Anti-Suit Injunction and Anti Anti Suit Injunction

Introduction

An injunction is a remedy granted by courts that prohibits the commission of a wrong threatened or the continuance of a wrongful course of action already begun. Under Indian Legal System, the law relating to injunction has been provided in the Specific Relief Act, 1963 and under Order XXXIX(39) of the Code of Civil Procedure, 1908.

Injunctions mainly are of two kinds according to Section 37 of the Specific Relief Act, 1963.

Temporary/Interim Injunction – It is granted for a specific time at any stage of the suit and upon completion of such specific time period it becomes dead.

Permanent/Perpetual Injunction – It is granted by the decree made at the hearing and upon the merits of the suit. The infringer/defendant is thereby perpetually prevented from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff/IP owner.

There is another kind of injunction under Section 39 of Specific Relief Act which is Mandatory Injunction. It is granted when there is a need for performance of an act to prevent the breach or infringement which is likely to be caused.

Understanding Anti-Suit Injunctions in India

Definition : Anti-suit injunctions are orders passed by courts to restrain parties from commencing or pursuing proceedings in another jurisdiction including a foreign court or forum.

Although there are no specific rules governing anti-suit injunctions in India, the Indian courts usually grant injunctions on the grounds of equity and preventing miscarriages of justice. While jurisprudence on this matter has been slow to develop there have been many new judgments which are significant in this regard.

The position of law regarding the principle of anti-suit injunctions was settled by the Supreme Court (“SC”) in the case of Modi Entertainment Network and Anr. v. W.S.G. Cricket PTE. Ltd. It was held in this case that courts in India, like the courts in England, are courts of both law and equity and the principles governing the grant of injunction, which is an equitable relief will also cover the grant of an anti-suit injunction. However, the rule of ‘comity of courts’ requires this power to be exercised sparingly because such an injunction though directed against a person in effect causes interference in exercise of jurisdiction by another Court.

SC also propounded certain guidelines for granting anti-suit injunctions, which are discussed below:

1. In exercising discretion to grant an anti-suit injunction the court must be satisfied of the following aspects: –
2. the defendant, against whom the injunction is sought, is amenable to the personal jurisdiction of the court;
3. if the injunction is declined, the ends of justice will be defeated and injustice will be perpetuated; and
4. 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;
5. In a case where more forums than one are available, the Court in the exercise of its discretion to grant an anti-suit injunction will examine as to which is the appropriate forum (Forum conveniens) having regard to the convenience of the parties and may grant anti-suit injunction in regard to proceedings which are oppressive or vexations or in a forum non-conveniens;

Similarly, there were few other guidelines that the Court laid down in the context of granting anti-suit injunctions in India.

• Where jurisdiction of a court is invoked on the basis of jurisdiction clause in a contract, the recitals therein in regard to exclusive or non-exclusive jurisdiction of the court of choice of the parties are not determinative but are relevant factors and when a question arises as to the nature of jurisdiction agreed to between the parties 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, save in an exceptional case for good and sufficient reasons, 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 vis major or force majeure and the like;
  
• where parties have agreed, under a non-exclusive jurisdiction clause, to approach a neutral foreign forum and 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 favored forum as it shall be presumed 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; yet 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-conveniens; and
  
• the burden of establishing that the forum of the choice is a forum non- conveniens or the proceedings therein are oppressive or vexatious would be on the party so contending to aver and prove the same.

Therefore, as per the guidelines, in considering whether an anti-suit injunction is to be granted or not, the court is to inquire whether the defendant is amenable to the personal jurisdiction of the court, whether the ends of justice would be defeated by refusal to grant the injunction and where there are more than one forums available, and which is the forum convenes for bringing the action in question having regard to the convenience of the parties and other factors. The court has also to bear in mind the principle of comity.

Summarizing, the guidelines given in Modi Entertainment, SC in Dinesh Singh Thakur v. Sonal Thakur, held that a request for granting an anti-suit injunction deserves to be dismissed/refused when by such refusal no grave injustice would be suffered by the party seeking such injunction. It was also held that the power to grant anti-suit injunction should be exercised sparingly, carefully, cautiously, and not in a routine manner in light of the comity of courts.

Anti-Suit injunctions in context of Trademarks

Anti-suit injunctions have been used by the Indian judiciary to protect the rights of intellectual property holders against defendants who are not based in India and try to initiate proceedings in their local courts.

Case laws:

In HT Media Limited & Anr v. Brain link International, INC. & Anr., the Delhi High Court tackled the permissibility of the grant of anti-suit injunction.

As per the facts, HT Media, had statutory and common law rights over the trademarks “Hindustan” and “Hindustan Times”, and the Defendant was a New York based Corporation, in the business of providing IT related support services. The Defendant in 1996 bought the disputed domain name www.hindustan.com which led to the present allegations of infringing and cyber-squatting in violation of HT Media’s trademark rights. Defendants filed a Declaratory Suit for non-infringement against HT Media in US.

In this case, the Court relied on the principles laid down in Modi Entertainment case and granted an interim ex-parte injunction in favour of HT Media temporarily restraining the Defendants from proceeding with the suit in New York, or instituting any proceeding in any other court, in relation to the disputed domain name or to any issue which formed the subject matter of the present suit. The Court also restrained the Defendants from creating third party rights in the disputed domain name or using any other mark identical/deceptively similar to HT Media’s trademarks.

The Court further relied on India TV, Independent News Service Pvt. Ltd. v. India Broadcast Live LLC & Ors. The facts of the case were, India TV, owned the website, ‘indiatvnews.com’. The defendants-India Broadcast Live, launched a news channel, ‘indiatvlive.com’, in India and Los Angeles. The website prominently displayed the words ‘INDIA TV’ inside the sketch of a television. The plaintiff filed an injunction to prevent the defendant from using the mark INDIA TV as a part of its domain name or in any other manner on their website. The Defendants contended that they were American entities, formed and effectively established in the USA, with absolutely no presence in India, thereby Indian Courts would not have the Jurisdiction. In the case, it was held that insofar as the position in India is concerned, there is no long-arm’ statute as such which deals with jurisdiction as regards non-resident defendants. Thus, it would have to be seen:

1. whether the defendant’s activities have a sufficient connection with the forum state i.e., India;
2. whether the cause of action arises out of the defendant’s activities within the forum, and
3. whether the exercise of jurisdiction would be reasonable.

The Court also held that the suit in New York is vexatious and oppressive as the Plaintiffs had not asserted trademark rights in the US. Further the Plaintiffs’ trademarks were registered in India and its goodwill spilled over internationally. Plaintiffs also did not do any business there. The Court also examined as to how the passive website of the Defendants would confuse the consumers in India and damage the reputation of the Plaintiffs. The Court granted interim injunction and anti-suit injunction in favour of the Plaintiffs.

In a similar case of Jaininder Jain and Ors. v. Arihant Jain, a dispute arose over the use of trademark “KANGARO”. The Court passed an anti–suit injunction order in the relation to a case of infringement of trademark.

Anti-Anti Suit Injunctions – a conundrum in itself

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,

A recent order passed by Delhi HC granted an anti-anti-suit injunction, in the case of InterDigital Corp & Ors. v. Xiaomi Corp & Ors. issued its first and presumably first global anti-anti-suit injunction order.

Facts

Interdigital had filed a case of infringement against Xiaomi in July 2020 in the Delhi High Court for the alleged use of technology of their SEPs without due authorization. Interdigital claimed that it grants licenses at rates that are fair, reasonable, and non-discriminatory (FRAND). In this case, the plaintiffs did not seek an absolute injunction against the defendants from using SEPs but sought an injunction in case they don’t acquire licenses at FRAND rates.

The case filed in India is inextricably linked with China where prior to the case of infringement filed in the Delhi High Court, the defendants had already filed SEP royalty rate-setting suit before the Wuhan Court. In Wuhan Court, the defendants sought to fix the global FRAND rate of worldwide SEPs of the plaintiffs, on the basis of which they could obtain a license from the plaintiffs. Further, the defendants filed an anti-suit injunction before the Wuhan Court for restraint from prosecuting the suit before the Delhi High court. Vide order dated 23rd Sept 2020, the Wuhan Court issued directions for either withdrawing or suspending the application for temporary or permanent injunction in China or elsewhere besides imposing a fine of RMB 1 million yuan per day calculated from the date of violation of the order of the Wuhan Court.

By the present application (anti-anti-suit), the plaintiffs sought an injunction against the defendants from enforcing against them, the directions of the Wuhan Court. Thus, the issues relating to the jurisdiction of China and India, comity of courts, and several other issues.

Judgment

In the final judgment delivered on 3^rd May 2021, the Delhi High Court created history by confirming and making absolute India’s first anti-enforcement injunction granted in favor of US technology giant and innovator, interdigital and against Chinese multinational Xiaomi Corporation. The court observed that the Wuhan Court failed to consider the fact that the cause of action arose in India as the proceedings before it was of perceived infringement of six specific Indian patents.

Conclusion

Anti-suit injunctions are considered a powerful tool to enforce a decision on jurisdiction. But that the exercise of power by the domestic forum leads to frustration on the side of the foreign forum because of the interference with its jurisdiction. Resultantly, anti-suit injunction is by far one of the most controversial remedies which could be granted by a Court.

In spite of the need to exercise judicial discretion, the Courts would be required to do so in a careful and thought-out manner to meet the ends of justice and satisfy the doctrine of equity and comity.