Do Anti-Execution Injunctions Step On the Toes of Foreign Courts?

DO ANTI-EXECUTION INJUNCTIONS STEP ON THE TOES OF FOREIGN COURTS?

The Delhi HC's extensive analysis of the law regarding the grant of cross-border anti-execution injunctions is a welcome development for Indian private international law

The High Court of Delhi ("Delhi HC") has decided an interim application ("Application") for an anti-execution injunction in the case of Interdigital Technology Corporation and Others v. Xiaomi Corporation and Others1 ("IDG v. Xiaomi"). The issues addressed in this judgment regarding anti-execution injunctions merit discussion as they are unprecedented and are res integra in Indian jurisprudence. It paves way for the tests that a Court should consider while passing such an order.

Facts of the case

Interdigital Technology Corporation and others ("IDG") had filed the Suit ("Suit") before the Delhi HC alleging that Xiaomi Corporation and others ("Xiaomi") infringed on its Standard Essential Patents ("SEP") for manufacturing of their cellular handsets. However, prior to the institution of this Suit, Xiaomi had filed a case regarding determination of FRAND royalties ("Wuhan Suit") before the Wuhan Intermediate People's Court ("Wuhan Court") and had obtained an ex-parte anti-suit injunction order on September 23, 2020 ("Wuhan Order"). The order barred IDG from initiating any proceeding in any jurisdiction (specifically before the Delhi HC) against Xiaomi regarding the SEPs involved in the case. The Wuhan Order also imposed a fine of RMB one million per day for any violation of its directions (including the prosecution of the Suit before the Delhi HC).

Key Issues

Tasked with navigating between the conflicting issues of the preservation of Indian law and yet not falling foul of the principle of comity of courts (and its cross-border implications), Justice C. Hari Shankar rendered his judgment after mapping the jurisprudence around anti-suit injunctions, anti-execution injunctions, and the principle of comity of courts, among others.

At the very outset, he classified the relief sought by the Application as the grant of an anti-execution injunction, and not an anti-suit injunction, as the Application was filed after the passing of the Wuhan Order. The broad issues covered by this decision are as under:

Comity of Courts

The concept of anti-suit injunctions and anti-execution injunctions are prima facie at loggerheads with the principle of comity of courts.

The Delhi HC took note of the case of Satya v. Teja Singh in which the Supreme Court of India ("SC") held that "no country is bound by comity to give effect in its courts to divorce laws of another country which are repugnant to its own laws and public policy".2 Furthering this line of thought, the Delhi HC observed that when a decision/order of a foreign court "entrenches on the lawful invocation of remedies known to law, by a litigant in another sovereign country," then the principle of comity of courts cannot be used to prevent the court from guarding against an incursion into its jurisdiction and protecting the right of its citizen to legal redress.3

Anti-Suit Injunctions and Anti-Anti-Suit Injunction Injunctions

As the law regarding the grant of cross-border anti-execution injunctions and anti-anti-suit injunction injunctions (anti-suit injunctions against proceedings for anti-suit injunctions before a foreign court) is res integra, the Delhi HC prefaced its analysis regarding them by distilling the jurisprudence regarding the grant of anti-suit injunctions as settled by the SC.

The law as laid down by the SC

In O.N.G.C. v. Western Co. of North America,4 the SC discussed that cross-border anti-suit injunctions should be issued in situations where the continuation of proceedings in the foreign court would be oppressive to the other party.5

In Modi Entertainment Network v. W.S.G. Cricket Pte Ltd,6 the SC had inter alia laid down clear parameters for granting an anti-suit injunction, such as:

(i) the defendant, against whom injunction is sought, is amenable to the personal jurisdiction of the court,

(ii) if the injunction is declined, the ends of justice will be defeated and injustice will be perpetuated, and

(iii) 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.

The SC has further held that the principles that govern the grant of anti-suit injunction were the same as those which apply to grant of injunction per se as injunctions are governed by the doctrine of equity.7 The grant of anti-suit injunctions would therefore be governed by the troika test laid in Order XXXIX of the Code of Civil Procedure ("CPC") – prima facie case, balance of convenience, and irreparable loss.

The Delhi HC after taking note of the aforesaid judgment also discussed the conditions for issuance of cross-border anti-suit injunctions in other jurisdictions. For example, the Unterweser factors propounded in Germany gives a list of conditions under which a foreign anti-suit injunction can be justified, including, inter alia, whether the foreign litigation is vexatious and oppressive, prejudicial to equitable considerations, and whether it threatens the issuing court's in rem or quasi in rem jurisdiction.8

Anti-Execution Injunctions

Further, the Delhi HC rejected Xiaomi's assertion, relying on the decision of the Singapore Court of Appeals in Sun Travels & Tours Pvt Ltd v. Hilton International Manage (Maldives) Pvt. Ltd. ("Sun Travels case"), that the grant of anti-execution injunctions must necessarily require more judicial circumspection than the grant of anti-suit injunctions. In, the Sun Travels case, it was held that anti-execution injunctions end up in "nullifying the foreign judgment or stripping the judgment of any legal effect when only the foreign court can set aside or vary its own judgments".9 The Delhi HC conversely has held that the issuance of anti-execution injunctions requires less caution because at that stage, the foreign courts are functus officio (as proceedings before them have concluded) and the anti-execution injunction would only affect the enforcement of the foreign court's decision whereas an anti-suit injunction would interfere in ongoing proceedings before a foreign court.10

The Delhi HC also noted that although anti-execution injunctions are to be issued in rare circumstances after giving due consideration to the facts of the case, 'exceptionality' as a criterion would be vague and would not be a jurisdictional requirement for the granting of an anti-execution injunction.11

Conditions laid down in by the DHC for the Issuance of Anti-Suit and Anti-Execution Injunctions

The Delhi HC taking note of the various judicial precedents regarding anti-suit and anti-execution injunctions, laid down certain conditions to be borne in mind while granting such injunctions, which are summarized as under:

(i) an anti-suit injunction should only be granted in rare cases, and not for the mere asking;

(ii) the court granting the anti-suit injunction should have sufficient interest in the subject matter and is required to be the natural forum;

(iii) the definitive test to understand whether an injunction should be granted is when its refusal would lead to the possibility of palpable and gross injustice;

(iv) an injunction granted in foreign proceedings/ orders which interferes with the right of a party to pursue legal remedies before the competent forum would be oppressive;

(v) the principle of comity of courts was of very little importance in situations where the injunction was being sought against a foreign proceeding/order that was oppressive to the applicant; and that

(vi) there was no requirement to consider anti-suit injunctions so exceptional and courts need not hesitate if the grounds for grant of injunction are made out.

Additionally, the Delhi HC listed certain instances in which anti-execution injunctions would be justified and observed that in cases of patent infringement, such as the case at hand, the patent holder should have the power to choose the patents which they desired to enforce and as the only remedy available to patent holders is to file an anti-infringement suit, any order barring the patent holders from initiating such action would be against their right to seek legal redressal. The Delhi HC rejected Xiaomi's contention that there was an overlap between the issues arising in the Suit and the Wuhan Suit as the former may or may not discuss the subject of determination of FRAND royalties.

Concluding Observations

This judgment has clarified important issues in the Indian jurisprudence regarding the grant of cross-border anti-execution injunctions. The Delhi HC's extensive analysis of the law regarding the grant of cross-border anti-execution injunctions is a welcome development for Indian private international law. It will be interesting to see how other Courts in India will approach similar situations.