India: Delhi High Court Adjudicates On Forum Non-Convenience: GSK´s Plaint Returned

Last Updated: 16 April 2009

The doctrine of "Forum non-convenience" is to render litigants an appropriate jurisdiction to file a suit, without causing undue hardship to any party. The dicta being well established in law was revisited in the case of Glaxo Smithkline Consumer Healthcare Ltd. v. Heinz India (P) Ltd. 2009 (39) PTC 498 (Del)

Two suits were filed against M/s Heinz India (P) Ltd by Glaxo Smithkline Consumer Health Care Limited (GSK) as a sole plaintiff in the first and joining as a co-plaintiff along with Horlicks Limited, United Kingdom in the Other. Both suits dealt with allegedly disparaging advertisements by Heinz, manufacturers of drink/milk mix "Complan". The first suit filed by GSK alone dealt with print advertisements and while the second dealt with moving/video advertisements.

Heinz had entered appearance on 12th December, 2008 when the first suit was listed for the first time and were on caveat in the second. Heinz submitted that the High Court of Delhi should not entertain the present suits on the principle of 'forum non-convenience' and that the parties had been extensively heard on the aspect as also the grant of ad interim injunction. The proceedings and outcome of the suits before the Calcutta, Mumbai and Madras High Courts were also alluded.

The suits were then filed at the Delhi High Court on the question of disparaging advertisements and after Calcutta, Madras and Bombay. It was alleged that disparaging remarks by using the words "cheap/cheaper" were made in reference to the product of GSK in the print advertisement and therefore advertising/ representing that the product of GSK is inferior in quality or sub-standard. Allegation of false claims with regard to the ingredients, nutritional value or number of nutrients in the two products in comparison was also made.

With reference to the moving advertisement launched by Heinz in which the two products were displayed, with two mothers and their children in a shop discussing the nutritional value of the ingredients in the two products. Horlicks was described as "Sasta", while Complan was stated to be a superior product with better quality and more.

The advertisements in the two suits before the Calcutta and Madras High Courts were opined by the Delhi High Court to be distinct and separate from the advertisements, which are a subject matter of the present suit and the one filed at Bombay High Court. The advertisements which were subject matter of the suit pending before the Calcutta and Madras High Court were said to bear no direct relation with the advertisements in the present suits since they were on the question of disparaging advertisements between parties to the present suit.

On the question of the High Court of Delhi being "forum non-convenience", the Court observing that
Sections 15-21A of the Code of Civil Procedure, 1908 dealt with territorial jurisdiction, stated that they were only with Section 20 of the Code in addressing the question of whether the Court should reject the
plaints on the ground of "forum non-convenience".

The plaintiffs in the suits contended that the principle of "forum non-convenience" was not incorporated and recognized under the Code. They averred that if a part of the cause of action had arisen within the jurisdiction of this Court, the plaint could not be rejected and hence the plaintiff(s) cannot be directed to approach another Court. Heinz contrary to this argued that the principle of "forum non-convenience" was not alien to Section 20 of the Code and is protected by Section 151 of the Code. They alleged that the present cases are one of forum shopping and directly a result of the advertisement of GSK and Horlicks which is a subject matter of challenge before the Bombay High Court. It was also noted that Section 151 of the Code recognizes the power of the Court to do justice in the facts and circumstances of the case but the said power could not be exercised to pass an order, which is contrary to or is prohibited by a provision in the Code. It was found that when there is an express or implied prohibition in the Code itself, power under Section 151 could not be exercised to negate or contrary to the provision and in the presence of a prohibition, section 151 of the Code cannot be applied.

The Court propounded that it was clear that if no specific provision prohibiting the grant of relief sought in an application filed under Section 151 of the Code, the Courts have all the necessary powers under Section 151 CPC to pass a suitable order to prevent the abuse of the process of court. Therefore, the court stated that while exercising the power under Section 151 CPC, it must be considered whether exercise of such power is expressly prohibited by any other provisions of the Code and if there is no such prohibition then the court must consider whether such power should be exercised or not on the basis of facts mentioned in the application.

Examining the scheme of Section 20, the Court opined that Section 20 is exhaustive and, therefore,
prohibits applicability of "forum non-convenience" which has not been directly answered in any decision. However, mulling over decisions that deal with the issue, the Court noted that Section 20 of the Code gives dominus litis to the plaintiff to file a suit in the courts located at a place where the defendant resides or works for gain or where cause of action, partly or wholly arises. However, the Court noted that it is also equally well settled that in spite of Section 20 of the Code, parties by a contract can confer sole or exclusive jurisdiction to courts at one location which otherwise has jurisdiction and exclude jurisdiction of other courts. In other words, the Court stated that Section 20 of the Code does not bar or prohibit parties from entering into a contract or mutual understanding that courts only at a particular location will have exclusive jurisdiction to decide the disputes and oust jurisdiction of courts located at other locations. The only condition is that the exclusive or the sole Court should otherwise have territorial jurisdiction to decide the disputes in terms of Section 20 of the Code. The Court stated that the principle of "forum non-convenience" does not confer jurisdiction on a court contrary to Section 20 of the Code but applies when a court otherwise has jurisdiction but for valid, sound and good reasons does not wish to entertain a suit.

Section 10 dealing with Stay of a Suit was also looked into. The cause of action in the suits at the Bombay and Delhi High Courts were noted to have been different advertisements but the legal issue and inter connection between the alleged infringing advertisements both by the plaintiff(s ) herein and by the defendant herein were said to be undeniable and even admitted to in the plaints. Restating the objective of Section 10 to be to obviate contradictory judgments, avoid multiplicity of proceedings, delay and prevent protraction of litigation, the same was not thought to be contradictory to the principle of "forum non-convenience". The Court also noted that a discretionary character was existent to the said principle and stated that an alternative forum could be invoked only when the forum is more appropriate than the forum of which jurisdiction is invoked. The principle has to be rarely invoked and when court is fully satisfied that the discretion should be exercised. It was also opined that no fixed or strait jacket principal could be laid down but the general objective is to prevent a party from deliberately creating a situation which will cause confusion or conflicting judgments.

On contemplation of the decisions of the various other courts as well as the rationale behind the principle of "forum non-convenience", the Delhi High Court stated that the present case, fell within one of those rare cases where a party deliberately and intentionally invoked jurisdiction of a court, which has jurisdiction to entertain a suit under Section 20 of the Code, but the interest of justice and equity requires that the plaintiff(s) should be asked to approach the court where the parties are already litigating. The Court noted that the two conditions to be satisfied for the principle of "forum non-convenience" to be applicable were met with in the present case. The Court noted that the advertisement being the subject of litigation of the Bombay High Court would necessarily call for examination and comments on the advertisement of the Bombay High Court. The Court also stated that the possibility of confusion or conflicting decisions, causing prejudice to the parties could not be ruled out, in view of the interim application for injunction still being pending before the Bombay High Court.

The Court reiterated that the principle of "forum non-convenience" be applied rarely when there are overwhelming facts and interest of justice requires that a Court that has jurisdiction should not adjudicate the suit/legal proceedings. Stating that the principle be applied strictly and with great caution and care, any failure to do so, was said to result in abuse of process of Court causing grave injustice. In this view, the plaints were return and rejected, and were advised that they were at liberty to file fresh suits at Bombay High Court. However, the Delhi High Court attached a clarification in its judgment to the effect that the opinion expressed on merits was restricted only for the purpose of deciding and passing the present order and that the same was not binding and would not influence any other or future litigation between the parties.

© Lex Orbis 2009

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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