IpsofactoJ.com: International Cases [2000] Part 1 Case 2 [HL]


HOUSE OF LORDS

Coram

Patel

- vs -

Airbus Industrie G.I.E.

LORD GOFF OF CHIEVELEY  

LORD SLYNN OF HADLEY

LORD STEYN  

LORD CLYDE  

LORD HUTTON

2 APRIL 1998


Judgment

Lord Goff of Chieveley

My Lords,

  1. This appeal is concerned with the circumstances in which an English court may grant what is usually called an "anti-suit injunction." The proceedings in question have arisen from a very serious air crash which occurred at Bangalore airport on 14 February 1990. An Airbus A-320 aircraft crashed when coming in to land. Many of the passengers died and the remainder were injured. Among the passengers on board were two families of Indian origin who were British citizens with homes in London. Four of them were killed, and the remaining four were injured. They are, or are represented by, the six appellants in the appeal now before your Lordships' House. Following the publication in December 1990 of the Report of a Court of Inquiry in India, in which the cause of the crash was identified as error on the part of the pilots (both of whom were killed in the crash), claims were made by solicitors acting for the appellants, their primary claim being against Indian Airlines Corporation ("I.A.C."), the employers of the pilots. When it appeared that these claims would not be settled within the two-year time-limit for such proceedings in India, proceedings were commenced in India on 12 February 1992 against I.A.C., and also against Hindustan Aeronautics Ltd. ("H.A.L."), the airport authority at Bangalore airport. H.A.L. was criticised by the Court of Inquiry for failing to make adequate arrangements for dealing with accidents, and in particular for extinguishing fires such as that which broke out in the aircraft when it crashed; the Court considered that, if such arrangements had been in place, the loss of life and the injuries suffered would not have been so severe. On 6 March 1992 the appellants settled their claim against I.A.C. for the full amount recoverable up to the limit of I.A.C.'s liability. This resulted in a total recovery of £120,000 by all the appellants which, taking into account irrecoverable expenses, left a net sum of no more than £75,000. Little progress has been made in the proceedings against H.A.L.. This may be due to delay in the Indian proceedings; but there may also be difficulty in establishing that the death or injuries of the passengers in question were attributable to negligence on the part of H.A.L.

  2. Meanwhile in February 1992 the appellants also commenced proceedings in Texas, where they sued a number of parties who might have had some connection with the aircraft or its operation. These included the respondent company, Airbus Industrie G.I.E. ("Airbus"), which designed and assembled the aircraft at Toulouse in France. Similar proceedings were brought in Texas in respect of three American passengers who died in the same crash. The two sets of proceedings were later consolidated. In response to these proceedings in Texas, on 21 November 1992 Airbus brought proceedings in the Bangalore City Civil Court against, inter alia, the appellants and the American claimants, and on 22 April 1995 the presiding judge made a number of declarations designed to deter the defendants in those proceedings (i.e. the appellants and the American claimants) from pursuing their claims in Texas. These included a declaration that the appellants were not entitled to proceed against Airbus in any court in the world other than in India / Bangalore, and an injunction which purported to restrain the appellants from claiming damages from Airbus in any court in the world except the courts in India / Bangalore. However, since the appellants were not within the Indian jurisdiction, the injunction had little deterrent effect.

  3. Airbus then issued an originating summons in this country with the purpose of

    1. enforcing the Bangalore judgment against the appellants, and

    2. obtaining an injunction from the English High Court restraining the appellants, who are resident in England, from continuing with their action against Airbus in Texas on the grounds that pursuit of that action by the appellants would be contrary to justice and/or vexatious or oppressive.

    The originating summons came before Colman J. who, on 23 April 1996, refused to enforce or to recognise the Bangalore judgment and also refused to grant an injunction. Airbus then appealed to the Court of Appeal against the refusal of Colman J. to grant an injunction, and on 31 July 1996 the Court of Appeal allowed the appeal and granted an injunction restraining the appellants from pursuing their action in Texas against Airbus. The appellants now appeal to your Lordships' House against that order, with the leave of this House.

    THE PROCEEDING IN TEXAS

  4. Jurisdiction was established over Airbus in Texas on the basis that Airbus had in the past done business with a Texas-based corporation. Airbus nevertheless challenged the jurisdiction of the Texas courts under the United States Foreign Sovereign Immunity Act, on the ground that Airbus was a corporation which was more than 50 per cent. government-owned. The Texas State District Court upheld this challenge, but it failed before the Texas Court of Appeals. Airbus is now seeking to appeal to the Texas Supreme Court. There was, at the material time, no principle of forum non conveniens applicable in Texas on the basis of which Airbus could seek a stay of proceedings in that State. Legislation has been passed to remedy this deficiency, but it was not in force at the material date (the date of commencement of the proceedings). The claims in the proceedings were founded principally on allegations that the aircraft was physically defective and that Airbus was liable under United States product liability law, but also on alleged negligence by Airbus in the training of the pilots in the handling of the aircraft. It appeared to the Court of Appeal that the claim against Airbus in Texas was to be based simply on a principle of strict liability, under which the claimants would have to establish only that some part of the aircraft was in a defective condition and that the condition of that part was a cause of the claimants' injury. Furthermore, as regards the assessment of damages the principles applicable in Texas include a power to award punitive damages, and it was on this basis that the claimants were advancing their claim. Contingency fees are available in Texas, and it followed that the legal expenses of the appellants in Texas were covered by their Texas lawyers against an agreement to pay to the lawyers a percentage of any eventual recovery. Hobhouse L.J., who delivered the leading judgment in the Court of Appeal, observed (see [1997] 2 Lloyd's Rep. 8, 11):

    Such an arrangement is clearly very strongly influenced by, if not wholly dependent upon, the availability of strict liability in Texas and the ability to recover damages which exceed the claimants' actual loss and far exceed those recoverable in other jurisdictions. If the English Claimants [the appellants] had to prove fault on the part of Airbus Industrie and if their recovery was restricted to the actual loss suffered by the Claimants, the scope for a contingent fee arrangement might well be very different. It similarly is no doubt influenced by the fact that in Texas there is no opportunity for Airbus Industrie to object that for this action the forum is inappropriate.

  5. The view of the Court of Appeal, as expressed in the judgment of Hobhouse L.J., was that, if the appellants were required to make their claims against Airbus in a jurisdiction which applied fault based principles of liability, their claims would probably be abandoned.

    COLMAN J.'S REASONS FOR REFUSING AN INJUNCTION

  6. Colman J. approached the matter as follows. He first of all concluded, in the light of the authorities, that the availability of the English courts for the conduct of the substantive proceedings was not an essential pre-condition for the exercise of the jurisdiction to grant an anti-suit injunction; but where, as here, the English court is being asked in effect to adjudicate between two foreign jurisdictions, the jurisdiction to grant an injunction would be exercised with very considerable caution and for that reason would probably be very rarely exercised, and an injunction should in such circumstances only be granted where the very clearest case of oppression is made out. In the present case he concluded that, although India was the natural forum for the resolution of the dispute, nevertheless Airbus had not established that it was obviously vexatious or oppressive for the appellants to pursue proceedings elsewhere, i.e. in Texas. In weighing the balance of justice between the parties, he recognised the force of an argument by Airbus that, if held liable in Texas, it would have to relitigate the question of its own liability in India if it sought contribution from I.A.C. or H.A.L., thus facing the risk of inconsistent decisions. On the other side of the balance, however, the appellants could rely on a number of factors, viz.:

    1. Airbus was also being sued in Texas by the American claimants, and there was no reason to suppose that their action would not continue if the appellants were restrained from proceeding in Texas.

    2. Without the benefit of the contingency fee arrangement which enabled the appellants to litigate in Texas, they could not litigate anywhere else.

    3. There was a substantial risk that litigation in India would be subject to serious delay.

    On the whole of the evidence, Colman J. concluded that Airbus had failed to establish such a decisive balance of injustice as would justify the grant of an injunction restraining the appellants from proceeding in Texas.

    THE REASONING OF THE COURT OF APPEAL

  7. The principal judgment was delivered by Hobhouse L.J., with whom Aldous L.J. and Nourse L.J. (in a brief judgment) agreed. Hobhouse L.J. first considered whether there exists jurisdiction to grant an injunction to restrain foreign proceedings when the application is not made for the purpose of protecting proceedings in this country. Having reviewed the authorities, including the decision of the Privy Council in Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] A.C. 871 (which I shall refer to as "Aerospatiale"), he concluded, at p. 16, as Colman J. did, that such jurisdiction did exist; and that the question to be decided by the court, in the exercise of its discretion, was whether an injunction was necessary in order to prevent injustice.

  8. Hobhouse L.J. then turned to the exercise of the discretion. First, he considered that Colman J. had erred in holding that, in a case such as the present where the English court was being asked in effect to adjudicate between two foreign jurisdictions, an injunction should only be granted where the clearest case of oppression was made out. Hobhouse L.J. considered that Colman J. had only reached this conclusion because he treated as irrelevant the fact that the courts of Texas paid no regard to the question of forum conveniens. Hobhouse L.J., at p. 17, then identified three aspects of the situation which were relevant to the question whether there was in fact an injustice. These were:

    1.

    The identification of the natural forum for the resolution of the dispute between the appellants and Airbus. He held that India was the appropriate forum, and that France was an appropriate forum. The appellants were suing in a third forum, Texas, which was clearly inappropriate. Their conduct was prima facie oppressive.

    2.

    Whether Airbus would be prejudiced by the continuation of the proceedings in Texas. He held that it would, because liability of Airbus would be determined on the basis of strict liability, and Airbus would be exposed to potential liability in penal damages, both of which applied under Texas law but were otherwise inappropriate to the determination of the liability of Airbus. Further, an adverse decision to Airbus on the basis of strict liability would place it in the impossible position, when seeking contribution against I.A.C. and H.A.L. in India, of having to prove that it was itself at fault.

    3.

    Whether an injunction restraining the appellants from proceeding in Texas would deprive them of a legitimate advantage. There were two such advantages on which the appellants relied. The first was the avoidance of delay in the Indian courts, but this was of limited cogency in the present case, having regard to the scope for time-consuming manoeuvres in Texas. The second was the availability of the contingency fee system in Texas, whereas in India the lack of financial resources to litigate meant that, if an injunction was granted, the prosecution of the appellants' claim against Airbus would come to an end. However this state of affairs arose from the fact that the appellants had attempted to obtain illegitimate and unjust advantages by suing in Texas.

  9. In the light of the foregoing Hobhouse L.J. concluded that Colman J. had wrongly evaluated the factors which he had to take into account in the exercise of his discretion, and that his judgment could not stand. The conduct of the appellants in suing Airbus in Texas was clearly oppressive, and caused significant injustice to Airbus. He therefore held that an injunction should be granted restraining them from further prosecuting their proceedings against Airbus in Texas.

    THE SUBMISSIONS OF THE APPELLANTS BEFORE THE APPELLATE COMMITTEE

  10. At the forefront of the appellants' case before the Appellate Committee was the submission that, where England is not the natural forum for the trial of the substantive dispute, the English court should not, as a matter of policy or law, restrain proceedings in one foreign jurisdiction where the purpose of the injunction is to favour proceedings in another jurisdiction. In other words, as Mr. Kentridge Q.C. summarised the point for the appellants, it is no part of the function of the English courts to act as an international policeman in matters of this kind. This submission raises an important question of principle.

  11. The remainder of the appellants' submissions were directed towards the principles applicable in the event that it was open to the English courts to grant an injunction in such circumstances. They raised (inter alia) the following questions: whether the English courts should, in such a case, apply a different test to that applicable where England was a natural forum for the trial; the relevance, if any, of the fact that, at the relevant time, there was no doctrine of forum non conveniens in Texas law; the relevance of any advantages derived by the appellants from suing in Texas; whether the Court of Appeal was entitled to interfere with the exercise of discretion by Colman J., and, if so, whether the Court of Appeal exercised its discretion properly. However I should record at once that this part of the argument was much affected, indeed transformed, by two concessions which were made by the appellants, the first at the commencement of the reply of Mr. Kentridge Q.C., and the second after the close of the argument. Both concessions were made without prejudice to the appellants' primary submission, which I have already recorded. Subject to that, the appellants undertook

    1. to waive their claim to punitive damages, and

    2. to waive reliance on the principle of strict liability, in the proceedings in Texas.

    It will at once be seen that these concessions, if applicable, must have a profound effect on the exercise of the court's discretion to grant an injunction. However, before I reach that part of the argument, it is necessary for me first to consider whether Mr. Kentridge was right in his primary submission. For that purpose I must turn to the principles which underlie the exercise of the English court's power to grant an anti-suit injunction.

    THE UNDERLYING PRINCIPLES

  12. This part of the law is concerned with the resolution of clashes between jurisdictions. Two different approaches to the problem have emerged in the world today, one associated with the civil law jurisdictions of continental Europe, and the other with the common law world. Each is the fruit of a distinctive legal history, and also reflects to some extent cultural differences which are beyond the scope of an opinion such as this. On the continent of Europe, in the early days of the European Community, the essential need was seen to be to avoid any such clash between member States of the same community. A system, developed by distinguished scholars, was embodied in the Brussels Convention, under which jurisdiction is allocated on the basis of well-defined rules. This system achieves its purpose, but at a price. The price is rigidity, and rigidity can be productive of injustice. The judges of this country, who loyally enforce this system, not only between United Kingdom jurisdictions and the jurisdictions of other member States, but also as between the three jurisdictions within the United Kingdom itself, have to accept the fact that the practical results are from time to time unwelcome. This is essentially because the primary purpose of the Convention is to ensure that there shall be no clash between the jurisdictions of member States of the Community.

  13. In the common law world, the situation is precisely the opposite. There is, so to speak, a jungle of separate, broadly based, jurisdictions all over the world. In England, for example, jurisdiction is founded on the presence of the defendant within the jurisdiction, and in certain specified (but widely drawn) circumstances on a power to serve the defendant with process outside the jurisdiction. But the potential excesses of common law jurisdictions are generally curtailed by the adoption of the principle of forum non conveniens -- a self-denying ordinance under which the court will stay (or dismiss) proceedings in favour of another clearly more appropriate forum. This principle, which has no application as between states which are parties to the Brussels Convention, appears to have originated in Scotland (partly, perhaps, because of the exorbitant Scottish jurisdiction founded upon arrestment of the defendant's goods in Scotland: see The Atlantic Star [1974] A.C. 436, 475F-G, per Lord Kilbrandon), and to have been developed primarily in the United States; but, at least since the acceptance of the principle in England by your Lordships' House in Spiliada Maritime Corporation v Cansulex Ltd. [1987] A.C. 460, it has become widely accepted throughout the common law world--notably in New Zealand (see Club Mediterranée N.Z. v Wendell [1989] 1 N.Z.L.R. 216); in Australia, though in a modified form (see Voth v Manildra Flour Mills Pty. Ltd. (1990) 65 A.L.J.R. 83); in Canada (see Amchem Products Inc. et al. v Workers' Compensation Board et al. (1993) 102 D.L.R. (4th) 96); and in India, as is exemplified by the litigation in the present case. It is of interest that it also appears to have been adopted in Japan, a country whose system has been much influenced by German law: see the article by Ellen Hayes in (1992) 26 U.B.C. Law Rev. 41, 112. The principle is directed against cases being brought in inappropriate jurisdictions and so tends to ensure that, as between common law jurisdictions, cases will only be brought in a jurisdiction which is appropriate for their resolution. The purpose of the principle is therefore different from that which underlies the Brussels Convention. It cannot, and does not aim to, avoid all clashes between jurisdictions; indeed parallel proceedings in different jurisdictions are not of themselves regarded as unacceptable. In that sense the principle may be regarded as an imperfect weapon; but it is both flexible and practical and, where it is effective, it produces a result which is conducive to practical justice. It is however dependent on the voluntary adoption of the principle by the state in question; and, as the present case shows, if one state does not adopt the principle, the delicate balance which the universal adoption of the principle could achieve will to that extent break down.

  14. It is at this point that, in the present context, the jurisdiction to grant an anti-suit injunction becomes relevant. This jurisdiction has a long history, finding its origin in the grant of common injunctions by the English Court of Chancery to restrain the pursuit of proceedings in the English courts of common law, thereby establishing the superiority of equity over the common law. In the course of the 19th century we can see the remedy of injunction being employed to restrain the pursuit of proceedings in other jurisdictions within the United Kingdom, and even in other jurisdictions overseas. The principles upon which the jurisdiction may be exercised have recently been examined and restated by the Privy Council in Aerospatiale [1987] A.C. 871, and it is therefore unnecessary for me to restate them in this judgment. I wish to record however that the principles there stated have found broad acceptance in the Supreme Court of Canada (see the Amchem Products case (1993) 102 D.L.R. (4th) 96, in which the judgment of the court was delivered by Sopinka J.) and the High Court of Australia (see the judgment of the majority of the Court in CSR Ltd. v Cigna Insurance Australia Ltd (1997) 146 A.L.R. 402); and a similar jurisdiction is exercised by the Indian courts, as the present litigation shows. The broad principle underlying the jurisdiction is that it is to be exercised when the ends of justice require it. Generally speaking, this may occur when the foreign proceedings are vexatious or oppressive. Historically these terms have different meanings (see Aerospatiale at pp. 893B-E and 893H-894G); but in the Amchem Products case at p. 119 Sopinka J. expressed a preference for a formulation of the principle based simply on the ends of justice, without reference to vexation or oppression. But, as was stressed in Aerospatiale (see, in particular, p. 895D-H), in exercising the jurisdiction regard must be had to comity, and so the jurisdiction is one which must be exercised with caution: (see p. 892E-F). This aspect of the jurisdiction has been stressed both by the Supreme Court of Canada (see the Amchem Products case (1993) 102 D.L.R. (4th) 96, pp. 120-121, per Sopinka J.) and by the High Court of Australia (see the CSR Ltd. case (1997) 146 A.L.R. 402, 436), and it is, in my opinion, of particular relevance in the present case.

  15. I must stress again that, as between common law jurisdictions, there is no system as such, comparable to that enshrined in the Brussels Convention. The basic principle is that each jurisdiction is independent. There is therefore, as I have said, no embargo on concurrent proceedings in the same matter in more than one jurisdiction. There are simply these two weapons, a stay (or dismissal) of proceedings and an anti-suit injunction. Moreover, each of these has its limitations. The former depends on its voluntary adoption by the state in question, and the latter is inhibited by respect for comity. It follows that, although the availability of these two weapons should ensure that practical justice is achieved in most cases, this may not always be possible.

    THE PROBLEM IN THE PRESENT CASE

  16. As I have already indicated, the first and crucial question which arises in the present case is whether the English court will grant an anti-suit injunction in circumstances where there is no relevant connection between the English jurisdiction and the proceedings in question other than that the appellants, who are resident in this country, are subject to the jurisdiction and so can effectively be restrained by an injunction granted by an English court.

  17. I wish first to observe that this question may arise not only in cases such as the present, usually described as "alternative forum cases" (the two most relevant jurisdictions here being India and Texas), but also in what have been called "single forum cases," in which (for example) the English court is asked to grant an anti-suit injunction to restrain a party from proceeding in a foreign court which alone has jurisdiction over the relevant dispute. The distinction is of some importance in the present context, and I shall have to refer to it later. But for the moment it is enough for me to say that, in both categories of case, the basis of the jurisdiction has been traditionally stated in broad terms which are characteristic of the remedy of injunction as used in our domestic law. In alternative forum cases, it has been stated that the jurisdiction will be exercised as the ends of justice require, and in particular where the pursuit of the relevant proceedings is vexatious or oppressive; in single forum cases, it is said that an injunction may be granted to restrain the pursuit of proceedings overseas which is unconscionable. The focus is, therefore, on the character of the defendant's conduct, as befits an equitable remedy such as an injunction. In particular, although it has frequently been stated that comity requires that the jurisdiction to grant an anti-suit injunction should be exercised with caution, no requirement has been imposed specifically to prevent the grant of an anti-suit injunction in circumstances which amount to a breach of comity. The present case raises for the first time, and in a stark form, the question whether such a requirement should be recognised and, if so, what form it should take.

  18. In alternative forum cases, in which the choice is between the English forum and some other forum overseas, an anti-suit injunction will normally only be applied for in an English court where England is the natural forum for the resolution of the dispute; and, if so, there will be no infringement of comity. England was assumed to be the natural forum in a passage in the judgment of the Privy Council in Aerospatiale, which was delivered by myself. There, with reference in particular to cases such as the present, I said (at p. 894E-G):

    Their Lordships refer, in particular, to the fact that litigants may now be encouraged to proceed in foreign jurisdictions, having no connection with the subject matter of the dispute, which exercise an exceptionally broad jurisdiction and which offer great inducements, in particular greatly enhanced, even punitive, damages, that they may tempt litigants to pursue their remedies there. In normal circumstances, application of the now very widely recognised principle of forum non conveniens should ensure that the foreign court will itself, where appropriate, decline to exercise its own jurisdiction .... But a stay may not be granted; and if, in particular, the English court concludes that it is the natural forum for the adjudication of the relevant dispute, and that by proceeding in the foreign court the plaintiff is acting oppressively, the English court may, in the interests of justice, grant an injunction restraining the plaintiff from pursuing the proceedings in the foreign court.

  19. It is to be observed that the example there given presupposes that the English court is the natural forum for the adjudication of the dispute, though it is not stated in terms whether that is a prerequisite of the exercise of the jurisdiction in an alternative forum case, no doubt because the point did not there arise for decision. In a later passage in the same judgment I did however state that, as a general rule, the court granting the injuction must conclude that it is the natural forum for the trial of the action: see [1987] A.C. 871, 896.

  20. 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.

  21. 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.

  22. 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.

  23. 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 & 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.

  24. 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

  25. 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.

  26. 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

  27. 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.

  28. 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.

  29. 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.

  30. 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.

  31. 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

  32. 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.

  33. 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

  34. 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

  35. 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,

  36. 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,

  37. 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,

  38. 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,

  39. 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!


Cases

Societe Nationale Industriele Aerospatiale v Lee Kui Jak [1987] A.C. 871; The Atlantic Star [1974] A.C. 436; Spiliada Maritime Corporation v Cansulex Ltd [1987] A.C. 460; Club Mediterranee NZ v Wendell [1989] 1 NZLR 216; Voth v Manildra Flour Mills Pty Ltd (1990) 65 A.L.J.R. 83; Amchem Products Inc. et al v  Workers Compensation Board et al. (1993) 102 D.L.R. (4th) 96; CSR Ltd v Cigna Insurance Australia Ltd and ors (1997) 146 A.L.R. 402; Gulf Oil Corporation v Gilbert (1947) 330 U.S. 501; Piper Aircraft Co. v Reyno (1981) 454 U.S. 235; Laker Airways Ltd v Sabena Belgian World Airlines (1984) 731 F. 2d. 909; British Airways Board v Laker Airways Ltd [1985] A.C. 58; Bank of Tokyo Ltd v Karoon (Note) [1987] A.C. 45; China Trade & Development Corporation v MV Choong Yong (1987) 83 F.2d. 33; Gau Shan Co v Bankers Trust Co (1992) 956 F.2d. 1349; Philips Medical Systems International NV v Bruetman (1993) 8 F.3d. 600; Allendale Mutual Insurance v Bull Data Systems (1993) 10 F.3d. 425; Midland Bank Plc v Laker Airways Ltd [1986] Q.B. 689

Authors and other references

Ellen Hayes, (1992) 26 U.B.C. Law Rev. 41

American Restatement of Conflict of Laws, para 84

Scole and Hay on Conflict of Laws, 2nd ed (1992)

Lawrence Collins, Current Legal Issues in International Commercial Litigation, NUS

Representations

Mr. Kentridge Q.C. for the appellants.


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