Bombay High Court
W.S.G. Cricket Pte. Ltd. vs Modi Entertainment Network And Anr. on 1 April, 2002
Equivalent citations: 2002(5)BOMCR87, AIR 2002 BOMBAY 365, (2002) 3 ALLMR 377 (BOM), 2002 (3) ALL MR 377, (2002) 5 BOM CR 87, 2002 (4) BOM LR 798, 2002 BOM LR 4 798
Author: A.P. Shah
Bench: A.P. Shah, V.K. Tahilramani
JUDGMENT A.P. Shah, J.
1. The appellant is the original defendant in the suit. The defendant is aggrieved by the impugned order of the learned Single Judge granting ad interim order of injunction restraining the defendant from proceeding with or taking any step in the claim filed by the defendant in the High Court of Justice, Queen's Bench Division, England. At the request of learned Counsel for the parties and considering all the facts and circumstances of the case, we have taken up for the decision the Notice of Motion in the suit for grant of interim injunction instead of only considering the question of grant of ad interim injunction. In order to appreciate the rival contentions, the facts in brief may be stated as follows:
2. The 1st and 2nd plaintiffs are both companies registered under the Companies Act, 1956, carrying on business in the media and entertainment industry. The defendant is a company registered under the laws of Singapore. The 2nd plaintiff and the defendant entered into agreement dated 21st September, 2000 whereby the defendant who had exclusive licence for, inter alia, television rights in respect of ICC Knockout Cricket Tournament at Kenya between 3rd and 15th October, 2000 granted to the 2nd plaintiff, the exclusive licence to exhibit the said Tournament on terrestrial television i.e. Doordarshan in India. The 2nd plaintiff in turn, assigned the same to the 1st plaintiff. In consideration of the grant of television rights, the licensee (plaintiffs) were to pay to the designated account the licence fee which was to be paid net of any and all the set-offs, deductions, withholding or taxes. The consideration/licence fee stipulated under the agreement was guaranteed net amount of US $ 35,00,000/- and a further sum of US $ 20,00,000/- in the event of the net advertising revenue exceeding the sum of the guaranteed amount of US $ 35,00,000/-.
Clause 12 of this agreement provided as follows:
"12. ENGLISH LAW This agreement shall be governed by and construed in accordance with English Law and the parties hereby submit to the non-exclusive jurisdiction of the English courts (without reference to English conflict of law Rules)."
3. The event which was to be telecast i.e. the ICC Knockout Cricket Tournament commenced from 3rd October, 2000. The plaintiffs for the purposes of telecast of the said event, entered into an agreement with Doordarshan to telecast/beam/display the said signals through its satellite. The Doordarshan by way of consideration was to be paid a sum of Rs. 4 crores as telecast fees. By their fax message dated 5th October, 2000, the defendant complained that the Doordarshan was broadcasting the matches from the event in the Middle-East through their satellite signal which is directly in breach of Arab Digital Distribution Company's rights and the rights granted to the plaintiffs which were limited to terrestrial free-to-air television in India only. The plaintiffs were requested to cease and desist from this immediately. In reply to this fax message the plaintiffs conveyed to the defendant by their letter dated 7th October, 2000 that Doordarshan is not intentionally violating or broadcasting any rights of third party, that it is using the INSAT 2E satellite for its wide terrestrial network linkage and that any spillover of the signal outside India, is purely incidental and a natural overspill. It seems that Doordarshan vide its letter dated 6th October, 2000 took the same stand as taken by the plaintiffs namely that spillover of signal outside India, is only incidental and not intentional. Thereafter there was extensive correspondence between the parties, allegations and counter allegations ensued, plaintiffs threatening to disconnect the signal on account of the alleged breach and defendant denying any breach explaining that the spillover of signal was not intentional and repeated threat of disconnection had hampered and hindered the plaintiffs capacity to exploit commercial potential of the event. It is not necessary to refer to the entire correspondence but suffice it to say that the threat of disconnection was not implemented and the plaintiffs telecast all the matches through Doordarshan including the finals which took place on 14th October, 2000.
4. It is an admitted position that the plaintiffs thereafter made various payments to the defendant as per the agreement during the period December 2000 to February 2001. In the plaint, it is averred by the plaintiffs that these payments were made without prejudice. However, according to the defendant this story is belied by the plaintiffs own letters dated 18th December, 2000 and 5th January, 2001 which show that in response to the defendant's request for payment, the plaintiffs had offered no excuse or arguments but they had simply apologised for the delay in making payments and assured the defendant that they were doing everything they could to make those payments. The defendant has alleged that these letters were deliberately suppressed and this by itself disentitles the plaintiffs from seeking discretionary and equitable relief of injunction. To complete the narration of facts, it is to be noted that the plaintiffs failed to make the balance payment as per the agreement. By its Solicitor's notice dated 3rd May, 2001, the defendant called upon the plaintiffs to pay the balance amount of US $ 2,436,286 on account of licence fee and a further sum of GB Pounds 40,000/- for technical/satellite services provided by WSG and interest thereon at the rate of 1.5% per annum.
5. On 9th May, 2001, the plaintiff filed the present suit alleging inter alia that due to threats of the defendant that the feed would be stopped and plaintiffs would be held responsible for the loss of revenue for the Gulf licensee and also due to the fact that threats given by the defendant were made public by them, it became known to the prospective advertisers that the telecast was likely to be discontinued or disconnected or was in serious jeopardy. This resulted in a large number of prospective advertisers threatening to curtail their commitments to the plaintiffs. Several other advertisers who were interested in giving their advertisements, as India's performance was stunning in the Tournament, pulled out of their commitments and gave their advertisements to ESPN channel instead of Doodarshan, that because of this conduct of the defendant the plaintiffs suffered loss of over US $ 43,00,000/-. It is alleged by the plaintiffs that the entire episode of the complaint allegedly made by the Gulf licensee was deliberately overplayed in collusion with Mr. Murdock (owner of Star) with a view to divert the advertisers to ESPN channel belonging to the said Murdock. On that basis the plaintiffs sought a decree for damage in the sum of US $ 43,00,000/-.
6. The defendant filed its claim for breach of contract against the plaintiffs in the High Court of Justice, Queen's Bench Division, England on 15th November, 2001. Service of the said claim was acknowledged by the defendant's solicitor on 9th January, 2002. By their letter dated 11th January, 2002, the plaintiffs solicitor wrote to the defendant's Solicitors' that the plaintiffs intend to file application to challenge the courts jurisdiction and requested for short extension of time and defendant's Solicitors agreed for seven days extension i.e. upto 31st January, 2002. On the same day, however, the plaintiffs filed the present notice of motion seeking interlocutory injunction restraining the defendant from proceeding with the claim in the High Court of Justice Queen's Bench. It is inter alia contended that the suit filed by them against the defendant is earlier than the defendant's claim, which has been filed in England, that entire cause of action has arisen in India, that the parties who would be deposing in the said claim would all be from India, and, therefore, the claim filed by the defendant in England be stayed. It is contended, that if the claim in England is allowed to continue, it will cause enormous expenses to the plaintiffs, that it is not convenient and proper forum at all and that the claim filed by the defendant in England is vexatious and is filed only with a view to harass them. It is also contended that since all their witnesses, like personnel from Doordarshan, advertisers etc., are in India, it will be impossible to secure their presence before the Court in England and defendant's intention in filing claim there is only to prevent plaintiffs from establishing their case in the Court in England. The learned Single Judge after hearing the parties was of the prima facie opinion that though the parties had agreed to a forum which was chosen by them, the claim in the Court in England if continued, would be oppressive and vexatious and on that basis granted ad interim injunction in favour of the plaintiffs.
7. The question that falls for our consideration is whether the plaintiffs are entitled to any interlocutory injunction preventing the defendant from proceeding with the claim filed by the defendant before a forum agreed by the parties under the agreement.
Dicey and Morris in the Conflict of Laws (13th Edition) have given following general principle as to the jurisdiction in actions in personam.
"Rule 27(4) The Court may assume jurisdiction if the claim is brought to enforce rescind, dissolve, annul or otherwise affect a contract or to recover damages or obtain other relief in respect of the breach of a contract, being (in either case) a contract which: (i) was made in England, or (ii) was made by or through an agent trading or residing in England on behalf of a principal trading or residing out of England, or (iii) is by its terms or by implication governed by English law, or (iv) contains a term to the effect that the Court shall have jurisdiction to hear and determine any action in respect of the contract."
Rule 32 which deals with the jurisdiction clauses provides as follows:
"Rule 32(1) Where a contract provides that all disputes between the parties are to be referred to the jurisdiction of the English courts, the Court normally has jurisdiction to hear and determine proceedings in respect thereof.
(2) Subject to Clause (3) of this Rule, where a contract provides that all disputes between the parties are to be referred to the exclusive jurisdiction of a foreign Tribunal, the English Court will stay proceedings instituted in England in breach of such agreement (or, as the case may be, refuse to give permission to serve process out of jurisdiction) unless the claimant proves that it is just and proper to allow them to continue.
(3) Where the case falls within the scope of the 1968 Convention or the Lugano Convention, unless the defendant submits to the jurisdiction, the Court has no jurisdiction to determine a dispute.
(a) if one or more of the parties is domiciled in a contracting State and the parties have agreed in accordance with Article 17 that the courts of a contracting State other than the United Kingdom are to have jurisdiction to settle any such disputes; or
(b) if none of the parties is domiciled in a contracting State and the parties have agreed in accordance with Article 17 that the courts of a contracting State other than the United Kingdom are to have jurisdiction to settle any such dispute and the courts chosen have not declined jurisdiction.
(4) An English Court may restrain a party over whom it has personal jurisdiction from the institution or continuance of proceedings in a foreign Court in breach of a contract to refer disputes to an English (or semble, another foreign) Court."
Rule 32 deals with the common case where the parties to a contract in international trade or commerce agree in advance on the forum which is to have jurisdiction to determine the disputes which may arise between them. The chosen Court may be a Court in the country of one or both the parties or it may be a neutral forum. The jurisdiction clause may provide for submission to the Court of a particular country or to a Court identified by a formula in printed standard form such as bill of lading referring the disputes to the courts at carrier's principal place of business. Some jurisdiction clauses provide for the courts of a particular country to have an exclusive jurisdiction; others provide for the courts of one of more countries to have non-exclusive jurisdiction i.e. they confer jurisdiction on the courts of one or more countries without prejudice to the rights of the parties to sue in any other Court which may have jurisdiction.
8. The learned Authors state that where the Court finds that the agreement is for non-exclusive jurisdiction of the designated Court (whether in England or foreign country), it cannot be argued that the institution of the proceedings is breach of contract and any application for stay of proceedings in favour of that foreign Court will be determined on the basis of Spiliada Maritime Corporation v. Cansulex Ltd., 1987 A.C. 460. But the fact that a Court contractually chosen by parties will be taken as clear evidence that it is a available forum and that in principle at least, it is not open to either party to object to the exercise of jurisdiction at least on grounds which should have been foreseeable when the agreement was made. This principle is found in S. & W. Berisford Plc. v. New Hampshire Insurance Company, 1990(1) Lloyd's Rep. 454 : 1990(2) All.E.R. 321, British Aerospace PLC v. DEE Howard Co., 1993(1) Lloyd's Law Reporter 368, Rothmic, 1996(2) Lloyds Rep. 206. In other words the principle is that the Court will not grant injunction unless the institution of the proceedings in a foreign Court is in breach of the contract and any application for stay of such proceedings will have to be made before the agreed forum and such application will be governed by the above mentioned principles.
9. The relevant rules quoted from Dicey and Morris were also cited with approval by the Supreme Court with reference to its earlier 11th Edition in British India Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries , where the Court after referring to Cheshire and North's Private International Law (11th Edition) summed up the position as follows:
"The jurisdiction of the Court in actions in personam may be decided upon by the parties themselves on basis of various connecting factors. The parties to a contract in international trade or commerce may agree in advance on the forum which is to have jurisdiction to determine disputes which may arise between them. The express choice of law made by the parties obviates need for interpretation. The chosen Court may be a Court in the country of one or both the parties, or it may be a neutral forum. The jurisdiction clause may provide for a submission to the Court of a particular country, or to a Court identified by a formula in a printed standard forum, such as a bill of lading referring disputes to the courts of the carrier's principal place of business. It is a question of interpretation, governed by the proper law of the contract, whether a jurisdiction clause is exclusive or non-exclusive or whether the claim which is the subject-matter of the action falls within its terms. If there is no express choice of the proper law of the contract, the law of the country of the chosen Court will usually, but not invariably, be the proper law."
10. In the present case, by Clause 12 of the agreement, the parties agreed to submit to the non-exclusive jurisdiction of the English Court (without reference to English conflict of law rules). In a case of present type, where the parties have agreed on a neutral forum, the question of granting injunction would arise only when the proceedings are brought in a foreign Court in breach of the contract i.e. in a Court other than the Court which is chosen by the parties. Where the agreement confers non-exclusive jurisdiction on the designated Court and where the proceedings are brought in that Court it is not permissible to contend that the institution of the proceedings is breach of contract and any application for stay of such proceedings on the ground that there was another forum which was more appropriate will have to be made to that Court which will be determined in the light of principles in Spiliada Maritime Corporation v. Cansulex Ltd. In the circumstances, we have no hesitation to hold that the present application for injunction is completely misconceived. The remedy of the plaintiffs is to raise objection before the Court in England where the defendant has instituted its claim.
11. Mr. Chinoy appearing for the plaintiffs referring to various judgments of this Court and the Supreme Court on the Court's power to grant anti suit injunction. But having carefully considered the judgments, we are of the view that none of them is applicable to the facts of the present case. None of these judgments involves the question before us. The decisions of the Bombay High Court in V.R. Naik v. Balvant Sitaram Mahindra, A.I.R. 1927 Bombay 135, and Lakhiram v. Poonamchand, A.I.R. 1921 Bombay 128, merely hold that the Court has jurisdiction to restrain the party within the jurisdiction from prosecuting the suit in a foreign Court if it thinks that action of the party in filing suit in foreign Court is opposed to notions of equity, etc. of the Court seeking to restrain him. It is needless to say that these are not cases where the parties have contractually agreed to a particular forum.
12. The next decision relied upon by Mr. Chinoy is in the case of Oil and Natural Gas Commission v. Western Company of North America, , where an anti suit injunction was granted in the light of peculiar facts of the case. In that case, the appellant, ONGC, and the respondent Western Company, had entered into a drilling contract. The contract provided for any differences arising out of the agreement being referred to arbitration. The arbitration proceedings were to be governed by the Indian Arbitration Act, 1940 read with the relevant Rules. A disputes between the parties were referred to two arbitrators and an Umpire was also appointed. The arbitrators were unable to agree on the matters outstanding in the reference. Consequently, the Umpire entered upon the arbitration, and straightway proceeded to declare his Award (styled as interim Award) without affording any hearing to the parties on the matters outstanding in the reference. The Award rendered by the Umpire was lodged in the Bombay High Court. Subsequently the Umpire rendered a supplementary Award relating to costs which has been termed as "final Award". About a month after the lodging of the Award in the High Court of Bombay by the Umpire at the instance of the respondent, Western Company, the latter lodged a plaint in the U.S. District Court, inter alia, seeking confirming the two Awards rendered by the Umpire and a judgment against the ONGC. Appellant ONGC on its part instituted an arbitration petition under sections 30 and 33 of the Arbitration Act, 1940 for setting aside the Awards rendered by the Umpire. It was noticed by the Supreme Court that there is a possibility of the Award rendered by the Umpire being set aside by the Indian Court. In that event, an extremely anomalous situation would arise in as much as successful party (Western Company) may well have recovered the amount awarded as per the Award from the assets of the losing party in the USA after procuring a judgment in terms of the Award from the USA Court. It would result in an irreversible damage being done to the losing party (ONGC) for the Court in USA would have enforced a non-existent Award under which nothing could have been recovered. Secondly while as per the contract, parties were governed by the Indian Arbitration Act and the Indian courts had the exclusive jurisdiction to affirm or set aside the Award under the said Act, the Western Company was seeking to violate the very arbitration clause on the basis of which the Award has been obtained by seeking confirmation of the Award in the New York Court under the American Law. In these circumstances, it was held that it was one of those rare cases where the Court would be failing in its duty if it hesitates in granting the restraint order, for, to oblige the ONGC to face the aforesaid proceedings in the American Court would be oppressive in the facts and circumstances of the case.
13. The next judgment relied upon by Mr. Chinoy is in the case of Ramji Dayawala & Sons Ltd. v. Invest Import, . In that case, the dispute was between a petty labour contractor and a foreign engineering construction company which had undertaken to erect the Thermal Power Station in Barauni in Bihar State. The contractor filed a suit for recovery of his dues. The defence was that there was an arbitration agreement between the parties to refer the disputes arising out of the same contract to arbitration and therefore, suit has to be stayed. The Court found that there was no concluded arbitration agreement between the parties. It was held that in any event in the facts and circumstances of the case the High Court was not right in exercising its discretion in favour of the respondents by granting stay of the suit filed by the appellant. The Court observed that the entire evidence both of the appellant and the respondent is in this country, the contract as a whole was executed and carried out in this country, the claim as a whole arose in this country, the appellant is a company incorporated in this country and the respondent is having its office in this country and that the respondent is not motivated by any principle to have the decision of the foreign Arbitral Tribunal at Paris but the principle object of the respondent is merely to make it more difficult, if not impossible, for the appellant, to assert the claim. It was held that in such a suit when discretion is exercised on well settled judicial considerations no Court would grant stay and the stay has to be refused. The decision lays down principles for grant of stay under section 34 of the Arbitration Act, 1940 and has no bearing on the facts of the present case.
14. Mr. Chinoy also referred to the decision of the Privy Council in SNI Aerospatiale v. Lee Kui Jak and another, 1987(3) All.E.R. 510 and the decision of the House of Lords in Airbus Industries GEI v. Patel and others, 1998(2) All.E.R. 257. These judgments basically deal with anti suit injunction and are not relevant to the issue raised in the instant case.
15. We may also mention that we find considerable substance in the submission of Mr. Chagla that the plaintiffs have deliberately suppressed letters dated 18th December, 2000 and 5th January, 2001. The Court of law exercising discretionary powers in such matters, rightly insists on a party approaching the Court with clean hands. In S.P. Chengalvarya Naidu (dead) by LRs. v. Jagannath (dead) by LRs. and others, , the Supreme Court declared in unmistakable terms that "a litigant who approaches the Court is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the Court as well as on the opposite party". Mr. Chinoy strenuously contended that documents were not intentionally suppressed. He submitted that no such objection was raised in the affidavit in reply filed on behalf of the defendants and this submission was made for the first time only during the course of arguments. Mr. Chinoy contended that Court should not deny reliefs without fair consideration of merits of the application. It is not necessary to dilate on this aspect, suffice it to say that the plaintiffs conduct is not above board. We are not satisfied that non-production of the letters dated 18th December, 2000 and 5th January, 2001, is a bona fide mistake and indeed this Court would have been justified in vacating ad interim injunction on this count. However, since we are of the opinion that plaintiffs are not entitled to any interlocutory injunction, we do not wish to express any final opinion on this aspect.
16. In the result, the appeal succeeds. Order of the learned Single Judge is set aside. Notice of motion is dismissed with costs quantified at Rs. 25,000/-.
17. On the request made by Mr. Chinoy ad interim injunction granted earlier is continue for a period of six weeks.
Certified copy expedited.
Parties to act on the copy of this order duly authenticated by the Personal Secretary of this Court.
Appeal succeed.