2003 Supreme(SC) 65

2003(1) Supreme 709
Supreme Court of India
(From Mumbai High Court)
Syed Shah Mohammed Quadri & Arijit Pasayat, JJ.
Modi Entertainment Network & Anr. —Appellants
versus
W.S.G. Cricket PTE Ltd. —Respondent
Civil Appeal No. 422 of 2003
(Arising out of SLP (C) No. 9530/2002)
Decided on 21-1-2003
Counsel for the Parties :
For the Appellants : Ashok H. Desai and Aspi Chinoy, Sr. Advocates, Mahesh Agarwal, C. Dhond, Rishi Agrawala, Manu Krishnan, E.C. Agrawala, Advocates.
For the Respondent : Iqbal Chagla, Sr. Advocate, Anil Menon, Ravi Kadam, S. Uday Kumar Sagar, Ms. Bina Madhavan, Prasanth P., and Ms. Meena C.R., Advocates for M/s. Lawyer’s Knit and Co., Advocates.­

Important point
There is no valid reason to grant anti-suit injunction in favour of the appellants, in disregard of jurisdiction clause, to restrain the respondent from proceeding the case in the foreign forum of the choice of the parties - the English Court.

Headnote:Conflict of Laws—Jurisdiction agreement—Appellants who are parties to contract with respondent containing a non-exclusive jurisdiction clause of English Courts and resolution of disputes in accordance with the principles of English law—Dispute—Appellants filed a suit in Bombay—Respondents filed another suit in English Court—Appellant seeking anti-suit injunction against the respondent to restrain it from proceeding with the action brought by it in English Court—Granted by Single Judge but vacated by DB—Appeal to Supreme Court—Whether the DB of Bombay HC erred in vacating the anti-suit injunction granted by a learned Single Judge restraining the respondent from proceeding with the action between the same parties pending in the English Courts, the forum of their choice? (No)—Appeal dismissed—Case law on conflict of law relating to jurisdiction agreement surveyed.

       Held : 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 vexatious or in a ­forum non-conveniens;

       (3) where jurisdiction of a court is invoked on the basis of jurisdiction clause in a contract, the recitals therein in regard to exclusive or non-exclusive jurisdiction of the court of choice of the parties are not determinative but are relevant factors and when a question arises as to the nature of jurisdiction agreed to between the parties the court has to decide the same on a true interpretation of the contract on the facts and in the circumstances of each case;

       (4) a court of natural jurisdiction will not normally grant anti-suit injunction against a defendant before it where parties have agreed to submit to the exclusive jurisdiction of a court including a foreign court, a forum of their choice in regard to the commencement or continuance of proceedings in the court of choice, save in an exceptional case for good and sufficient reasons, with a view to prevent injustice in circumstances such as which permit a contracting party to be relieved of the burden of the contract; or since the date of the contract the circumstances or subsequent events have made it impossible for the party seeking injunction to prosecute the case in the court of choice because the essence of the jurisdiction of the court does not exist or because of a vis major or force majeure and the like;

       (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;

       (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 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. (Para 24)

       Applying it to facts of the case held : Now adverting to the facts of this case, the jurisdiction clause in the contract runs thus:

       "This agreement shall be governed by and construed in accordance with English law and the parties hereby submit to the non-exclusive jurisdiction of the English Courts (without reference to English conflict of law rules ). "

       A plain reading of this clause shows that the parties have agreed that their contract will be governed by and be construed in accordance with English law and they have also agreed to submit to the non-exclusive jurisdiction of English Courts (without reference to English conflict of law rules). We have already observed above that recitals in regard to submission to exclusive or non-exclusive jurisdiction of a court of choice in an agreement are not determinative. However, as both the parties proceeded on the basis that they meant non-exclusive jurisdiction of the English Courts, on the facts of this case, the Court is relieved of the interpretation of jurisdiction clause. Normally, the court will give effect to the intention of the parties as expressed in the agreement entered into by them except when strong reasons justify disregard of the contractual obligations of the parties. In Donohue s case (supra) although the parties to the agreement stipulated to submit to the exclusive jurisdiction of the English Courts, the House of Lords found that it would not be in the interests of justice to hold the parties to their contract as in that case strong reasons were shown by the respondent. It was felt necessary that a single trial of all the claims of the parties by one forum would be appropriate and as all the parties to the New York proceedings were not parties to the agreement stipulating exclusive jurisdiction of the English Court and as all the claims before the New York court did not arise out of the said contract so they could not have been tried in the English Court. It was urged that in the circumstances parallel proceedings - one in England and another in New York- would have to go on which might result in inconsistent decisions. Those facts were considered as strong reasons to decline to grant anti-suit injunction though the parties had agreed to the exclusive jurisdiction of the English Court. In contrast in SABAH s case (supra) even though GOP filed the suit first in the court of natural jurisdiction and sought anti-suit injunction against SABAH restraining them from proceeding with the action brought by them in the English Court, the Court of Appeal found that non-exclusive jurisdiction clause in the agreement of guarantee executed by GOP was binding on them. The action of GOP in filing the suit earlier in the court of natural jurisdiction was held to be clearly in breach of contract and in the context of the non-exclusive jurisdiction clause, oppressive and vexatious unless the GOP could show strong reasons as to why parallel proceeding would be justified. The only ground urged for continuance of proceeding in Pakistan Court was that it was a convenient forum which was considered not strong enough for the GOP to disregard the contractual obligation of submission to the jurisdiction of the English Court for resolution of disputes. The Court of Appeal, upheld the anti-suit injunction granted by the learned Judge at the first instance as also the order declining to stay the English suit. In the instant case, though the learned single judge proceeded on the prima facie finding that the proceedings in the English Courts would be oppressive and vexatious, in our view, those findings, recorded at the stage of passing an ad-interim order, would not bind the same learned judge much less they would bind the appellate court or the parties thereto at subsequent stage of the same proceeding because it cannot operate as issue estoppel. It cannot be laid down as a general principle that once the parties have agreed to submit to the jurisdiction of a foreign court, the proceedings or the action brought either in the court of natural jurisdiction or in the court of choice will per se be oppressive or vexatious. It depends on the facts of each case and the question whether the proceedings in a Court are vexatious or oppressive has to be decided on the basis of the material brought before the court. Having perused the plaints in both the suits and the contract we are of the view that the proceeding in the English Court for recovery of the minimum guaranteed amount under the contract cannot, at this stage, be said to be oppressive or vexatious. It is true that the courts would be inclined to grant anti-suit injunction to prevent breach of contractual obligation to submit to the exclusive or non-exclusive jurisdiction of the court of choice of the parties but that is not the only ground on which anti-suit injunction can be granted. As is apparent the appellants brought the suit in the court of natural jurisdiction for adjudication of the disputes arising under the contract for which the parties have agreed to submit to the non-exclusive jurisdiction of the English Court in accordance with English law though the English Court has no nexus with the parties or the subject-matter and is not the natural forum. But then the jurisdiction clause indicates that the intention of the parties is to have the disputes resolved in accordance with the principles of English law by an English Court. Unless good and sufficient reasons are shown by the appellants, the intention of the parties as evidenced by their contract must be given effect to. Even when the appellants had filed the suit earlier in point of time in the court of natural forum and the respondent brought action in the English Court which is the agreed forum or forum of the choice having regard to the expressed intention of the parties, no good and sufficient reason is made out to grant anti-suit injunction to restrain the respondent from prosecuting the English action as such an order would clearly be in breach of agreement and the court will not, except when proceedings in foreign court of choice result in perpetuating injustice aid a party to commit breach of the agreement. To apply the principle in Donohue s case good and sufficient reasons (strong reasons) should be shown to justify departure from the contractual obligations. Here, two contentions have been urged; the first is that the English Court is forum non-conveniens in view of the alleged breach of the agreement by the respondent in the manner not foreseen. This, in our view, is far from being a good and sufficient reason to ignore the jurisdiction clause. Even otherwise the fact that the parties had agreed to resolve their disputes arising under the agreement, shows that they had foreseen possible breach of agreement by any of the parties and provided for the resolution of the disputes which might arise therefrom. In the context, the fore­seeability test would take in circumstances which render approaching the forum of choice impossible like the court of choice merging with other court and losing its identity or a vis major etc., which would make it impossible for the party seeking anti-suit injunction, to prosecute the case before the forum of choice. In our view, on the facts of this case, the foreseeability test cannot be extended to the manner of breach of the contract so as to turn the forum of choice into forum non-conveniens. Circumstances such as comparison of litigation expenses in England and in India or the hardship and incurring of heavy expenditure on taking the witnesses to the English Court, would be deemed to have been foreseen by the parties when they agreed to submit to the jurisdiction of the English Court in accordance with the principles of English law and the said reasons cannot be valid grounds to interdict prosecution of the action in the English Court of choice. And the second is that English Court has no connection with either of the parties or the subject-matter and it is not a court of natural jurisdiction. This reason can be taken note of when strong reasons are shown to disregard the contractual obligation. It cannot be a good and sufficient reason in itself to justify the court of natural jurisdiction to interdict ­action in a foreign court of choice of the parties. (Paras 25, 26 and 27)

       Held consequently : We, therefore, find no valid reasons to grant anti-suit injunction in favour of the appellants, in disregard of jurisdiction clause, to restrain the respondent from prosecuting the case in the foreign forum of the choice of the parties - the English Court. (Para 28)

       Held finally : For the aforementioned reasons, interference in the order of the High Court, under challenge, is not warranted. The appeal fails and it is accordingly dismissed with costs. (Para 29)