ever be
granted. The court thus concluded that the court can in
appropriate cases grant temporary injunction in exercise of
its inherent power in cases not covered by Order 39 of the
said Code but while exercising this inherent power, the
court should not overlook the statutory provision which
clearly indicates that injunction to restrain initiation of
proceeding cannot be granted. Section 41 (b) of the said
Act is one such provision and in that context it was
observed that the inherent power of the court cannot be
invoked to nullify or stultify a statutory provision. The
aforesaid judgment has not even been brought to the notice
of the learned Single Judge who has passed the impugned
judgment. This judgment cuts at the root of the argument
of the respondent that grant of anti suit injunction in
domestic forums is a settled proposition of law. If the
principle of forum non convenience is the other side of the
77 of 97 coin, as contended
on behalf of the respondent, then the
same would not be available in a domestic forum.
60. It is also relevant to note that in Oil and Natural Gas
Commission v. Western Company of North America; (1987)
1 SCC 496, the judgment in Cotton Corporation of India
Limited v. United Industrial Bank Limited and Orss case
(supra) has been referred and distinguished on the ground
that it refers to an anti suit injunction in a domestic forum
and the ratio would not be applicable to a foreign forum.
The Indian company had entered into a contract with an
American company and the parties opted to be governed by
the Indian Arbitration Act, 1940. The award rendered by the
umpire in London (being the agreed venue) was sought to
be enforced by the American company in the New York
court. The Indian company instituted proceedings before
the Bombay High Court by filing arbitration petition under
Sections 30 and 33 of the Arbitration Act, 1940 and sought
an injunction restraining the American company from
enforcing the award. It is in this factual matrix that while
dealing with the judgment of Cotton Corporation of India
Limited v. United Industrial Bank Limited and Orss case
(supra) and referring to the provisions of Section 41(b) of
the said Act, it was observed as under:
"This provision, in our opinion, will be attracted only in a
fact−situation where an injunction is sought to restrain a party from
instituting or prosecuting any action in a court in India which is either of co
ordinate jurisdiction or is higher to
(OS) NOs. 86/2009 and
87/2009 Page 78 of 97 the court from which the injunction is sought in the
hierarchy of courts in India. There is nothing in Cotton Corporation case which
supports the proposition that the High Court has no
jurisdiction to grant an injunction or a restraint order in
exercise of its inherent powers in a situation like the one in the present case.
In fact this Court had granted such a restraint order in V/O Tractoroexport,
Moscow v. Tarapore & Company and had restrained a party from
proceeding with an arbitration proceedings in a foreign country
(in Moscow)."
61. A Division Bench of this Court in Kangaro Industries
(Regd.) v. Jaininder Jain; 2007 (34) PTC 321 referred to the
judgment of the Cotton Corporation of India Limited v.
United Industrial Bank Limited and Orss case (supra) and
naturally followed the same. However, a distinction was
once again made that the said judgment would not apply in
the case of a foreign forum like the Dubai court. A similar
view was taken by a learned Single Judge of this Court (as
he then was) in Anant Raj Industries Ltd. v. Industrial
Finance Corporation of India Ltd.; 1999 (79) DLT 273.
62. In our considered view, there is little doubt in the legal
proposition that 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
said Act. The only thing now to be considered is whether
there can be a different legal position applicable to the
principle of forum non convenience. The plea of the
learned counsel for the respondent, in fact, was that since
anti suit injunction could be granted, principles of forum non
79 of 97 convenience would
apply as it would be the other side of
the same coin. If that be so, nothing survives in the
contention of the learned counsel for the respondent. We,
however, consider it appropriate to discuss some of the
judgments referred to by learned counsel for the parties in
support of their respective pleas.
63. In Frank Finn Management Consultants v. Mr.Subhash
Motwani and Anr.; 154 (2008) DLT 95, Rajiv Sahai Endlaw,J.
has observed that the doctrine in international law of forum
non convenience cannot be used to not−suit a plaintiff.
Similarly, A.K.Sikri, J. in L.G.Corporation & Anr. v.
Intermarket Electroplasters (P) Ltd and Anr.; 2006 (32) PTC
429 (Del.) has observed as under:
" The principle laid down by the Supreme Court in the
aforesaid case to the effect that in appropriate cases the High Court may refuse
to exercise discretionary jurisdiction by invoking the doctrine of Forum
convenience has no applicability in suit. However, those observations are
clearly in the context of Article 226 of the Constitution as the Court exercises
extraordinary jurisdiction in writ petitions and it is trite law that the
jurisdiction under Article 226 is discretionary. That would not be a position
when a suit is filed, as in the instance case, and if it is established that
even a part of cause of action has arisen, there is no question of then refusing
to exercise the jurisdiction."
64. Once again Badar Durrez Ahmed, J. in WP(C)
10480/2005 titled as Jayaswals NECO Limited v. Union of
India and Ors. and other connected matters decided on
02.07.2007, while discussing writ jurisdiction, has made
following observations:
80 of 97 "35. Some comment
is called for on the issue of forum conveniens (or forum non conveniens as it is
more commonly known). The principle was stated by Lord Kinnear in Sim v. Robinow
(1892) 19 K. 665 thus:
The general rule was stated by the late Lord President in
Clements v. Macaulay 4 Macph. 593, in the following terms: ’In cases in which
jurisdiction is competently founded, a court has no discretion whether it shall
exercise its jurisdiction or not, but is bound to award the justice which a
suitor comes to ask. Judex tenetur imperator judicium suum;6and the plea7 under
consideration must not be stretched so as to interfere with the general
principle of jurisprudence.’ And thereforee the plea can never be sustained
unless the court is satisfied that there is some other tribunal, having
competent jurisdiction, in which the case may be tried more suitably for the
interests of all the parties and for the ends of justice... In all these cases
there was one indispensable element present when the court gave effect to the
plea of forum non conveniens, namely, that the court was satisfied that there
was another court in which the action ought to be tried as being more convenient
for all the parties, and more suitable for the ends of justice." (underlining
added)
36. In a recent decision of the House of Lords Tehrani v. Secy
of State for the Home Department [2006] UKHL 47 it was observed:
The doctrine of forum non conveniens is a good example of a
reason, established by judicial authority, why a court should not exercise a
jurisdiction that (in the strict sense) it possesses. Issues of forum non
conveniens do not arise unless there are competing courts each of which has
jurisdiction (in the strict sense) to deal with the subject matter of the
dispute. It seems to me plain that if one of the two competing courts lacks
jurisdiction (in the strict sense) a plea of forum on conveniens could never be
a bar to the exercise by the other court of its jurisdiction.
Thus, the doctrine of forum non conveniens can only be invoked
where the court deciding not to exercise jurisdiction, has jurisdiction to
decide the case. The U.S. Supreme Court also held in Gulf Oil Corp. v. Gilbert
330 U.S. 501 that "[I] ndeed, the OS) NOs. 86/2009 and
87/2009 Page 81 of 97 doctrine of forum non conveniens can never apply if there
is absence of jurisdiction or mistake of venue".
In this very decision (viz. Gulf Oil Corp.) the doctrine is
stated as follows:
The principle of forum non conveniens is simply that a court
may resist imposition upon its jurisdiction even where jurisdiction is
authorised by the letter of a general venue statute. These statutes are drawn
with a necessary generality and usually give a plaintiff a choice of courts, so
that he may be quite sure of some place in which to pursue his remedy. But the
open door may admit those who seek not simply justice but perhaps justice
blended with some harassment. A plaintiff sometimes is under temptation to
resort to a strategy of forcing the trial at a most inconvenient place for an
adversary, even at some inconvenience to himself.
37. From the above discussion, it is clear that the doctrine of
forum non conveniens can only be invoked where the court deciding not to
exercise jurisdiction, has jurisdiction in the strict sense. So, if the Supreme
Court directs the High Courts as it did in the case of Kusum Ingots (supra) and
Mosaraf Hossain Khan (supra) to be mindful of the doctrine of forum non
conveniens, the same would clearly be applicable only in cases where the High
Court otherwise has jurisdiction. The argument of forum non conveniens cannot be
raised in conjunction with the argument of lack of jurisdiction. It is also
worthwhile to note that in Om Prakash Srivastava v. Union of India and Anr., the
Supreme Court did not find favor with the approach of the High Court in not
dealing with the question as to whether it had or did not have jurisdiction and
by merely observing that the Court may have jurisdiction but the issues could be
more effectively dealt with by another High Court. The Supreme Court while
remanding the matter to the High Court made the following observations:
18. In the instant case the High Court has not dealt with the
question as to whether it had jurisdiction to deal with the writ petitioners. It
only observed that the Delhi High Court may have jurisdiction, but the issues
relating to conditions of prisoners in the State of U. P. can be more (OS) NOs. 86/2009 and 87/2009 Page 82 of 97 effectively dealt with by
the Allahabad High Court. As noted supra, there were two grievances by the
appellant. But only one of them i.e the alleged lack of medical facilities has
been referred to by the High Court. It was open to the Delhi high Court to say
that no part of the cause of action arose within the territorial jurisdiction of
the Delhi High Court. The High Court in the impugned order does not say so. On
the contrary, it says that jurisdiction may be there, but the Allahabad High
Court can deal with the matter more effectively. That is certainly not a correct
way to deal with the writ petition. Accordingly, we set aside the impugned order
of the High Court and remit the matter to it for fresh hearing on merits....
38. It must also be kept in mind that the doctrine of forum non
conveniens is essentially a common law doctrine originating from admiralty cases
have trans−national implications. It is clear that the doctrine of forum non
conveniens is only available when a Court has the jurisdiction but the
respondent is able to establish the existence of an adequate alternative forum.
In this context, the doctrine of forum non conveniens would be appropriate only
when an adequate alternative forum is available but again this doctrine is a
common law doctrine which cannot override statutory or constitutional
provisions."
65. Gita Mittal, J. in Rashtriya Mahila Kosh v. The Dale
View and Anr.; 2007 (4) AD (Delhi) 593 has referred to her
earlier judgment in WP(C) 5133/2005 where it was observed
that even if it was to be held that a court has jurisdiction,
yet guided by principles of forum non conveniens, the court
may divert the parties to the court having a closer
connection with the subject matter of the litigation.
66. There are also some passing observations in this
behalf in Milkfood Limited v. Union Bank of India; 2007 (2)
CTLJ 362 (Del.) by one of us (Sanjay Kishan Kaul, J.) in
respect of the principles of forum non convenience. The (OS) NOs. 86/2009 and 87/2009 Page 83 of 97 Judgment in Cotton Corporation
of India Limited v. United
Industrial Bank Limited and Orss case (supra) was,
however, not brought to the notice of the court and thus
one is wiser after a greater elucidation of the legal
principles enunciated in different judgments of the Supreme
Court.
67. Learned senior counsel for the respondent had given a
list of judgments relating to the principle of forum non
convenience as applicable to writ jurisdiction. Out of the
said list, there are three judgments specifically referred to
by the learned counsel. The first one is Kusum Ingots and
Alloys Ltd v. Union of India and Anr.; (2004) 6 SCC 254
where the matter involved exercise of writ jurisdiction under
Article 226 of the Constitution of India and was not one
governed by the said Code. In that context, it was observed
that the court may refuse to exercise its discretionary
jurisdiction by invoking the doctrine of forum convenience.
The judgment in Cotton Corporation of India Limited v.
United Industrial Bank Limited and Orss case (supra) was
not referred to.
68. The learned Single Judge in the impugned judgment
has referred to the second judgment in this series i.e.
Ambica Industries v. Commissioner of Central Excise; (2007)
6 SCC 769. The matter involved a question as to which
would be an appropriate High Court which would deal with
the order of an appellate tribunal under the Central Excise
Act. It was held
that a High Court situated in the State
where the first court is located should be considered to be
the appropriate Appellate Authority. The court further
observed that keeping in view the expression "cause of
action" used in Clause (2) of Article 226 of the Constitution
of India, indisputably even if a small fraction thereof accrues
within the jurisdiction of the court, the court will have
jurisdiction in the matter though the doctrine of forum
conveniens may also have to be considered.
69. The third judgment is in Mosaraf Hossain Khan v.
Bhagheeratha Engg.Ltd. and Ors; (2006) 3 SCC 658. The
only relevant observations in that are that the High Courts
must remind themselves about the doctrine of forum non
conveniens. This case also involved exercise of jurisdiction
under Articles 226 and 227 of the Constitution of India.
70. The learned Single Judge of this Court in Indra Deo
Paswan and Ors.v. Union of India & Ors.; 125 (2005) DLT
763 discussed the principles of forum non convenience by
referring to it in para 23 as under:
"23. The test of forum convenience was applied in subsequent
judgments, and was noted, with approval, by the Supreme Court in Kusum
Ingots (supra). Blacks Law Dictionary (Seventh Edition) page
665 defines "Forum Convenience", as follows:
"The Court in which an action is most
appropriately brought, considering the best interests of the
parties and witnesses".
"Forum Non−convenience" on the other hand, has been described
as follows:
"The doctrine that
an appropriate forum even though competent under law may divest itself of
jurisdiction if, for the convenience of the litigants and the witnesses, it
appears that the action should proceed in another forum in which the action
might originally have been brought."
The learned Single Judge concluded that all the material
circumstances viz the service or cadre of the petitioners;
the seat of government; the State Advisory Committee and
the concerned records of the relevant government
departments were not at Delhi and, therefore, the grievance
of the petitioner should be agitated before the concerned
High Courts either at Bihar or Jharkhand.
71. Learned counsel for the respondent also referred to
the judgement in M/s. New Horizons Ltd. v. Union of India;
AIR 1994 Del 126 where it was observed that while
exercising jurisdiction under Article 226, a court having
jurisdiction could refuse to exercise the same.
72. A Full Bench of this Court in New India Assurance
Co.Ltd v. Union of India and Ors; 2009 (161) DLT 55 made
telling observations, which are as under:
"The principle of forum non conveniens
originated as a principle of international law, concerned with
Comity of Nations. A domestic court in which jurisdiction is vested by law
otherwise ought not to refuse exercise of jurisdiction for the reason that under
the same law some other courts also have jurisdiction."
We may, however, note that the aforesaid judgment was
rendered in the context of Article 226 of the constitution of
India.
73. The aforesaid exposition thus shows that principles
while exercising the discretionary jurisdiction under Article
226 of the Constitution of India cannot ipso facto be applied
to a civil proceeding governed by the said Code. Not only
that, the principle of forum non convenience emerged as a
principle of admiralty law applicable primarily to foreign
forums. It finds no place in a domestic forum in India. The
plaintiff is always the dominus litis and so long as the court
has jurisdiction to try a suit, a party cannot be non−suited. A
suit has to be governed by the provisions of the said Code.
In this context, we may refer to the observations made in
Abdul Gafur and Anr. v. State of Uttarakhand and Ors;
(2008) 10 SCC 97 where the Supreme Court held that since
Section 9 of the said Code provides that a civil court shall
have jurisdiction to try all suits of civil nature excepting the
suits of which their cognizance is either expressly or
impliedly barred, the civil courts have inherent jurisdiction
unless a part of that jurisdiction is carved out. Thus, the
law confers on every person an inherent right to bring a suit
of civil nature of ones choice, at ones peril, howsoever
frivolous the claim may be, unless it is barred by a statute.
It was further observed that a plaint can only be rejected in
terms of Order 7 Rule 11 of the said Code and similarly a
plea of bar to jurisdiction of a civil court can be examined.
74. Learned senior counsel for the respondent had placed
reliance on the observations made by the Supreme Court in
Modi Entertainment
Network and Anr. v. W.S.G. Cricket Pvt.
Ltds case (supra) where in para 9 the Supreme Court had
observed that the courts in India have the power to restrain
a party to a suit/proceeding before it from instituting or
prosecuting a case in another Court including a foreign
court. We may note that the said judgment does not refer
to the judgment in Cotton Corporation of India Limited v.
United Industrial Bank Limited and Orss case (supra) and
that the said judgment was in respect of grant of an anti
suit injunction when the alternate forum was a foreign
forum.
75. We have found that there have been some passing
references made to the principle of forum non convenience.
Some of them are in the context of exercising writ
jurisdiction while others are in the context of a foreign
forum. Every judgment is not to be treated as a precedent
nor every passing sentence in a judgment is to be read as a
provision in a statute.
76. In Municipal Corporation of Delhi v. Gurnam Kaur;
(1989) 1 SCC 101, it was observed that quotability as law
applies to the principle of a case, its ratio decidendi and the
only thing which is binding is the principle upon which the
case was decided. The statements which are not part of
the ratio decidendi are distinguished as obiter dicta and are
not authoritative. A decision should be treated as given
per incuriam when it is given in ignorance of the terms of a
88 of 97 statute or of a
rule having the force of a statute. It would
be useful to reproduce paras 11 and 12 of the said
judgment, which are as follows:
"11. Pronouncements of law, which are not part of the ratio
decidendi are classed as obiter dicta and are not authoritative. With all
respect to the learned Judge who passed the order in Jamna Das case1 and to the
learned Judge who agreed with him, we cannot concede that this Court is bound to
follow it. It was delivered without argument, without reference to the relevant
provisions of the Act conferring express power on the Municipal Corporation to
direct removal of encroachments from any public place like pavements or public
streets, and without any citation of authority. Accordingly, we do not propose
to uphold the decision of the High Court because, it seems to us that it is
wrong in principle and cannot be justified by the terms of the relevant
provisions. A decision should be treated as given per incuriam when it is given
in ignorance of the terms of a statute or of a rule having the force of a
statute. So far as the order shows, no argument was addressed to the court on
the question whether or not any direction could properly be made compelling the
Municipal Corporation to construct a stall at the pitching site of a pavement
squatter. Professor P.J. Fitzgerald, editor of the Salmond on Jurisprudence,
12th edn. explains the concept of sub silentio at p. 153 in these words :
A decision passes sub silentio, in the technical sense that has
come to be attached to that phrase, when the particular point of law involved in
the decision is not perceived by the court or present to its mind. The court may
consciously decide in favour of one party because of point A, which it considers
and pronounces upon. It may be shown, however, that logically the court should
not have decided in favour of the particular party unless it also decided point
B in his favour.; but point B was not argued or considered by the court. In such
circumstances, although point B was logically involved in the facts and although
the case had a specific outcome, the decision is not .an authority on point B.
Point B is said to pass sub silentio.
12. In Gerard v. Worth of Paris Ltd. (k)., the only point argued
was on the question of priority of the claimants debt, and, on this argument
being heard, the court granted the order. No
consideration was given to the question whether a garnishee
order could properly be made on an
(OS) NOs. 86/2009 and
87/2009 Page 89 of 97 account standing in the name of the liquidator. When,
therefore, this very point was argued in a subsequent case before the Court of
Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith Ltd., the court held
itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that
he could not help thinking that the point now raised had been deliberately
passed sub silentio by counsel in order that the point of substance might be
decided. He went on to say that the point had to be decided by the earlier court
before it could make the order which it did; nevertheless, since it was decided
"without argument, without reference to the crucial words of the rule, and
without any citation of authority", it was not binding and would not be
followed. Precedents sub silentio and without argument are of no moment. This
rule has ever since been followed. One of the chief reasons for the doctrine of
precedent is that a matter that has once been fully argued and decided should
not be allowed to be reopened. The weight accorded to dicta varies with the type
of dictum. Mere casual expressions carry no weight at all. Not every passing
expression of a judge, however eminent, can be treated as an ex cathedra
statement, having the weight of authority."
77. Learned counsel for the appellants had brought to our
attention the prevalence of the doctrine of forum non
convenience in domestic courts in the US is based on the
codified US law, which is as under:
"Section 1404. Change of Venue
a) For the convenience of parties and witnesses, in the interest of
justice, a district court may transfer any civil action to any other district or
division where it might have been brought."
Similarly, in the UK the Civil Jurisdiction and Judgments Act,
1982 as amended by Civil Jurisdiction and Judgments Act,
1991 states as under:
"Nothing in this Act shall prevent any court in the United
Kingdom from staying, sisting, striking out or dismissing any proceedings before
it, on the ground of forum non
conveniens or otherwise, where to do so is not
90 of 97 inconsistent with
the 1968 Convention or, as the case may be, the Lugano Convention."
Article 22 of the Brussels Convention, 1968 reads as under:
"Where related actions are brought in the courts of different
Contracting States, any court other than the court first seised may, while the
actions are pending at first instance, stay its proceedings.
A court other than the court first seised may also, on the
application of one of the parties, decline jurisdiction if the law of that court
permits the consolidation of related actions and the court first seised has
jurisdiction over both actions.
For the purposes of this Article, actions are deemed to be
related where they are so
closely connected that it is expedient to hear and determine
them together to avoid the risk of irreconcilable judgments resulting from
separate proceedings."
The aforesaid provisions have been referred to clarify that it
is specific statutes which permit exercise of such principles
of forum non conveniens in domestic forums in US and UK.
In Amchem Products Incorporated v. British Columbia
(Workers Compensation Board)s case (supra), the
Canadian Supreme Court summarized the position in
England as under:
The English courts have exercised jurisdiction to restrain
proceedings in a foreign court and to stay domestic actions since 1821. Leach
V.−C. in Bushby v. Munday, supra, at p. 307 and p. 913, stated the rule as
follows:
Where parties Defendants are resident in England, and brought
by subp{oe}na here, this Court has full authority to act upon them personally
with respect to the subject of the suit, as the ends of justice require; and
with that view, to order them to take, or to omit to take, any steps and
proceedings in any other
Court of Justice, whether in this country, or in a foreign country.
The sentiment expressed at that time was that the relief
sought, whether an injunction or a stay, operated in personam and was not
intended to interfere with the other court. Thus viewed, the
question to be determined was whether the ends of justice required the issuance
of an injunction or a stay. In deciding that an injunction should be granted in
Bushby v. Munday, supra, the Vice−Chancellor made findings that the English
Court was a more convenient jurisdiction; and, that the proceedings in Scotland,
due to procedural law, were less likely to elicit the truth. Leach V.−C.
concluded (at p. 308 and p. 913) that the English court should pursue its
superior means for determining both law and fact.
Even the Supreme Court in Cotton Corporation of India
Limited v. United Industrial Bank Limited and Orss case
(supra) in para 14 elucidated this difference.
78. The impugned judgment is predicated on the omnibus
powers under Section 151 of the said Code where despite
the plaintiff being dominus litis, the Court is empowered to
pass orders in litigation, which may be vexatious or
oppressive. We have already discussed the legal principles
aforesaid to conclude how in a domestic forum, the
institution of a suit must necessarily be governed by the
provisions of the said Code and the interpretation of the
same by the Supreme Court after amendment of the said
Code. The reasoning in the impugned judgment, thus,
cannot be sustained. The principle of forum non conveniens
cannot be introduced by concluding that Section 20 of the
said Code is not exhaustive or draw strength from the power
(OS) NOs. 86/2009 and 87/2009 to stay suit under Section 10
of the said Code. The stay of
suit proceedings under Section 10 of the said Code must be
for the reasons set out in the said provision.
79. We may at this stage notice that we have already
discussed the scope and ambit of the suits in the Bombay
High Court and this Court from which the impugned
judgment arises and do not find that the reliefs are inter−
linked or inter−related. The factual basis on which the
impugned judgment is predicated, thus, also does not find
favour with us.
80. We are in agreement with the submissions of the
learned counsel for the appellants that if the principle of
forum non convenience would be applied to a civil suit
governed by the said Code, the plaintiff would be left in the
dark. 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
plaintiff may be made to run from one court to the other
without knowing where the initial case ought to be
instituted. Such a situation is not envisaged by the said
Code.
81. We have discussed the aforesaid judgments despite
the sub stratum of the case of the respondent not surviving
as it was based on the contention of principle of forum non
convenience being the other side of the coin of the doctrine
of anti suit injunction since if a court could restrain another
(OS) NOs. 86/2009 and 87/2009 Page court indirectly, it could
certainly restrain itself. We find
that the views expressed by the learned Single Judges in
Frank Finn Management Consultants v. Mr.Subhash
Motwani and Anrs case (supra), L.G.Corporation & Anr. v.
Intermarket Electroplasters (P) Ltd and Anrs case (supra)
and Jayaswals NECO Limited v. Union of India and Ors case
(supra) holding that the principle of forum non convenience
has no application to suits, enunciates the correct legal
position and thus are unable to approve the view taken in
Rashtriya Mahila Kosh v. The Dale View and Anrs case
(supra) and the impugned judgment.
82. We thus hold that the principle of forum non
convenience has no application to domestic forums in India
which are governed by the said Code.
Conclusion
83. The appeals had been argued at length. The legal
position enunciated in different countries was cited before
us. This required all the aspects and the judgments to be
analyzed. The fact, however, remains that there was really
no dispute about the applicability of the doctrine of anti suit
injunction and the principle of forum non convenience as
applicable to foreign forums. The question was only
whether the principle of forum non convenience would apply
to domestic forums and the same required consideration of
the application of doctrine of anti suit injunction to domestic
forums on account of direction of the arguments of the
learned counsel
for the respondent that the principle of
forum non convenience was the other side of the coin of the
doctrine of anti suit injunction. The factual aspect which
required consideration was even if such a principle of forum
non convenience was applicable in the given facts of a case
whether it could be said that such a principle ought to have
been applied to the present case and the nature of relief.
84. On the conspectus of the aforesaid, we hold as under:
i) The doctrine of anti suit injunction though
may be applicable both in foreign forums
and domestic forums in different countries
has no place in India regarding another
domestic forum in view of the specific bar
created by Section 41(b) of the said Act as
interpreted in Cotton Corporation of India
Limited v. United Industrial Bank Limited and
Orss case (supra). It would apply only in
case of a foreign forum or in a situation
where an injunction is sought against a
domestic court which is subordinate to the
one where such an application is made.
ii) The principle of forum non convenience
applies to foreign forums and Indian courts
can apply the said principle vis−a−vis foreign
forums or while exercising discretionary
jurisdiction under
Article 226 of the
Constitution of India.
iii) The principle of forum non convenience does
not apply to civil suits in India which are
governed by the said Code, there being no
provision under the Code for the same and
recourse to Section 151 CPC is not
permissible for application of the principle of
forum non convenience 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,
however, approach the Supreme Court
under Section 25 of the said Code.
iv) The impugned judgment of the learned
Single Judge rejecting and returning the
plaint cannot be sustained and is thus set
aside.
v) In the given facts of the case, even
otherwise, if the principle of forum non
convenience had been applicable, then
there was no reason not to proceed with the
suits on merits.
vi) The interlocutory applications for injunction
would be required to be heard on merits by
the learned Single
Judge and decided in
accordance with law.
85. The appeals are accordingly allowed and the plaints as
well as the interlocutory applications are restored to their
original numbers. The appellants shall also be entitled to
costs quantified at Rs.50,000/−. The suits and the
interlocutory applications be listed before the learned Single
Judge on 06.11.2009 for directions.
SANJAY KISHAN KAUL,
J.
OCTOBER 23, 2009 SUDERSHAN KUMAR MISRA, J. dm
