DELHI HIGH COURT REFUSES TO GRANT ANTI-SUIT INJUNCTION AGAINST FOREIGN COURT PROCEEDINGS

The Hon’ble Justice C. Hari Shankar of the #DelhiHighCourt has in a recent case of Raaj Unocal Lubricants Limited Vs Apple Energy Pvt Ltd & Anr passed a Judgment dated 25-05-2021 and decided upon the issue of grant of #antisuit #injunction against #foreigncourt proceedings in #trademark #infringement matter.

 

In this case, M/s Raaj Unocal Lubricants Ltd, the Plaintiff claims to have been granted a license by US based Union Oil Company of California (UNOCAL), for exclusive use of the technical know-how of UNOCAL as well as its trademark for blending, packaging and marketing of UNOCAL products in India, vide License Agreement dated 25-09-1990 (Agreement) and a Memorandum of Understanding (MOU) dated 03-06-1991. Hence, the Plaintiff applied for registration of the said trademark, namely, “UNOCAL”, “76” and “UNOCAL 76” before the Registrar of Trademarks, India (Trademarks).

 

However, the Defendant No. 2 objected to the Plaintiff’s application as it had also filed an application for registration of “76” trademark in India on the basis of assignment of the original application filed by UNOCAL before the Registrar for registration of “76” trademark in India.

 

Meanwhile, the Defendant No. 2 initiated proceedings against the Plaintiff before the United States District Court, Texas on the ground that the Plaintiff is using the same Trademarks and has targeted customers in the United States, where, the Defendant No. 2 claimed to have been using the aforesaid Trademarks since 1932. The Defendant No. 2 claimed that the Petitioner is engaged in such activities to deceive customers including potential customers in the US, etc into associating the products of the Plaintiff with those of the Defendant, thereby diluting the Defendant’s marks.

 

Aggrieved, the Plaintiff sought for interim relief from the Delhi High Court and the Delhi High Court passed an Order dated 08-03-2021 and granted ad-interim relief to the Plaintiff by restraining the Defendant from selling, manufacturing, advertising, promoting or otherwise using the marks or any other mark deceptively similar to Plaintiff’s trademarks “UNOCAL” and further restrained the Defendant from continuing with the civil proceedings pending before the United States District Court, Texas (Ad-Interim Anti-Suit Injunction Order). The Court further noted that the Defendant No. 2 concealed the fact, from the US Court, about the proceedings pending before the Registrar of Trademarks and that the proceedings initiated in the US Court were oppressive and vexatious in nature and that any order passed by the US Court against the Plaintiff was likely to result in irreparable injury to it. Hence, the Court granted Ad-Interim Anti-Suit Injunction Order to the Plaintiff.

 

Thereafter, the Defendants filed an Interim Application seeking vacation of the aforesaid Ad-Interim Anti-Suit Injunction Order dated 08-03-2021.

 

The Delhi High Court made the following observations about whether continuance of US Court proceedings would be oppressive or vexatious to the proceedings pending before the High Court and would justify the grant of anti-suit injunction:

 

1) That an Indian citizen can seek protection against the effect of pending proceedings or judgments passed in foreign courts under Section 13 of the Code of Civil Procedure 1908 (CPC) and under anti-suit injunctions. Section 13 CPC applies where judgment has already been passed by foreign court, whereas, anti-suit injunctions are granted where the proceedings are pending before a foreign court.

 

2) Anti-suit injunctions are granted by Indian courts to bring to a halt the prosecution of the proceedings pending in a foreign court. The Indian court only restrains the party from prosecuting, or continuing to prosecute, the proceedings before a foreign Court.

 

3) That in this case, the Plaintiff has sought anti-suit injunction against the proceedings pending before the US Court. On the other hand, the Defendant sought vacation of the Ad-Interim Anti-Suit Injunction Order dated 08-03-2021.

 

4) That the complaint filed before the US Court sought for an injunction against the Plaintiff with respect to its use of “76” mark – over which the Defendants claim superior trademark rights in the US.

 

5) That the intellectual property rights being territorial in nature, the Defendant can assert its right to use “76” mark in US and seek protection against Plaintiff’s use of “76” mark in US in the courts of US only and not in any other jurisdiction.

 

6) Hence, the anti-suit injunction jurisdiction cannot be exercised to direct the Defendants to dispose the US Court proceedings or to withdraw the said matter. In fact, the anti-suit injunction jurisdiction can be exercised only to the extent of restraining the Defendants from continuing to prosecute the proceedings pending in the US Court, only if the continuance of such proceedings is vexatious or oppressive to the present proceedings pending before the High Court.

 

7) However, in this case, as the Defendants have restricted their claim, in the US Court proceedings, to the activities of the Plaintiff in the US and not beyond US, hence, the US Court proceedings cease to be vexatious or oppressive to the proceedings before the Delhi High Court.

 

Thus, based on the aforesaid grounds, the Delhi High Court held that the Plaintiff has not been able to establish legitimate grounds to grant anti-suit injunction to restrain the Defendants from continuing to prosecute the US Court proceedings. Hence, the Anti-Suit Injunction Order dated 08-03-2021has been accordingly vacated.

 

 

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer