Case Note & Summary
The Plaintiff, Hansraj Nayyar Medical India, a proprietorship engaged in selling medical products, filed a suit for anti-suit injunction against Smith Medical International Limited (Defendant No.1, an English company) and its Indian subsidiary (Defendant No.2). The parties entered into an Exclusive Distribution Agreement (EDA) dated 16 May 2011, appointing the Plaintiff as exclusive distributor for India, Nepal, Bhutan, and Maldives. The EDA contained an exclusive jurisdiction clause submitting to the English courts. Subsequently, a tripartite Memorandum of Understanding (MOU) dated 12 March 2012 varied certain terms of the EDA, including allowing Defendant No.2 to import products and requiring the Plaintiff to buy from Defendant No.2 from an effective date. The MOU stated that the EDA shall remain in full force and effect except as modified. Disputes arose, and the Defendants filed a claim in the Commercial Court in England (Claim No.2013 Folio 1380). The Plaintiff sought an anti-suit injunction to restrain those proceedings, arguing that the MOU did not alter the exclusive jurisdiction clause and that the dispute was connected to India. The Defendants contended that the MOU superseded the EDA and that England was the natural forum. The court held that the exclusive jurisdiction clause in the EDA remained binding, as the MOU did not expressly or impliedly vary it. The court granted the anti-suit injunction, finding that the Defendants had not shown strong cause to proceed in England and that the Indian court was competent to adjudicate the dispute. The Notice of Motion was made absolute.
Headnote
A) Civil Procedure - Anti-Suit Injunction - Exclusive Jurisdiction Clause - The court considered whether to restrain foreign proceedings brought in breach of an exclusive jurisdiction clause. Held that where parties have agreed to submit to the exclusive jurisdiction of a court, a breach of that agreement is a strong ground for granting an anti-suit injunction, unless the defendant shows strong cause to the contrary. (Paras 5-10) B) Contract Law - Variation of Contract - Jurisdiction Clause - The court examined whether the MOU varied the exclusive jurisdiction clause in the EDA. Held that the MOU did not expressly or impliedly vary the jurisdiction clause; the EDA remained in full force and effect except as specifically modified. (Paras 11-14) C) Civil Procedure - Forum Non Conveniens - Anti-Suit Injunction - The court rejected the argument that England was a more convenient forum, noting that the exclusive jurisdiction clause binds the parties and the Indian court is competent to decide the dispute. (Paras 15-18)
Issue of Consideration
Whether an anti-suit injunction should be granted to restrain the Defendants from proceeding with a claim in England in breach of an exclusive jurisdiction clause in the EDA, and whether the MOU varied the jurisdiction clause.
Final Decision
Notice of Motion made absolute; Defendants restrained from proceeding with Claim No.2013 Folio 1380 in the Commercial Court in England.
Law Points
- Anti-suit injunction
- exclusive jurisdiction clause
- forum non conveniens
- strong cause test
- breach of contract
- comity of courts
