_____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 1 of 97 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on : 24.07.2009 % Date of decision : 23.10.2009 + FAO (OS) No. 86 of 2009 HORLICKS LTD. AND ANR. … … … … APPELLANTS Through : Mr.C.M. Lall, Mr. Dushyant K. Mahant and Ms. Kripa Pandit, Advocates. - V E R S U S - HEINZ INDIA (PVT.) LIMITED ... … … RESPONDENT Through : Mr.C.A.Sundaram, Sr.Adv. with Ms.Anuradha Salhotra, Ms.Bhavna Gandhi, Ms.Rohini Musa, Mr.Rahul Chaudhary, Mr. Sumit Wadhwa, Mr.Amritesh Mishra, Mr.Abhishek Gupta and Mr.Zafar Inayat, Advocates. AND FAO (OS) NO. 87 OF 2009 GLAXOSMITHKLINE CONSUMER HEALTHCARE LIMITED .. … … APPELLANT Through : Mr.C.M.Lall, Mr.Dushyant K.Mahant and Ms.Kripa Pandit, Advocates. - V E R S U S - HEINZ INDIA (PVT.) LIMITED ... … … RESPONDENT Through : Mr.C.A.Sundaram, Sr.Adv. with Ms.Anuradha Salhotra, Ms.Bhavna Gandhi, _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 2 of 97 Ms.Rohini Musa, Mr.Rahul Chaudhary, Mr. Sumit Wadhwa, Mr.Amritesh Mishra, Mr.Abhishek Gupta and Mr.Zafar Inayat, Advocates. CORAM : HON'BLE MR. JUSTICE SANJAY KISHAN KAUL HON‟BLE MR. JUSTICE SUDERSHAN KUMAR MISRA 1. Whether the Reporters of local papers may be allowed to see the judgment? YES 2. To be referred to Reporter or not? YES 3. Whether the judgment should be YES reported in the Digest? SANJAY KISHAN KAUL, J. 1. The principle of forum non convenience emerged as a concept primarily applicable to a foreign forum. The important question whether it will apply to domestic forum in India governed by Code of Civil Procedure, 1908 (hereinafter referred to as the „said Code‟) has given rise to the present appeals since the appellants have been non suited by the learned Single Judge applying the said principle. 2. The doctrine of forum non convenience which originated in Scotland and thereafter brought to England and United State of America simply put means that if legal proceedings are initiated in a particular forum and that forum is of the opinion that there is a more convenient forum where such _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 3 of 97 lis should be tried, it desists from trying the particular lis. The meaning to be given to “convenience”, and as to whether other parameters also come into play, is another aspect which has developed in respect of this doctrine over a period of time making its application more stringent. The factual background 3. M/s Glaxo Smithkline Consumer Healthcare Limited is a company incorporated and registered under the Companies Act, 1956 while Horlicks Limited, United Kingdom is a foreign company which owns the registered trade mark Horlicks (hereinafter referred to as „appellants‟). M/s Heinz India Pvt Limited (hereinafter referred to as „respondent‟) is the licensed user of the trademark Complan. There is a commonality in the products to the extent that both these products are positioned as a complete planned food for better growth of the children. The products manufactured under the two brand names became competing products in the market. 4. The appellants being the owners of the trademark Horlicks filed a civil suit in the Calcutta High Court in August, 2004 alleging the disparagement of their product by an advertisement of the respondent who are the licensed users of the trade mark Complan. The Complan advertisement had depicted the two cups including one cup with the alphabet „H‟. In the said advertisement, Complan cup was shown as growing in height as compared to the cup with the _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 4 of 97 alphabet „H‟. The appellants succeeded in getting injunction orders against the respondent restraining the respondent to continue with the said advertisement or any other advertisement which reflected adversely on the appellants product Horlicks. It was, however, clarified that the order would not prevent the respondent from publishing the advertisement of its product without showing the cup marked with alphabet „H‟ in the said advertisement. 5. The respondent introduced another advertisement replacing the alphabet on the second cup with the alphabet „X‟ which gave rise to contempt proceedings where the judge once again found that the act of the respondent was in disregard of the intent of the injunction and thus directed for deletion of even the brown cup/mug from the disputed advertisement. The matter is stated to be pending in appeal. 6. The second set of litigation was instituted in the same year in the Madras High Court by the appellants alleging that a series of advertisements had been issued throughout the country in August, 2004 disparaging the products „Horlicks‟ and „Boost‟ with false and misleading comparison with the product „Complan‟. The advertisement showed two cups on either side bearing alphabets „X‟ and „Y‟ with white colour liquid and chocolate colour liquid which was suggested to be indicative of „Horlicks‟ and „Boost‟. The children consuming Complan were shown to grow taller. The Madras High Court _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 5 of 97 vide a detailed order held that the appellants were entitled to the temporary injunction restraining the respondent from using the two cups with the alphabets „X‟ and „Y‟ along with Complan cup and that the respondent was not entitled to use the words „largest selling brand‟. 7. The third suit was instituted by the respondent against the appellants in the Bombay High Court in respect of a moving advertisement of the appellants. 8. This suit was filed in the year 2008 titled Heinz India (P) Ltd v. Glaxosmithkline Consumer Healthcare Limited before Bombay High Court in Suit(L) No.3308/2008. The advertisement showed the two products Complan and Horlicks visible in the baskets held by two mothers with their sons. The maximum retail price of the two products is stated and it is highlighted that the product of the appellants is lower in price. The respondent further claimed that there were disparaging remarks against Complan in regard to nutrients and health value comparison to the appellants‟ product. In the said proceedings a statement was made by the counsel for the appellants that while showing the costs of the products and their comparison relevant flavour would be mentioned so that the comparison of price is flavour to flavour. Subject to compliance of this, interim relief was rejected. The respondent went in appeal but the appeal was ultimately withdrawn. _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 6 of 97 9. In December, 2008, the respondent introduced an advertisement in the print media which according to the appellants sought to give an impression to the readers that Horlicks was a cheap and ineffective product which did not give balanced complete planned nourishment to the child. The lower price of Horlicks is sought to be attributed to use of cheaper and inferior quality ingredients and the question posed to a mother of a child is whether the cheaper price or a child‟s complete growth is important while choosing a health drink. 10. The appellants thus contended that the advertisement sought to convey that though Horlicks was cheaper in price it also compromised on a child‟s growth. Such a comparison was sought to be made more apparent by putting a choice to the mother as to whether she knew the difference between what is good or what is cheap. 11. There are other aspects also alleged of disparagement, it is not necessary to go into the details of the same. Suffice to say that this gave rise to the institution of the suit by the appellants. The respondent subsequently even came up with a televised version of the advertisement and the appellant sought to amend the plaint, but thereafter withdrew the same with leave to file a fresh suit. It is thereafter that the second suit was instituted in Delhi. Hearing of these two suits was taken up together. The fate of the Delhi suits _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 7 of 97 12. The hearing on the interlocutory applications of these two suits were taken up by the learned Single Judge. The learned Single Judge also considered the question of maintainability of the suit at Delhi within the parameters of the principle of forum non convenience. The learned Judge in terms of the impugned judgment after considering the scope of the subject matter of the two suits and the provisions of the said Code, came to a finding that the proceedings before the Bombay High Court and the proceedings now initiated before the Delhi High Court were intertwined and interrelated, if not, a counter blast by the respondent. The plaints were directed to be returned and rejected giving liberty to the appellants if they were so advised to file fresh suits before the Bombay High Court. It may be noticed at this stage that the finding of the learned Single Judge is not that the Delhi Court has no territorial jurisdiction to try the suits and the plaint is being returned to be presented before the appropriate court. In fact, it is clearly recorded that it is not even disputed that the Delhi Court would have jurisdiction. 13. The suit has also not been stayed on the ground that the subject matter of the suit involves matters which are directly and substantially an issue in a previously instituted suit. No preliminary issue has been framed. The suit has been simultaneously returned and rejected. The appellants have thus filed the present appeals against the said order. _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 8 of 97 The principle question, as noticed above, of course is as to whether the suits could have been returned and rejected on the principle of forum non convenience. There are, however, other linked issues also about whether at all the subject matter of the Bombay suit itself can be stated to be interlinked and intertwined with the Delhi suits. Are the Delhi suits interlinked with the Bombay suits 14. We cannot lose sight of the fact that litigation between the parties is pending in three courts. The first two litigations were initiated by the appellants in Calcutta and Madras while the third litigation was initiated by the respondent at Bombay. There is an interlinkage between the first and second litigation to the extent that the advertisement was of a similar nature though in a different language and the appellants chose to institute the litigation in respect of the published advertisement in the area concerned. The learned Single Judge in the impugned judgment has sought to make a distinction between the scope of these two litigations and the one instituted at Bombay while discussing these aspects in para 10 of the impugned judgment. In the opinion of the learned Single Judge, the product of the competitor was not displayed but reference was made to the other product. While in the Bombay suit, there was specific reference to the two products. We are unable to accept this factual reasoning because the very principle of disparagement has to satisfy a _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 9 of 97 dual test of the identification of the competitor‟s product and the disparagement of the plaintiff‟s product. The injunction would not have been granted by the Calcutta and Madras High Courts if there was no identification of the product of the appellants. It is only because the product sought to be disparaged was perceived in the advertisement to be indicative enough to be identified as the appellants‟ product, did the courts proceed to grant injunction on specific parameters. The dual test was thus satisfied in those two proceedings. 15. Undoubtedly in the Bombay suit, there was a direct comparison but limited to the aspect of the price of the two products. The appellants agreed to compare the price product to product in respect of the identical flavours. Once this was conceded by the appellants, the court did not prima facie find that there was any disparagement of the product of the respondent. The appeal filed by the respondent also failed inasmuch as the respondent withdrew the appeal and sought to raise the issues before the learned Single Judge. The advertisements in question in the Delhi suits identify the product of the appellants and make a comparison with the same. The comparison is not on pricing but on the quality of the products based on its ingredients clearly giving an impression that the pricing cannot be a real yardstick and that the quality of their product is superior. The question whether such a _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 10 of 97 comparison can be made or not would be an aspect to be adjudicated on weighing the material produced by both the sides to form a prima facie view for grant or refusal of injunction. However, that endevour has not been made by the learned Single Judge since the learned Single Judge has really proceeded only on the issue of forum non convenience to non suit the plaintiffs. The factual dispute thus remains to be decided. 16. The advertisement in question is a different advertisement from the one in challenge before the Bombay High Court. In fact, in Bombay, it is the respondent who have sought to allege disparagement by an advertisement of the appellants. The suits in Calcutta and Madras are by the appellants alleging disparagement by the respondent. The suits in Delhi are in respect of a completely different advertisement of the respondent where the appellants allege disparagement. Thus the factual matrix of the suit at Delhi is neither intertwined nor interlinked in any manner with the litigation in the Bombay High Court. The matter however cannot rest at this since elaborate arguments have been advanced by learned counsel for the parties on the applicability of the principle of forum non convenience to domestic forums and that issue would have to be examined in the appeal. Doctrine of anti suit injunction and the principle of forum non convenience as applicable to foreign forums _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 11 of 97 17. The doctrine of anti suit injunction as applicable to international forums is not disputed by the learned counsel for the parties. However, this doctrine has to be applied with care and caution as it involves the issue of respect for corresponding international forums. 18. The aforesaid legal position is abundantly clear in view of the judgment of the Supreme Court in Modi Entertainment Network and Anr. v. W.S.G. Cricket Pte. Ltd.; AIR 2003 SC 1177. It was observed in the said judgment that the courts in India like the courts in England are courts of both law and equity and thus the principles governing grant of injunction an equitable relief by the court would also govern grant of anti suit injunction, which is a species of injunction. However, the rule of Comity of Courts require this power to be exercised sparingly because such an injunction though directed against a person in effect causes interference in exercise of jurisdiction by another court. The test adopted by the House of Lords in Castanho v. Brown and Root (U.K.) Ltd and Anr; (1981) AC 557 „to avoid injustice‟ was noted. A reference was also made to SNI Aerospatiale v. Lee Kui Jak and Anr; (1987) 3 All ER 510 and it was noticed that in recent cases the test is whether the foreign proceedings are “oppressive or vexatious”. Although, Lord Goff explained, in SNI Aerospatiale v. Lee Kui Jak and Anr‟s (supra) that these words could have a different meaning in different contexts, he was inclined, in _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 12 of 97 Airbus Industrie GIE v. Patel and Others; {(1998) 2 All ER 257}, to agree, albeit obiter, with Judge Sopinka in Amchem Products Incorporated v. British Columbia (Workers‟ Compensation Board); 1993 CanLII 124 (SCC)., who preferred to use, simply, „ends of justice‟. However, Lord Goff did not expressly abandon those words. The High Court of Australia in CSR Ltd v. Cigna Insurance Australia Ltd. and Ors.; 146 A.L.R. 402 used them in the sense that only if there is nothing which can be gained by them over and above what may be gained in local proceedings. 19. The plea of the respondent is that the principle of forum non convenience is nothing but the other side of the same coin of the doctrine of anti suit injunction. It was thus contended that if the court is entitled to pass an anti suit injunction restraining a party from proceeding in another court, which actually tantamounts to the other court not proceeding further, then certainly that court is also entitled to stay its own hands. Learned counsel submitted that in fact almost all the judgments in question have dealt with both the principles of anti suit injunction and forum non convenience parallely and the judgment in Modi Entertainment Network and Anr. v. W.S.G. Cricket Pvt. Ltd‟s case (supra) is no exception to it. Leaned counsel emphasized that the observations of the House of Lords in Spiliada Maritime Corporation v. Cansulex Ltd; (1987) AC 460 were cited with approval in para 18 of Modi _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 13 of 97 Entertainment Network and Anr. v. W.S.G. Cricket Pvt. Ltd‟s case (supra), which are as follows: "18. … … … … … … … The fundamental principle applicable to both the stay of English proceedings on the ground that some other forum was the appropriate forum and also the grant of leave to serve proceedings out of the jurisdiction was that the court would choose that forum in which the case could be tried more suitably for the interests of all the parties and for the ends of justice". 20. The principles governing anti suit injunction were set out in para 23 of the Modi Entertainment Network and Anr. v. W.S.G. Cricket Pvt. Ltd‟s case (supra), which are as follows: “From the above discussion the following principles emerge: (1) In exercising discretion to grant an anti- suit injunction the court must be satisfied of the following aspects:- (a) the defendant, against whom injunction is sought, is amenable to the personal jurisdiction of the court; (b) if the injunction is declined the ends of justice will be defeated and injustice will be perpetuated; and (c) the principle of comity -- respect for the court in which the commencement or continuance of action/proceeding is sought to be restrained -- must be borne in mind; (2) in a case where more forums than one are available, the Court in exercise of its discretion to grant anti-suit injunction will examine as to which is the appropriate forum (Forum conveniens) having regard to _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 14 of 97 the convenience of the parties and may grant anti-suit injunction in regard to proceedings which are oppressive or vexations or in a forum non-conveniens; (3) Where jurisdiction of a court is invoked on the basis of jurisdiction clause in a contract, the recitals therein in regard to exclusive or non-exclusive jurisdiction of the court of choice of the parties are not determinative but are relevant factors and when a question arises as to the nature of jurisdiction agreed to between the parties the court has to decide the same on a true interpretation of the contract on the facts and in the circumstances of each case; (4) a court of natural jurisdiction will not normally grant anti-suit injunction against a defendant before it where parties have greed to submit to the exclusive jurisdiction of a court including a foreign court, a forum of their choice in regard to the commencement or continuance of proceedings in the court of choice, save in an exceptional case for good and sufficient reasons, with a view to prevent injustice in circumstances such as which permit a contracting party to be relieved of the burden of the contract; or since the date of the contract the circumstances or subsequent events have made it impossible for the party seeking injunction to prosecute the case in the court of choice because the essence of the jurisdiction of the court does not exist or because of a vis major or force majeure and the like; (5) where parties have agreed, under a non- exclusive jurisdiction clause, to approach a neutral foreign forum and be governed by the law applicable to it for the resolution of their disputes arising under the contract, ordinarily no anti- suit injunction will be granted in regard to proceedings in such a forum conveniens and favoured forum as it shall be presumed that the parties have thought over their convenience and all other relevant factors before submitting to non- exclusive jurisdiction of the court of their choice which cannot be treated just an alternative forum; _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 15 of 97 (6) a party to the contract containing jurisdiction clause cannot normally be prevented from approaching the court of choice of the parties as it would amount to aiding breach of the contract; yet when one of the parties to the jurisdiction clause approaches the court of choice in which exclusive or non-exclusive jurisdiction is created, the proceedings in that court cannot per se be treated as vexatious or oppressive nor can the court be said to be forum non-conveniens; and (7) the burden of establishing that the forum of the choice is a forum non- conveniens or the proceedings therein are oppressive or vexatious would be on the party so contending to aver and prove the same.” 21. We may notice that the aforesaid judgment is relies on the earlier judgment of the Supreme Court in Oil and Natural Gas Commission v. Western Company of North America; (1987) 1 SCC 496. The said judgment was almost the first case where exercising jurisdiction under Section 151 of the said Code, the power of anti suit injunction was exercised. 22. We would now proceed to discuss from all the other judgments referred to in this context. English View 23. The court of appeal in Castanho v. Brown and Root (UK) Limited and Anr.; 1980 (3) All ER 72 had three judges giving separate opinions. The relevant discussion is as under (in the opinion of Brandon L.J.) : “So far as the jurisdiction of the court generally in matters of this kind is concerned, it has long been established that there may be _____________________________________________________________________________________________ FAO (OS) NOs. 86/2009 and 87/2009 Page 16 of 97 circumstances in which an English court will (i) compel a plaintiff, who desires to sue in England, to sue in another forum elsewhere instead, or (ii) compel a plaintiff, who desires to sue in another forum elsewhere, to sue in England instead. In case (i) the court achieves its purpose by staying any proceedings which the plaintiff has brought here, so leaving him with the only practical alternative of beginning or continuing proceedings in the other forum. In case (ii) the court achieves its purpose by granting an injunction restraining the plaintiff from beginning or continuing proceedings in the other forum, leaving him with the only practical alternative of beginning or continuing proceedings here. It follows that, when on 1st May 1979 the defendants in the action here applied for an injunction restraining the plaintiff from proceeding against his employers in Texas or elsewhere outside England, the court certainly had jurisdiction to intervene in the manner sought. Difficult questions arise, however, as to the effect on that jurisdiction of the discontinuance of the action by the plaintiff on 15th May 1979. Did the discontinuance, by brining the action to an end, also bring to an end the court‟s jurisdiction to intervene? If so, does the court have power to restore that jurisdiction, as it were, by striking out the notice of discontinuance as an abuse of its process? If so, ought the court to exercise that power in the circumstances of the case? These questions do not need to be answered unless the court