Cyberspace markets and e-commerce businesses have witnessed an exponential growth in the recent past. The internet has reshaped markets, supply models and the entire concept of buying and selling by bringing the concept of a local global market to the forefront. Further, with the on-going pandemic, the shift to the cyberspace has been enormous, giving rise to numerous legal complexities pertaining to transactions over cyberspace. Particularly in the realm of intellectual property, we have witnessed an influx of counterfeiters and infringers sprouting every day. With the limitless boundaries of the internet, the enforcement of intellectual property rights is often faced with the question of determination of the court which has the jurisdiction to adjudicate on a dispute.
How is Jurisdiction Conferred
The term “jurisdiction” in its natural parlance denotes the extent to which an authority can adjudicate over a matter. A dispute between two parties is decided by a court or other appropriate forum having jurisdiction over the dispute. In the present-day scenario, where parties and persons are connected across territorial boundaries, the aspect of “jurisdiction” is of considerable significance.
The jurisdiction of an adjudicating authority is subject to numerous factors such fiscal value of the dispute, place of performance of the agreement, exclusive jurisdiction decided by the parties, etc. Although the Code of Civil Procedure, 1908 lays down the criteria to ascertain jurisdiction, the same are not exhaustive as several specific legislations grant jurisdiction to other forums and even bar the jurisdiction of a forum over a particular matter.
The era of digital marketplace also opens up the possibilities of multifarious jurisdictions in the event of a dispute. The digital marketplace which has expanded and grown in the recent past in itself makes the world a single market but the law of territorial jurisdiction of a court or forum over disputes arising from such transactions needs to be understood with paramount lucidity. In a dispute concerning parties situated in different geographical territories, there is possibility to invoke jurisdictions of different territories. The parties in such an event always have the option to confer “exclusive jurisdiction” on any one court or forum amongst those capable of having jurisdiction. However, the question of determination of jurisdiction becomes labyrinthine in situations where no exclusive jurisdiction has been conferred by agreement and several courts or forums have the power to exercise jurisdiction which is known as the “natural” or “available” jurisdiction.
Long-Arm Jurisdiction and Anti-Suit Injunctions
The current statutory framework in India does not specifically deal with the concept of long-arm jurisdiction and anti-suit injunctions. However, this concept has been discussed and invoked through judicial precedents.
In simple words, long-arm jurisdiction refers to the ability of a court to exercise jurisdiction over foreign defendants. As for anti-suit injunctions, the Hon’ble Supreme Court of India in Dinesh Singh Thakur versus Sonal Thakur, AIR 2018 SC 2094, stated –
“Anti-Suit Injunctions are meant to restrain a party to a suit/proceeding from instituting or prosecuting a case in another court, including a foreign court. Simply put, an anti-suit injunction is a judicial order restraining one party from prosecuting a case in another court outside its jurisdiction.”
Understandably, one might question how can a person be restrained from exercising his legal rights of approaching a court, particularly in light of Section 41(b) of the Specific Relief Act, 1963 which bars grant of an injunction to restrain any person from instituting or prosecuting in a court not subordinate to that from which the injunction is sought.
Although anti-suit injunctions may be applicable in foreign and domestic forums in different countries, the bar placed by Section 41(b) of the Specific Relief Act, 1963 precludes grant of an anti-suit injunction by one domestic forum against another domestic forum only. This bar, however, does not preclude anti-suit injunctions against foreign forums.
Principles Governing Anti-Suit Injunctions
Courts in India are that of law and equity. Anti-suit injunctions, being a species of injunctions would be governed by the same legal principles that govern the grand of an injunction, an equitable relief.
The Supreme Court of India in Modi Entertainment Network v. WSG Cricket Pte Ltd, [(2003) 4 SCC 341], laid down the following principles to be taken into account while assessing whether or not an anti-suit injunction should be granted:
(1) In exercising discretion to grant an anti-suit injunction, the court must be satisfied of the following aspects:
(a) the defendant, against whom the 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 of 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 vexations or in a forum non-conveniens; (emphasis added)
(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 parties the court has to decide the same on a true interpretation of the contract on the facts and in the circumstances of each case.
(4) a court of natural jurisdiction will not normally grant an anti-suit injunction against a defendant before it where parties have agreed to submit to the exclusive jurisdiction of a court including a foreign court,…
(5) where parties have agreed, under a non-exclusive jurisdiction clause, to approach a neutral foreign forum and be governed by the law applicable to it for the resolution of their disputes arising under the contract, ordinarily no anti-suit injunction will be granted in regard to proceedings in such a forum convenience and favoured forum as it shall be presumed that the parties have thought over their convenience and all other relevant factors before submitting to the non-exclusive jurisdiction of the court of their choice which cannot be treated 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-conveniens; and
(7) The burden of establishing that the forum of choice is a forum non-conveniens or the proceedings therein are oppressive or vexatious would be on the party so contending to aver and prove the same.” (emphasis added)
In the case of (India TV) Independent News Service Pvt. Ltd. v. India Broadcast Live LLC & Ors., [2007 (35) PTC 177 Del], it was observed that there are three tests that are repeatedly employed by courts to determine amenability of the defendant to the personal jurisdiction of the court. These are –
Anti-Suit Injunctions, Cyber Space and Trade Mark Law
The statute on Trade Marks in India confers jurisdiction on courts in addition to those provided by the Civil Procedure Code, viz. a suit for trademark infringement or passing off may also be brought before a court in whose jurisdiction the plaintiff resides or carries on business.
Many businesses not only operate in cyberspace but also elect to promote their brands and trademarks on the internet through various means including through acquiring domain names which may possess all characteristics of a trademark. While doing so, businesses often encounter counterfeiters and infringers in the cyberspace, thereby highlighting the issue of enforcement against foreign defendants.
In such cases, in order to ascertain whether jurisdiction vests with a court or not, the purposeful availment test or concluded contract is applied. In case of websites, the mere fact that a website is accessible in a particular place may not by itself be sufficient for courts to exercise personal jurisdiction.
In HT Media Ltd. & Anr. v. Brainlink International Inc. & Anr., CS (COMM) 119/2020, the Delhi High Court, in determining passing off, invoked its inherent powers to pass an anti-suit injunction order against the foreign defendant restraining it from prosecuting legal proceedings initiated by it against the Indian plaintiff before a US district court. In doing so, the court relied upon the principles laid down in Modi Entertainment Network v. WSG Cricket Pte Ltd (supra). The Court held that “…. Suit before the Eastern District of New York, is vexatious and oppressive, as the Plaintiffs have not asserted Trademark rights in USA. The Trademarks of the Plaintiffs are registered in India and the Plaintiffs‟ goodwill spills over Internationally. But the Plaintiffs do not carry on any business in USA. Defendants had offered to sell the Domain name to the Plaintiffs at a price of US $ 3 Million but once unsuccessful, in the attempt to profiteer, they filed a suit for Declaration in order to further their intention to frustrate the Plaintiffs from availing of their remedies. The filing of the suit is also an attempt to legitimise the alleged infringement action of the registered Trademarks of the Plaintiffs. Plaintiffs have made out a prima facie case for grant of an anti-suit injunction before this Court.”
The concept of anti-suit injunctions has its place in the Indian legal system and has evolved through the judgments of various High Courts and the Supreme Court. The court while granting an anti-suit injunction in any case also needs to consider that this form of injunction involves a court impinging on the jurisdiction of another court and hence, an anti-suit injunction has to granted sparingly and based on the facts and circumstances of each case.
Anti-suit injunctions play an important role in helping ascertain a more appropriate forum and preventing parties from instituting vexatious and oppressive suits in other jurisdictions with the sole intent of causing hardship to the other side.
In the absence of a ‘long arm’ statute in India which deals with jurisdiction as regards non-resident defendants, one would need to see whether the defendant’s activities have a sufficient connection with the forum state (India); whether the cause of action arises out of the defendant’s activities within the forum and whether the exercise of jurisdiction would be reasonable.
Copyright: ALG India Law Offices LLP