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2014 Supreme(Bom) 1354

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.C. GUPTE, J.
Hansraj Nayyar Medical India - Applicant/Plaintiff
vs.
Smith Medical International Limited & Anr. - Defendants
NOTICE OF MOTION NO. 597 OF 2014 IN SUIT NO. 367 OF 2014
Decided on: 9 JULY 2014

Advocates:
Advocate Appeared
Mr. Haresh Jagtiani, Senior Advocate with Mr.Amin Arsiwala, Mr.Parag Sharma, Mr.Mihir Kamdar, Ms.Vandana Mehta i/b. M/s.Udwadia & Udeshi for Plaintiff.
Dr.Veerandra Tulzapurkar, Senior Advocate with Mr.Simil Purohit, Mr.Raj Panchmatia, Mr.Peshwan Jehangir i/b. M.s.Khaitan & Co. for Defendants.

The central legal point established in the judgment is that the Court's jurisdiction to grant an anti-suit injunction is contingent upon the defendant being amenable to its personal jurisdiction and the cause of action for the injunction arising within its jurisdiction.

Headnote:

anti-suit injunction - Exclusive Distribution Agreement - Code of Civil Procedure, 1908 - Section 9A - Enercon (India) Ltd. vs. Enercon GMBH - Modi Entertainment Network vs. W.S.G. Cricket Pvt.Ltd.

Fact of the Case:

The Plaintiff sought an anti-suit injunction against the Defendants from proceeding before the Commercial Court in England in respect of a claim filed against the Plaintiff. The Plaintiff claimed that the English Court lacked jurisdiction and that the proceedings were vexatious and oppressive.

Finding of the Court:

The Court found that it lacked jurisdiction to grant the anti-suit injunction as the Defendants were not amenable to its personal jurisdiction. The Court also held that the cause of action for an anti-suit injunction arises where the proceedings are sought to be served on the plaintiff, and in this case, it was outside the jurisdiction of the Court.

Issues: The main issue was whether the Court had jurisdiction to grant the anti-suit injunction and whether the English Court lacked jurisdiction. The Court also considered the novation of the agreement between the parties and the forum non-conveniens.

Ratio Decidendi: The Court's decision was based on the principles of personal jurisdiction, the location of the cause of action for an anti-suit injunction, and the joint nature of the proceedings before the English Court. The Court also emphasized the need for the defendant to be amenable to the personal jurisdiction of the Court when granting an anti-suit injunction.

Final Decision: The Court dismissed the suit seeking relief in terms of the anti-suit injunction and the decree against Defendant No.1. The Court also dismissed the Notice of Motion with no order as to costs.

JUDGMENT


This is a suit filed for anti-suit injunction restraining the Defendants from proceeding before the Commercial Court in England in respect of the claim filed by them against the Plaintiff herein, being Claim No.2013 Folio 1380. The Notice of Motion seeks an interim order of injunction in the same terms.

2. The Plaintiff is a proprietorship concern engaged in the business of selling and marketing medical products. Defendant No.1 is a company incorporated in England having its registered office at Ashford, Kent. Defendant No.1 is engaged in the business of manufacturing and production of pharmaceutical and medicinal preparations. Defendant No.2 is an Indian company, said to be a subsidiary of Defendant No.1.

3. By an Exclusive Distribution Agreement dated 16 May 2011 (EDA), the Plaintiff was appointed as an Exclusive Distributor for resale of the products of Defendant No.1 in a defined territory, namely, India, Nepal, Bhutan and Maldives. The Plaintiff was to import and distribute the products in the territory so defined during the term of the EDA, which was to be for two years terminable by a written notice of not less than six months. The EDA inter alia provided that the matters relating to interpretation, construction and enforcement of the EDA shall be governed by the laws of England and that the parties to the EDA agreed to submit to the exclusive jurisdiction of the English Courts.

4. By a tripartite Memorandum of Understanding dated 12 March 2012 (MOU), entered into between the Plaintiff and the Defendants, the parties inter alia agreed to vary the EDA on the terms set out in the MOU. It was inter alia provided in the MOU that notwithstanding anything contained in the EDA, Defendant No.2 shall be entitled to import the products from Defendant No.1, but that the products shall not be sold by Defendant No.2 to any party other than the Plaintiff. The MOU further provided that notwithstanding anything contained in the EDA, the Plaintiff shall buy products from Defendant No.2 with effect from 13 December 2012 ('the effective date') on the same terms and conditions as contained in the EDA and at prices set out in Schedule-1 to the EDA. The MOU provided that the EDA shall remain in full force and effect, save and except that the obligations of Defendant No.1 to supply the products to the Plaintiff under the EDA shall cease with effect from the effective date and instead would be performed by Defendant No.2. The MOU specifically provided that save as set out in the MOU, “the terms and conditions contained in the Exclusive Distribution Agreement, including without limit, those relating to term and termination, shall remain in force. This MOU has to be read and applied in conjunction with the Exclusive Distribution Agreement.”

5. By a termination notice issued on 18 April 2013, the EDA, as amended by the MOU, was terminated by the Defendants. Certain dues were claimed as due and payable by the Plaintiff to the Defendants under the EDA.

6. On 16 October 2013, Defendant Nos.1 and 2 filed a claim bearing No.2013 Folio 1380 in the High Court of Justice, Queen's Bench Commercial Court in England against the Plaintiff for repayment of a debt of £ 32,299 due from the Plaintiff to the Defendants under the EDA.

7. By a Demand Notice dated 31 October 2013, the Defendants demanded a sum of US $ 30,444 due by the Plaintiff to Defendant No.1 and a sum of INR 79,011,746 due by the Plaintiff to Defendant No.2 under various invoices raised under the EDA as varied by the MOU. The demand was resisted by the Plaintiff inter alia on the ground that the Plaintiff has already initiated proceedings before this Court, being Suit (Lodging) No.918/2013, seeking specific performance of C&F Agreement purportedly entered into between the Plaintiff and the Defendants and that the demand raised by the Defendants was an afterthought and an attempt for defeating its legitimate claims. (Incidentally, the Plaintiff's application for ad-interim reliefs in th


























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