When can enforcement of an anti-suit injunction passed by a foreign court be denied? Delhi High Court answers

In the first-ever judgement on enforcement of an anti-suit injunction, the Delhi High Court has ruled that a foreign court cannot injunct a party from pursuing its cause before Indian Court when Indian jurisdiction is the only forum competent to adjudicate the claim (Interdigital Technology vs Xiaomi Corp)..The judgment was delivered by a single-judge Bench of Justice C Hari Shankar. “It is totally impermissible for a Court in one sovereign jurisdiction to injunct the party before it from pursuing its cause against infringement of its intellectual property before another sovereign jurisdiction, where such latter jurisdiction is the only forum competent to adjudicate the claim of infringement, save and except where continuation of the infringement proceedings are vexatious or oppressive to the proceedings pending before the former, injuncting, court,” the High Court held..The order was passed in Interdigital Technology’s plea to restrain Xiaomi Corporation from enforcing an order passed by a Wuhan Court in China..The Wuhan Court had, in a plea by Xiamoi, directed Interdigital to “withdraw or suspend application” in relation to its patent infringement claim against Xiaomi, which is pending before the Delhi High Court, else a fine of RMB 1 million yuan per day would be imposed on it..The High Court clarified that it was not sitting in appeal against the order passed by the Wuhan Court.It went on to hold that a court in one country should not ordinarily injunct enforcement of an order passed by a court of another country. "I am entirely in agreement with the proposition that a Court, of one sovereign country, should ordinarily loath to injunct enforcement of an order passed by a Court in another sovereign country; indeed, empirically stated, no such jurisdiction exists at all. Where, however, the order passed by the Court of one sovereign country, without due justification, entrenches on the lawful invocation of remedies known to law, by a litigant in another sovereign country, the Court in the latter sovereign country is duty-bound to protect such incursion on its jurisdiction, and on the fundamental right of its citizen to seek legal redress," the judgment said. .The Court weighed in detail the considerations that led the Wuhan Court to pass the anti-suit injunction and concluded that neither were these factors recognised as grounds for grant of anti-suit injunction in any jurisdiction nor did the order refer to any such decision or authority..The Court further noted that Interdigital was never issued notice of the anti-suit injunction application before it came to be decided against them..Even assuming that Interdigital defaulted in responding to the notice, no decision was brought to notice to justify why the Wuhan Court proceeded to finally decide the anti-suit injunction application, the Court observed. .The Court observed that the cause of action in the proceedings before it were of perceived infringement by Xiamoi, of six select and specific Indian patents, which could only be challenged in India.."Perceived infringement of Indian patents can, indisputably, be challenged only in India, patent rights being territorial in nature and patents themselves being granted only by the concerned sovereign state. There is, therefore, no question of the plaintiffs having been able to seek injunction, against infringement of the suit patents in issue in the present case, before any forum outside India," the Court ruled. .The Court added that this aspect was "completely overlooked" by the Wuhan Court when it observed that Interdigital was trying to exclude the jurisdiction of Wuhan Court by initiating proceedings before this Court. ."What the defendants (Xiaomi) suggest is, therefore, that the plaintiffs (Interdigital) should sit back and helplessly watch continued infringement of their suit patents by the defendants (as the plaintiffs would allege) without being able to lift a finger to prevent it, even while legal remedies, for redressal, continue to remain available in this country under the Patents Act. This would, clearly, render the Patents Act, and the statutory guarantees available thereunder, both otiose and impotent. Damages are but poor solace, once the damage itself is done," it further explained. .The Court further stated that the constitutional guarantee of “justice, social economic and political” to every citizen could not be "sacrificed at the altar of comity". "The right of the citizen, in this country, to legal redressal to ventilate his legitimate rights, is hallowed, sacred, and fundamental. It is a sanctified and preambular constitutional goal, and derives sustenance from the most sublime of our fundamental rights, including those consecrated by Articles 14 and 21. It is an inviolable and inalienable facet of access to justice. It triumphantly carries forward the torch lit, over two centuries ago, by Chief Justice Marshall in Marbury v. Madison49 which hailed the right to obtain civil redress as “the very essence of civil liberty”. What the order of the Wuhan Court does, unfortunately, is to deny, to the plaintiffs, the right to even flavour this essence, without due justification.".The Court added that the scale and sweep of enquiry in the Wuhan Court was decidedly different from that of the case before this court, and pertained to the fixation of a FRAND rate for the entire portfolio of Interdigital's SEP..The Court also held that mere overlap of issues would also not justify grant of an anti-suit injunction.."Mere overlap of issues is not regarded, either by the law in this country or in any other jurisdiction, as sufficient to grant anti-suit injunction. It is only where the overlap results in the foreign proceedings being rendered “oppressive or vexatious” that anti-suit injunction may be justified...I have not come across any decision which justifies this. To my mind, a step so extreme as an anti-suit injunction cannot be justified on a mere apprehension of the possibility of conflicting orders, were proceedings in both jurisdictions to be allowed to proceed," it said. .In its judgement, the Court also took on record the concealment, lack of fairness and transparency by Xiaomi with respect to the pendency of an anti-suit injunction proceedings before the Wuhan Court. . "A transparent intent, to keep the plaintiffs, as well as this Court, in the dark, regarding the filing of the anti-suit injunction application, and the passing of the order, thereon, it is apparent. In my view, such an attitude, in a commercial litigation such as the present – or, for that matter, in any proceeding in a court – is completely intolerable. It amounts to fraud on the Court as well as material concealment from the plaintiffs. Even on this sole ground, I am convinced that the defendants deserve to be injuncted from enforcing, against the plaintiffs, the order dated 23rd September, 2020, of the Wuhan Court, passed in such circumstances," the Court held..Finally, applying the test of prima facie case, the balance of convenience and irreparable loss, the Court held that the grant of anti-enforcement injunction was eminently justified in the case. .In the event the Wuhan Court takes action against Interdigital towards deposit of the fine of RMB 1 million per day, as directed in its order, Xiaomi shall deposit the same with the Court and Interdigital shall be entitled to withdraw the same, the Court added. .Interditigal was represented by Senior Advocate Gourab Banerji, along with Anand and Anand team including Pravin Anand, Vaishali Mittal, Siddhant Chamola, Manisha Singh and Pallavi Bhatnagar. Xiamoi was represented by Senior Advocate Neeraj Kishan Kaul with Saikrishna Associates team Saikrishna Rajagopal, Siddharth Chopra, Sneha Jain, Garima Sahney, Stuti Dhyani, Charu Grover, Anu Paarcha, Vivek Ayyagari, Victor Vaibhav Tandon, Arjun Gadhoke, Avijit Kumar, Aniruddh Bhatia, Pritha Suri and Chanan Parwani..[Read Judgement].Can Confidentiality Club have documents for "legal eyes only"?: Delhi High Court answers