Case Note & Summary
The plaintiff, Anupam Mittal, filed a suit in the Bombay High Court seeking an anti-anti-suit injunction to restrain the defendants from enforcing an anti-suit permanent injunction passed by the High Court of Singapore. The Singapore court had restrained the plaintiff from proceeding with his petition before the National Company Law Tribunal (NCLT), Mumbai, under Sections 241 and 242 of the Companies Act, 2013, alleging oppression and mismanagement in defendant No.1 company. The plaintiff contended that disputes relating to oppression and mismanagement are non-arbitrable under Indian law and that the NCLT has exclusive jurisdiction. He argued that the arbitration proceedings initiated by defendant No.2 in Singapore would not provide an adequate remedy, as any award on such non-arbitrable issues would be unenforceable in India. The defendants opposed the application, relying on the Shareholders Agreement (SHA) which contained an arbitration clause and a Singapore exclusive jurisdiction clause. They argued that the plaintiff had submitted to the jurisdiction of the Singapore court and that the anti-suit injunction was valid and should be respected under principles of comity. The court analyzed the nature of oppression and mismanagement disputes, noting that they are statutory in nature and non-arbitrable, as held by the Supreme Court in Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. and other precedents. The court held that the NCLT has exclusive jurisdiction over such matters and that an arbitral award on these issues would be contrary to the public policy of India. The court also considered the principle of comity but found that it did not require enforcement of the Singapore anti-suit injunction, as it would prevent the plaintiff from accessing a statutory remedy in India. The court granted an interim injunction restraining the defendants from taking any steps to enforce the Singapore anti-suit injunction, including seeking contempt or other proceedings, until the disposal of the suit. The court directed the plaintiff to file an affidavit of undertaking to indemnify the defendants for any damages caused by the injunction.
Headnote
A) Civil Procedure - Anti-Suit Injunction - Anti-Anti-Suit Injunction - Order 39 Rules 1 and 2 CPC - The court considered whether to restrain enforcement of a foreign anti-suit injunction to protect the plaintiff's right to pursue statutory remedies before NCLT - Held that where a foreign court's anti-suit injunction prevents a party from accessing a domestic statutory forum that has exclusive jurisdiction over non-arbitrable disputes, an anti-anti-suit injunction may be granted to prevent injustice and protect the plaintiff from being rendered remediless (Paras 1-2, 48-53).
B) Company Law - Oppression and Mismanagement - Non-Arbitrability - Sections 241, 242 Companies Act, 2013 - The court examined whether disputes relating to oppression and mismanagement are arbitrable - Held that such disputes are non-arbitrable as they involve statutory rights and remedies that can only be adjudicated by the NCLT, and any arbitral award on such matters would be unenforceable in India as being contrary to public policy (Paras 30-35).
C) Private International Law - Comity of Courts - Enforcement of Foreign Anti-Suit Injunctions - The court considered the principle of comity and whether a foreign anti-suit injunction should be enforced in India - Held that while comity is important, it does not require Indian courts to enforce a foreign anti-suit injunction that would prevent a party from pursuing a statutory remedy in India, especially when the foreign court's order is based on a different legal framework and the disputes are non-arbitrable under Indian law (Paras 40-47).
D) Civil Procedure - Interim Relief - Prima Facie Case and Balance of Convenience - Order 39 Rules 1 and 2 CPC - The court assessed whether the plaintiff had made out a prima facie case and whether the balance of convenience favored granting an interim injunction - Held that the plaintiff had a strong prima facie case that the NCLT had exclusive jurisdiction, and the balance of convenience was in favor of granting the injunction to prevent the plaintiff from being rendered remediless, as the arbitration proceedings were at an advanced stage (Paras 48-53).
Issue of Consideration
Whether the High Court can grant an anti-anti-suit injunction restraining the defendants from enforcing an anti-suit permanent injunction passed by the High Court of Singapore, which restrains the plaintiff from pursuing his oppression and mismanagement petition before the NCLT, Mumbai, on the ground that such disputes are non-arbitrable under Indian law and that the NCLT has exclusive jurisdiction.
Final Decision
The court allowed the interim application and granted an interim injunction restraining the defendants from taking any steps to enforce the anti-suit permanent injunction order passed by the High Court of Singapore, including seeking contempt or other proceedings, until the disposal of the suit. The plaintiff was directed to file an affidavit of undertaking to indemnify the defendants for any damages caused by the injunction.
Law Points
- Non-arbitrability of oppression and mismanagement disputes
- Anti-suit injunction
- Anti-anti-suit injunction
- Comity of courts
- Public policy
- Exclusive jurisdiction of NCLT
- Enforcement of foreign judgments
- Interim relief under Order 39 Rules 1 and 2 CPC
Case Details
2023 LawText (BOM) (09) 80
Interim Application No.1010 of 2021 in Suit No.95 of 2021
Darius Khambata, Senior Advocate a/w. Sharan Jagtiani, Senior Advocate, Kunal Dwarkadas, Rahul Dwarkadas, Abhijit Joshi, Areez Gazdar, Nutash Kotwal, Shireen Mistri, Karan Rukhana and Ammar Faizullabhoy i/b. Veritas Legal for Applicant / Plaintiff; Janak Dwarkadas, Senior Advocate a/w. Nikhil Sakhardande, Senior Advocate a/w. Rajendra Barot, Anusha Jacob, Richa Borthakur and Mrudula Dixit i/b. AZB & Partners for Respondent No.2; Nikhil Sakhardande, Senior Advocate a/w. Rajendra Barot, Anusha Jacob, Richa Borthakur and Mrudula Dixit i/b. AZB & Partners for Defendant No.3; Rishika Harish a/w. Shivani Prasad i/b. TRD Associates for Defendant Nos.4 and 5.
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Nature of Litigation
Civil suit seeking anti-anti-suit injunction to restrain enforcement of a foreign anti-suit injunction order passed by the High Court of Singapore, which restrains the plaintiff from proceeding with his oppression and mismanagement petition before the NCLT, Mumbai.
Remedy Sought
The plaintiff seeks a declaration that the NCLT is the only appropriate and competent forum to decide the disputes pertaining to oppression and mismanagement, and an interim injunction restraining the defendants from enforcing the Singapore anti-suit injunction order.
Filing Reason
The plaintiff filed the suit because the High Court of Singapore passed an anti-suit permanent injunction restraining him from proceeding with his NCLT petition, and the plaintiff contends that the disputes are non-arbitrable and that the NCLT has exclusive jurisdiction, making the Singapore order unenforceable in India.
Previous Decisions
The High Court of Singapore passed an anti-suit permanent injunction restraining the plaintiff from proceeding with the NCLT petition. The plaintiff had also filed a petition before the NCLT, Mumbai, which was stayed by the Singapore order. The present suit and interim application seek to restrain enforcement of that Singapore order.
Issues
Whether disputes relating to oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013 are arbitrable?
Whether an anti-anti-suit injunction can be granted to restrain enforcement of a foreign anti-suit injunction that prevents a party from pursuing statutory remedies before the NCLT?
Whether the principle of comity of courts requires the Indian court to enforce the Singapore anti-suit injunction?
Whether the plaintiff has made out a prima facie case and balance of convenience in favor of granting interim relief?
Submissions/Arguments
Plaintiff: The disputes are non-arbitrable as they pertain to oppression and mismanagement under the Companies Act, 2013, which are exclusively triable by the NCLT. The Singapore anti-suit injunction prevents the plaintiff from accessing his only statutory remedy, rendering him remediless. The arbitration proceedings in Singapore cannot adjudicate these non-arbitrable issues, and any award would be unenforceable in India as being contrary to public policy.
Defendants: The SHA contains an arbitration clause and a Singapore exclusive jurisdiction clause. The plaintiff voluntarily submitted to the jurisdiction of the Singapore court and participated in the arbitration. The Singapore anti-suit injunction is valid and should be respected under principles of comity. The NCLT petition is an abuse of process and the plaintiff is forum shopping.
Ratio Decidendi
Disputes relating to oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013 are non-arbitrable and fall within the exclusive jurisdiction of the NCLT. A foreign anti-suit injunction that prevents a party from pursuing such statutory remedies in India cannot be enforced in India, as it would be contrary to public policy and would render the party remediless. An Indian court may grant an anti-anti-suit injunction to protect the party's right to access the statutory forum, even if the foreign court's order is based on a contractual arbitration clause, provided the party has a strong prima facie case and the balance of convenience favors such relief.
Judgment Excerpts
The present suit is in the nature of an anti-enforcement action, whereby the plaintiff is seeking an injunction to restrain the defendants from enforcing an anti-suit permanent injunction order passed by the High Court of Singapore.
It is the case of the plaintiff that since disputes pertaining to oppression and mismanagement under Indian law are non-arbitrable, it would be futile for him to raise the same in an arbitration proceeding initiated by defendant no.2 at Singapore.
The court held that the NCLT has exclusive jurisdiction over oppression and mismanagement disputes and that an arbitral award on such matters would be unenforceable in India as being contrary to public policy.
The court granted an interim injunction restraining the defendants from taking any steps to enforce the Singapore anti-suit injunction.
Procedural History
The plaintiff filed Suit No.95 of 2021 in the Bombay High Court seeking an anti-anti-suit injunction. The plaintiff also filed Interim Application No.1010 of 2021 seeking interim reliefs. The matter was heard and reserved on 18th August 2023, and judgment was pronounced on 11th September 2023.
Acts & Sections
- Companies Act, 2013: 241, 242
- Code of Civil Procedure, 1908 (CPC): Order 39 Rules 1 and 2, Section 151
- Arbitration and Conciliation Act, 1996: Section 2(3), Section 34, Section 48
