Judgment - Airbus Industrie G.I.E v. Patel and Others  continued

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    In this connection it is helpful to refer to other common law jurisdictions. In the Amchen Products case (1993) 102 D.L.R. (4th) 96, Sopinka J., delivering the judgment of the Supreme Court of Canada, stated (at p. 118F):

      "If the foreign court stays or dismisses the action there, the problem is solved. If not, the domestic court must proceed to entertain the application for an injunction but only if it is alleged to be the most appropriate forum and is potentially an appropriate forum."

There follows, at pp. 118-121, a valuable account by Sopinka J. of the manner in which the domestic court should approach the question whether to grant an anti-suit injunction in an alternative forum case, to which I will return later. I am glad to have this opportunity to pay my respectful tribute to the work of a distinguished judge, whose untimely death was announced during the hearing of the argument in the present case before the Appellate Committee.

    Again, in the CSR case (1997) 146 A.L.R. 402, it was stated by the majority of the High Court of Australia (at pp. 437-438):

      "In a case in which an anti-suit injunction is sought on equitable grounds, the central question is whether the court to which application is made or some other court should hear and determine the matter in issue or, at least, that aspect of it involved in the application for injunction. And where the courts concerned are, respectively, an Australian court and a court of another country, there is involved in that question the further question whether the Australian court is an appropriate forum, in the Voth sense of it not being clearly inappropriate, for the determination of that matter. The fact that there is that further question, the preclusive nature of an interlocutory anti-suit injunction and the importance of comity combine to require an Australian court to consider whether it is appropriate, in the sense that it is not clearly inappropriate, for it to determine the matter in issue before granting an anti-suit injunction."

I stress the reference to comity in that passage.

    I turn to the United States of America, where the situation is more complicated. The principle of forum non conveniens has long been recognised in the United States: see generally the American Restatement of Conflict of Laws, para. 84, and Scole and Hay on Conflict of Laws, 2nd ed. (1992), pp. 373 et seq. Notable judgments on the subject by the Supreme Court of the United States are to be found in Gulf Oil Corporation v. Gilbert (1947) 330 U.S. 501, and Piper Aircraft Co. v. Reyno (1981) 454 U.S. 235. The jurisdiction to grant an anti-suit injunction is likewise recognised in the United States: see the American Restatement of Conflict of Laws, para. 84, comment h, and Scoles and Hay, sup., pp. 356-359.

    In the well-known anti-trust suit brought by Laker Airways Ltd. in the United States against (among others) the British Airways Board and British Caledonian Airways Ltd., in which the liquidator of Laker alleged a conspiracy among a number of major airlines to force Laker out of the market for transatlantic flights by predatory low pricing, there developed a battle of anti-suit injunctions between the courts of this country and those of the District of Columbia, where Laker's anti-trust proceedings were brought. An injunction was granted in this country restraining Laker from so proceeding against certain European airlines; and Judge Greene, sitting in Washington D.C., then granted an injunction restraining airlines which had not obtained such an injunction in England from seeking an anti-suit injunction here. His decision was affirmed by the Court of Appeals for the District of Columbia Circuit (see Laker Airways Ltd. v. Sabena, Belgian World Airlines (1984) 731 F.2d. 909); but the matter was laid to rest by the decision of the House of Lords in British Airways Board v. Laker Airways Ltd. [1985] A.C. 58, where it was made plain that no anti-suit injunction should have been granted in that case by the English courts. For present purposes, however, it is the judgment of Judge Wilkey in the District of Columbia Court of Appeals which is significant. In his judgment, for which I have expressed my respectful admiration on a previous occasion (see Bank of Tokyo Ltd. v. Karoon (Note) [1987] A.C. 45, 57-59), Judge Wilkey stated, (at pp. 926-927), that anti-suit injunctions are most often necessary (a) to protect the jurisdiction of the enjoining court, or (b) to prevent the litigant's evasion of the important public policies of the forum. Judge Wilkey's judgment has been most influential in the United States, but there has nevertheless developed a division of opinion among the Circuits as to the circumstances in which an anti- suit injunction may be granted. A valuable account of this is to be found in an article by Dr. Lawrence Collins, contained in Current Legal Issues in International Commercial Litigation (published by the Faculty of Law of the National University of Singapore) 3, 6- 8. One approach, embodying what Dr. Collins calls "the stricter standard," is applied by the Second Circuit, the Sixth Circuit and the District of Columbia Circuit. This is derived from Judge Wilkey's judgment in the Laker case. It requires that the court should have regard to comity, and should only grant an anti-suit injunction to protect its own jurisdiction or to prevent evasion of its public policies: see, for example, China Trade & Development Corporation v. M.V. Choong Yong (1987) 837 F.2d. 33 and Gau Shan Co. v. Bankers Trust Co. (1992) 956 F.2d. 1349. The other approach, embodying what has been called a laxer standard, is applied in the Fifth, Seventh and Ninth Circuits. On this approach, an anti- suit injunction will be granted if the foreign proceedings are vexatious, oppressive or will otherwise cause inequitable hardship. In deciding whether to grant an injunction, the court will take into account the effect on a foreign sovereign's jurisdiction as one factor relevant to the grant of relief (see Philips Medical Systems International N.V. v. Bruetman (1993) 8 F.3d. 600, 605, per Judge Posner), but will require evidence that comity is likely to be impaired (see Allendale Mutual Insurance v. Bull Data Systems (1993) 10 F.3d. 425, 431, per Judge Posner).

Single forum cases

    Before I attempt to formulate the principle applicable in the present case, I find it useful to return to the single forum cases which arose out of the Laker Airways litigation in this country. There are two decisions in question. In the first case, British Airways Board v. Laker Airways Ltd. [1985] A.C. 58, to which I have already referred, the House of Lords held that British Airways and British Caledonian Airways were not entitled to an injunction. These two airlines had, by becoming parties to the applicable agreement between the United Kingdom and United States Governments regulating transatlantic air traffic between the two countries, accepted that they were subject to the private law of both countries; and for that reason they failed to establish that Laker Airways' conduct in instituting the proceedings against them in the United States was unconscionable. The second case, Midland Bank Plc. v. Laker Airways Ltd. [1986] Q.B. 689, is of more relevance to the present case. Laker Airways had joined the Midland Bank (together with another bank) to its anti-trust proceedings in the United States on the basis that the bank, having been involved in mounting a financial rescue operation for Laker Airways, had withdrawn its support in circumstances which suggested that the bank was party to the conspiracy to put Laker Airways out of business. The Court of Appeal granted the bank an anti-suit injunction to restrain Laker Airways from proceeding against the bank in the anti- trust suit in the United States. The basis for so doing appears to have been that the dealings between the two parties were part of the domestic business of the bank, which took place subject to English law and in an English context. The position was put very clearly by Neill L.J. in his judgment, at pp. 714H-715D:

     ". . . it is legitimate to look very closely at the suggestion that a resident in country A who has a series of dealings in country A with another resident of country A and who conducts his dealings in accordance with and subject to the law of country A is at the same time exposing himself to a potential liability in country B because the way in which he conducts the dealings may offend some law in country B.   "This question may arise in many different situations, often in fields far removed from antitrust legislation. Where the question does arise, then, in my judgment, the court has jurisdiction to consider whether it is just and equitable for the party affected to be brought before the courts of country B. . . .  "In my view, the dealings between the plaintiff banks and Laker Airways were . . . part of the domestic business of the banks. The dealings took place subject to English law and in an English context . . . the plaintiff banks did not at any stage subject the relevant banking dealings and operations to the scrutiny or control of the United States authorities. Accordingly, in my judgment, the English court has jurisdiction to intervene to prevent the plaintiff banks from being subjected to proceedings in the New York court."

    Your Lordships' House is not here concerned to consider whether that case was correctly decided. Moreover it was not a case in which our present problem arises. That would have happened if the bank in that case had been a bank which carried on business in a third country, for example India, and all the relevant business had been transacted in India subject to Indian law. The question would then have arisen whether an English court should be prepared, in such circumstances, to grant an injunction restraining Laker Airways from joining the Indian bank to its anti-trust suit in the United States, simply because Laker Airways was a company carrying on business in England and so amenable to being sued in this country; and my immediate reaction is that it would be surprising if that question was to be answered in the affirmative. At all events it is striking that, in Midland Bank Plc. v. Laker Airways Ltd., the injunction was granted in circumstances where the relevant transaction was overwhelmingly English in character. It can therefore be said that, on this basis, the decision was consistent with comity, though the point was not articulated in the judgments because it did not arise for consideration; and, by parity of reasoning, it can be said that the grant of an injunction at the suit of British Airways and British Caledonian to restrain Laker from proceeding against them in the United States could not be justified in this way. These single forum cases demonstrate that any limiting principle requiring respect for comity cannot simply be expressed by reference to the question whether the English court may be the natural forum for the dispute. Such a principle would have to be stated on a wider basis. I wish to stress however that, in attempting to formulate the principle, I shall not concern myself with those cases in which the choice of forum has been, directly or indirectly, the subject of a contract between the parties. Such cases do not fall to be considered in the present case.

Comity

    I approach the matter as follows. As a general rule, before an anti-suit injunction can properly be granted by an English court to restrain a person from pursuing proceedings in a foreign jurisdiction in cases of the kind under consideration in the present case, comity requires that the English forum should have a sufficient interest in, or connection with, the matter in question to justify the indirect interference with the foreign court which an anti-suit injunction entails.

    In an alternative forum case, this will involve consideration of the question whether the English court is the natural forum for the resolution of the dispute. The proper approach in such cases was considered in some depth by Sopinka J. in the Amchem Products case, where he said (at p. 119):

      "The first step in applying the [Aerospatiale] analysis is to determine whether the domestic forum is the natural forum, that is the forum that on the basis of relevant factors has the closest connection with the action and the parties. I would modify this slightly to conform with the test relating to forum non conveniens. Under this test the court must determine whether there is another forum that is clearly more appropriate. The result of this change in stay applications is that where there is no one forum that is the most appropriate, the domestic forum wins out by default and refuses a stay, provided it is an appropriate forum. In this step of the analysis, the domestic court as a matter of comity must take cognizance of the fact that the foreign court has assumed jurisdiction. If, applying the principles relating to forum non conveniens outlined above, the foreign court could reasonably have concluded that there was no alternative forum that was clearly more appropriate, the domestic court should respect that decision and the application should be dismissed. Where there is a genuine disagreement between the courts of our country and another, the courts of this country should not arrogate to themselves the decision for both jurisdictions. In most cases it will appear from the decision of the foreign court whether it acted on principles similar to those that obtain here, but, if not, then the domestic court must consider whether the result is consistent with those principles. In a case in which the domestic court concludes that the foreign court assumed jurisdiction on a basis that is inconsistent with principles relating to forum non conveniens and that the foreign court's conclusion could not reasonably have been reached had it applied those principles, it must go then to the second step of the [Aerospatiale] test" (i.e., whether to grant an injunction on the ground that the ends of justice require it)."

    His exposition is of considerable interest; for present purposes, however, it is not necessary for me to give the matter detailed consideration.

    In a single forum case this approach, as I have pointed out, can have no application. In such a case it may however be possible to establish a sufficient connection with the English forum. In particular this may, as the Midland Bank case suggests, involve consideration of the extent to which the relevant transactions are connected with the English jurisdiction or it may, as Judge Wilkey's statement of principle suggests, involve consideration of the question whether an injunction is required to protect the policies of the English forum.

    The general principle which I have outlined above is, I understand, consistent with the approach adopted by the Supreme Court of Canada in the Amchem Products case. It is also close to the stricter approach adopted by the Second Circuit, the Sixth Circuit and the District of Columbia Circuit in the United States. It may be said that the traditional way in which the principles applicable in cases of anti-suit injunctions have been formulated in this country corresponds to the "laxer" approach applied in the Fifth, Seventh and Ninth Circuits, in that the latter refers to vexation, oppression and inequitable hardship. But, as I see it, the problem which has arisen in such an acute form in the present case requires the English courts to identify, for the first time, the limits which comity imposes on the exercise of the jurisdiction to grant anti-suit injunctions. In truth, the solution which I prefer gives (as does the statement of the law by Judge Wilkey) due recognition to comity but, subject to that, maintains (as do the statements of the law by Judge Posner) the traditional basis of the jurisdiction as being to intervene as the ends of justice may require.

    In any event, however, I am anxious that the principle which I have stated should not be interpreted too rigidly. I have therefore expressed it as a general rule. This is consistent with my statement of the law in Aerospatiale, an alternative forum case, to the effect that "as a general rule" the court granting the injunction must conclude that it is the natural forum for the trial of the action (see [1987] A.C. 871, 896). It is also consistent with Judge Wilkey's statement (see 731F 2d. 909, 926-7) that anti-suit injunctions are "most often" necessary for the two purposes which he specified. Indeed there may be extreme cases, for example where the conduct of the foreign state exercising jurisdiction is such as to deprive it of the respect normally required by comity, where no such limit is required to the exercise of the jurisdiction to grant an anti-suit injunction. In the present case Hobhouse L.J. attached particular importance to the fact that, at the material time, the State of Texas did not recognise the principle of forum non conveniens. For my part, however, I cannot accept that this was sufficient to entitle the English court to intervene in the present case, bearing in mind that the principle is by no means universally accepted, and in particular is not accepted in most civil law countries.

The present case

    I ask myself therefore whether there is any other aspect of the present case which would render the intervention of the English court consistent with comity. The facts upon which Airbus particularly relies are that there is a forum other than Texas, viz. India, which is indeed the natural forum for the dispute, but which is unable to grant effective injunctive relief restraining the appellants from proceeding in Texas because they are outside the jurisdiction of the Indian courts; however, since the appellants are amenable to the jurisdiction of the English courts, Airbus is in effect seeking the aid of the English courts to prevent the pursuit by the appellants of their proceedings in Texas, which may properly be regarded as oppressive but which the Indian courts are powerless to prevent.

    I must first point out that, for the English court to come to the assistance of an Indian court, the normal process is for the English court to do so by enforcing a judgment of the Indian court. However, as the present proceedings have demonstrated, that is not possible here. An attempt was made by Airbus to persuade Colman J. to enforce, or at least to recognise, the Indian judgment; but he declined to do so, and Airbus has not appealed from that part of Colman J.'s decision. So Airbus is relying simply on the English court's power of itself, without direct reliance on the Indian court's decision, to grant an injunction in this case where, unusually, the English jurisdiction has no interest in, or connection with, the matter in question. I am driven to say that such a course is not open to the English courts because, for the reasons I have given, it would be inconsistent with comity. In a world which consists of independent jurisdictions, interference, even indirect interference, by the courts of one jurisdiction with the exercise of the jurisdiction of a foreign court cannot in my opinion be justified by the fact that a third jurisdiction is affected but is powerless to intervene. The basic principle is that only the courts of an interested jurisdiction can act in the matter; and if they are powerless to do so, that will not of itself be enough to justify the courts of another jurisdiction to act in their place. Such are the limits of a system which is dependent on the remedy of an anti-suit injunction to curtail the excesses of a jurisdiction which does not adopt the principle, widely accepted throughout the common law world, of forum non conveniens.

Conclusion

    For the reasons I have given, I would allow the appeal on the first issue, and set aside the injunction ordered by the Court of Appeal. It follows that the question of oppression does not arise. Had it done so the result would have been that the appeal would have been allowed on the terms of the undertakings offered by the appellants at the end of the hearing, with the effect that the respondent would have had the benefit of the undertakings, and there would have been an order for costs against the appellants. On the conclusion I have reached, however, that stage in the argument is not reached, and in my opinion the appeal should be allowed with costs, both before your Lordships' House and in the courts below. It should not however be inferred from the mere fact that your Lordships have not reviewed the decision of the Court of Appeal to interfere with Colman J.'s exercise of his discretion that, had the point arisen, your Lordships would necessarily have approved of the decision of the Court of Appeal in this respect.

Postscript

    I have no doubt that it will be of some comfort to your Lordships, though of none to Airbus, that the State of Texas has now, like other common law jurisdictions, adopted the principle of forum non conveniens, so that the situation which has arisen in the present case is unlikely to arise again. The principle is now so widespread that it may come to be accepted throughout the common law world; indeed, since it is founded upon the exercise of self restraint by independent jurisdictions, it can be regarded as one of the most civilised of legal principles. Whether it will become acceptable in civil law jurisdictions remains however to be seen.

LORD SLYNN OF HADLEY

My Lords,

    I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Goff of Chieveley. For the reasons he gives I would allow the appeal.

LORD STEYN

My Lords,

    I have had the advantage of reading in draft the speech of my noble and learned friend Lord Goff of Chieveley. For the reasons contained in his speech I would also allow the appeal.

LORD CLYDE

My Lords,

    I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Goff of Chieveley. For the reasons which he has given I would also allow the appeal.

LORD HUTTON

My Lords,

    I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Goff of Chieveley. For the reasons which he has given I also would allow the appeal. start rest here!

 
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