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Anti-Anti-Suit Injunction: The Nascent Nomenclature Laid Down By The Delhi High Court

The Delhi High Court in Interdigital Technology Corporation v. Xiaomi Corporation & Ors has propounded a novel legal nomenclature namely Anti-Anti-Suit Injunction (hereinafter referred to as A2SI) . The Delhi High Court became the first court in India to pass an Anti-Anti-Suit Injunction and subsequently drew the attention of the Indian legal fraternity.

Before we discuss the concept of A2SI, it is pertinent to first understand what an anti-suit injunction is. In an Anti-suit injunction, an order is made against a party in personam restraining them from instituting a legal action or from continuing with proceedings that have already been instituted.[1] In simple terms, an anti-suit injunction prohibits a party from continuing a case in another jurisdiction. The injunction can be granted in respect of proceedings in either local and foreign courts.

The principles of an anti-suit injunction in India have been propounded by various landmark judgements. In Modi Entertainment Network and Anr v WSG Cricket PTE Ltd, the Hon'ble Supreme Court of India made instructive observations and laid down the following principles[2]

While granting an anti-suit injunction the Court must be satisfied of the following aspects:
  • The defendant, against whom injunction is sought, is amenable to the personal jurisdiction of the court
  • If the injunction is declined the ends of justice will be defeated and injustice will be perpetuated; and
  • 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;
  • Where there are more than one forums, the Court in exercise of its discretion to grant anti-suit injunction has to examine and determine the appropriate forum (forum convenience) i.e. 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-convenience;
  • Where jurisdiction of a court is invoked on the basis of jurisdiction clause in a contract, the recitals of the contract specifying exclusive or non-exclusive jurisdiction of the court of choice of the parties are not determinative but only the relevant factors. The court has to decide the same on a true interpretation of the contract on the facts and in the circumstances of each case;
  • 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 unless necessary in an exceptional circumstances backed by sufficient reasons and 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 force majeure reasons etc.;
  • Where parties have agreed, under a non- exclusive jurisdiction clause, to approach a neutral foreign forum and to 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 on the presumption 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;
  • 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;
  • However 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-convenience;
  • The burden of establishing that the forum of choice is a forum non- convenience or the proceedings therein are oppressive or vexatious would be on the party so contending to aver and prove the same.

Furthermore, in (India TV) Independent News Service Pvt Ltd v India Broadcast Live LLC & Ors[3], the Hon'ble Delhi High Court held that while deciding an application for anti-suit injunction, held that 'factors such as convenience of parties, expenses involved and law governing the transaction are important while determining the appropriate forum'.[4]

While the principles laid down in anti-suit injunction orders clearly state that a party cannot take a continuing case to another jurisdiction, the Hon'ble Mr. Justice C. Hari Shankar in Interdigital Technology Corporation vs. Xiaomi Corporation held, inter alia, that it is impermissible for a court in one sovereign jurisdiction to injunct a party before it from pursuing its cause before a court in another jurisdiction, where such latter jurisdiction is the only competent forum.[5] The Supreme Court opined that it exercises personal jurisdiction over Xiaomi, the defendant therein.

Factual Background:
The dispute between Interdigital (plaintiff) and Xiaomi (defendant) is regarding the violation of the Indian Patents IN 262910, IN 295912, IN 298719, IN 313036, and IN before320182 registered under Standard Essential Patents (SEP) held by interdigital without taking their due permission or license.

Therefore, the plaintiff has filed a suit against the defendant demanding the decree of permanent injunction restricting the defendants to use its SEPs in their devices.
Or as an alternative, the plaintiffs contend that the defendants can be permissible to use SEPs only if they enter into a licensing agreement with them according to FRAND i.e. fair, reasonable and non-discriminatory terms.

However, the defendant before this case filed a SEP royalty rate-setting suit (the Wuhan suit) on 9th June 2020 before the Wuhan Court against the plaintiff. The order passed by the court on 23rd September 2020 revealed that there was no violation of the patent as the suit primarily sought for the fixation of FRAND compliant royalty rates between the plaintiff and the defendant to enable the defendant to use the SEP technology of the plaintiff.

In addition to the present suit, the plaintiff also filed Interlocutory Applications (IAs) under Order 39 Rules 1 and 2 of the Civil Procedure Code, 1908 and Chapter VII Rule 17 of the Delhi High Court (Original side) Rule, 2018 seeking interim reliefs and set up of confidentiality club respectively.

Summons in the current suit and notice in Interlocutory Applications 6440/2020 and 6441/2020 were issued by the Delhi High Court on 4th August 2020.

The defendant too filed an application pleading for an anti-suit injunction before the Wuhan Court on the same day i.e. 4th August 2020 to restrain the plaintiff from pursuing the suit against them.

Despite the ongoing proceedings in the Delhi H.C., the defendant did not inform the court regarding the pendency of the anti-suit injunction application filed by them before the Wuhan court or the issuance of notice to the plaintiff.

The order dated 23rd September 2020 by the Wuhan court revealed that serving the summons by the court to the plaintiff is under progress and issued an anti-suit injunction in a sense of behaviour preservation.

Judgement and findings:
The Delhi Court referred to the precedents set by both Indian and Foreign Court judgements[6] and propounded the following principles:
  • It should be granted in rare cases as it may interfere with functioning of a sovereign forum
  • It could only be granted by a court which is the natural forum for the dispute. Protection of the jurisdiction of a court is an important factor to be considered;
  • The crucial test for an anti-suit injunction / anti-enforcement injunction is if there is a possibility of palpable and gross injustice due to non-grant of injunction;
  • It could be granted where there is interference to pursue legal remedies before a competent forum, as the same amounts to oppression;
  • The principle of comity of courts would not apply when the foreign order was offensive to domestic public policy or customary international law; and
  • Certain instances would justify the grant of anti-enforcement injunction, such as obtaining the judgment too quickly or secretly, and/or fraudulently and/or where the applicant seeking such injunction had no means of knowing of the same.

Conclusion:

The Delhi HC has laid down methodology which the courts must approach applications seeking anti-enforcement injunctions. Notably, the issue of 'comity of courts', whilst by no means ignored, has certainly been put alongside the problem of vexatious and oppressive proceedings.

While the conduct of the parties and also the factual matrix in the instant case played an important role in the Delhi HC coming to its judgment, this judgment assumes greater significance for several other reasons. One must keep in mind that this area of law i.e., issuance of anti-enforcement injunctions remains at its nascent stage in India and is anticipated to develop with the passage of time and with additional jurisprudence being created as such orders are taken up in appeal all the way up to the Supreme Court of India.

The Delhi HC didn't delve into the enforceability of the Anti-Suit Injunction Order in India. India and China don't have reciprocal arrangements on enforcement of court orders under the Code of Civil Procedure, 1908, therefore, the enforceability of such orders are often a particularly cumbersome and tedious process.

Generally, complex cross border transactions involve an array of issues which are individually governed by a distinct set of dynamics, such as, competence of the fora, arbitrability of the disputes, enforceability of awards and/or decrees etc. Such composite transactions usually tend to involve similar issues between the same parties to be adjudicated by different fora or perhaps in numerous resolution mechanisms. The problem of overlap is a reality and can't be discounted.

End-Notes:
  1. The law of anti-suit injunctions in India - Litigation Committee newsletter article
  2. Judgement propounded in (2003) 4 SCC 341
  3. (2007) 35 PTC 177 (Del).
  4. The law of anti-suit injunctions in India - Litigation Committee newsletter article
  5. I.A. 8772/2020 in CS(COMM) 295/2020
  6. Devi Resources Ltd v. Ambo Exports Ltd., 2019 SCC OnLine Cal 7774, SAS Institute v. World Programming Ltd, (2020) EWCA Civ 599; IPCom GmbH & Co KG v. Lenovo Technology (United Kingdom) Ltd; Lenovo (US) Inc. v. IPCom GmbH & Co KG, RG 19/21426-No Portalis 35L7-V-B7D-CBAZK; Huawei v. Conversant, [2019] EWCA Civ.
  7. 38; Unwired Planet International Ltd v. Huawei Technologies (UK) Co Ltd, 2020] UKSC 37; Ecobank Transnational Inc v. Tanoh, (2016) 1 WLR 2231

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