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ESPL Sports v. BCCI

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Mohit Abraham

This post was published by mylaw.net on May 9, 2011-http://mylaw.net/Article/ESPL_Sports_v_BCCI/

On March 31, 2011, the Delhi High Court delivered an important judgment in Essel Sports Private Limited (Indian Cricket League) v. Board of Control for Cricket in India and Others (“the ESPL Case”).

 

In this case, the High Court restrained Essel Sports Private Limited (“ESPL”), the promoter of the Indian Cricket League (“the ICL”), from filing a suit in English courts seeking damages from the Board of Control for Cricket in India (“the BCCI”), the England & Wales Cricket Board (“the ECB”), and theInternational Cricket Council (“the ICC”). The High Court therefore granted the BCCI the relief of an anti-suit injunction.

An anti-suit injunction restrains a person from commencing or proceeding with a suit before another court. It is to be noted that the injunction itself is directed to the individual party and not to the concerned court.

Background

 

ESPL had filed a suit seeking declaratory and mandatory injunctive reliefs against the BCCI before theDelhi High Court where it alleged that the BCCI used its influence on various agencies – both domestic and foreign, to boycott the ICL. While this suit was progressing before the Delhi High Court, the BCCI filed a suit seeking an anti-suit injunction against ESPL. The BCCI alleged that it had received a notice from ESPL stating it intended to initiate proceedings against it in the Courts of England and Wales. Similar notices were also sent to the ECB and the ICC, and it was proposed that they would be made co-defendants in these proceedings. The BCCI therefore prayed for a perpetual injunction against ESPL from initiating any action against the BCCI in any other judicial forum in respect of the subject matter of the suit that was already pending before the Delhi High Court.

The judgment of the court

Upon analysing the suits as well as the notice, the court observed that the main allegations in both causes of action were made against the BCCI for orchestrating the alleged boycott of the ICL. The court concluded that the cause of action in the two suits were substantially and materially the same.

The high court was of the view that legal proceedings instituted by an Indian party in a foreign court would be vexatious and oppressive, if the prayers predominantly concern another Indian party and a suit on similar allegations and reliefs were pending in an Indian court between the same parties. The court was also of the opinion that that since the evidence sought to be adduced in the English court was the same as the evidence given before the India courts, the suit in the English court would only lead to multiplicity of proceedings. Further, the court observed that there was a possibility of conflicting verdicts, and, consequently, held that the English courts were a forum non conveniens.

The high court also relied on a decision of the Supreme Court in Modi Entertainment Network v. W.S.G. Cricket Pte. Ltd., (2003) 4 SCC 341, where the Supreme Court had held that a court may grant an anti-suit injunction in regard to proceedings which are oppressive or vexatious or in a forum non-conveniens,and concluded that an anti-suit injunction would lie against ESPL in the present case.

It may be noted that the Division Bench of the High Court, while upholding the decision of the Single Judge granting an anti-suit injunction in favour of BCCI, also covered the ECB and the ICC within the purview of the anti-suit injunction (something which the Single Judge had avoided). The Division Benchwas of the view that if the suit in India were decided in favour of ESPL, the claims in the U.K. against the ICC and the ECB would become redundant, and in case ESPL is able to prove anti-competitive practices on the part of the BCCI and obtain a mandatory injunction against all such actions, all its grievances would be met by a decree in India itself. The court therefore concluded that in order to prevent the mischief that may be caused by a partial stay, the actions initiated by ESPL against ECB and ICC before the courts in England shall also stayed.

A decision that adversely affects judicial comity

 

The High Court has barred ESPL from approaching the courts in England on the ground that proceedings in the courts of England amount to being vexatious and oppressive as the English courts would be forum non conveniens.

A critical aspect, which the court appears to have overlooked, is that the ECB and the ICC are subject to the jurisdiction of the courts in England, and their actions had substantially affected ESPL’s interests. ESPL was therefore entitled to approach the courts in England against such actions and avail the appropriate remedy. Further, the anti-suit injunction in effect amounts to the Delhi High Court having debarred the English courts from exercising jurisdiction over this matter. This has a significant impact on the concept of international comity amongst courts. The claim against the ECB and the ICC in the United Kingdom were based on the U.K. Competition Act amongst other provisions and could have afforded ESPL an additional claim or relief. However, by not even permitting the English courts to consider this question, the Delhi High Court has effectively ruled out ESPL’s right to approach these courts.

The Delhi High Court was greatly influenced by the view that the English courts in the present case would be forum non-conveniens, and used this principle to oust the jurisdiction of the English courts. This interpretation goes fundamentally against the concept of forum non conveniens which was elucidated by the Delhi High Court in Horlicks Limited v. Heinz India (Private) Limited, 164(2009) DLT 539,as follows:

“The doctrine of forum non convenience … 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 lis should be tried, it desists from trying the particular lis..

 

Therefore, a court applies this doctrine to conclude that the court itself would not have jurisdiction over a matter. It is not to be applied by a court to oust the jurisdiction of another court. In fact, as noted by the Delhi High Court in Moser Baer India Limited v. Koninklijke Philips Electornics NV and Others, 151 (2008) DLT 180, the principle of an anti-suit injunction is just the reverse of the principle of the doctrine of forum non conveniens. In the former, a court prevents the parties before it from instituting or continuing with proceedings in another court, whereas in the latter, a court refuses to entertain a matter presented to it in view of the fact that there exists a more appropriate court of competent jurisdiction. The consequences of an Indian court injuncting a foreign court from hearing a matter on the ground that the foreign court is forum non conveniens could be adverse. This is more so if we were to consider the provisions of the Explanation to Section 10 of the Code of Civil Procedure, 1908 (“the CPC”), which clearly states that the pendency of a suit in a foreign court does not preclude the courts in India from trying a suit that is founded on the same cause of action. ESPL had in fact argued that the reverse should also hold true, that is, the pendency of a suit in an Indian court ought not to preclude the courts in England from trying a suit founded on the same cause of action. The Delhi High Court had accepted this rationale in an earlier decision in Magotteaux Industries Private Limited v. AIA Engineering Limited,155 (2008) DLT 73, where it was held that a foreign court should also not be precluded from entertaining any suit based on the same cause of action for which a suit is pending in an Indian court. However, the Delhi High Court in the ESPL Case held that the observations in Magotteaux to this effect were obiter and not binding on it.

The decision in the ESPL Case has created an anomaly by which an Indian court can apply the doctrine of forum non conveniens to hold that a suit may not be proceeded against in a foreign court, whereas, owing to the Explanation to Section 10 of the CPC, a foreign court would not be able to effectively pass a similar order pertaining to a proceeding in an Indian court as the concerned party can still file a suit before the courts in India and the same would be admissible. The interpretation adopted by the court in the ESPL Case is therefore not in keeping with the principles of international judicial comity.

Having said that, it appears that in the ESPL Case the Delhi High Court was forced to apply the doctrine of forum non-conveniens on the aforesaid basis because of the binding decision of the Supreme Court inModi Entertainment where the Supreme Court has clearly said that a court, in exercise of its discretion to grant anti-suit injunction, may grant anti-suit injunction in regard to proceedings which are oppressive or vexatious or in a forum non-conveniens. While the fact remains that the decision of the Supreme Courtin Modi Entertainment could easily be distinguished from the facts in the ESPL Case, the broad nature of the principles laid down therein appear to have left the Delhi High Court with very little choice.

In the best interests of international judicial comity, a review of the principles laid down in the ESPL Case as well as a reduction in the scope of the Modi Entertainment Case would be the proper course. If ESPL prefers a Special Leave Petition to the Supreme Court under Article 136, perhaps the Supreme Courtwould have the opportunity to remedy this situation.

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