NMS586-10 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.586 OF 2010 IN SUIT NO.529 OF 2010 Steelco Gujarat Ltd. .. Plaintiff Versus Steelforce N.V. .. Defendant Mr.Iqbal Chagla, Senior Advocate with Mr.Anil Menon, Vijay Sondhi, A.Bhattacharya and Rigved Sawant i/b. Anil Menon & Associates for plaintiff Mr.J.J.Bhatt, Senior Advocate with Nikhil Sakhardande, Simil Purohit, Suraj Jeneja & Ms.Swapnila Khatri i/b. Wadia Ghandy & Co. for defendant. CORAM : S.C.DHARMADHIKARI, J. DATE : 14th October 2010. P.C.: 1] The plaintiff has filed the suit for a declaration that in the absence of a written contract of indemnification between defendant and the plaintiff, the defendant is not entitled to seek indemnification in any suit or legal proceedings filed in Antwerp, Belgium including proceedings against the plaintiff under Docket Nos.A/09/04008 and A/09/04378. NMS586-10 2 2] By prayer clause (b) of the plaint, a permanent injunction is sought against the defendants, their servants or agents from continuing with the intervention and indemnification proceedings against the plaintiff in Sixth Chamber of the Court of Commerce of the Judicial District with its seat at Antwerp. Permanent injunction is also sought restraining the defendants from instituting any fresh proceedings against the plaintiff in relation to G.I. Coils sold to them in Belgium outside India as evidenced by Exh.T to the plaint. 3] In terms of the prayers for permanent injunction the present notice of motion is moved for claiming an anti suit injunction. 4] The plaintiff is a company incorporated under the provisions of the Companies Act, 1956 which carries on business of manufacturing of products in steel including Hot Dip Galvanised Steel Coils (for short GI Coils). It is stated that plaintiff is a reputed company with ISO 9001/00 and ISO 14/001 certification. The plaintiff has been awarded certificate of merit of Government of India, Ministry of NMS586-10 3 Commerce for outstanding export performance. Plaintiff’s factory is situated at Palej, Dist.Bharuch, Gujarat. 5] Defendant is a Belgium company having its principal office at Antwerp and it is carrying on business in trading of steel GI coils. 6] In para 2 of the plaint, it is stated that defendant carries on business in India having its representative office at the address mentioned in the cause title. 7] Defendant claims that it imports and export GI coils to more than 85 countries. 8] On 14th May 2008, the defendant approached plaintiff and enquired about price of GI coils. The coils were to be shipped from India to Mombassa, Kenya. In response to the query, the plaintiff submitted its offer via e.mail dated 4th July 2008. The details of the offer made are set out in para 4.2 of the plaint and it is stated that the NMS586-10 4 plaintiff offered inspection of the goods to the defendants at their cost prior to the shipment. 9] It is stated that by e.mail dated 12th June 2008 Ms.Poonam Patil of defendant’s Mumbai office reverted back with revised specifications and a counter offer and by e.mail dated 13th June 2008, plaintiffs accepted the offer and the contract for sale and supply of steel came into effect. 10] It is stated that on 13th June 2009, Steelforce Africa N.V. an Antwerp (Belgium based company since merged with defendant as on 9th October 2008 placed a Purchase order for supply of 500 tonnes coil on the plaintiffs for consideration of U.S.$746,500. It is stated that the defendant did not avail of plaintiff’s offer of third party inspection prior to shipment. The goods were to be shipped to Mombassa. The other payment terms mentioned in the purchase order categorically provided for payment that shipment of goods was to be effected by encashment of Irrevocable confirmed letter of credit. NMS586-10 5 11] Annexure D to the plaint is a copy of the purchase order and it is stated that coils were shipped on 9th July 2008 and reached Mombassa on 28th July 2008. It is stated that defendants did not complain of any defects but accepted the goods without any qualifications, protest or demur. It is stated that consideration was also paid to the plaintiff. The details in this behalf are set out in para 4 to 6 of the plaint. 12] It is alleged that after about three months from the date of supply and the performance of the contract, in October 2008, one Mr.Jayanto Roy, an official of the defendant working in Mumbai office claimed that the G.I. Coils supplied were defective and requested for investigation in the matter. It is alleged that the plaintiff agreed to inspect the coils and deputed their representative to visit Uganda and look into the matter. It is alleged that 35 coils were already consumed by the purchaser Megha Industries Ltd., (MIL for short) out of total 119 G.I. Coils shipped. Samples were drawn and NMS586-10 6 they were sent for testing but it is alleged that the samples were not drawn in the presence of the official of the plaintiff. These samples were sent for testing to France. Without availability of the report of the test, an e.mail came to be addressed which was received by the plaintiff alleging that the plaintiff was liable for costs and consequences due to non-conformity of the goods supplied with the specifications under the purchase order. There was correspondence and ultimately, the plaintiff was provided with test results. 13] On 11th May 2009, plaintiff received via e.mail a copy of summons dated 27th April 2009 along with forwarding letter dated 8th May 2009 issued by the bailiff of the Court of Commerce of the Judicial District At Antwerp directing them to appear on 20th May 2009 before the said Court. It is stated that the summons was issued by the Court in Belgium pursuant to the petition for truncation of the period of notice of summons filed before the Belgium court. In the petition it is alleged by the defendant that intervention of the Court is necessary because in the suit instituted by MIL, an indemnification NMS586-10 7 against decree that would be passed against defendants is required so as to meet the decreetal claim. The petition together with summons and all other details were forwarded by the Bailiff. 14] On perusal of the summons, the plaintiffs discovered that the said MIL alleged that the consignment supplied by the defendant was defective and called upon the defendants to take back the same and reimburse the sale price. Owing to the failure on the part of the defendants to refund the sale price, MIL initiated legal action against the defendants in the said Belgium court and that is how the claim was made for reimbursement. In para 4.14 of the plaint, it is alleged that pursuant to the issuance of summons in MIL proceedings, the defendants separately initiated civil action against the plaintiffs before the Belgium court. In these proceedings, the defendants, while relying upon the claim made by MIL has inter alia sought an order that the plaintiff should be called upon to indemnify the defendant against the liability arising out of any judgement that may be passed against the defendant on account of alleged defective coils supplied NMS586-10 8 by the plaintiff to the defendant. Accordingly, the defendant has prayed that plaintiff be directed to pay an amount of U.S.$ 742,662.95 as well as damages provisionally estimated at Euro 1.00. 15] It is stated that MIL proceedings and defendant’s proceedings be heard by the same court. The defendant made a prayer to summon the plaintiff which came to be allowed and that is how the summons was issued. 16] Initially, the plaintiff did not engage any lawyer nor appeared before the Belgium court in pursuance of the summons but initiated formal talks to amicably resolve the matter. It is alleged that in the midst of the same, plaintiff once again received a summons to appear before the Belgium court and considering that there was no positive outcome of the negotiations, the plaintiff sent a reply dated 25th September 2009 by courier to the Belgium court. It is alleged that in order to avoid the risk of being ordered ex-parte by the Belgian court, the plaintiff on 29th September 2009 also mailed a copy of the reply NMS586-10 9 with a request to produce it before Belgian court. The plaintiff denied jurisdiction of the Belgian court and set out the facts to establish the same and the court was requested to dismiss the proceedings initiated by the defendants against the plaintiff seeking plaintiff’s forced intervention and indemnification. It was contended that the court has no jurisdiction to decide the dispute. It is stated that there was no reply given to these contentions and allegations by the defendant and it is alleged that defendants advised the plaintiff to contact its lawyer at Belgium since it was stated that the reply was in English language and it would not be accepted in Belgium court. Accordingly, the plaintiff engaged a Belgian law firm with limited mandate and, thereafter, the proceedings commenced before the Belgium court. After considering the rival submissions, the Court delivered its judgement dated 4th December 2009 wherein it is alleged that it has arbitrarily rejected the objections of the plaintiff to its inherent lack of jurisdiction to hear the third party intervention and warranty claim. The Belgium court directed that all proceedings viz., MIL and third party intervention initiated by the defendant against the plaintiff will NMS586-10 10 be merged and an English translation of the judgement of the Belgium court came to be delivered to the plaintiff on 19th December 2009. 17] It is in such circumstances that it is alleged that the terms of the sale dated 13th June 2009 do not contain the indemnity clause. There is no other contract between the plaintiff and defendant under which the plaintiff has undertaken an obligation to indemnify the defendant for any alleged loss suffered by the defendant pursuant to further sale of coils. In these circumstances, defendants action in trying to get the plaintiffs, impleaded in the proceedings in the Belgian court, which proceedings are initiated by MIL and/or seeking indemnification to meet any decree made therein, is without any basis, impermissible in law and untenable. In para 5 it is alleged that the proceedings initiated by the defendant at Antwerp are without jurisdiction, vexatious, oppressive and in a forum non-convenience. It is alleged that defendant carries on business within the jurisdiction of this Court and the plaintiff is also amenable to the jurisdiction of this Court. The Belgian court has no jurisdiction to entertain and try the alleged NMS586-10 11 dispute, particularly because, the contract between the plaintiff and defendant was concluded in India and the money was payable in India and not at Antwerp. The goods under the contract were also not to be delivered from India to Antwerp but were to be shipped from India to Mombassa. In such circumstances, it is only the court of natural jurisdiction, which is this court or the Court at Mombassa which could have any jurisdiction and not the Court at Belgium, as no part of cause of action has arisen within the jurisdiction of the Court at Antwerp in Belgium. Therefore, the plaintiff has sought an anti suit injunction. In para 17 of the plaint this is what is alleged:- “17. Keeping in mind the respect for the Belgian courts it cannot be denied that the Belgian courts are not a forum of choice by the plaintiff and the defendant and the facts of the case certainly justifies the grant of an anti suit injunction as this is an exceptional case where injustice is to be prevented. The contract between the parties does not contain a jurisdiction clause and therefore, it is the court of natural justice that the defendant should be approached. The proceedings in the Belgian court are oppressive and vexatious filed with the intention to bring pressure on the plaintiff to submit to the defendant’s unjust demands and as such the defendant can be prevented from continuing the action in the Belgian court. Which action is per se NMS586-10 12 vexatious and oppressive apart from being brought in a forum convenience. There is no agreement between the parties to go to any agreed forum in the event of disputes and the court of natural jurisdiction would be this Court. The Belgian courts are not courts of natural jurisdiction and, therefore, an anti suit injunction will lie against the defendant. This Court has the jurisdiction to grant an anti suit injunction against the defendant since there exists no jurisdictional agreement between the parties to submit to the exclusive jurisdiction of any court. Keeping in view the facts and circumstances of the case, it is obvious that since both the parties are carrying on business in Mumbai, Court in Mumbai would have jurisdiction in the matter naturally. On identifying the appropriate forum, having regards to the convenience of parties, it is evident that the Belgian court is certainly not forum convenience and this Court is empowered to grant an anti suit injunction. If the injunction sought for by the plaintiff is declined injustice will be perpetuated and the ends of justice would be defeated with due respect to the Belgian courts.” 18] Based on these allegations, the final reliefs as indicated above have been claimed and in furtherance thereof, instant notice of motion is filed. 19] On being served with the motion, the defendant has filed a reply in which it has been clearly stated that the vakalatnama and reply are filed under protest and without prejudice to the stand of the defendant NMS586-10 13 that this Court has no jurisdiction to entertain and try any proceedings between the plaintiff and defendant in relation to the subject contract. However, only to meet the case on the anti suit injunction that the affidavit has been filed. 20] It is stated that the Belgian court has already delivered a judgement and adjudicated and decided that it has international jurisdiction over the dispute. It is stated that no cause of action has arisen in Mumbai nor the defendant carries on business in Mumbai or India. After setting out the facts leading to the contract, it is stated by the defendant that in or about May 2008, defendant through its consultant, situated in India enquired with the plaintiff about price of steel coils to be purchased by defendant for further re-sale to its client MIL Uganda. It is alleged that there is no branch office of the defendant or the representative office in India. The defendant has since considerable time engaged consultancy services of one Steel Force South Asia for marketing operations and technical support of the defendant in the development of policies and procedures and to NMS586-10 14 facilitate appropriate deals with importers for the requisite goods, as per the need of the defendant and for importing the same for the defendant for which Steelforce South Asia are paid consultancy fees by the defendant. Though Steelforce South Asia acts as the Consultant Advisor to the defendant, they are not authorised to take any decision, business or commercial, for and on behalf of the defendant. They are not authorised to execute and conclude any contract on behalf of the defendant. The entire correspondence is addressed in their capacity as consultant. 21] The defendant, then, has set out their version of the dealings and contended that in order to indemnify themselves for any loss/ liabilities that may arise in the case that has been filed by MIL, the defendant initiated third party proceedings being case No.A/09/4378 against the plaintiffs before the Belgian Court and claimed U.S. $742,665.95 plus Euro 1 (provisional amount) as well as compensation, damages as particularly set out therein. The choice of Belgian court was not made by the defendant but was made by the NMS586-10 15 MIL and, therefore, the defendant had no option but to go before the same Court. The defendant is bound and compelled to initiate third party proceedings against the plaintiff in the same court. It is also stated that plaintiff have not alleged that the Court has no jurisdiction to try and entertain the MIL case against the defendant. Further, there is a judgement of the Belgium court that it has international jurisdiction. The plaintiff has not filed any appeal against the said judgement but it is pertinent to note that they appeared and contested the matter before the trial court in Belgium. It is contended that having regard to the principle of comity of courts, this court should not pass any order which would contravene the judgement of Belgian court but leave the plaintiff to file an appeal, if it is aggrieved by the ruling on the question of jurisdiction. For all these reasons, the suit filed by the plaintiff is an abuse of the process of law and it is nothing but an attempt to interfere through this Court with the adjudication done by the Belgian court. 22] Thereafter, the plaint averments have been dealt with and denied NMS586-10 16 and particularly, on the point of jurisdiction. 23] As far as para 17 of the plaint, which is reproduced above, is concerned, it is alleged by the defendant that there is no substance in any of the contentions raised in the said para and proceedings in the Belgian court cannot be said to be oppressive and vexatious. It is specifically denied that defendant carries on business in Mumbai and, therefore, this Court would have jurisdiction in the matter. 24] There is a rejoinder and sur-rejoinder filed but it is not necessary to refer to the contents thereof in details because they are more or less repetitions of the same assertions. 25] It is on this material, I have heard Mr.Chagla, learned Senior Counsel for plaintiff. He submits that the documents, including the contract would show that no part of cause of action has arisen outside India but it is only in India. The goods have been shipped from Mumbai to Mombassa in Kenya. Nothing has been done in relation NMS586-10 17 the said goods within the jurisdiction of the Court at Belgium. He submits that the materials, copies of which are annexed to the plaint and particularly at Annexures H-I and J-43 to 48 would indicate that the defendant is representative of Steelforce South Asia, which is having its office at Mumbai. Once the defendant has dealt with the plaintiff through its representative who is based in Mumbai as evidenced, prima facie, by the materials, then, this Court has jurisdiction over the defendant. He also invites my attention to the reply of the plaintiff, a copy of which is at page 81 of the paperbook. He submits that this is without prejudice reply to the summons of the Chamber of Court of House of Commerce in Antwerp and in this reply as well, it has been urged by the plaintiff that the Court at Antwerp has no jurisdiction over the alleged dispute. The parties have not agreed upon or chosen a law of contract or chosen mode to resolve the dispute. The plaintiff has no privity of contract between M/s.Steelforce N.V. And MIL. In such circumstances, the Court which has maximum connection with the dispute would be appropriate forum to resolve the same. Accordingly, only the Courts NMS586-10 18 in India would have jurisdiction over the present dispute. Mr.Chagla submits that there is no question of submission by the plaintiff to the jurisdiction of the Court at Antwerp. He submits that this reply was only in response to the summons asking the plaintiff to appear before the court in Belgium. He submits that once the entire cause of action has arisen in India and only a small part can be said to have been arisen outside India and that too in Kenya, then coupled with the fact that there is no indemnity by the plaintiff, that the Court in Belgium would have no jurisdiction over the dispute. He submits that there is no privity of contract between, defendant – purchaser in Mombassa and MIL and the plaintiff. The claim by MIL against the defendant in Belgium by itself would not mean that the plaintiff can be dragged to that Court because there is no indemnity by the plaintiff. In such circumstances, the claim by defendant against the plaintiff arising out of the relief sought against MIL would be for damages on the allegation that the supplies were defective and that the defendant has suffered loss. However, these damages will have to be proved by the defendant. There is, therefore, no question of dragging plaintiff by NMS586-10 19 filing third party claim and in such circumstances, the plaintiff has rightly contended that the proceedings against them are oppressive, vexatious and instituted in forum non-convenience. It is clear that the plaintiff had to engage a lawyer and translate the documents but by these acts and filing the objections in the Belgium court, it cannot be concluded that the plaintiff has submitted to the jurisdiction of the Belgium court. The order of the Belgium court records this fact. 26] Mr.Chagla submits that as far as principles which are applicable for an anti suit injunction, the plaintiff has fully satisfied this court that it has jurisdiction over the defendant. The defendant has a place of business in India. The plaint and the affidavit in rejoinder make this fact apparent. He invites my attention to Annexure A to the plaintiff’s rejoinder in this behalf and submits that the address on the e.mail is clear, inasmuch as the defendant admits its presence in India and particularly in Mumbai. Mr.Chagla makes a grievance that the words “India” appear to have been deleted later on from the website and in that behalf, he invites my attention to the rejoinder affidavit NMS586-10 20 and particularly pages 59 and 60 thereof. The defendant claims that it is a sole proprietary concern is belied by the document at page 62 of the rejoinder. Mr.Chagla submits that the conduct of the defendant is also relevant inasmuch as there is a deliberate attempt to show that it has no presence in India. In such circumstances, this Court must proceed on the basis that it has jurisdiction over the defendant and particularly on account of uncontroverted statement in the affidavit in rejoinder. Mr.Chagla also invited my attention to Exh.H to the plaint and contended that when the contract was entered into and suit filed and even before, the plaintiff has reiterated that defendant has presence in India and within territorial jurisdiction of this Court. Once the first criteria is satisfied and that this Court has powers under Order XXXIX Rule (1) of CPC to grant such an injunction, then, all that is required to be prima facie established and proved are the tests laid down in the decision of the Supreme Court reported in (2003) 4 S.C.C. 341 (Modi Entertainment Network and Anr. Vs. W.S.G. Cricket Pte. Ltd.). Mr. Chagla has invited my attention to para 24 of this judgement and has contended that the principles which are laid NMS586-10 21 down and particularly in para 24(1) (a) and (b) and para 24(2) are attracted to this case. Mr.Chagla submits that there is no question of applying further principles laid down in this para because they deal with the case of forum of choice provided in the contract. In this case, there is admittedly no forum of choice. The courts in India will only have jurisdiction. The equities are also in favour of plaintiff because the entire evidence is in India and Kenya. Further the case is peculiar inasmuch as Belgium court has assumed jurisdiction although, it is this court which will have jurisdiction. In such circumstances, when all tests as pointed out above are satisfied and the contract in question has no connection with Belgium court, cause of action has not accrued in Belgium, then, this Court must grant interim injunction as prayed. 27] Mr.Chagla has