- Apprentice Lawyer
With the expansion of global trade, business, commerce and investments, international boundaries have slowly blurred. Invariably, disputes between two parties from different countries/jurisdictions are resolved either through the dispute mechanism in the agreement entered into between the parties, or by approaching local courts through suits. Issues arise when parties trigger two different mechanisms in two or more jurisdictions to resolve their disputes.
In order for the disputes to be resolved by one court and to avoid conflicting judgments in different jurisdictions, courts pass anti-suit injunctions. A recent trend has shown that parties have also filed anti-anti suit injunctions, in a bid to reverse the effect of anti-suit injunctions passed by some local courts.
The question which this article seeks to address relates to the parameter for grant of an anti-anti suit injunction, the power of tribunals to grant such orders, and the ramifications of such orders.
What is an anti-suit injunction?
To put it simply, an order of anti-suit injunction is an order passed by a court to stop one of the parties to a litigation from pursuing its remedies in a foreign court. Illustratively, two entities, one based in USA and the other in India, have disputes. One entity pursues its remedies in a forum in USA, which is not natural or convenient and where the opposite party is not amenable to its jurisdiction. The other entity can essentially approach the local courts to state that all disputes should be adjudicated by one court alone, and can thus seek an injunction to restrain the opposite side from pursuing remedies in a foreign jurisdiction.
In order for the court to grant an anti-suit injunction, parameters set out by the Supreme Court are to be met which include but are not restricted to (a) amenability of the opposite side to the personal jurisdiction of the court; (b) forum conveniens; and/or (c) ends of justice would be defeated.
A brief history of anti-anti-suit injunctions
An anti-anti-suit injunction is effectively an injunction restraining a court, where a proceeding in the nature of an anti-suit injunction is pending and/or where orders of anti-suit injunction have been passed, from continuing with such a proceeding.
The first such case where an anti-anti-suit injunction was passed pertained to disputes between Lenovo and Motorola/IPCom relating to imposition of Fair Reasonable and Non Discriminatory (FRAND) terms for grant of mobile patents. In this context, the US courts granted Lenovo an anti-suit injunction, while the courts of Paris granted Motorola/IPCom an anti-anti-suit injunction preventing the US courts from proceeding any further. Similar anti-anti suit injunction was passed by German Courts and English Courts as well.
The case pertaining to Interdigital Technology passed by the Delhi High Court is of particular interest. The case concerned disputes in respect of certain Standard Essential Patents (SEPs) held by Interdigital Technology. While a suit for fixing of royalty for the SEPs was pending in the Delhi High Court, Xiaomi approached the Wuhan Intermediate People’s Court and obtained an anti-suit injunction against Interdigital, restraining it rom pursuing the suit filed by it. Interdigital Technologies moved the High Court of Delhi requesting that Xiaomi should be restrained from pursuing and enforcing the anti-suit injunction obtained from the courts at Wuhan.
The High Court of Delhi, while deprecating the conduct of Xiaomi in obtaining the injunction before the courts of Wuhan, passed an order restraining Xiaomi from pursuing or enforcing the anti-suit injunction order until the final disposal of the present proceedings. It arrived at this conclusion while applying the principles for the grant of anti-suit injunction more particular set out in Modi Entertainment Network and Anr. v. WSG Cricket PTE. Ltd.
Can the principles of anti-suit injunction apply to an anti-anti-suit injunction?
The question which begs an answer is whether the principles laid out in Modi Entertainment Network can be applied cursorily to grant of an anti-anti-suit injunction? Should the principle of comity not take precedence, especially once a court of another country has passed an order of an anti-suit injunction? Should the threshold for grant of anti-anti-suit injunction not be higher than the threshold of merely an anti-suit injunction (especially since this is a higher threshold than the grant of a simpliciter injunction)?
To illustrate the absurdity, here is an example. A files a suit in India. B goes to the courts in UK and obtains an anti-suit injunction. This means that the UK courts have held that the opposite side is amenable to its jurisdiction and that the proceedings in India are vexatious, oppressive and inconvenient to the parties. A then moves an application for anti-anti-suit injunction, which gets passed. This also means that Indian court has held that the opposite side is amenable to its jurisdiction and that the proceedings in the UK are vexatious, oppressive and inconvenient to the parties. The findings are inherently contradictory, arent they?
The very reason why such anti-suit injunctions are passed is to avoid conflicting judgments. However, at the threshold itself, there are conflicting views and judgments by the courts of UK and India. Isn't the rationale behind grant of anti-suit injunction defeated by passing orders of anti-anti-suit injunctions? Thus, to grant an anti-anti-suit injunction on the parameters/threshold of an anti-suit injunction, in the estimation of the author, is patently flawed. The courts thus need to formulate a test which has a higher threshold than the parameters of anti-suit injunction to pass an anti-anti-suit injunction.
Can Tribunals pass orders of anti-anti-suit injunctions?
There is a larger question that must be addressed. Can Tribunals pass such orders? Take for instance a situation that a creditor has moved the Adjudicating Authority under the Insolvency and Bankruptcy Code (IBC) and a Corporate Insolvency Resolution Process (CIRP) has been initiated by the Adjudicating Authority. One of the other creditors of the company or a person aggreived applies to a court in USA and obtains an anti-proceeding injunction. Does the Adjudicating Authority have the power under the IBC to pass orders akin to anti-anti-suit injunctions? A similar predicament would be faced by the Competition Commission of India to grant such orders.
Problems while passing anti-anti suit injunctions:
Some problems can be discerned straight away. Assuming that an arbitration is invoked by an US entity, in terms of the dispute resolution clause, against an entity based in the India and arbitration proceedings commence. The entity based in India approaches the local courts and gets a stay on the arbitral proceedings. When the order is brought to the notice of the arbitrator, he either disregards the order or passes an order akin to an anti-anti-suit injunction and the US entity eventually succeeds in the arbitration. The US entity then tries to enforce the arbitral order in India as a foreign award. Would such an award, which has been passed in the teeth of a judgment by the local courts suspending arbitral proceedings, fall foul of the test of fundamental policy of Indian law? Would orders of the arbitral tribunal be a nullity?
There is another way to look at it. Parties have agreed to a particular exclusive jurisdiction to resolve their disputes. Since the criteria for grant of anti-suit injunction and anti-anti-suit injunction is not necessarily the exclusive jurisdiction clause agreed to by the parties (which is a relevant factor only), assuming that an order of anti-suit or anti-anti-suit injunction is passed in derogation of such an exclusive jurisdiction clause, what would be the point of agreeing to such an exclusive jurisdiction clause? In arbitration, this defeats the very purpose and concept of party autonomy.
Additionally, passing an anti-anti-suit injunction also hits at the very basis of the principle of comity (which is the respect for the orders of a foreign court).
The questions raised above remain unanswered, possibly because this quandary has never been brought to the notice of the courts passing orders. In essence, parties who have applied for an injunction, anti-suit injunction or an anti-anti-suit injunction are mired in litigation and do not and cannot enjoy the fruits of the litigation. Courts ought to be reluctant in passing such orders of anti-suit injunctions and anti-anti-suit injunctions.