#4979 - Airbus Industrie V. Patel - Conflict of Laws BCL

Airbus Industrie v. Patel

Facts

The proceedings in question have arisen from a very serious air crash which occurred at Bangalore airport on 14 February 1990. An Airbus A-320 aircraft crashed when coming in to land. Many of the passengers died and the remainder were injured. Among the passengers on board were two families of Indian origin who were British citizens with homes in London. Four of them were killed, and the remaining four were injured. They are, or are represented by, the six defendants in the appeal now before your Lordships' House. Following the publication in December 1990 of the report of a court of inquiry in India, in which the cause of the crash was identified as error on the part of the pilots (both of whom were killed in the crash), claims were made by solicitors acting for the defendants, their primary claim being against Indian Airlines Corporation ("I.A.C."), the employers of the pilots. When it appeared that these claims would not be settled within the two-year time-limit for such proceedings in India, proceedings were commenced in India on 12 February 1992 against I.A.C., and also against Hindustan Aeronautics Ltd. ("H.A.L."), the airport authority at Bangalore airport… Little progress was been made in the proceedings against H.A.L.

Meanwhile in February 1992 the defendants also commenced proceedings in Texas, where they sued a number of parties who might have had some connection with the aircraft or its operation. These included the plaintiff company, Airbus Industrie G.I.E. ("Airbus"), which designed and assembled the aircraft at Toulouse in France. Similar proceedings were brought in Texas in respect of three American passengers who died in the same crash. The two sets of proceedings were later consolidated. In response to these proceedings in Texas, on 21 November 1992 Airbus brought proceedings in the Bangalore City Civil Court against, inter alia, the defendants and the American claimants, and on 22 April 1995 the presiding judge made a number of orders designed to deter the defendants in those proceedings (i.e. the defendants and the American claimants) from pursuing their claims in Texas. These included a declaration that the defendants were not entitled to proceed against Airbus in any court in the world other than in India/Bangalore, and an injunction which purported to restrain the defendants from claiming damages from Airbus in any court in the world except the courts in India/Bangalore. However, since the defendants were not within the Indian jurisdiction, the injunction had little deterrent effect.

Airbus then issued an originating summons in this country with the purpose of (1) enforcing the Bangalore judgment against the defendants, and (2) obtaining an injunction from the English High Court restraining the defendants, who are resident in England, from continuing with their action against Airbus in Texas on the grounds that pursuit of that action by the defendants would be contrary to justice and/or vexatious or oppressive.

Holding

Lord Goff

Argument: At the forefront of the defendants' case before the Appellate Committee was the submission that, where England is not the natural forum for the trial of the substantive dispute, the English court should not, as a matter of policy or law, restrain proceedings in one foreign jurisdiction where the purpose of the injunction is to favour proceedings in another jurisdiction. In other words, as Mr. Kentridge summarised the point for the defendants, it is no part of the function of the English courts to act as an international policeman in matters of this kind.

As I have already indicated, the first and crucial question which arises in the present case is whether the English court will grant an anti-suit injunction in circumstances where there is no relevant connection between the English jurisdiction and the proceedings in question other than that the defendants, who are resident in this country, are subject to the jurisdiction and so can effectively be restrained by an injunction granted by an English court.

Distinction between single-forum and alternate forum cases

I wish first to observe that this question may arise not only in cases such as the present, usually described as "alternative forum cases" (the two most relevant jurisdictions here being India and Texas), but also in what have been called "single forum cases," in which (for example) the English court is asked to grant an anti-suit injunction to restrain a party from proceeding in a foreign court which alone has jurisdiction over the relevant dispute. The distinction is of some importance in the present context, and I shall have to refer to it later. But for the moment it is enough for me to say that, in both categories of case, the basis of the jurisdiction has been traditionally stated in broad terms which are characteristic of the remedy of injunction as used in our domestic law. In alternative forum cases, it has been stated that the jurisdiction will be exercised as the ends of justice require, and in particular where the pursuit of the relevant proceedings is vexatious or oppressive; in single forum cases, it is said that an injunction may be granted to restrain the pursuit of proceedings overseas which is unconscionable. The focus is, therefore, on the character of the defendant's conduct, as befits an equitable remedy such as an injunction. In particular, although it has frequently been stated that comity requires that the jurisdiction to grant an anti-suit injunction should be exercised with caution, no requirement has been imposed specifically to prevent the grant of an anti-suit injunction in circumstances which amount to a breach of comity. The present case raises for the first time, and in a stark form, the question whether such a requirement should be recognised and, if so, what form it should take.

Natural Forum – Implicit Recognition in Alternate Forum Cases

In alternative forum cases, in which the choice is between the English forum and some other forum overseas, an anti-suit injunction will normally only be applied for in an English court where England is the natural forum for the resolution of the dispute; and, if so, there will be no infringement of comity. England was assumed to be the natural forum in a passage in the judgment of the Privy Council inSociété Nationale Industrielle Aérospatiale v. Lee Kui Jak[1987] A.C. 871, which was delivered by myself…. In a later passage in the same judgment, at p. 896, I did however state that, as a general rule, the court granting the injuction must conclude that it is the natural forum for the trial of the action.

Two approaches in US Cases

One approach, embodying what Dr. Collins calls "the stricter standard," is applied by the Second Circuit, the Sixth Circuit and the District of Columbia Circuit. This is derived from Judge Wilkey's judgment in theLaker Airways Ltd. case. It requires that the court should have regard to comity, and should only grant an anti-suit injunction to protect its own jurisdiction or to prevent evasion of its public policies: see, for example,China Trade and Development Corporation v. M.V. Choong Yong(1987) 837 F.2d 33 andGau Shan Co. Ltd. v. Bankers Trust Co.(1992) 956 F.2d 1349. The other approach, embodying what has been called a laxer standard, is applied in the Fifth, Seventh and Ninth Circuits. On this approach, an anti-suit injunction will be granted if the foreign proceedings are vexatious, oppressive or will otherwise cause inequitable hardship.

What is the rule applicable?

At all events it is striking that, in Midland Bank Plc. v. Laker Airways Ltd., the injunction was granted in circumstances where the relevant transaction was over-whelmingly English in character. It can therefore be said that, on this basis, the decision was consistent with comity, though the point was not articulated in the judgments because it did not arise for consideration; and, by parity of reasoning, it can be said that the grant of an injunction at the suit of British Airways and British Caledonian to restrain Laker from proceeding against them in the United States could not be justified in this way. These single forum cases demonstrate that any limiting principle requiring respect for comity cannot simply be expressed by reference to the question whether the English court may be the natural forum for the dispute. Such a principle would have to be stated on a wider basis.

Not deciding cases where jurisdictional agreements are in play: I wish to stress however that, in attempting to formulate the principle, I shall not...