COURT OF APPEAL, MALAYSIA
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www.ipsofactoJ.com/appeal/index.htm [2000] Part 2 Case 4 [CAM] |
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COURT OF APPEAL, MALAYSIA |
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Coram |
BSNC
Leasing Sdn Bhd
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vs -
Sabah
Shipyard Sdn Bhd
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GOPAL SRI RAM JCA MOKTHAR SIDIN JCA HAIDAR MOHD NOOR JCA |
12 JANUARY 2000 |
Judgment[a]
Gopal Sri Ram, JCA
(delivering the judgment of the court)
1.0 PRELIMINARY
These two appeals arise out of the same subject matter. When we sat on November 22, 1999, there was only one appeal before us. It was Civil Appeal No 686/99 ("the second appeal") in which Sabah Shipyard Sdn Bhd ("Sabah Shipyard") was the appellant. We then discovered from counsel that there was a related appeal, viz. Civil Appeal No 482/99 ("the first appeal") in which BSNC Leasing (M) Sdn Bhd ("BSNC Leasing") was the appellant. It was against an earlier order made in the same proceedings.
It was apparent that a resolution of the first appeal would finally determine the event of the second. But not the other way around. We therefore suggested that the first appeal be also fixed on short notice and that both appeals be heard together. Counsels agreed. The learned President of the Court of Appeal then issued the appropriate direction pursuant to which both appeals were heard and disposed of, two days later, on November 24.
2.0 FACTS AND BACKGROUND
Sabah Shipyard is in the business of constructing, among other things, power barges for the generation of electricity. Turbines are required in the construction of power barges. In or about June 1995, Sabah Shipyard purchased a turbine from Wing Teik Holdings Bhd ("Wing Teik"). The price was RM49 million. Wing Teik in turn ordered the turbine from Westinghouse Electric Corporation which manufactures turbines in the United States of America. Westinghouse delivered the turbine direct to Sabah Shipyard at Labuan in September 1995.
On January 3, 1996, Wing Teik raised an invoice against Sabah Shipyard for RM49 million. Sabah Shipyard paid Wing Teik RM20 million in part payment of the purchase price. It needed to raise funds to settle the balance-owing to Wing Teik. It therefore approached BSNC Leasing.
On August 3, 1996, a hire-purchase agreement was drawn up and executed between Sabah Shipyard and BSNC Leasing. The agreement described BSNC Leasing as the owner of the turbine. Under its terms BSNC Leasing purported to hire the turbine out to Sabah Shipyard for a gross sum of RM29 million and interest. Sabah Shipyard was to repay this amount in monthly instalments over 24 months. If it did, and it was not in breach of its covenants under the hire purchase agreement, the property in the turbine was to pass to it at the end of the period of hire. For the purpose of this transaction, Wing Teik's invoice was amended by deleting Sabah Shipyard's name and inserting BSNC Leasing. Following the execution of the hire-purchase agreement BSNC Leasing paid the sum of RM29 million to Wing Teik. Sabah Shipyard then went about constructing a power barge called Victoria II and installed the turbine in question as a component in the barge.
Following the economic crisis that descended upon this region in mid 1997, Sabah Shipyard, like so many other businesses began to experience financial hardship. It defaulted in the instalments payable to BSNC Leasing. It also owed monies to other creditors. It wanted to stave off all its creditors in order to earn itself some breathing space. So, acting in conjunction with its holding company, Westmont Industries Bhd, it drew up a scheme of arrangement and moved the court for various orders under s 176 of the Companies Act 1965. The relief it obtained included an order under s 176(10) restraining legal proceedings against both companies.
On December 3, 1998, BSNC Leasing intervened in the s 176 proceedings. It wanted to re-possess the turbine under the terms of the hire purchase agreement. It therefore moved the court for an order enabling it to do so. Sabah Shipyard opposed this application. Another creditor, Usaha Asas Sdn Bhd also intervened and opposed the orders sought by BSNC Leasing. The learned Judge, after considering the copious documents put in evidence and the arguments of counsel, dismissed BSNC Leasing's application and granted a declaration that the hire-purchase agreement is void. His order is dated May 21, 1999. It is against this order of the learned Judge that the first appeal was brought.
In the meantime, on July 21, 1998, Sabah Shipyard entered into an agreement with a company called Starweaver Ltd under the terms of which it sold the Victoria II to the latter. Starweaver Ltd then chartered the Victoria II to an Ecuadorian company called Energycorp Companie Generadorrade Energia SA ("Energycorp") on a bare boat charter for two years. By the time BSNC Leasing's application for possession was heard, the Victoria II was well on its way to Ecuador. An application by BSNC Leasing to get the vessel to return to the Malaysian jurisdiction failed. The Victoria II therefore proceeded to Ecuador.
BSNC Leasing then commenced proceedings in the Ecuadorian court and, pursuant to an order made by that court, arrested the Victoria II in the hands of Energycorp. Later, Sabah Shipyard moved the High Court at Kuala Lumpur for an order restraining BSNC Leasing from prosecuting the Ecuadorian proceedings or from commencing any other proceedings in any other jurisdiction in respect of the turbine that formed the subject matter of the hire-purchase agreement. This application was heard and dismissed by the same learned Judge who had heard BSNC Leasing's earlier applications. This, then is the order that forms the subject matter of the second appeal.
So much for the factual background against which these appeals rest.
3.0 THE ISSUES
At issue in these appeals are the following two questions:
Whether the property in the turbine had ever passed to BSNC Leasing.
Whether the institution and prosecution of the proceedings before the Ecuadorian court (including the order authorising the arrest of the Victoria II) was vexatious and oppressive in all the circumstances of the case.
The learned Judge resolved the first issue against BSNC Leasing and the second issue against Sabah Shipyard. I now turn to consider each issue and the arguments directed upon each of them.
3.1 THE FIRST ISSUE (PASSING OF PROPERTY)
To succeed in its application for re-possession, BSNC Leasing had to demonstrate that the property in the turbine had passed to it before it entered into the hire purchase agreement with Sabah Shipyard. Only on that basis could it be argued with any conviction that there was a genuine hire-purchase transaction.
In the court below, Sabah Shipyard argued that the property in the turbine had always remained with it and had never passed to BSNC Leasing. It was contended that the so-called hire-purchase agreement was a sham: a device to cloak the real transaction, which was one of loan upon the security of the turbine. It was also submitted that the hire-purchase agreement was in truth an unregistered bill of sale that was void against Sabah Shipyard by reason of the provisions of s 108 of the Companies Act 1965.
The learned Judge, after a careful analysis of the evidence, agreed with these arguments. He came to the conclusion that the so-called hire purchase was merely a device to cloak what in truth and in fact was a loan transaction. This is how he put it:
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The statement in Part III of the Schedule that the cash price of the goods was RM20 million implied a representation that BSNC, at the date of the agreement, August 3, 1996, were the owner of the turbine, having bought it for RM20 million. It raised the crucial question of when did BSNC become the owner of the turbine, or when and from whom did they purchase it for RM20 million. Learned counsel for BSNC did not suggest that BSNC bought it from Saship for RM20 million. At one point he submitted that BSNC bought it from Wing Tiek, but Wing Tick could not have sold it to BSNC because Wing Tiek had already sold it to Saship and received RM29 million from Saship as part of the purchase price. Later on in his submission, learned counsel for BSNC suggested that BSNC became the owner of the turbine at the date of the agreement. It implied that the signing of the agreement effected two things simultaneously, namely, a sale by Saship of the turbine to BSNC and a hiring of the turbine back to Saship. But the agreement was only about hiring, with BSNC claiming that they were already the owner. There was no proof that Saship had sold the turbine to BSNC at anytime before the agreement. In any event they could not have sold it to BSNC because it was already subject to a sale to Ganda as part of the power-barge Victoria II. As I have attempted to show, there were various indications in the documents that I have mentioned that went to support the view that the transaction between Saship and BSNC was a loan transaction. That view was strengthened by the consideration that since the turbine was to form a part of the power-barge that Saship were under contract to construct and sell to a third party, a fact that was known to BSNC, BSNC and Saship would have known that a true hire-purchase arrangement, with the essential feature that BSNC were the owner of the turbine with the right to repossession upon default, would not have been possible. The ultimate determinant was the failure on BSNC's part to show, against the history of events that I have set out, at what stage and in what manner they became the owner of the turbine. BSNC could not succeed in their contention that the agreement was a true hire-purchase agreement unless they could show that at some distinct point in time before the execution of the agreement they had become the owner of the turbine. This they had not been able to do. It was therefore clear to me that the transaction between BSNC and Saship was a lending of RM20 million, with the turbine as security, but cloaked in a hire-purchase agreement. [emphasis added] |
Mr. N Chandran of counsel for BSNC Leasing criticised this finding of the learned Judge. But I must say at once, with all due respect to counsel that I am unable to agree with his arguments.
It is clear from the evidence available in the record provided to us that Sabah Shipyard entered into a contract with Wing Teik to purchase the turbine. That contract was made sometime in June 1995. The turbine was to be delivered and paid for later. Hence Wing Teik's invoice dated January 3, 1996. There is nothing in any of the contemporary documents to indicate the point of time at which the parties intended that property should pass from Wing Teik to Sabah Shipyard. The primary question then is when, if ever, did property in the turbine ever pass to Sabah Shipyard?
In my judgment, that question falls to be resolved in accordance with the relevant provisions of the Sale of Goods Act 1957 which in this instance are ss 19 and 20. They read as follows:
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Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. |
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For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case. |
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Unless different intention appears the rules contained in sections 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. |
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20. |
Where there is an unconditional contract for the sale of specific goods in a deliverable state the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price, or the time of delivery of the goods, or both, is postponed. |
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The effect of these sections may be summarised thus. In a contract for the sale for specific or ascertained goods, property in them passes from the seller to the buyer according to the intention of the parties. That intention is to be gathered from the terms of the contract, the conduct of the parties and all the circumstances of the case. In the absence of a contrary intention, property in specific goods passes to the buyer at the time the contract is made. And it matters not whether the parties have postponed either payment for, or the delivery of, the goods.
It has been recognised by high authority that although the provisions of ss 20 to 24 are merely rules that operate in the absence of a contrary intention, in practice, they are of much importance. That is because of the extreme difficulty in the great majority of cases to actually prove the intention of the parties. As Lord Wright said in Ross T Smyth & Co Ltd v TD Bailey Son & Co [1940] 3 All ER 60, 67 when speaking of the corresponding English provisions:
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It is true that all these rules, both under s 18 and under s 19, are prima facie rules, and depend on intention, but the intention in this regard by the parties is seldom or never capable of proof. It is to be ascertained, as already stated here, by having regard to the terms of the contract, the conduct of the parties and the circumstances of the case. |
There may, of course, be cases where the parties by words or conduct evince a clear intention that the property in specific goods is not to pass at the time the contract is made. In such a case, property in the goods will remain in the vendor until the event specified by the contract occurs. A case which illustrates this point is Au Yong Kun Min v Tractors Malaysia Bhd [1997] 5 MLJ 168. There the vendors of a tractor retained ownership of it after having parted with possession to the buyer. They also reserved unto themselves the right to take possession of the tractor if there was any default in payment of any of the sums due under the agreement in question. In an instructive judgment, Augustine Paul J, reviewed all the relevant case law on the point and held quite rightly that the rule governing intention housed in the English equivalent of s 20 had been displaced.
The present case is a far cry from Au Yong Kun Min v Tractors Malaysia Bhd (ibid). Here, Wing Teik and Sabah Shipyard did not express any intention as to when property in the turbine (which comes within the category of "specific goods") will pass from the one to the other. Neither is there any form of conduct or circumstances from which such intention is to be deduced. The rule expressed in s 20 of the Sale of Goods Act 1957 therefore applies with full force. Accordingly, the property in the turbine passed from Wing Teik to Sabah Shipyard when the contract was made. There is, as the learned Judge has found, no evidence to show any sale either by Sabah Shipyard or Wing Teik to BSNC Leasing. The property in the turbine therefore remained at all material times with Sabah Shipyard.
In these circumstances I find the approach adopted by the learned Judge to accord entirely with what I apprehend to be the law upon the subject as established in the leading case of Kan Yeow Wing v Keng Soon Motor Finance [1962] MLJ 391.
In that case, the plaintiff, who was pressed by pawnbrokers to whom he owed money, purported to sell his five lorries to the defendant and simultaneously entered into hire-purchase agreements in respect of the five vehicles. He defaulted in making payments of the monthly instalments, and when faced with a demand from the defendants, commenced proceedings for a declaration that the five hire-purchase agreements were void bills of sale. Ong J, (later CJ, (Malaya)) accepted the following observation by Devlin J, in Eastern Distributors Ltd v Goldring [1957] 2 All ER 525, at p 527:
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There is, however, nothing to prevent the owner of a vehicle from selling it to a hire-purchase company, pocketing the price and paying it back by instalments; and provided the sale is a genuine one and not a sham, effect will be given to it as a hire-purchase agreement. [emphasis added] |
His Lordship also accepted as correct the five propositions set out by Cairns J, in the following passage in his judgment in North Central Wagon Finance Co Ltd v Brailsford [1962] 1 All ER 502:
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I propose now to consider whether the hire-purchase agreement was in law and in fact a bill of sale. There are relevant authorities, and from them I think that the following proposition can be derived:
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He then applied the foregoing principles to the case before him as follows (at p 393):
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The fixing of unrealistic prices having no relation to the true values of the vehicles, and the notional setting off of the initial payments therefore makes the conclusion inevitable, that the prices and initial payments were tailored to suit the plaintiffs requirements for adequate cash accommodation to repay the pawnbrokers, in other words, to substitute one creditor for another and that the true purchase agreements were not a mirror of the truth. I accordingly find that the transaction was one of loan on security rather than a genuine sale and re-letting on hire-purchase. The plaintiff accordingly succeeds, and he is entitled to both the declarations prayed, because there was non-registration under the Bills of Sale Ordinance and no memorandum of the contract of loan as required by s 16 of the Moneylenders Ordinance. The defence of estoppel cannot arise and the counterclaim for arrears of hire likewise fails. |
Returning to the present case, if one were to go behind the principal document one would discover not a shred of evidence to show that the turbine in question had been sold to BSNC Leasing at any point in time before the execution of the hire-purchase agreement. Yet the hire-purchase agreement refers to B SNC Leasing as owner of the turbine which is plainly not the truth. Further, it describes the purchase price to be RM20 million when in fact it was RM49 million.
Again, as the learned Judge pointed out, there are clauses in the hire-purchase agreement which restrict Sabah Shipyard's right to dispose of the turbine. Yet, Sabah Shipyard, to the knowledge of BSNC Leasing proposed to install the turbine into a power barge and dispose of the finished product. In these circumstances it is amazing how BSNC Leasing could possibly have treated the transaction as a genuine hire-purchase.
In my judgment, the fair inference to be drawn from the totality of the evidence is that Sabah Shipyard owed Wing Teik RM20 million and the hire-purchase agreement was used as a device to cloak the real transaction which was a loan upon the security of goods. In short, the hire-purchase agreement was an unregistered bill of sale. Not being in the statutory form, it was non-registrable and was therefore void. Accordingly, the learned Judge was entirely correct in dismissing BSNC Leasing summons for leave to re-possess the turbine.
3.2 THE SECOND ISSUE (RESTRAINING THE ECUADORIAN PROCEEDINGS)
3.2.1 General observations
The second appeal raises a point of some importance in the environment of private international law. It has to do with the power of our courts to issue, what have popularly come to be called, "anti-suit injunctions". In the context of private international law, by definition, an anti-suit injunction is one that restrains a defendant from either instituting or prosecuting proceedings in the court of another jurisdiction. As presently advised, it is a subject upon which there has been no decision of this court. Accordingly, I think that this is an appropriate case for this court to re-state the relevant legal principles that operate in this area of the law. The principles involved include those governing the doctrine of forum non conveniens which, although not directly in issue in the second appeal, have relevance in some part to it. I shall therefore address the reasons given by the learned Judge and the respective arguments of counsel later in this judgment.
3.2.2 Forum non conveniens
It is beyond argument that our courts have, in appropriate cases, jurisdiction to stay proceedings commenced within Malaysia on the ground that they amount to an abuse of the court's process. It is an inherent jurisdiction that every court must have in order to control the use to which its process is put by a litigant. Order 92 r 4 of the Rules of the High Court 1980 is declaratory of that jurisdiction. It reads as follows:
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For the removal of doubts it is hereby declared that nothing in these rules shall be deemed to limit or affect the inherent powers of the Court to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court. |
This is
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a unique rule of court for while it neither defines nor gives jurisdiction, yet it serves as a reminder and confirmation - lest we forget - of the common law powers of the court, which are residuary or reserve powers and a separate and distinct source of jurisdiction from the statutory powers of the court. |
[per Edgar Joseph Jr FCJ, in R Rama Chandran v The Industrial Court of Malaysia [1997] 1 AMR 433, at p 541]
Because human ingenuity is without limit, the circumstances in which there may be an abuse of the court's process are endless. Accordingly, the jurisdiction to control such abuse is wide and flexible. It is to be exercised according to the peculiar circumstances of a particular case. (See, Jasa Keramat Sdn Bhd v Monatech (M) Sdn Bhd [1999] 4 AMR 4653).
One of the circumstances in which an action may be stayed by a Malaysian court is where, on the facts and evidence disclosed, there is available to the plaintiff a forum in a foreign country having jurisdiction, at which the dispute may more conveniently be litigated. This is known as the doctrine of forum non conveniens.
Where an action is properly commenced in this country, that is to say in a case where the High Court is seised of jurisdiction, there is a rebuttal) i.e. presumption that the domestic court is the forum conveniens. The burden is accordingly on the defendant to satisfy the court that that action within our jurisdiction should be stayed on the ground that there are factors that weigh in favour of the dispute being litigated before the foreign court. It must be established that there is clearly a more appropriate forum in another country with which the action has the most real and substantial connection and that it is in the interests of justice to have the dispute resolved by that forum. (See, Sim v Robinow (1892) 19 R 665).
The leading case on the subject is Spiliada Maritime Corp v Cansulex Ltd [1986] 3 All ER 843, where Lord Goff of Chieveley formulated the underlying principle in the following terms (at p 854):
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The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice. |
In deciding where the interests of justice lie, a court may take into account a combination of several factors. These include, but are not confined to, the following matters:
that the dispute has a real and substantial connection with the foreign court;
that all or most of the important witnesses are situated within the jurisdiction of the foreign court as in MacShannon v Rockware Glass Ltd [1978] AC 795;
that the plaintiff will enjoy a personal or juridical advantage by having the dispute tried by the Malaysian court (Bank of Tokyo Ltd v Karoon [1987] AC 45).
On the other hand, it may be a case where there is no clear forum conveniens, in which event a stay will generally be refused. (European & Asian Bank A G v Punjab & Sind Bank [1982] 2 Lloyds' Rep 356)
3.3 THE ANTI-SUIT INJUNCTION
3.3.1 Nature of the jurisdiction
The power in our courts to perpetually restrain a defendant who is amenable to their jurisdiction from prosecuting a claim in a foreign court is founded upon statute. It is derived from a joint reading of ss 52(3)(e) and 54(a) of the Specific Relief Act 1950. These sections provide as follows:
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When the defendant invades or threatens to invade the plaintiffs right to, or enjoyment of, property, the court may grant a perpetual injunction in the following cases, namely: |
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where the injunction is necessary to prevent a multiplicity of judicial proceedings. |
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54. |
An injunction cannot be granted - |
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to stay a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such a restraint is necessary to prevent a multiplicity of proceedings. |
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It is well known that these provisions are drawn from the Specific Relief Act 1877 of India. Assistance is therefore to be gained from cases decided by the courts of that country on the equipollent provisions of the Indian statute prior to the enactment of the Specific Relief Act 1963 which radically altered the law upon the subject.
My appreciation of the Indian cases decided under the Act of 1877 is that they adopt the same approach to the problem as the courts of England.
This appears, sufficiently from the decision in Naik v Balvant AIR 1927 Bom 135. In that case, the defendant filed an action against the plaintiff in the court in the State of Hyderabad. The defendant was resident in that State. For the purposes of private international law, a court in that State was a foreign court, being situated outside British India. The plaintiff in the meantime instituted proceedings in the State of Bombay in respect of the same subject matter. The defendant entered an appearance to that action and delivered a counterclaim. The plaintiff then applied to the High Court at Bombay for an injunction restraining the defendant from proceeding with the Hyderabad action. Macleod J, granted the injunction.
The defendant then appealed to the appellate Bench of the Bombay High Court, comprising Marten CJ and Kemp J. He contended that the High Court at Bombay had no jurisdiction to issue the injunction. He also argued that if there was jurisdiction, then it ought not to be exercised in the plaintiff's favour. The appellate Bench held that the defendant had submitted to the jurisdiction of the Bombay High Court by entering an unconditional appearance and delivering a counterclaim. Dealing with this aspect of the case, the learned Chief Justice said (at p 137):
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The matter came up before this High Court in Mulchand Raichand v Gill & Co [1919] 21 Bom LR 963 (53 IC 518) which was also an appeal from Sir Norman Macleod's decision and there the court held that it had jurisdiction in a case of that nature. I recognize, speaking for my own judgment, that the views there expressed on the points of law which I am now on may be said to be obiter. But, nevertheless, I would like to take pp 970 and 971 as part of my judgment in the present case, containing as it does references to Halsbury's Laws of England, Vol XVII p 263; Dawkins v Simonetti [1880] 44 LT 266, a decision of the English Court of Appeal; and Dicey's Conflict of Laws (1908 Edn) pp 44, 45 and 48; and also The Carronir Company v Maclaren [1855] 5 HLC 416. Mr. Justice Heaton, in giving his judgment in Mulchand Raichand v Gill & Co, held that the Judge has complete jurisdiction to make all orders appropriate to the trial and progress of the suit, and that he must have that power over the parties which is essential to a prompt and complete disposal of the suit before him. |
On the manner in which the jurisdiction fell to be exercised. Marten CJ, said (at p 138):
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Holding then, as we do, that we have jurisdiction in this case, the next question is whether this is a proper case in which it should be exercised. Now I think it reasonably clear that the jurisdiction is one of a delicate character, and that it requires to be exercised with it caution. The English cases of Cohen v Rothfield [1919] 1 KB 410, McHenry v Lewis [1882] 22 Ch D 397, and Hyman v Helm [1883] 24 Ch D 531, which are all decisions of the English Court of Appeal, fully establish that proposition. So far as the jurisdiction in England is concerned, they go to show that there must be something vexatious or oppressive before the court will interfere to restrain an action in a foreign court. So too, in Vanichand v Lakhmichand [1919] 21 Bom LR 955 (53 IC 395), Mr. Justice Pratt refused in that case to stay proceedings in the Court of Morvi, but it would appear there, at p. 960, that the Morvi suit provided a more complete remedy than the British suit. That case went to the Court of Appeal, but was decided on the point that the order of Mr. Justice Pratt was not a judgment and therefore no appeal lay. I do not wish to be led into a precise and accurate definition of the circumstances under which a court in British India will or will not exercise that jurisdiction. I do not think that such a definition could easily, if at all, be framed. But I do think that we have to consider whether it would be a real hardship on the plaintiff if his suit which was instituted first was allowed to proceed in the Hyderabad suit. I have to the best of my ability weighed carefully all that has been said by counsel for the plaintiff in this respect. I recognize that the Bombay suit is the more complete suit of the two. [emphasis added] |
I will, for completeness, also quote from the judgment of Kemp J. He said (at p 139):
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Prima facie, there is nothing oppressive in a defendant filing a suit in his country when a similar suit is filed against him by his defendant in this court. The decided cases in England show that a foreigner has a right to prefer - if he thinks he can derive any advantage therefrom – the procedure of the court of his own country. The courts in England have been slow to exercise their jurisdiction in personam in such a case. They laid down that it should be shown that the plaintiff in the English suit should show that there is no advantage which his foreign defendant could obtain from the procedure in the foreign country which he cannot equally obtain in the English suit: Cohen v Rothfield [1919] 1 KB 410 per Scrutton LJ, at p 414. Moreover, there is no presumption that the multiplicity of actions is vexatious and a special case must be made out to induce a British court to interfere: McHenry v Lewis [1882] 22 Ch D 397. It lies on the English plaintiff to show that the foreign action brought by his defendant is vexatious or oppressive. In Vanichand Lakhmichand [1919] 21 Bom LR 955 (53 IC 395) Mr. Justice Pratt refused the stay of a suit in Morvi State, and that decision was upheld in appeal. Nevertheless, I think it is necessary to proceed with caution in India in applying the principle laid down in the English cases which proceed on the assumption that the foreign courts are courts with an established system of jurisprudence tested by time and to which litigants can safely have recourse without the fear of not obtaining substantial justice. [emphasis added] |
As will appear momentarily from decisions of high authority, those parts of the judgments quoted above to which I have lent emphasis, continues to represent the traditional view of the law. It is apparent that the passage of time has done nothing to dilute the principle.
3.3.2 The jurisdictional categories
The jurisprudence on anti-suit injunctions in the environment of private international law reveals three broad categories of cases in which the jurisdiction has been exercised. They may, for convenience be classified as "single forum cases", "alternative forum cases" and "forum selection cases".
A "single forum case" is one in which the Malaysian court is moved for an injunction to restrain the defendant from prosecuting an action in a foreign court which has exclusive jurisdiction over the subject matter of the relevant dispute. In a single forum case, the Malaysian court is moved solely upon the basis that the defendant is amenable to its jurisdiction. There is no other connection between the Malaysian court and the subject matter of the dispute. An "alternative forum case" is one in which there are two or more available forums for the trial of the particular dispute and Malaysia is one of them.
A "forum selection case" is one in which the parties to the litigation have, by contract, agreed to submit to the exclusive jurisdiction of the Malaysian courts. In such a case, the bringing of, or a threat to bring, proceedings in a foreign court by one party may amount to an invasion or threatened invasion of a legal or equitable right of the other party not to be sued abroad.
At this juncture there is a point of much importance which, I think, ought to be made. It is this. While it may be convenient to resort to classify cases in which the jurisdiction is exercisable, care must be taken not to adhere to rigid categorisation. For, it must not be forgotten that what is being invoked is jurisdiction that is essentially equitable in nature and content. It is a broad and flexible jurisdiction that is primarily concerned with an investigation into where the justice lies, having regard to the peculiar facts of the particular case and having regard to such matters as comity between nations. The authorities have emphasised this. It is sufficient to quote from two cases.
In Castanho v Brown & Root (UK) Ltd [1981] 1 All ER 143, at p 149, Lord Scarman said:
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The considerable case law to which your Lordships have been referred does not, in terms, express any limitation on the sorts of cases in which it may be appropriate to exercise the jurisdiction. Counsel for the plaintiff, however, submitted that it is to be found to have been exercised only in two classes of cases:
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