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|Judgments - Airbus Industrie G.I.E v. Patel and Others
LORD GOFF OF CHIEVELEY
This appeal is concerned with the circumstances in which an English court may grant what is usually called an "anti-suit injunction." The proceedings in question have arisen from a very serious air crash which occurred at Bangalore airport on 14 February 1990. An Airbus A-320 aircraft crashed when coming in to land. Many of the passengers died and the remainder were injured. Among the passengers on board were two families of Indian origin who were British citizens with homes in London. Four of them were killed, and the remaining four were injured. They are, or are represented by, the six appellants in the appeal now before your Lordships' House. Following the publication in December 1990 of the Report of a Court of Inquiry in India, in which the cause of the crash was identified as error on the part of the pilots (both of whom were killed in the crash), claims were made by solicitors acting for the appellants, their primary claim being against Indian Airlines Corporation ("I.A.C."), the employers of the pilots. When it appeared that these claims would not be settled within the two-year time-limit for such proceedings in India, proceedings were commenced in India on 12 February 1992 against I.A.C., and also against Hindustan Aeronautics Ltd. ("H.A.L."), the airport authority at Bangalore airport. H.A.L. was criticised by the Court of Inquiry for failing to make adequate arrangements for dealing with accidents, and in particular for extinguishing fires such as that which broke out in the aircraft when it crashed; the Court considered that, if such arrangements had been in place, the loss of life and the injuries suffered would not have been so severe. On 6 March 1992 the appellants settled their claim against I.A.C. for the full amount recoverable up to the limit of I.A.C.'s liability. This resulted in a total recovery of £120,000 by all the appellants which, taking into account irrecoverable expenses, left a net sum of no more than £75,000. Little progress has been made in the proceedings against H.A.L.. This may be due to delay in the Indian proceedings; but there may also be difficulty in establishing that the death or injuries of the passengers in question were attributable to negligence on the part of H.A.L.
Meanwhile in February 1992 the appellants also commenced proceedings in Texas, where they sued a number of parties who might have had some connection with the aircraft or its operation. These included the respondent company, Airbus Industrie G.I.E. ("Airbus"), which designed and assembled the aircraft at Toulouse in France. Similar proceedings were brought in Texas in respect of three American passengers who died in the same crash. The two sets of proceedings were later consolidated. In response to these proceedings in Texas, on 21 November 1992 Airbus brought proceedings in the Bangalore City Civil Court against, inter alia, the appellants and the American claimants, and on 22 April 1995 the presiding judge made a number of declarations designed to deter the defendants in those proceedings (i.e. the appellants and the American claimants) from pursuing their claims in Texas. These included a declaration that the appellants were not entitled to proceed against Airbus in any court in the world other than in India/Bangalore, and an injunction which purported to restrain the appellants from claiming damages from Airbus in any court in the world except the courts in India/Bangalore. However, since the appellants were not within the Indian jurisdiction, the injunction had little deterrent effect.
Airbus then issued an originating summons in this country with the purpose of (1) enforcing the Bangalore judgment against the appellants, and (2) obtaining an injunction from the English High Court restraining the appellants, who are resident in England, from continuing with their action against Airbus in Texas on the grounds that pursuit of that action by the appellants would be contrary to justice and/or vexatious or oppressive. The originating summons came before Colman J. who, on 23 April 1996, refused to enforce or to recognise the Bangalore judgment and also refused to grant an injunction. Airbus then appealed to the Court of Appeal against the refusal of Colman J. to grant an injunction, and on 31 July 1996 the Court of Appeal allowed the appeal and granted an injunction restraining the appellants from pursuing their action in Texas against Airbus. The appellants now appeal to your Lordships' House against that order, with the leave of this House.
The proceedings in Texas
Jurisdiction was established over Airbus in Texas on the basis that Airbus had in the past done business with a Texas-based corporation. Airbus nevertheless challenged the jurisdiction of the Texas courts under the United States Foreign Sovereign Immunity Act, on the ground that Airbus was a corporation which was more than 50 per cent. government-owned. The Texas State District Court upheld this challenge, but it failed before the Texas Court of Appeals. Airbus is now seeking to appeal to the Texas Supreme Court. There was, at the material time, no principle of forum non conveniens applicable in Texas on the basis of which Airbus could seek a stay of proceedings in that State. Legislation has been passed to remedy this deficiency, but it was not in force at the material date (the date of commencement of the proceedings). The claims in the proceedings were founded principally on allegations that the aircraft was physically defective and that Airbus was liable under United States product liability law, but also on alleged negligence by Airbus in the training of the pilots in the handling of the aircraft. It appeared to the Court of Appeal that the claim against Airbus in Texas was to be based simply on a principle of strict liability, under which the claimants would have to establish only that some part of the aircraft was in a defective condition and that the condition of that part was a cause of the claimants' injury. Furthermore, as regards the assessment of damages the principles applicable in Texas include a power to award punitive damages, and it was on this basis that the claimants were advancing their claim. Contingency fees are available in Texas, and it followed that the legal expenses of the appellants in Texas were covered by their Texas lawyers against an agreement to pay to the lawyers a percentage of any eventual recovery. Hobhouse L.J., who delivered the leading judgment in the Court of Appeal, observed (see  2 Lloyd's Rep. 8, 11):
The view of the Court of Appeal, as expressed in the judgment of Hobhouse L.J., was that, if the appellants were required to make their claims against Airbus in a jurisdiction which applied fault based principles of liability, their claims would probably be abandoned.
Colman J.'s reasons for refusing an injunction
Colman J. approached the matter as follows. He first of all concluded, in the light of the authorities, that the availability of the English courts for the conduct of the substantive proceedings was not an essential pre-condition for the exercise of the jurisdiction to grant an anti-suit injunction; but where, as here, the English court is being asked in effect to adjudicate between two foreign jurisdictions, the jurisdiction to grant an injunction would be exercised with very considerable caution and for that reason would probably be very rarely exercised, and an injunction should in such circumstances only be granted where the very clearest case of oppression is made out. In the present case he concluded that, although India was the natural forum for the resolution of the dispute, nevertheless Airbus had not established that it was obviously vexatious or oppressive for the appellants to pursue proceedings elsewhere, i.e. in Texas. In weighing the balance of justice between the parties, he recognised the force of an argument by Airbus that, if held liable in Texas, it would have to relitigate the question of its own liability in India if it sought contribution from I.A.C. or H.A.L., thus facing the risk of inconsistent decisions. On the other side of the balance, however, the appellants could rely on a number of factors, viz.: (1) Airbus was also being sued in Texas by the American claimants, and there was no reason to suppose that their action would not continue if the appellants were restrained from proceeding in Texas. (2) Without the benefit of the contingency fee arrangement which enabled the appellants to litigate in Texas, they could not litigate anywhere else. (3) There was a substantial risk that litigation in India would be subject to serious delay. On the whole of the evidence, Colman J. concluded that Airbus had failed to establish such a decisive balance of injustice as would justify the grant of an injunction restraining the appellants from proceeding in Texas.
The reasoning of the Court of Appeal
The principal judgment was delivered by Hobhouse L.J., with whom Aldous L.J. and Nourse L.J. (in a brief judgment) agreed. Hobhouse L.J. first considered whether there exists jurisdiction to grant an injunction to restrain foreign proceedings when the application is not made for the purpose of protecting proceedings in this country. Having reviewed the authorities, including the decision of the Privy Council in Société Nationale Industrielle Aerospatiale v. Lee Kui Jak  A.C. 871 (which I shall refer to as "Aerospatiale"), he concluded, at p. 16, as Colman J. did, that such jurisdiction did exist; and that the question to be decided by the court, in the exercise of its discretion, was whether an injunction was necessary in order to prevent injustice.
Hobhouse L.J. then turned to the exercise of the discretion. First, he considered that Colman J. had erred in holding that, in a case such as the present where the English court was being asked in effect to adjudicate between two foreign jurisdictions, an injunction should only be granted where the clearest case of oppression was made out. Hobhouse L.J. considered that Colman J. had only reached this conclusion because he treated as irrelevant the fact that the courts of Texas paid no regard to the question of forum conveniens. Hobhouse L.J., at p. 17, then identified three aspects of the situation which were relevant to the question whether there was in fact an injustice. These were:
(1) The identification of the natural forum for the resolution of the dispute between the appellants and Airbus. He held that India was the appropriate forum, and that France was an appropriate forum. The appellants were suing in a third forum, Texas, which was clearly inappropriate. Their conduct was prima facie oppressive.
(2) Whether Airbus would be prejudiced by the continuation of the proceedings in Texas. He held that it would, because liability of Airbus would be determined on the basis of strict liability, and Airbus would be exposed to potential liability in penal damages, both of which applied under Texas law but were otherwise inappropriate to the determination of the liability of Airbus. Further, an adverse decision to Airbus on the basis of strict liability would place it in the impossible position, when seeking contribution against I.A.C. and H.A.L. in India, of having to prove that it was itself at fault.
(3) Whether an injunction restraining the appellants from proceeding in Texas would deprive them of a legitimate advantage. There were two such advantages on which the appellants relied. The first was the avoidance of delay in the Indian courts, but this was of limited cogency in the present case, having regard to the scope for time-consuming manoeuvres in Texas. The second was the availability of the contingency fee system in Texas, whereas in India the lack of financial resources to litigate meant that, if an injunction was granted, the prosecution of the appellants' claim against Airbus would come to an end. However this state of affairs arose from the fact that the appellants had attempted to obtain illegitimate and unjust advantages by suing in Texas.
In the light of the foregoing Hobhouse L.J. concluded that Colman J. had wrongly evaluated the factors which he had to take into account in the exercise of his discretion, and that his judgment could not stand. The conduct of the appellants in suing Airbus in Texas was clearly oppressive, and caused significant injustice to Airbus. He therefore held that an injunction should be granted restraining them from further prosecuting their proceedings against Airbus in Texas.
The submissions of the appellants before the Appellate Committee
At the forefront of the appellants' case before the Appellate Committee was the submission that, where England is not the natural forum for the trial of the substantive dispute, the English court should not, as a matter of policy or law, restrain proceedings in one foreign jurisdiction where the purpose of the injunction is to favour proceedings in another jurisdiction. In other words, as Mr. Kentridge Q.C. summarised the point for the appellants, it is no part of the function of the English courts to act as an international policeman in matters of this kind. This submission raises an important question of principle.
The remainder of the appellants' submissions were directed towards the principles applicable in the event that it was open to the English courts to grant an injunction in such circumstances. They raised (inter alia) the following questions: whether the English courts should, in such a case, apply a different test to that applicable where England was a natural forum for the trial; the relevance, if any, of the fact that, at the relevant time, there was no doctrine of forum non conveniens in Texas law; the relevance of any advantages derived by the appellants from suing in Texas; whether the Court of Appeal was entitled to interfere with the exercise of discretion by Colman J., and, if so, whether the Court of Appeal exercised its discretion properly. However I should record at once that this part of the argument was much affected, indeed transformed, by two concessions which were made by the appellants, the first at the commencement of the reply of Mr. Kentridge Q.C., and the second after the close of the argument. Both concessions were made without prejudice to the appellants' primary submission, which I have already recorded. Subject to that, the appellants undertook (1) to waive their claim to punitive damages, and (2) to waive reliance on the principle of strict liability, in the proceedings in Texas. It will at once be seen that these concessions, if applicable, must have a profound effect on the exercise of the court's discretion to grant an injunction. However, before I reach that part of the argument, it is necessary for me first to consider whether Mr. Kentridge was right in his primary submission. For that purpose I must turn to the principles which underlie the exercise of the English court's power to grant an anti-suit injunction.
The underlying principles
This part of the law is concerned with the resolution of clashes between jurisdictions. Two different approaches to the problem have emerged in the world today, one associated with the civil law jurisdictions of continental Europe, and the other with the common law world. Each is the fruit of a distinctive legal history, and also reflects to some extent cultural differences which are beyond the scope of an opinion such as this. On the continent of Europe, in the early days of the European Community, the essential need was seen to be to avoid any such clash between member States of the same community. A system, developed by distinguished scholars, was embodied in the Brussels Convention, under which jurisdiction is allocated on the basis of well-defined rules. This system achieves its purpose, but at a price. The price is rigidity, and rigidity can be productive of injustice. The judges of this country, who loyally enforce this system, not only between United Kingdom jurisdictions and the jurisdictions of other member States, but also as between the three jurisdictions within the United Kingdom itself, have to accept the fact that the practical results are from time to time unwelcome. This is essentially because the primary purpose of the Convention is to ensure that there shall be no clash between the jurisdictions of member States of the Community.
In the common law world, the situation is precisely the opposite. There is, so to speak, a jungle of separate, broadly based, jurisdictions all over the world. In England, for example, jurisdiction is founded on the presence of the defendant within the jurisdiction, and in certain specified (but widely drawn) circumstances on a power to serve the defendant with process outside the jurisdiction. But the potential excesses of common law jurisdictions are generally curtailed by the adoption of the principle of forum non conveniens--a self-denying ordinance under which the court will stay (or dismiss) proceedings in favour of another clearly more appropriate forum. This principle, which has no application as between states which are parties to the Brussels Convention, appears to have originated in Scotland (partly, perhaps, because of the exorbitant Scottish jurisdiction founded upon arrestment of the defendant's goods in Scotland: see The Atlantic Star  A.C. 436, 475F-G, per Lord Kilbrandon), and to have been developed primarily in the United States; but, at least since the acceptance of the principle in England by your Lordships' House in Spiliada Maritime Corporation v. Cansulex Ltd.  A.C. 460, it has become widely accepted throughout the common law world--notably in New Zealand (see Club Mediterranée N.Z. v. Wendell  1 N.Z.L.R. 216); in Australia, though in a modified form (see Voth v. Manildra Flour Mills Pty. Ltd. (1990) 65 A.L.J.R. 83); in Canada (see Amchem Products Inc. et al. v. Workers' Compensation Board et al. (1993) 102 D.L.R. (4th) 96); and in India, as is exemplified by the litigation in the present case. It is of interest that it also appears to have been adopted in Japan, a country whose system has been much influenced by German law: see the article by Ellen Hayes in (1992) 26 U.B.C. Law Rev. 41, 112. The principle is directed against cases being brought in inappropriate jurisdictions and so tends to ensure that, as between common law jurisdictions, cases will only be brought in a jurisdiction which is appropriate for their resolution. The purpose of the principle is therefore different from that which underlies the Brussels Convention. It cannot, and does not aim to, avoid all clashes between jurisdictions; indeed parallel proceedings in different jurisdictions are not of themselves regarded as unacceptable. In that sense the principle may be regarded as an imperfect weapon; but it is both flexible and practical and, where it is effective, it produces a result which is conducive to practical justice. It is however dependent on the voluntary adoption of the principle by the state in question; and, as the present case shows, if one state does not adopt the principle, the delicate balance which the universal adoption of the principle could achieve will to that extent break down.
It is at this point that, in the present context, the jurisdiction to grant an anti-suit injunction becomes relevant. This jurisdiction has a long history, finding its origin in the grant of common injunctions by the English Court of Chancery to restrain the pursuit of proceedings in the English courts of common law, thereby establishing the superiority of equity over the common law. In the course of the 19th century we can see the remedy of injunction being employed to restrain the pursuit of proceedings in other jurisdictions within the United Kingdom, and even in other jurisdictions overseas. The principles upon which the jurisdiction may be exercised have recently been examined and restated by the Privy Council in Aerospatiale  A.C. 871, and it is therefore unnecessary for me to restate them in this judgment. I wish to record however that the principles there stated have found broad acceptance in the Supreme Court of Canada (see the Amchem Products case (1993) 102 D.L.R. (4th) 96, in which the judgment of the court was delivered by Sopinka J.) and the High Court of Australia (see the judgment of the majority of the Court in CSR Ltd. v. Cigna Insurance Australia Ltd. and others (1997) 146 A.L.R. 402); and a similar jurisdiction is exercised by the Indian courts, as the present litigation shows. The broad principle underlying the jurisdiction is that it is to be exercised when the ends of justice require it. Generally speaking, this may occur when the foreign proceedings are vexatious or oppressive. Historically these terms have different meanings (see Aerospatiale at pp. 893B-E and 893H-894G); but in the Amchem Products case at p. 119 Sopinka J. expressed a preference for a formulation of the principle based simply on the ends of justice, without reference to vexation or oppression. But, as was stressed in Aerospatiale (see, in particular, p. 895D-H), in exercising the jurisdiction regard must be had to comity, and so the jurisdiction is one which must be exercised with caution: (see p. 892E-F). This aspect of the jurisdiction has been stressed both by the Supreme Court of Canada (see the Amchem Products case (1993) 102 D.L.R. (4th) 96, pp. 120-121, per Sopinka J.) and by the High Court of Australia (see the CSR Ltd. case (1997) 146 A.L.R. 402, 436), and it is, in my opinion, of particular relevance in the present case.
I must stress again that, as between common law jurisdictions, there is no system as such, comparable to that enshrined in the Brussels Convention. The basic principle is that each jurisdiction is independent. There is therefore, as I have said, no embargo on concurrent proceedings in the same matter in more than one jurisdiction. There are simply these two weapons, a stay (or dismissal) of proceedings and an anti-suit injunction. Moreover, each of these has its limitations. The former depends on its voluntary adoption by the state in question, and the latter is inhibited by respect for comity. It follows that, although the availability of these two weapons should ensure that practical justice is achieved in most cases, this may not always be possible.
The problem in the present case
As I have already indicated, the first and crucial question which arises in the present case is whether the English court will grant an anti-suit injunction in circumstances where there is no relevant connection between the English jurisdiction and the proceedings in question other than that the appellants, who are resident in this country, are subject to the jurisdiction and so can effectively be restrained by an injunction granted by an English court.
I wish first to observe that this question may arise not only in cases such as the present, usually described as "alternative forum cases" (the two most relevant jurisdictions here being India and Texas), but also in what have been called "single forum cases," in which (for example) the English court is asked to grant an anti-suit injunction to restrain a party from proceeding in a foreign court which alone has jurisdiction over the relevant dispute. The distinction is of some importance in the present context, and I shall have to refer to it later. But for the moment it is enough for me to say that, in both categories of case, the basis of the jurisdiction has been traditionally stated in broad terms which are characteristic of the remedy of injunction as used in our domestic law. In alternative forum cases, it has been stated that the jurisdiction will be exercised as the ends of justice require, and in particular where the pursuit of the relevant proceedings is vexatious or oppressive; in single forum cases, it is said that an injunction may be granted to restrain the pursuit of proceedings overseas which is unconscionable. The focus is, therefore, on the character of the defendant's conduct, as befits an equitable remedy such as an injunction. In particular, although it has frequently been stated that comity requires that the jurisdiction to grant an anti-suit injunction should be exercised with caution, no requirement has been imposed specifically to prevent the grant of an anti-suit injunction in circumstances which amount to a breach of comity. The present case raises for the first time, and in a stark form, the question whether such a requirement should be recognised and, if so, what form it should take.
In alternative forum cases, in which the choice is between the English forum and some other forum overseas, an anti-suit injunction will normally only be applied for in an English court where England is the natural forum for the resolution of the dispute; and, if so, there will be no infringement of comity. England was assumed to be the natural forum in a passage in the judgment of the Privy Council in Aerospatiale, which was delivered by myself. There, with reference in particular to cases such as the present, I said (at p. 894E-G):
It is to be observed that the example there given presupposes that the English court is the natural forum for the adjudication of the dispute, though it is not stated in terms whether that is a prerequisite of the exercise of the jurisdiction in an alternative forum case, no doubt because the point did not there arise for decision. In a later passage in the same judgment I did however state that, as a general rule, the court granting the injuction must conclude that it is the natural forum for the trial of the action: see  A.C. 871, 896.