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TMI Blog2011 (5) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... sent appeal. 3. The Appellant before us filed in the Original Side of this Court a Civil Suit being No. 10 of 2011 thereby praying for the following reliefs: a) Decree for US$ 12,22,125.00 against the Defendant as pleaded in paragraph 22 above; b) In the alternative, an enquiry into the damages suffered by the Plaintiff caused by the Defendant's breach and appropriate decree for such sum as may be deemed to be found due and payable upon such enquiry; c) Perpetual injunction restraining the Defendant, its servants, agents and/or assigns from initiating and/or in any manner proceeding with any legal proceeding before any of the Courts in Illinois or in any other place in the United States of America or any forum other than this Hon'ble Court; d) Receiver; e) Injunction; f) Attachment; g) Costs and; h) Such further and/or other relief or reliefs as this Hon'ble Court may deem fit and proper. 4. The case made out by the Plaintiff in the said suit may be summed up thus: 1) At all material times, the Plaintiff was and still is engaged, inter alia, in the manufacture, sale and repair of locomotive traction motors, spare parts and other ancillary commodities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d offer, accepted the technical specifications supplied by the Plaintiff and never raised any objection with regard to the said drawings prepared and submitted by the Plaintiff. 5) Thereafter, between June 2008 and September 2008, protracted negotiations and discussions took place between the Plaintiff and the Defendant through the respective representatives of the parties, either at the workshop and factory of the Plaintiff or at the registered office of the Plaintiff. In all such discussions, the said Mr. V. K. Pal, represented the Defendant and the Managing Director and/or the Deputy Managing Director of the Plaintiff represented the Plaintiff. 6) In course of the aforesaid negotiations, there had been exchange of a series of e-mails between the Plaintiff and the Defendant through the said Mr. V. K. Pal during the period from April 2008 till the finalization of the said Agreement as stated herein below. 7) By an e-mail dated May 02, 2008, the Plaintiff forwarded to Mr. V. K. Pal the technical details of D78 traction motors, consisting of Technical Specifications, Outline Drawings, General Arrangement and Armature Coil Drawing. By an e-mail dated June 11, 2008, the Defendan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded and signed by the Plaintiff at the Plaintiff's registered office within the aforesaid jurisdiction. The said agreement, inter alia, stipulated as follows: 16.3 Entire Agreement. This Agreement constitutes the entire agreement and supersede all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter thereof. Accordingly, all the prior agreements and understandings between the parties including the Standard Purchase Order Terms have been superseded, altered, rescinded and novated by the said Agreement. 11) In view of the urgency expressed by the Defendant, the Plaintiff had already commenced work on preparation of the said motors for type-testing and two motors were checked, inspected and their performance type-tested and approved by Mr. Will Burrows of the Defendant at the factory and works of the Plaintiff in Kolkata. The same were also found to be in conformity with the Plaintiff's drawings which were approved by the Defendant. The Defendant, through its representative Mr. Will Burrows, witnessed the type testing at the Plaintiff's said works and factory in Kolkata outside the aforesaid jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... locomotives were re-fixed with new locally sourced Axle Caps. It was further alleged that the Defendant got the new Axle Caps sourced from local vendors which were being fixed for the purpose of completing the locomotives. In doing so, the Defendant unconditionally accepted the said goods. Thereafter, correspondence ensued between the Plaintiff and the Defendant with regard to rebate/deduction that should be given by the Plaintiff to the Defendant in respect of the alleged defective Axle Caps. 16) Ultimately, towards the end of April 2009, it was, inter alia, agreed by and between the Plaintiff and the Defendant that as against the alleged cost of repair, renewal and replacement aggregating USD 2,30,000.00 the Defendant would absorb 25 per cent of such cost and that the Plaintiff would grant a deduction/rebate of USD 54,000.00 in respect of the last of its invoices referred to hereinabove, namely, REPL/EXP-12A/09-10 dated May 29, 2009 and that a further sum of USD 25,000.00 would also be paid by the Plaintiff on behalf of the Defendant to Messrs Logistics Plus India Private Limited, the freight agent of the Defendant towards compensation for the alleged loss stated to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Plaintiff as mentioned hereinbefore. The said letters of the Defendant were replied to by the Plaintiff on October 12, 2009 denying the allegations made by the Defendant. The Defendant however continued with its false and untenable allegations by its letter dated December 10, 2009. In any event, the contents of the letters issued for and on behalf of the Defendant were false, frivolous and wholly motivated. 19) Though the Defendant was acting wrongfully and in violation of its commitments, the Plaintiff with a view to continuing the business relationship, sought to accommodate the Defendant and prolonged discussions were held between January, 2010 and June, 2010. However, such negotiations did not result in any mutually acceptable solution as the Defendant, inter alia, sought to change the very basis of the said Agreement by insisting on 100 per cent compliance with OEM D-78. Significantly, as will be evident from an e-mail dated March 18, 2010, the Defendant deliberately, intentionally and fraudulently denied the Plaintiff any access to the motors for the purposes of inspection. 20) By a notice dated October 28, 2010 issued for and on behalf of the Defendant, the Defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above. d) The Defendant with the intent to deceive and/or defraud the Plaintiff made suggestions and/or representations which were not true and not believed by it to be true. In fact, it will be evident from the letter dated October 28, 2010 that the sole and mala fide intention of the Defendant was to defraud and deceive the Plaintiff. e) The purposed letter of termination dated October 28, 2010 issued for and on behalf of the Defendant is in breach of the said Agreement and in violation of the terms thereof. f) The purposed letter of termination dated October 28, 2010 is ex facie in breach of the said Agreement and in violation of the terms and conditions thereof. The Defendant wrongfully caused the said letter to be issued in order to conceal its acts of repudiation of the said Agreement, and in order to shift the burden of its obligations on the Plaintiff. g) The purported letter of termination dated October 28, 2010 is fraudulent inasmuch as it is silent on the fact of the Defendant having received USD 79,000.00 and/or having adjusted the same. h) The Defendant has acted in breach of its obligations to the Plaintiff by misleading and/or prejudicing the rights of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of D-78 and D-87B traction motors as contemplated a n d projected in the aforesaid Agreement. 4,90,000.00 (iii) Compensation for failure to place orders for D31 traction motors. 2,10,000.00 (iv) Loss of business opportunities relating to North and South America (excepting Argentina) arising out of the exclusivity clause in the said agreement. 70,000.00 Total 12,22,125.00 24) The Plaintiff has now come to learn that the said Mr. V. K. Pal who had at all material times been acting as a representative of the Defendant, has recently been permanently employed by the Defendant. In any event, the Defendant has a significant presence in India which would be evidenced inter alia from the fact that the Defendant has an Indian subsidiary namely NREC Railway Equipment India Private Limited having its registered office and carrying on business in New Delhi, India. The Plaintiff has come to learn that the said Mr. V. K. Pal, who all throughout acted as the representative of the Defendant, has now been appointed as one of the directors of the said Indian subsidiary of the Defendant and is at present posted in India and is looking after the Defendant's business in India. 25) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Will Burrows had visited Kolkata, in particular the registered office and the works and factory of the Plaintiff on numerous occasions. As against the aforesaid, none of the Plaintiff's employees and/or directors and/or agents had ever visited Illinois in connection with the contract during its formation or its implementation, except on one occasion for reconciliation attempts after these disputes had arisen. All correspondence relating to the said Agreement was by and between the Plaintiff and the Defendant at the Plaintiff's registered office at Kolkata situated within the aforesaid jurisdiction or its factory and works at Kolkata outside the jurisdiction aforesaid. 28) There is no clause in the said Agreement by which the parties conferred exclusive or non-exclusive jurisdiction on Courts in any particular country, whether in India or Illinois in the USA. Significantly, the clause with regard to the choice of forum mentioned in the standard terms and conditions initially forwarded by the Defendant purporting to confer jurisdiction on Courts in Illinois to hear, mediate or litigate the disputes has been consciously and expressly excluded from the said Agreement, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order of injunction for such an order would in effect "amount to interference under exercise of jurisdiction by a foreign court"; 3) when two parties to a contract belong to two different countries and proceedings are initiated in the country of origin of one of the parties to the contract, it could not be said the proceedings were initiated in a forum of non-convenience, if the forum is otherwise competent; 4) at any rate, anti-suit injunction should be granted in very rare and exceptional cases and not for the mere asking; 5) the refusal of injunction as prayed for would not defeat the ends of justice or perpetrate injustice; on the other hand, the grant of injunction would violate the rule comity. 7. The learned Single Jude, however, observed that the said order would not prevent the Plaintiff from filing an application in future should any suit be filed by the Defendant. 8. Being dissatisfied, the Plaintiff has come up with the present appeal. 9. Mr. Jayanta Mitra, the learned Senior Advocate appearing on behalf of the Appellant, has strongly contended before us that in dismissing the application for injunction filed by his client even without calling for any exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Network and Anr. v. W.S.G. Cricket Pte. Ltd reported in AIR 2003 SC 1177 in paragraph 23 of the said judgment which is quoted below: 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 jurisdiction of the Court; (b) if the injunction is declined the ends of justice will be defeated and injustice will be perpetuated; and (c) the principle of comity - respect for the Court in which the commencement or continuance of action/proceeding is sought to be restrained - must be borne in mind; (2) in a case where more forums than one are available, the Court in exercise of its discretion to grant anti-suit injunction will examine as to which is the appropriate forum (forum conveniens) having regard to the convenience of the parties and may grant anti-suit injunction in regard to proceedings which are oppressive or vexatious or in a forum non-conveniens; (3) Where jurisdiction of a Court is invoked on the basis of jurisdiction clause in a contract, the recitals therein in regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to aver and prove the same. (Emphasis supplied by us). 13. After hearing the learned Counsel for the parties and after going through the materials on record, we find that the suit is basically one for damages for breach of contract admittedly entered into by the parties and also for injunction restraining the Defendant from initiating or proceeding with any legal proceedings in any other forum than the present forum. 14. The agreement has been annexed to the plaint and it appears that according to the terms of the agreement goods are to be delivered in the States of Illinois and thus, the country of performance of the contract is undisputedly the United States of America. Term 16.6 of the agreement is important and is quoted below: The agreement shall be construed and interpreted with the laws of the State of Illinois and may be amended only by a writing signed by the parties hereto. The parties agree to opt out of CISG and the UCC shall apply. 15. From the aforesaid admitted facts, we are of the opinion that if Clause 16.6 quoted above was not there, it could be reasonably argued that the cause of action for getting the relief claimed in the suit has arisen both in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selves, such agreement would be valid and binding. 20. We, therefore, find that prima facie, the learned Single Judge had no territorial jurisdiction to entertain the suit in view of the agreement between the parties and if by agreement, the jurisdiction of a Court is excluded, the grant of leave under Clause 12 of the Letters Patent on the face of the documents annexed to the plaint cannot confer jurisdiction. 21. We, accordingly, find that in view of the agreement between the parties, the Plaintiff has prima facie failed to prove that the Defendant which is a foreign company is amenable to the personal jurisdiction of this Court. If in a contract between the subjects of two different countries, the parties agree not to be governed by the laws of the one of them, it necessarily follows that in the matter of adjudication of the disputes relating to the breach of such contract, the parties are not amenable to the jurisdiction of the Court of that country. Thus, the very first condition for grant of an anti-suit injunction pointed out by the Supreme Court in the case of Modi Entertainment Network and Anr. v. W.S.G. Cricket Pte. Ltd (supra) is not satisfied. 22. Further we find tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Umpire was lodged in the Bombay High court on November 22, 1985. Subsequently, on Nov. 28, 1985 the Umpire rendered a supplementary award relating to costs which has been termed as "final" award. About a month after the lodging of the award in the High Court of Bombay by the Umpire at the instance of the Respondent, Western Company, the latter lodged a plaint in the U. S. District Court, inter alia, seeking an order (1) confirming the two awards dated Oct. 17, 1985 and Nov. 28, 1985 rendered by the Umpire; (2) a judgment against the ONGC for the amount of $ 256,815.45 by way of interest until the date of the judgment and costs etc. On Jan. 20, 1986, the Appellant ONGC on its part instituted an Arbitration petition under Sections 30 and 33 of the Arbitration Act 1940 for setting aside the awards rendered by the Umpire. The Appellant, ONGC, also prayed for an interim order restraining the Western Company from proceeding further with the action instituted in the U.S. Court. The single Judge granted an ex parte interim restraint order on Jan. 20, 1986 but vacated the same after hearing the parties by his impugned order against which the matter went to the Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder was not granted, serious prejudice would be occasioned and a party violating the very arbitration clause on the basis of which the award has come into existence will secure an order enforcing the order from a foreign Court in violation of that very clause. Till an award is transformed into a judgment and decree under Section 17 of the Arbitration Act, the Supreme Court proceeded, it was altogether lifeless from the point of view of its enforceability and life is infused into the award in the sense of its becoming enforceable only after it is made a rule of the Court upon the judgment and decree in terms of the award being passed. The American Court would therefore enforce an award which is a lifeless award in the country of its origin, and under the law of the country of its origin which law governs the award by choice and consent. We, thus, find that the facts of the said case is totally opposite the case before us and the case rather supports the view we have adopted in this case as regards the prima facie lack of jurisdiction of the Indian Court in view of the agreement between the parties as to applicability of the law of the State of Illinois. The aforesaid decision, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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