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Shree Precoated Steels Limited Versus Macsteel International Far East Ltd. and Anr.

2007 (11) TMI 671 - BOMBAY HIGH COURT

Notice of Motion No. 3472 of 2006 in Suit No. 2866 of 2006 Along with Notice of Motion No. 1343 of 2007 in Suit No. 2866 of 2006 - Dated:- 2-11-2007 - S.J. Vazifdar For the Appellant: Janak Dwarkadas, Sr. Adv. and Sandip Parikh, Amit Pradhan, Adv., i/b., Wadia Gandhy, Adv. and Co. For the Respondents: F.E. Devitre, Sr. Adv. and D.D. Madon, Zarir Bharucha, Advs., i/b., Ashwin Shankar, Adv. for Respondent No. 1 and O. Mohandas, Adv., i/b., Little and Co. for Respondent No. 2 JUDGMENT S.J. Vazifdar .....

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that defendant No. 1 is not entitled to claim from it any amount by way of damages or otherwise under the said documents. The plaintiff has further sought a perpetual order and injunction restraining defendant No. 1 from claiming any amount under the said documents and from proceeding further with the proceedings filed by defendant No. 1 in the High Court of Judicature, Queen's Bench Division, Commercial Court, Royal Court of Justice in the United Kingdom. 4. Notice of Motion No. 3472 of 200 .....

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nt No. 1 in the United Kingdom. 5. The subject matter of this suit and of the proceedings instituted by defendant No. 1 in the United Kingdom are two contracts for sale of steel by defendant No. 1 to the plaintiff allegedly arrived at between the plaintiff and defendant No. 1. Defendant No. 1 contends that the plaintiff is in breach of the said contracts and has, therefore, claimed damages in the English proceedings. The plaintiff on the other hand contends that neither of the contracts was arri .....

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otice of Motion on an English non-exclusive jurisdiction Clause contained in conditions of sale, the receipt whereof is denied by the plaintiff. 7. Before going further it is important to note that Mr. Devitre, the learned Senior Counsel appearing on behalf of defendant No. 1, expressly stated that he would not deal with the merits of the rival contentions including regarding the formation of the contracts and the terms and conditions thereof. I will therefore state the facts only briefly. FACTS .....

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TT reimbursement". The document concludes: "Please counter sign in acceptance. Our formal Sales contract will follow shortly". One Sanjay Ajmera of the plaintiff signed the documents for the plaintiff under the words: "Counter signed in acceptance". The plaintiff contends that Sanjay Ajmera signed the documents in token of receipt and not in acceptance of all the terms and conditions. (B). Defendant No. 1 thereafter on 6th April, 2005 sent a "Sales Contract" c .....

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a first Class Bank in India (to be acceptable to the Seller) in terms of the contract in favour of defendant No. 1, the plaintiff suggested that the Letter of Credit should be 120 days usance LC. Whereas the Sales Contract stipulated that the Letter of Credit should be in their hands latest by 8th April, 2005, the plaintiff suggested that the date be 15th April, 2005. Defendant No. 1, however, did not respond to the amendments proposed by the plaintiff. The plaintiff, therefore, contends that th .....

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isdiction Clause which reads as follows: 15. In case of a dispute or disagreement arising in respect of this contract, the Seller and Buyer will attempt to resolve such disputes in an amicable manner. The validity, construction and performance of the contract shall be governed by the laws of England and any disputes, differences or questions that may arise under or in relation to the contract (including any disputes, differences or questions relating to its validity and construction) which are n .....

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in accordance with the Rules of the London Court of International Arbitration ("LCIA"). The number of arbitrators shall be three, one to be nominated by each party and the third (Chairman) to be of a nationality independent of the parties and to be nominated by the other two arbitrators failing which the LCIA. The parties agree that services of any notices in connection with any such legal proceedings or arbitration effected at the addresses given in the contract shall be determined to .....

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Sales Contract is similar to the Sales Contract dated 6th April, 2005. On this Sales Contract too the plaintiff proposed amendments as it did to the earlier Sales Contract dated 6th April, 2005. The plaintiff contends that the conditions of sale in this case were also not received and that there was no response from defendant No. 1 to the alterations proposed by the plaintiff. (C). It is pertinent to note moreover that the Sales Contract is addressed to defendant No. 2 as the customer. The Sale .....

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ssary to identify them. (A). Both the Sales Contracts provided that the payment terms were to be strictly conformed to. The last date by which the Letters of Credit were to be in the hands of defendant No. 1 was substantially before the date of shipment. The amendment proposed by the plaintiff was that the Letters of Credit should be 120 days usance LC. Payment is an essential term of a contract. The mode of payment was clear and was made an essential term of the contract. The amendments propose .....

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or a consideration of these applications is the plaintiff's denial of the receipt of conditions of sale which, included Clause 15, the English non-exclusive jurisdiction Clause, stated to have been attached to the sale agreements in both cases. (ii). Thus the disputes are not restricted to the legal effect of admitted documents or transactions. In other words, they are not restricted to questions of formation or existence of contracts to be decide on legal principles based on admitted facts .....

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tter of Credit on an urgent basis. The plaintiff by its letter dated 11th May, 2005 stated that the Letter of Credit was being issued by defendant No. 2 on its behalf and that defendant No. 1 may proceed with the shipment as planned. The plaintiff further assured defendant No. 1 that it would organize the Letter of Credit at the earliest and hopefully by the following week. 12. The goods thereafter landed in Mumbai but the plaintiff refused to accept delivery thereof. 13. According to defendant .....

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pted proceedings in the English Courts to recover damages on account of the plaintiffs breach of the contracts. 14. The plaintiff contends that defendant No. 1 shipped the goods despite no contract having been arrived at between the parties with a view to portray that there was a concluded contract between them in an attempt to force the plaintiff to make payment for the goods at a price which was higher than the prevailing market price for the said goods. As regards the letter dated 11th May, 2 .....

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, United Kingdom for permission to issue a claim form for service out of jurisdiction on the plaintiff. Under C.P.R. 6.20(5)(c) and (d) a claim form may be served out of the jurisdiction of the Court in the United Kingdom with the permission of the Court if a claim is made in respect of a contract where the contract is governed by English laws or contains a term to the effect that the English Courts shall have jurisdiction to determine any claim in respect of the contract. The witness statement .....

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the claim form on the plaintiff. Thereafter, the Solicitors of defendant No. 1 forwarded the original claim form to the plaintiffs Solicitors in India under cover of their letter dated 20th December, 2005. (C). The plaintiff filed an application challenging the jurisdiction of the English Court and for setting aside the service on the plaintiff out of jurisdiction. This application was dismissed by an order dated 28th July, 2006. A plain reading of this order makes it clear that the learned Jud .....

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HE PLAINTIFF AND DEFENDANT No. 1 CONTEMPT BY DEFENDANT No. 1 17. The following facts demonstrate how defendant No. 1 and the plaintiff pursued their respective anti-suit injunction applications in the English proceedings and in this suit respectively. 18(A). The plaintiff filed a precipe dated 4th/6th October, 2006 for circulation and production of the papers and proceedings in Notice of Motion No. 3472 of 2006 on 9th October, 2006 at 11.00 a.m. as it intended making an application for ad interi .....

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, 2006 the plaintiffs advocates informed the defendants of the same. 19(A). On 10th October, 2006 defendant No. 1 made an application to the English Court to restrain the plaintiff herein from taking any further steps in the above suit and from instituting or pursuing any other proceeding against defendant No. 1 arising out of or in connection with the said contract. The witness statement in support of the anti-suit and anti-anti-suit reliefs claimed by defendant No. 1 before the English Court, .....

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ry. I am not quite sure what the deponent of the witness statement meant by saying that "...there is a risk that the defendant (plaintiff herein) might obtain some sort of judgment...." People however are certainly entitled to their views of and to determine their level of confidence in the legal system of a country. I would not deny defendant No. 1 the reliefs I believe it is entitled to because it may have little regard for the Courts of this country. (C). I cannot however understand .....

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firm to attend the Court on its behalf to watch the proceedings in this Court but not to appear in them. Admittedly, the Indian Solicitors kept defendant No. 1 and its English Solicitors informed of what transpired in Court. (D). On the other hand and in stark contrast, the application by defendant No. 1 to the English Court was without notice to the plaintiff. The application did not even disclose to the English Court the fact that defendant No. 1 had been served with the notice dated 5th Octo .....

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dicate from the record before me that these facts were brought to the attention of the English Court. (E). By an order dated 10th October, 2006 the application was allowed and the learned Judge of the English Court restrained the plaintiff herein upto and including 20th October, 2006 or further order in the following terms: (a) From taking any further steps in proceedings issued by it on or about 4 October 2006 in the High Court of Judicature at Bombay known as Suit No. 2866 of 2006 and. (b) Fro .....

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ted 10th October, 2006. It is pertinent to note, for what transpired later, that the said communication, inter alia, stated: This Order continues until 20th October. 2006 when a further hearing has been scheduled, constituting the return date referred to in the enclosed Order and the Application Notice. Please note we intend to apply on that day for the Order to be made permanent. You have a right to attend on that day to ask the Court to vary or discharge this Order, and we advised you to appoi .....

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in open Court on 18th October, 2006. Defendant No. 1 yet again refused to appear. A copy thereof was forwarded to the defendants on 19th October, 2006. (B). The Solicitors of defendant No. 1 were however present in Court throughout observing the proceedings but not appearing in them. Nor did the Solicitors of defendant No. 1 even disclose this to the Court or to the plaintiff. 21. By a detailed order dated 18th October, 2006, I granted an ad interim order in terms of prayer (a) of the notice of .....

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strain the plaintiff from proceeding with the proceedings in the Court of United Kingdom. The inadvertent error was on my part and quite clearly did not form the basis of the order. 22. In the meantime, defendant No. 1 by its Solicitor's letter dated 17th October, 2006, enclosed by way of service upon the plaintiff a copy of an application dated 17th October, 2006 and the second witness statement filed in the English Court on the same day. The notice specifically stated that the hearing of t .....

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and sought on that day itself the continuation of the order dated 10th October, 2006 despite the fact that by the notice dated 17th October, 2006 the Solicitors of defendant No. 1 had informed the plaintiff that the application was posted for and would be heard on 20th October, 2006. What is even more startling is the fact that this application was made without notice to the plaintiff and after being made aware of the ad interim injunction passed by this Court earlier that day. (B). It is extre .....

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ant No. 1 had been informed by the Indian Solicitors about the ad interim injunction granted by this Court on 18th October, 2006 and that liberty had been reserved to defendant No. 1 to make an application for vacating the order, upon 48 hours notice to the plaintiff. The reasons for moving the application on 18th October, 2006 are contained in paragraph 7 of the third witness statement, which reads as under: This statement is in support of an urgent application to the Commercial Court this even .....

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it has not at any time taken any steps that may been seen by the Indian Court as an contempt of its Order, even if that Order is ultimately discharged. No attempt of service of the Indian injunction has yet been made and, therefore, at this time that condition can be satisfied, but the situation may be different if the matter were allowed to come before the English Court on Friday 20 October 2006 in the normal way. 24. Mr. Devitre, was unable to explain the relevance of these averments for adva .....

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was a "procedural step" for extension of the interim order dated 18th October, 2006. 25. I find it difficult to accept all this. Defendant No. 1 informed the plaintiff by the letters dated 10th October, 2006 and-17th October, 2006 that it would apply on 20th October, 2006 for the order dated 10th October, 2006 to be made permanent and that the plaintiff had a right to appear on that day to ask the Court to vary or discharge the order. Despite this defendant No. 1 advanced the date of .....

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such thing. I am constrained to say that the first defendant's application in the English Court was made suppressing facts and in an unfair manner deliberately avoiding giving notice to the plaintiff. 26. The application dated 18th October, 2006 was allowed by an order passed on the same day. This order too contains no reasons. Mr. Devitre submitted that the order dated 18th October, 2006 has now finally disposed of the application for the anti-suit injunction dated 10th October, 2006 and c .....

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on granted without affording the plaintiff an opportunity of defending the application on 10th October, 2006 was operative only till 20th October, 2006; that by the notices dated 10th October, 2006 and 17th October, 2006 issued by the Solicitors of defendant No. 1 the plaintiff was expressly informed that the application would be renewed on 20th October, 2006 and that despite the same the application was in fact made on 18th October, 2006 again without notice to the plaintiff. But it is suggeste .....

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y determining the application after hearing only one party without granting the other party a right to be represented, I am not sure that I would not be persuaded to allow the plaintiffs Notice of Motion. 28. Mr. Dwarkadas, submitted that defendant No. 1 was in contempt of the Order dated 18th October, 2006 and that the manner in which the application was made in the English Court indicated sharp practice and an attempt at overreaching the order dated 18th October, 2006. I entirely agree. 29. De .....

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h they did not appear in them. Thirdly, the Indian Solicitors of defendant No. 1 were aware of the order dated 18th October, 2006 and of the effect thereof. Lastly, defendant No. 1 was informed by the Indian Solicitors of the proceedings and of the order dated 18th October, 2006. 30. Mr. Devitre did not dispute the fact that under Indian law a party is bound to obey the order of a Court even if the party did not appear in Court but was aware of the same. I did not understand him to contend that .....

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e of the same as the order had not been served upon defendant No. 1. 32. I do not find this contention having been raised in any affidavit filed before me. The statement coming as it does from Counsel on instructions of Solicitors, I do not propose letting the conduct of defendant No. 1 come in its way in the present Notice of Motion. I, however, reserve liberty to the plaintiff to adopt appropriate proceedings regarding the same. The denial of reliefs to the plaintiff by this order shall not pr .....

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ite obvious that the plaintiff did not have a copy of the reasoned order dated 28th July, 2006 when it filed the suit and when it made the ad interim application. That the order was passed is disclosed by the plaintiff and this was in fact referred to in the ad interim order dated 18th October, 2006. It is important to note that Mr. Devitre was himself unable to state when the reasoned order was made available to the parties. In any event, it is evident that the plaintiff did not have a copy of .....

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nglish Solicitors of defendant No. 1 themselves did not have even a copy of the transcript of the judgment. Mr. Devitre was unable to state when after 11th September, 2006 the transcript was made available and actually in the possession of the plaintiff. The plaintiff having discharged its English Solicitors, it is quite possible that it did not have a copy of the reasoned order when the application was made. 35. Faced with this, Mr. Devitre contended that the plaintiff, though aware that a reas .....

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e of the fact that reasons had been given in support of the order. I see no intention on the part of the plaintiff to have suppressed any material fact. 37. Mr. Devitre then submitted, relying upon an affidavit of the first defendant's English Solicitors, that the procedure in the English Court for interlocutory hearings is that the learned Judge retires to his Chamber to consider his notes at the conclusion of submissions and thereafter returns to the Court to deliver the Judgment in open C .....

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intention on the part of the plaintiff to have suppressed the reasons for the order which its Solicitors may have noted while the same were being dictated in Court. I cannot therefore, blame either the plaintiff or its Solicitors for not having referred to the notes that the plaintiffs Solicitors may have taken in the English Court. 39. Indeed, if the plaintiff had any intention to suppress anything, it would not have given notice of the ad interim application before this Court to defendant No. .....

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service on the plaintiff out of jurisdiction under Rule 6 of the English Civil Procedure Rules. 41. The argument is contrary to the record of the proceedings in the English Court. The form which the plaintiff was required to file in the English proceeding establishes the same. The form, titled "Acknowledgment of Service", requires the defendant to tick one of the four appropriate boxes. The first box is to be ticked if the defendant admits the claim. The second box is to be ticked if .....

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urt's jurisdiction. The plaintiff, therefore, had no option but to contest the jurisdiction. In these circumstances, it can hardly be stated that the plaintiff voluntarily submitted to the jurisdiction of the English Court in respect of the merits of the case. 42. Nor do I find any substance in the contention that there was a delay in filing this suit. The suit was filed in the peculiar circumstances of the case. Had the plaintiff succeeded in its challenge to the jurisdiction of the English .....

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titled to have the matter adjudicated in this Court or in any other Court which would otherwise have jurisdiction. The suit was necessitated only in view of the plaintiffs challenge to the jurisdiction having failed in the English Court though not finally. Viewed in this manner, there is no delay in the filing of the suit. 43. Nor do I find the suit to be vexatious. For the reasons I have just given, this suit is not a "counter blast" to the English proceedings. Defendant No. 1 has its .....

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nvenient at this stage to refer to paragraph 24 of the judgment of the Supreme Court in (Modi Entertainment Network and Anr. v. W.S.G. Cricket Pte. Ltd.) [2003]1SCR480 relied upon by Mr. Dwarkadas and Mr. Devitre, which reads: 24. From the above discussion the following principles emerge: (1). In exercising discretion to grant an anti-suit injunction the Court must be satisfied of the following aspects: (a) the defendant, against whom injunction is sought, is amenable to the personal jurisdictio .....

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o 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. (3) 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 parti .....

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ent 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 ITS major or force majeure and the like. (5) Where parties have agreed, under a non-exclusi .....

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ated just as an alternative forum. (6) 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-c .....

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e Court was not considering a case such as this where the contract is denied as a question of fact. 48. I am not inclined to dismiss the plaintiffs Notice of Motion on any of the grounds submitted by Mr. Devitre. Nor am I inclined to accept Mr. Dwarkadas's submissions on behalf of the plaintiff. I have dismissed the plaintiffs Notice of Motion adopting a different approach which I shall come to after dealing with Mr. Dwarkadas's submissions. 49. Mr. Dwarkadas on the other hand submitted .....

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isputes between the plaintiff and the defendants. No part of the cause of action has arisen in the United Kingdom. A material part of the cause of action alleged by defendant No. 1, itself has arisen in Mumbai. Logistically and financially too, Mumbai would be more convenient than the United Kingdom for both the parties. The transcript of the arguments in the English Courts referred to the arguments on behalf of defendant No. 1 including on the question of costs. The transcript indicates an admi .....

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the assumption that the contracts were concluded and that a copy of the terms and conditions containing Clause 15, did form a part thereof. It is obvious that parties such as those before me, knew of all the possible difficulties including the financial burden and logistic problems while entering into the agreement. Having agreed to Clause 15 despite the same, only strengthens the presumption that Clause 15 was an essential and indeed a crucial term of the contracts. In commercial transactions .....

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tial terms of an agreement. If parties do not agree to the price, there would be no agreement. I do not think that a non-exclusive jurisdiction Clause is any less important or essential. The enforcement of rights under a contract and the involvement in judicial proceedings are considerations of equal, if not greater importance to contracting parties. I would indeed not find it surprising if in many cases parties are flexible as to price but not to the absence of a non exclusive jurisdiction Clau .....

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use is justified, prejudice is inherent by the grant of an anti-suit injunction in a case such as this, assuming of course that the contracts as contended by defendant No. 1 are established. 53. Mr. Dwarkadas further contended that there is a possibility that the plaintiff would be prevented from contesting the English proceedings on merits if the English Court upholds the contention of defendant No. 1 that the plaintiff had committed contempt of the order dated 10th October, 2006. It was, there .....

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will not take any steps to strike out the plaintiffs defence. He added, however, that this would be provided the plaintiff withdraws its application for an anti suit injunction restraining defendant No. 1 from continuing the English proceedings and undertakes not to bring any subsequent application before this Court to restrain defendant No. 1 from continuing with the English proceedings or in the event of this Court dismissing the plaintiffs Notice of Motion No. 3472 of 2006 and vacating the ad .....

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cates the ad interim order and such order is upheld finally. With regard to the statement in writing tendered by him, Mr. Devitre further stated before me that defendant No. 1 will not take steps to strike out the plaintiffs defense in the English Court on any ground whatever including on the ground of the plaintiff being allegedly in contempt of any order of the English Court. Further Mr. Devitre agreed that in the event of the plaintiffs notice of motion being dismissed, defendant No. 1 would .....

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s including the first defendant's claim were to be adjudicated in this Court, there would be no prejudice of any nature whatever to any of the parties in what I have described as physical terms. Indeed, in purely physical terms, it would be to the benefit of all the parties including defendant No. 1 to have the matter adjudicated in this Court. That this Court has jurisdiction to adjudicate this suit as well as the claim/counterclaim of defendant No. 1 is not in dispute. If the English proce .....

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sh Court held that it had no jurisdiction defendant No. 1 would not adopt proceedings in any other Court for recovery of its claim on merits. This would result in tremendous inconvenience and an unnecessary financial burden on all the parties including defendant No. 1 itself. This aspect when considered with what I have stated earlier, regarding the obvious benefits of litigating in this Court is a strong argument, in favour of the plaintiff. 57. I do not suggest that the argument is without any .....

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The matter must proceed on the basis that the plaintiffs contentions including the question whether the contracts were entered into or not are open both in the English proceedings and in these proceedings. The grant of an anti-suit injunction in such a case posits the absence of the agreement regarding the non-exclusive jurisdiction Clause in an action by the parry denying it and the establishment thereof in an action by a party affirming it. There is no justification for the grant of an injunc .....

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invoke the jurisdiction of particular country would have to do is to allege the existence of a nonexclusive jurisdiction Clause pertaining to that country. Conversely, all that a party desiring to avoid the jurisdiction of a country in respect whereof there is a non-exclusive jurisdiction Clause would have to do is to deny the agreement or the Clause itself. And what must a Court do when each party alleges different non-exclusive jurisdiction Clauses each referring to a different country? There .....

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rio High Court of Justice in (Greymac Trust Co. et al. v. BNA Realty Inc. et al.) 50 Carswell's Practice cases where it is held: The Court will not decide whether the plaintiff in the foreign action has a good cause of action, and the Court will give credit to the foreign Court for doing justice between the parties (Pennel v. Roy) (1853) 2 DeG.M & G.; (Wright v. Simson) (1802) 6 Ves. 714; (The North London Railway Co. v. The Great Northern Railway Co.) 1883 (11) Q.B.D. 30, applied. At p. .....

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ed to be deciding according to the laws of that country, I agree to this extent; that natural law requires the Courts of this country to give credit to those of another for the inclination and power to do justice." 63. Mr. Dwarkadas however submitted that the English Court has in the present case granted an anti-suit injunction in respect of these proceedings without notice to the plaintiff. 64. I do not take the manner in which the applications were made by defendant No. 1 in the English C .....

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opportunity of being heard. I reiterate that, I do not consider it to be a rule of English Law or of the process of the English Courts that anti-suit injunctions may be granted without affording the other side an opportunity of being heard. If the plaintiff is aggrieved by the order, its remedy is to adopt proceedings in the English Courts to challenge the same. 65. Mr. Dwarkadas submitted that in any event Clause 15 confers exclusive jurisdiction on the English Courts only to decide the validit .....

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. Mr. Devitre on the other hand submitted that the English Courts alone are entitled to determine even the factual existence of the contracts. 66. I am unable to agree with either of them. The point does not lead us anywhere. The Clause indeed posits the factual existence of the contract. In that sense it does not oust the jurisdiction of all but the English Courts to determine the factual existence of the contracts. That however would not lead to the conclusion that the English Courts have no j .....

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e question of contempt, I would reject the plaintiffs Notice of Motion for an anti-suit injunction. THE FIRST DEFENDANT'S NOTICE OF MOTION FOR A STAY OF THIS SUIT- 69. This brings me to the prayer in the first defendant's Notice of Motion for the stay of this suit. 70. Mr. Devitre submitted that this suit ought to be stayed on the principle of issue estoppel in view of the judgment of the English Court dated 28th July, 2006 holding that the plaintiff therein i.e. defendant No. 1 herein, .....

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peal in (Desert Sun Loan Corporation v. Hill) [1996] 2 All. E.R. 847. One of the main issues dealt with in these judgments and in the commentary pertains to the decision in The Sennar, being a turning point as it broadened the range of foreign judgments capable of founding the issue of estoppel to include issue as to a decision. I will however proceed on the basis that a decision on jurisdiction albeit at an interlocutory stage is a decision on merits for the purposes of the application of the d .....

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ocutory rulings; and provisional interlocutory rulings. In the footnote to this comment (Footnote No. 111 at page 154) it is noted; For example, those that, when made, are expressed to be pending the final determination of the case, such as an interlocutory injunction. 73. The facts in The Sennar (No. 2) were that earlier the jurisdiction of the Dutch Courts was invoked by one of the parties by their arrest at Rotterdam of a sister ship of the Sennar. The Dutch Court dismissed the claim inter al .....

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jurisdiction. The appellant thereafter began in the Admiralty Court in England, an action in rem against the ship and her sister ship. One of the issues that fell for consideration was whether the parties were estopped by the decision of the Dutch Court of Appeal from ascertaining that their claim did not fall within Clause 27. The House of Lords held that this was a case of issue estoppel created by the foreign Court of competent jurisdiction in which all three of the requirements for the exist .....

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House of Lords held that in order to create an issue estoppel three requirements are to be satisfied, one of which is that the judgment in the earlier action relied on as creation of an estoppel, must be final and conclusive. It was indeed obvious and accepted that the judgment of the Dutch Court of Appeal was final and conclusive. 74. In Desert Sun Loan Corporation v. Hill, the Court of Appeal cited with approval, the commentary in Dicey and Morris, page 467, which states that for there to be .....

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ment that the earlier (foreign) judgment which is relied upon in one party's favour must have been 'final' and on the merits'. Secondly, particularly in the case of issue estoppel, there are practical reasons why caution must be exercised before the rule is applied. This restriction was described by Lord Reid in (Carl Zeiss) [1966] 2 All. E.R. 536 : [1967] 1 AC 853 : I can see no reason in principle why we should deny the possibility of issue estoppel based on a foreign judgment, .....

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le and expense of deploying his full case in a trivial case: it might be most unjust: to hold that a litigant here should be estopped from putting forward his case because it was impracticable for him to do so in an earlier case of a trivial character abroad with the result that the decision in the case went against him. These two reasons do not apply in the present case. The case for the Shifting ,or on this issue those who purported to represent it, was fought as tenaciously in West Germany as .....

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tion must be finally disposed of so that the matter cannot be raised again in the foreign country. In this connection the case of (Nouvion v. Freeman) (1889) 15 App.Cas. 1 is important. There had been in Spain a final judgment in a summary form of procedure; but that was not necessarily the end of the matter because it was possible to reopen the whole question by commencing a different kind of action, so the summary judgment was not res judicata in Spain. I do not find it surprising that the Hou .....

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graphs 6 and 9, which read as under: 6. It is important that I bear in mind that all I am concerned with to consider is the question of whether the claimant has a good arguable case on this topic. It seems to be that it is manifest that the claimant's approach to this issue is fully and well arguable that there was a commitment between the parties as from the date of the confirmation. Whether that will prove to be so in due course may remain to be seen but I do not find it necessary to go on .....

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e course that it is arguable that there was a counter offer which was never accepted, although it will be the claimant's case that, as I understand it, to the extent there was any form of counter offer, it was irrelevant to the relationship between the claimant and the defendant and only really material to the relationship between the defendant and its bank. That is the first issue. 9. Again it may prove in due course that the discussions in May 2004 did not touch on the conditions; that the .....

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following observations from judgment of the Supreme Court in (Liverpool & London S.P. & I Association Ltd. v. M. V. Sea Success I and Anr.) (2004)9SCC512 : 130. Such observations have to be understood having regard to the concept of finality which is of three types: (1) a final judgment; (2) a preliminary judgment; and (3) intermediary or interlocutory judgment. 131. In our opinion an order refusing to reject the plaint falls in the category of a preliminary judgment and is covered by t .....

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rried out in the Code of Civil Procedure, the courts would interpret the provisions in such a manner so as to save expenses, achieve expedition and avoid the Court's resources being used up on cases which will serve no useful purpose. A litigation which in the opinion of the Court is doomed to fail would not further be allowed to be used as a device to harass a litigant. See (Azhar Hussain v. Rajiv Gandhi) 1986 DGLS 145 : 1986 (Supp.l) S.C.C. 315 : A.I.R. 1986 S.C. 1253 : 1986(1) SCALE 573. .....

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int did disclose a cause of action. The question was not kept open for trial at the suit. The judgment is therefore of no assistance to defendant No. 1. 76. Mr. Devitre then submitted that the principle of issue estoppel in respect of a foreign judgment ought to be extended even to judgments which are not final but provisional till the final decision in the action itself. 77. I am not inclined to do so. In this regard I am in respectful agreement with the judgments in Carl-Zeiss, The Sennar and .....

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. 78. The submission also has inherent practical difficulties. Let me illustrate. An action is brought in a country where a case would take an enormously long time to be finally decided and the Court in that country on an application for a summary dismissal of the action on a preliminary objection as to jurisdiction, decides that the issue cannot be decided at that stage and must be decided only at the trial. The other party files an action in another country where the decision of the suit final .....

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his Court ought to be stayed on the principle of the first suit filed. The principle does not appeal to me at all. With respect to Mr. Devitre, I see no sound reason for adopting this principle either. Indeed, the principle, if adopted, could lead to a dishonest party frustrating a claim in a Court of competent jurisdiction. The dangers in accepting this principle are obvious and may be best illustrated by accepting the case of defendant No. 1 itself. Let me assume, as contended by defendant No. .....

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enuity to file such proceedings which would overlap the proceedings to be adopted by defendant No. 1. If Mr. Devitre's first action principle is to be accepted, the dishonest plaintiff could frustrate the first Defendant's action in the English Courts for the entire duration of the legal proceedings in this country. 80. I have absolutely no hesitation in rejecting Mr. Devitre's submission founded on the first suit principle. It is detrimental to the interest of honest claimants. It w .....

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prior to the present proceedings adopted by the plaintiff. 81. Mr. Devitre submitted, that the English Court having held that there is a good arguable case, the judgment is binding between the parties and cannot be reiterated before any other Court in any other country. 82. The argument does not really take the first defendant's case any further. All that has been decided by the English Courts is only that defendant No. 1 has a good arguable case - nothing more nothing less. Even if I were .....

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ther countries from a final decision on the issue till the Court of the former country decides the issue. I have already dealt with this aspect and rejected it. 83. Mr. Devitre submitted that on the principle of comity this Court ought not to go behind the decision of the English Courts on the question of jurisdiction and that therefore this suit ought to be stayed. He submitted that if today this Court undertakes the same enquiry and comes to a different conclusion, it necessarily involves the .....

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in English Courts are decided faster than in the Indian Courts. That is not a ground for staying these proceedings. If that is so, the English proceedings will be concluded earlier and the decision in those proceedings would have their own effect. 86. I may only mention here that whereas the plaintiffs were ready and willing to do everything that is necessary for the expeditious disposal of this suit including by having the evidence recorded on commission. Defendant No. 1 has shown absolutely n .....

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lied upon the judgment of the Supreme Court in (K.K. Modi v. K.N. Modi and Ors.) [1998]1SCR601 and the judgment of a Division Bench of the Madras High Court in (Krishnan and Anr. v. Krishnamurthi and Ors.) A.I.R. 1982 Mad, 101. I will presume; without considering the effect of the Explanation to Section 10 of the CPC, that Mr. Devitre's submission is well founded. 88. I do not find this suit to be either vexatious or an abuse of process. The submission is founded on the basis that the plaint .....

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rd. Having done so, it is not even open for him to argue that the plaintiffs case on merits is vexatious. 90. Indeed, even otherwise, the plaintiff has more than just a strong arguable case. Admittedly, the modifications suggested by the plaintiff to the terms and conditions are material in nature. Admittedly, there was no response from defendant No. 1 to the same. This is a strong indication that there was no concluded contract between the parties. Whether defendant No. 1 establishes a contract .....

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injunction, is in contempt of this Court. I am therefore also not inclined to exercise my powers under Section 151 to stay the suit. 93. Mr. Devitre further submitted that the question whether the contract existed or not is required to be decided by the English Court by the application on the putative proper law test. In other words, he submitted, once a party alleges that a contract was entered into and that contract contains a choice of proper law Clause, the Courts of that country mentioned i .....

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isdiction Clause (Clause 15) were not even forwarded to it. This is a pure question of fact and does not involve questions of formation or existence of a contract based on the legal effect of admitted facts. It is important also to note that the point at issue in these Notices of Motion relate first to the forum and not to the identity of the legal system to be applied. The English law can always be applied in our courts if it is found that the parties had agreed to be bound by the English law. .....

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h would be the proper law if the contract were validly concluded. Formation of contract would cover aspects of offer and acceptance, consideration and reality of consent. A contract which lacks consideration for formation under the English law, would nevertheless be valid if the law applicable did. not require it. (24) In a case where a question is raised that whether the offer and acceptance resulted in a contract; the question would be determined on the basis of the putative proper law, i.e., .....

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ld that the contract being voidable and not void ab initio, illegality under the proper law of contract (the Belgian law) would merely make the policy unenforceable. The commentary does not deal with a case where the fact of the contract having been entered into is in issue. The expression "formation of a contract" in the commentary does not appear to contemplate such a case. Mr. Dwarkadas invited my attention to the judgments referred to in the above commentary which clearly establish .....

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irtue of the provisions of the English Bankruptcy Act, 1883 no proceedings could be taken in England in respect of the debt. The Court of Appeal came to the conclusion that the document was subject to Italian law. The question of forum was neither raised nor decided. The jurisdiction of the English Courts to decide the matter was not even challenged. It was held that the document was governed by Italian law and the Court of Appeal considered expert evidence relating thereto. 97. The decision of .....

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rchants, against loss of their stock of jewellery, contained a foreign jurisdiction Clause to the effect that it would be governed exclusively by Belgian law and any dispute arising thereunder shall be exclusively subject to Belgian jurisdiction. The representative of the companies alleged that the stock was stolen. The underwriters contended that the companies made a practice of smuggling diamonds into Italy and that it was contrary to English policy to insure goods which are to be smuggled int .....

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ng upon the foreign jurisdiction Clause, asked that the dispute be decided in Belgian. They had themselves filed proceedings in the Belgium Court claiming the amounts on account of the loss. (B). It must be noted therefore that the contract was itself admitted. On behalf of the underwriters, what was contended was that the foreign jurisdiction Clause only applies where a contract has been "truly created and formed" ; owing to the nondisclosure, "there was no true contract - no rea .....

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was a contract, and when it was made it contained the foreign jurisdiction Clause. Even if there was nondisclosure, nevertheless nondisclosure does not automatically avoid the contract. It only makes it voidable. It gives the insurers a right to elect. They can either avoid the contract or affirm it. If they avoid it, it is avoided in this sense, that the insurers are no longer bound by it. They can repudiate the contract and refuse to pay on it. But things already done are not undone. The cont .....

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ies in fact agreed to the terms of the policy, including those in the foreign jurisdiction ' Clause. It concedes that they did, but asserts that their agreement gave rise to no legally enforceable rights or duties. It thus raises no dispute about the consensus ad idem of the parties as to the exclusive jurisdiction of the Belgian Courts. The alternative claim of the underwriters, however, to avoid the contract for non-disclosure of a material fact, so it has been ably argued on their behalf, .....

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ithin the meaning of the foreign jurisdiction Clause. This argument, I think, is misconceived. It is based on an imprecise use of the phrase "avoid the contract". Where acts done in England, in this case the oral negotiations between the assured's broker and the underwriters ,the initialling of the slip and die signing of the policy, are alleged not to have resulted in an agreement at all (i.e., where mere is a plea of non est factum) and the question is whether there was any real .....

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innocent misrepresentation and clarified that he said nothing as to such cases. 98. The plaintiffs plea that the terms and conditions containing Clause 15 were never forwarded to it stands on the same footing as a plea of non est factum. Both pleas involve the absence of an ingredient essential to the existence of a contractual relationship in fact and not merely to its existence as a legal consequence of admitted facts. Mackender's case therefore not only does not support Mr. Devitre's .....

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entary itself states that the meaning of this expression is not clear (Footnote 56 at page 1250). Mr. Devitre placed strong reliance upon the following part of the commentary: Existence. The effect of the Convention is to refer questions relating to the existence of a contract to the putative governing law, i.e. the law which would govern the contract (or a term of the contract) if it were valid, subject to the special provisions in Clause (2). Apart from that special provision, the Convention r .....

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effect consequent to what admittedly has transpired between the parties and not to the factual aspect concerning that which is alleged to have transpired. For instance, it does not include a plea of non est factum. This is clear from the commentary that follows. 100. The third decision in (Albeko Schuhmaschinen A.G. v. Kamborian Shoe Machine Co. Ltd.) (1961) 111 L.J., 519 was not made available to me. The decisions in (The Parouth A and Co.) 1982 (2) Rip, 351 and in (Union Transport pic v. Conti .....

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emained within the foreign jurisdiction Clause, and leave to serve out of jurisdiction should therefore be refused. But all three members of the Court suggested that the position might have been different if the allegation had been that there never had been a contract at all, e.g. because of a plea of non est factum, or fraud. Only Diplock L.J., dealt with the question as to what law might govern such questions, and he dought that the concept of the putative objective governing law was "con .....

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rnational Transport Workers Federation) 1992 (2) A.C., 152. But that comment is not in respect of the observations of the Court of Appeal in the latter class of cases where the allegation is that there never had been a contract at all. It pertains to the first sentence quoted above. 102. I am of the opinion that where there is a dispute whether the contract was entered into at all, the putative law theory has no application and cannot restrain a party from proceeding with a case instituted in a .....

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