Back
HIGH COURT OF CALCUTTA
INDIRA BANERJEE, J.
Rotomac Electricals Private Limited - Appellant
Versus
National Railway Equipment Company - Respondent
G. A. No. 262 of 2011 and C.S. No. 10 of 2011
Decided on : Jan 31, 2011
ANTI-SUIT INJUNCTION - JURISDICTION - SECTION 41(A) AND (B) OF THE SPECIFIC RELIEF ACT, 1963 - COURT HELD THAT IN THE ABSENCE OF COGENT MATERIALS TO SHOW THAT THE PETITIONER WOULD NOT BE ABLE TO AFFORD TO CONTEST LEGAL PROCEEDINGS IN THE UNITED STATES OF AMERICA, ANTI SUIT INJUNCTION CANNOT BE GRANTED.
Fact of the Case:
THE PETITIONER, AN INDIAN COMPANY, ENTERED INTO AN AGREEMENT WITH THE RESPONDENT, A US COMPANY, FOR THE SUPPLY OF LOCOMOTIVE TRACTION MOTORS. AFTER SOME SHIPMENTS WERE MADE, DISPUTES AROSE BETWEEN THE PARTIES. THE RESPONDENT TERMINATED THE AGREEMENT AND DEMANDED MONEY FROM THE PETITIONER. THE PETITIONER FILED A SUIT IN INDIA, AND ALSO APPLIED FOR AN ANTI-SUIT INJUNCTION TO RESTRAIN THE RESPONDENT FROM INITIATING OR PROCEEDING WITH ANY LEGAL PROCEEDINGS IN THE UNITED STATES OR ANY OTHER FORUM OTHER THAN THE INDIAN COURT.
Finding of the Court:
THE COURT HELD THAT THE INDIAN COURT HAD JURISDICTION TO ADJUDICATE THE DISPUTES ARISING OUT OF THE CONTRACT, BUT THAT IT WAS NOT THE MOST CONVENIENT FORUM FOR SUCH ADJUDICATION. THE COURT ALSO HELD THAT THE PETITIONER HAD NOT MADE OUT A STRONG PRIMA FACIE CASE FOR THE GRANT OF AN ANTI-SUIT INJUNCTION, AND THAT THE BALANCE OF CONVENIENCE WAS NOT OVERWHELMINGLY IN FAVOUR OF GRANTING SUCH AN INJUNCTION. THE COURT FURTHER HELD THAT ANTI-SUIT INJUNCTIONS SHOULD NOT ORDINARILY BE GRANTED IN VIEW OF SECTION 41(A) AND (B) OF THE SPECIFIC RELIEF ACT, 1963.
Issues: 1. WHETHER THE INDIAN COURT HAD JURISDICTION TO ADJUDICATE THE DISPUTES ARISING OUT OF THE CONTRACT? 2. WHETHER THE INDIAN COURT WAS THE MOST CONVENIENT FORUM FOR SUCH ADJUDICATION? 3. WHETHER THE PETITIONER HAD MADE OUT A STRONG PRIMA FACIE CASE FOR THE GRANT OF AN ANTI-SUIT INJUNCTION? 4. WHETHER THE BALANCE OF CONVENIENCE WAS OVERWHELMINGLY IN FAVOUR OF GRANTING SUCH AN INJUNCTION?
Ratio Decidendi: 1. THE COURT HELD THAT THE INDIAN COURT HAD JURISDICTION TO ADJUDICATE THE DISPUTES ARISING OUT OF THE CONTRACT, BUT THAT IT WAS NOT THE MOST CONVENIENT FORUM FOR SUCH ADJUDICATION. 2. THE COURT ALSO HELD THAT THE PETITIONER HAD NOT MADE OUT A STRONG PRIMA FACIE CASE FOR THE GRANT OF AN ANTI-SUIT INJUNCTION, AND THAT THE BALANCE OF CONVENIENCE WAS NOT OVERWHELMINGLY IN FAVOUR OF GRANTING SUCH AN INJUNCTION. 3. THE COURT FURTHER HELD THAT ANTI-SUIT INJUNCTIONS SHOULD NOT ORDINARILY BE GRANTED IN VIEW OF SECTION 41(A) AND (B) OF THE SPECIFIC RELIEF ACT, 1963.
Final Decision: THE COURT DISMISSED THE PETITION FOR AN ANTI-SUIT INJUNCTION.
1. THE judgment of the Court was as follows:- This application has been taken out by the petitioner, seeking orders restraining the respondent from initiating or proceeding with any legal proceedings in any Court in Illinois or in any other place in the United States of America or in any forum other than this Court.
2. THE plaintiff-petitioner is engaged in manufacture, sale and repair of locomotive traction motors, spare parts and other ancillary commodities. THE registered office of the plaintiff-petitioner is situate in Kolkata, within the jurisdiction of this Court. On or about 1st October, 2008, the petitioner entered into an agreement in writing with the respondent for supply of traction motors to the respondent on terms and conditions stipulated in the said agreement.
3. THE execution of the aforesaid agreement was preceded by negotiations and exchange of correspondence including emails within the jurisdiction of this Court. It is alleged that the respondent and/or its representatives even inspected the factory of the petitioner in India.
4. PURSUANT to and/or in terms of the aforesaid agreement, the petitioner shipped traction motors to the respondent in Illinois in USA, on freight on board basis, from Kolkata. The particulars of the shipments have been given in sub-paragraph (1) of Paragraph 1 of the petition. The respondent paid US $1,371,000 to the petitioner through its banker's at Kolkata. It is alleged that when supply of motors had made substantial progress, the respondent raised disputes with regard to Axle Caps attached to the said motors. The representative of the respondent alleged that the Axle caps fitted to the motors being defective, the Axle caps were dismantled from the locomotives and the locomotives were re-fixed with new locally sourced Axle caps.
5. ACCORDING to the petitioner, it was agreed that the petitioner would absorb 25% of the cost of US $2,30,000 incurred by the respondents towards cost of repair, renewal and replacement, would grant deduction rebate of US $54,000 in respect of the last of its invoices and would further pay a sum of US $25,000 to M/s. Logistics Plus India Pvt. Ltd., the freight agent of the respondent towards compensation. Additionally, a sum of US $1,00,000 would be adjusted against the future orders to be placed by the defendant at the rate of 10% of each order value.
6. BY a letter dated 28th October, 2010, the respondent terminated the said agreement and demanded $1,137,393.00 USD from the petitioner. Correspondence ensued and ultimately the petitioner filed the instant suit. The question in this application is whether this Court ought to pass an anti-suit injunction in terms of prayer (a) of this petition, restraining the respondent from initiating or proceeding with any legal proceedings in the United States of America or in any forum other than this Court.
7. Mr. Jayanta Kr. Mitra, Senior Advocate appearing on behalf of the petitioner submitted that the cost of defending proceedings at Illinois would be prohibitive for the petitioner. The balance of convenience was, therefore, overwhelmingly in favour of orders being made as prayed for in the petition since the petitioner has already initiated a suit in this Court, which is a Court of competent jurisdiction. This Court has jurisdiction to adjudicate all disputes arising out of the contract for supply of locomotive Traction Motors.
8. Mr. Mitra argued that there being no forum selection clause in the contract this Court not only had jurisdiction to adjudicate the disputes arising out of the contract, but was the convenient forum for adjudication of the disputes. Mr. Mitra argued that this Court was competent to interpret the laws of Illinois. Mr. Mitra argued that even though the parties agreed to be governed by the laws of Illinois, the parties consciously did not opt for adjudication of disputes in Illinois.
9. Mr. Mitra argued that a strong prima facie case has been made out and ad-interim orders, therefor
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
