REC Wafer Norway AS v Moser Baer Photo Voltaic Ltd

This is a claim for a final anti-suit injunction in relation to proceedings brought by the defendant against the claimant in India. The claimant contends that the continuation of the proceedings is either (1) vexatious or oppressive, which on this application has been its primary case, or (2) commenced in breach of an English arbitration clause. The defendant submits (1) that the claimant has failed to establish that the legal proceedings in India are in breach of the arbitration clause, (2) that an abuse arises if at all if there is such breach, and (3) that injunctive relief should be refused by reason (among others) of delay. Other points also arise, but these were the principal issues addressed in the parties’ submissions.

The background is as follows. The claimant, REC Wafer Norway AS, is a Norwegian company which supplies silicon wafers, which form a major component of solar panels. The defendant, Moser Baer Photo Voltaic Ltd, is an Indian company which is one of the largest manufacturers of solar panels in India.

By a Supply Agreement dated 25 July 2007, REC agreed to supply wafers to Moser Baer over a period lasting until December 2015. There are a number of relevant terms as follows. Clause 7.11 contains choice of law and dispute resolution provisions the effect of which (it is not in dispute) is to stipulate for English law as the governing law of the contract, and to provide for the settlement of disputes by way of ICC arbitration, the venue being London, and the language of arbitration hearings being English. It is not in dispute that the effect of this clause is to make England the seat of the arbitration.

As security for Moser Baer’s payment obligations, clause 4.3.1 of the Agreement obliged Moser Baer to present to REC an irrevocable on-demand bank guarantee for a total amount of US$130 million. Two such guarantees were in due course issued in favour of REC. The first is a US$40 million guarantee issued by Canara Bank on 25 September 2007, and the second is a US$45 million guarantee issued by Union Bank of India on 30 June 2008.

The bank guarantees recite the Agreement and contain irrevocable undertakings by the issuing banks to pay up to the guarantee limits upon receipt of REC’s first demand in writing and a written statement detailing Moser Baer’s breach of its payment obligations. Both the guarantees state that the issuing banks will pay upon their receipt of such documents, waiving all Moser Baer’s rights of objections and defence. It is common ground that these are on demand bank guarantees (as opposed to guarantees imposing secondary liability). As the Agreement required, the guarantees are governed by the law of England, and as regards jurisdiction, the venue is expressed to be the “London City Court”.

Wafers began to be supplied pursuant to the Agreement at the end of December 2007. Over the course of the next year or so, Moser Baer began to complain about defects in these products. Its contention is that the crystal density (and therefore crystal size) of the wafers failed to conform to the contractual specifications. This culminated in the rejection of wafers in September 2009.

Following a demand which was withdrawn, on 5 October 2009, REC made demand under the Canara Bank guarantee in the amount of US$6,286,464. On 30 November 2009, this demand was “updated” to take account of further sums that were said to have fallen due, making a total demand in the sum of US$17,969,654.90. This has not been paid, and I am told that in the light of orders subsequently made by the Indian court, no further demand has been made. REC has some US$36m in invoices outstanding.

Moser Baer’s case is that following the demand, it sought to protect its position, in the face, among other things, it says, of mounting concern regarding the financial status of REC. In that regard, it began the proceedings in India as to which REC makes complaint in this application.

On 12 October 2009, it issued proceedings in the District Court of Gautam Buhd Magar, Noida, against both REC and the banks seeking an injunction restraining the encashing of the bank guarantees. It alleged fraud against REC. An ex parte hearing took place on 14 October 2009. According to the court record, the learned District Judge said, “It is now well settled law that the existence of any dispute between the parties to the contract is not a ground to restrain the enforcement of a bank guarantee. Prima facie it is not a case to issue any ex parte ad-interim order as prayed for, without affording an opportunity of hearing the opposite parties.” This, I interpose to say, could equally stand as a statement of the principle applied by the English courts.

The matter was adjourned to enable other parties to be served, but the proceedings were subsequently discontinued by Moser Baer on 4 November 2009. On 5 November 2009, Moser Baer issued further proceedings in the District Court seeking various forms of relief under s. 9 of the Indian Conciliation and Arbitration Act 1996. At the same time it made an application under Order 39 of the Indian Civil Procedure Code. The relief sought against REC and the banks included an application for an injunction restraining the encashing or paying of the bank guarantees. Again, it alleged fraud against REC.

There were inter partes hearings before the District Court on 30 November and 9 December 2009 when the District Judge again refused the application for an injunction. In his Order the judge noted that a jurisdictional objection had been taken by REC. That objection was rejected by reference to Supreme Court of India authority. The judge then considered further Supreme Court authority relating to bank guarantees and concluded:

“10.

Thus, from the above discussion, it is clear that [other than] in a wholly exceptional case of egregious fraud and irretrievable injury, the court cannot grant injunction in case of Bank Guarantee. The petitioner [that is, Moser Baer] has failed to establish how egregious fraud was committed by respondent no.1 [that is, REC] upon it causing irretrievable injury. It is settled principle of law that a temporary injunction cannot be granted unless the petitioner make out (1) prima-facie case (2) balance of convenience and (3) irreparable injury, simultaneously. Prima-facie case means there is a serious question to be tried in the case and on the facts before court, there is probability of the applicant being entitled to the relief asked for by him. In this case, as stated earlier, the petitioner had prayed for injunction against the bank guarantee which in ordinary course, cannot be granted and petitioner has certainly failed to establish the egregious fraud and irretrievable injury, as such the relief claimed cannot be granted by the Court. Thus, the petitioner could not establish the prima-facie case in its favour.”

The judge then went on to consider the position as regards arbitration as follows:

“Secondly, no irreparable loss will be caused to the petitioner by not granting the injunction as it can seek redressal of grievances, if any, before the Arbitral Tribunal in terms of agreement itself. So far as the comparative inconvenience is concerned, admittedly, the petitioner has received the delivery of the products from respondent no.1; therefore, the petitioner is bound to make payment of the products so supplied by respondent no.1. If the products are sub-standard, as alleged, then, it may settle the dispute in accordance with the terms and conditions of the agreement by way of mediation/arbitration. On the other hand the comparative inconvenience of the respondent no.1 would be greater in case the injunction, as prayed for is granted because the respondent no.1 will not be able to get the payment for the products which it has already supplied to the petitioner.”

In view of the above, Moser Baer’s application for an interim injunction was dismissed, though the proceedings for other relief remain on foot.

On 11 December 2009, Moser Baer filed a notice of appeal against the refusal of the application for an injunction, and REC cross appealed in relation to its jurisdiction argument. On 15 December 2009, two Judges of the Allahabad High Court heard the appeal, and on 16 December ordered further affidavit evidence to be served and filed prior to a further hearing. The Court made a holding order restraining REC from encashing the bank guarantees and also from shipping any further wafers in the following terms:

“Having considered the submission made by learned counsel for the parties, we are of the opinion that it will be appropriate in the interest of justice that the matter be decided at the admission stage itself after exchange of the affidavits between the parties, and till the next date of listing, the respondent no.1 be restrained from encashing the Bank Guarantee, if not already encashed, and from making any future shipment of the product to the petitioner/applicant.”

On 12 January 2010, REC filed an affidavit disputing jurisdiction. I should mention that Moser Baer suggested at one point that REC had submitted to the Indian jurisdiction, but there is little factual evidence to support this suggestion, which is purely a matter of Indian law, and it was not pursued in oral argument.

On 12 January, at the joint request of the parties, the hearing was adjourned until 11 February 2010. On that day, submissions were made by both parties before the Allahabad High Court. The Court ordered written submissions to be filed and stated that thereafter it would give judgment. The electronic record shows that the hearing concluded, judgment reserved, with both parties to file written arguments within two weeks. The stay order was extended until delivery of judgment.

Meanwhile, on 10 February 2010, Moser Baer gave notice of termination of the Supply Agreement. On 16 March 2010, it sought to proceed with a mediation, though this did not in the event take place.

Moser Baer then took action in the English court. According to REC, this was because Moser Baer anticipated an imminent finding by the Allahabad High Court dismissing its appeal, though there is no positive evidence to this effect.

In any event, by an application issued in the English Commercial Court on 12 May 2010, Moser Baer sought an interim injunction to restrain REC from making calls on the bank guarantees (unlike in the Indian proceedings, the banks were not parties). It also issued proceedings for rectification of the terms of the guarantees.

An ex parte hearing took place on 13 May 2010 before Hamblen J. Though the relief sought was in substance the same, the argument was different from that put in the Indian proceedings, in that Moser Baer did not make an allegation of fraud. It argued instead that REC was no longer entitled to enforce the bank guarantees because (i) Moser Baer had terminated the Agreement by its notice of 10 February 2010; (ii) consequently the bank guarantees were no longer in force because clause 4.3.1 of the Agreement provided that those instruments were to be valid for the duration of the Agreement ‘and for a reasonable period (60 days) thereafter’; and (iii) by mistake, similar wording was not included in the bank guarantees themselves. With considerable reservations, the judge granted the injunction until the return date.

The matter came before Tomlinson J on an inter partes basis on 27 May 2010. In giving judgment, he referred to the general rule that the court will not restrain a bank from paying out under a bank guarantee if under the terms of the guarantee, looked at as an autonomous contract, the money is payable irrespective of any claim that the beneficiary is acting improperly in making demand. He referred to the exception, namely where the bank has notice that the beneficiary is acting fraudulently. He refused to accept Moser Baer’s contention that the court should extend the exception so as to grant injunctive relief against a supplier in circumstances where it is said to be reasonably arguable that the bank guarantee itself should be rectified, where on its face the guarantee permits the making of the demand. To do so, Tomlinson J held, would be wrong in principle, seriously disruptive of international trade, and likely to bring in its wake serious consternation as to the approach of the English Court. Accordingly, he refused to continue the injunction.

In between the grant of the injunction on 13 May 2010 and its discharge on 27 May 2010, there were two further developments. On 18 May 2010, Moser Baer filed a Request for Arbitration with the ICC, so commencing the arbitration proceedings. On 17 June 2010, REC filed its Answer and Counterclaim. I am told that parties have nominated their arbitrators, a chairman has been appointed, and the Arbitral Tribunal constituted as of 1 October 2010.

The second development came on 20 May 2010, when the record of the Allahabad High Court shows that, “The case is released. List this case before appropriate bench. The case shall not be treated as tied up or part heard to this bench. Interim order is extended till further orders”. There is a dispute between the parties about why the court dealt with the matter in this way, but I think it was accepted before me on the part of Moser Baer that the appeal if pursued would need to be reargued before a new bench. In the meantime the holding order continues.

Following Tomlinson J’s decision, by letter of 20 July 2010, REC requested Moser Baer to discontinue the Indian proceedings. This request was rejected on 22 July 2010 on the ground that Moser Baer, as an Indian company, was entitled to apply to the Indian court for whatever relief it considers appropriate. On 4 August 2010, REC issued these proceedings in the Commercial Court seeking an anti-suit injunction, which came on before me for hearing on 11 to 12 October 2010.

Finally, I should say that I have evidence before me as to the course of the proceedings in India from Mr Indranil Ghosh (for REC), and Mr Joseph Tirado (for Moser Baer). Mr Tirado’s third witness statement contains further information as regards the course of the proceedings in the District Court. It appears that the hearing of such part of the proceedings before the District Court as was allowed to go forward is listed for 4 November 2010.

Having set out the facts at some length, I now come to the parties’ respective arguments, which have been in a relatively narrow compass. REC’s case is as follows. The Indian proceedings, it argues, were commenced in breach of the arbitration clause in the Agreement and, given the outcome of the English injunction application, their continuation is now vexatious and oppressive. This Court, as the supervisory court of the arbitration, has determined in accordance with the law applicable to the Agreement and the bank guarantees that REC is entitled to make demand.

Moser Baer’s allegations regarding the quality of the wafers supplied will be resolved in the arbitration in due course. In the meantime, REC is entitled to receive payment under the bank guarantees despite Moser Baer’s allegations in the supply dispute. To enable that to happen, the court should, it is submitted, grant the anti-suit injunction by way of permanent relief pursuant to the court’s general power under section 37(1) of the Senior Court Act 1980 to grant an injunction in all cases where it is just and convenient for it to do so. The restrictions on the grant of interim relief contained in s. 44 Arbitration Act 1996 do not apply, it is argued, to claims for permanent injunctive relief and so there is no concurrency of jurisdiction.

REC put the legal basis of its case in two distinct ways. First, where foreign proceedings are commenced in breach on an English arbitration clause, the court will ordinarily grant an anti-suit injunction to restrain those proceedings unless there are ‘good reasons’ or ‘strong reasons’ for it not to do so. The burden is on the foreign claimant to prove such reasons and, absent them, the court need feel no diffidence in granting the injunction, provided that it is sought promptly and the foreign proceedings are not too far advanced. Well known authorities are cited in that regard: Aggeliki Charis Compania Martima S.A. v Pagnan SpA, The Angelic Grace [1995] 1 Lloyd’s Rep 87 at 96 (Millett LJ); Donohue v Armco Inc [2002] 1 All ER 749 at [24] (Lord Bingham).

Second and in any case, the court has power to grant an injunction to restrain a party over whom it has personal jurisdiction from commencing or pursuing foreign proceedings when the ends of justice require it. While this power must be exercised with caution, an injunction may be granted when England is the natural forum for the resolution of the dispute and the proceedings in the foreign court are vexatious or oppressive: Dicey, Morris & Collins, 14th Edition, [12-073]; Donohue v Armco Inc at [19].

In his submissions, for reasons that I shall explain shortly, Mr Stephen Phillips QC for REC based his argument squarely on the second of these grounds. It was submitted that following Moser Baer’s application to the English court in May 2010 for an injunction, and the refusal of that application on 27 May, “everything changed”. There can be no argument, it was submitted, that the application was based on different grounds to those advanced in India. It was up to Moser Baer to put before the court all matters it relied upon in support of the application for an injunction, including any deployed in the Indian proceedings. The bank guarantees are subject to English law and jurisdiction, and on 27 May the English court determined that Moser Baer was not entitled to restrain demand and payment under the guarantees. Having taken the course it did, it is now vexatious for Moser Baer to refuse to discontinue its proceedings in India seeking the same relief in the hope of a different outcome. The application for the injunction has, it was submitted, been made promptly following the decision of 27 May, and the claim for relief is not barred by delay.

For Moser Baer, the argument advanced by Mr Khawar Qureshi QC is as follows. As regards REC’s first ground, Moser Baer submits that REC has to establish that it is “highly probable” (see Transfield Shipping Inc v. Chiping Xinfahuayu Alumina Co Ltd [2009] EWHC 3629 (QB), Christopher Clarke J) that Moser Baer was in breach of contract in bringing the Indian proceedings. It was not, it is submitted, in breach of contract. Further, in such proceedings, REC focused not on the arbitration agreement, but on the choice of law and jurisdiction clause in the bank guarantee. So far the agreement to arbitrate is concerned, the point taken by REC in the Indian proceedings was not that such proceedings were in breach of the arbitration clause, but that there was no imminent arbitration, so that section 9 of the Indian Conciliation and Arbitration 1996 (which deals with the grant of interim measures by the Court) did not bite.

The arbitration clause, Moser Baer points out, incorporated the ICC Rules. It is submitted that the effect of article 23(2) of the rules is clear. This provides that:

This provision had the effect of deeming the invocation of the Indian Court’s jurisdiction compatible with the contract, and accordingly Moser Baer was not in breach.

Even if there had been a breach, Moser Baer submits that grounds for injunctive relief have not been made out. The first and primary contention relates to delay. Given that proceedings in India were first commenced in October 2009, and this application was not made until August 2010, REC did nothing for nearly ten months to enforce its rights pursuant to the arbitration clause. On the contrary, Moser Baer says, it appears to have taken a strategic decision not to invoke the arbitration clause before the English courts until the Indian proceedings were far advanced. Numerous hearings have taken place in India, up to and including the Appeal Bench of the Allahabad High Court.

For tactical considerations, Moser Baer says that it would appear that REC has chosen not to seek expedition of the Indian proceedings, now that they are far advanced. Instead, it is seeking to “detonate the nuclear weapon” of the anti-suit injunction before the English courts. Further, it is submitted that no irreparable harm is done by withholding an injunction, since REC will be adequately compensated by its claim in damages.

So far as REC’s abuse argument is concerned, it is submitted that, if it arises at all, it can only arise because of breach of the arbitration agreement. It follows that if REC cannot demonstrate such a breach, which it cannot, then the continuation of the Indian proceedings cannot amount to an abuse. The arguments as regards delay apply equally to this ground.

I should begin with the position as regards the court’s jurisdiction to grant the relief sought, noting that what REC seeks is a permanent as opposed to an interim injunction. It has not been in dispute before me that the court has jurisdiction to grant such an injunction by way of its general power under section 37(1) of the Senior Court Act 1980 to grant an injunction in all cases where it is just and convenient for it to do so. REC contends that the restrictions on the grant of interim relief contained in s. 44 Arbitration Act 1996 do not apply to claims for permanent injunctive relief and so there is no concurrency of jurisdiction. Whilst not taking direct issue with that proposition, Moser Baer submits on the basis of Starlight Shipping Co v Tai Ping Insurance Co Ltd, The Alexandros T [2008] 1 All ER (Comm) 593, Cooke J, that in exercising any discretion under s.37, the court should have regard to matters which arise under s.44 (see at [19]). REC responds that Starlight Shipping was a case where an interim injunction was sought, and says that it does not apply to an application for a final injunction. In any case, it would (if necessary) submit that this is a case of urgency, or that this hearing is proceeding in effect by consent. Given that the arbitral tribunal was only constituted a few days before the hearing of this application, which has been in preparation for some time, and that the dispute as to the calling of the guarantees is already before this court, I am satisfied that the court has jurisdiction.

So I come to the issues that have been in contention before me. As Mr Qureshi QC pointed out, when one looks at the arbitration claim form issued in this case on 4 August 2010, the case appears to be based on a breach of the ICC arbitration clause in the agreement between the parties. See, for example, paragraph 4 which pleads that, “in breach of the arbitration clause in the Agreement, beginning in October 2009 the Defendant commenced multiple sets of proceedings in India … seeking an injunction to restrain the Claimant from ‘encashing’ the Bank Guarantees by reason of a dispute between the parties in relation to the agreement”. However, it is right to say, and REC does say, that the claim goes on to make clear that its case is that following the refusal of the injunction by the English court, the continuation of the Indian proceedings “is now abusive, vexatious and oppressive”.

It is not in dispute that whilst an anti-suit injunction may be granted to restrain the pursuit of foreign proceedings in breach of an arbitration clause (a type of application that has regularly been made since the Angelic Grace was decided), aside from such breach, it may be granted where to pursue foreign proceedings otherwise amounts to an abuse of process. These constitute independent grounds for the relief sought by REC.

As to breach of the arbitration clause in the Supply Agreement, Mr Phillips QC for REC accepted that the case was not clear cut. This is because of the terms of article 23(2) of the ICC Rules that I have referred to already, by which the “application of a party to a judicial authority for [interim] measures … shall not be deemed to be an infringement or waiver of the arbitration agreement”. As Mr Phillips put it, REC might have struggled to obtain an anti-suit injunction based on breach of contract in October or November 2009. He made it clear that REC’s case on the application was directed primarily to the abuse of process ground.

Given that stance, it is plain that this is the ground that REC must establish if it is to obtain an anti-suit injunction, and I need express no view as to how ICC Rule 23(2) (where as here incorporated in the arbitration agreement) might affect a case where otherwise the court might be minded to grant an injunction on Angelic Grace principles.

The approach to be taken is as set out Rix LJ in Glencore International AG v Exter Shipping Ltd [2002] 2 All ER (Comm) 1 (Robert Walker LJ and Sir Andrew Morritt V-C agreeing):

In considering how these principles are to be applied in the present case, it is right to reiterate the position as to jurisdiction and governing law. The bank guarantees are expressly governed by English law, and the English court is the parties’ chosen forum. Likewise, in the Supply Agreement of 25 July 2007, the parties stipulated that the “Agreement was to be governed by and construed in accordance with the laws of the United Kingdom”, and it is common ground that this is a reference to English law. The Agreement expressly provides for the settlement of disputes by way of ICC arbitration, stipulating that, “Any hearing(s) shall take place in London and shall be conducted in English”. The effect of this provision (again it is not in dispute) is to make England the agreed seat of the arbitration (Shashoua v Sharma [2009] 2 All ER (Comm) 477 at [27], Cooke J) thereby further agreeing that the English court is to have supervisory jurisdiction over the arbitration (C v D [2007 2 All ER (Comm) 557 at [29], Cooke J, affirmed [2008] 1 All ER (Comm) 1001, Longmore LJ with whom Sir Anthony Clarke and Jacob LJ agreed). That was the nature of the parties’ agreement in this instance, so far as relevant.

As things stand in India at present, Moser Baer’s appeal against the refusal of the District Judge to grant an injunction restraining the encashing of the bank guarantees remains to be determined. There has been no determination of the appeal on the merits, the order granted by the appeal court being a ‘holding order’. It was in those circumstances that Moser Baer applied to the English court for substantially the same relief on 12 May 2010. It is said that the nature of the applications differed, in that fraud was alleged in one, whereas the other was based on an argument that the guarantees could not be called following termination of the Agreement. But I agree with REC that Moser Baer had to put before the English court all arguments properly available to it on the application, and could not hold back allegations of fraud if properly arguable. It is said that the banks were respondents in the case of the Indian proceedings, but were not joined to the English proceedings. In my judgment however, none of these matters affect the fact that the relief sought in both jurisdictions was in substance the same, namely an injunction to prevent a call on the bank guarantees. That matter has been determined against Moser Baer, on its own application, by a court of the parties’ forum of choice. The question therefore, subject to discretionary considerations, is whether the court should now restrain Moser Baer from continuing to pursue proceedings in India in respect of a matter which has been decided against it.

Moser Baer’s response on this point is that an abuse arises, if it arises at all, on the basis of a breach of the arbitration agreement. If REC cannot demonstrate such a breach, then the continuation of the Indian proceedings cannot, it is submitted, amount to an abuse. In that regard, reference was made to Transfield at [54] quoting from American International Specialty Lines Insurance Co v Abbott Laboratories [2004] Lloyd’s Insurance and Reinsurance Reports 815, Cresswell J, citing earlier authority to the effect that it would be inappropriate to grant an interlocutory injunction to restrain foreign proceedings at a time when it is no more than arguable that they were brought in breach of contract, because it could not be said that such proceedings were vexatious or oppressive.

However, this response does not appear to me to meet the objection that is taken. Notwithstanding its earlier application in the Indian proceedings, Moser Baer applied to the English court for an injunction restraining demand on the guarantees. That issue having been decided against it, there can be no good reason for continuing to seek the same relief on appeal in India, and none was suggested. To continue do so is, in my judgment, vexatious and oppressive as those terms are used in the authorities (see the considerations set out in Dicey, Morris & Collins, 14th Edition, at 12-073). Following the approach laid down in Glencore v Exter Shipping, an injunction is, in my view, necessary to protect the applicant’s legitimate interest in English proceedings, since to withhold it would, as Mr Phillips QC put it, undo Tomlinson J’s order of 27 May 2010.

The grant of an injunction is, nevertheless, a matter of discretion, to be exercised (as Glencore v Exter Shipping makes clear) cautiously. Moser Baer suggested in argument that the discretion was to be exercised in accordance with Cyanamid principles, but as REC pointed out, Cyanamid applies to interim injunctions, whereas the application here is for a final order. It would nevertheless be relevant, were it the case, that damages are an adequate remedy. However, in my judgment, damages are not an adequate remedy in a case like this. The bargain agreed by the parties allowed the supplier to make call on the bank guarantees, with the contractual dispute between the parties to be resolved in the arbitration. The effect of Moser Baer’s conduct is to deprive REC of its contractual entitlement to immediate payment in the sums demanded, which cannot be compensated for (or adequately compensated for) in damages.

This brings me to the most substantial point made by Moser Baer, which relates to the timing of the application. As Mr Qureshi QC rightly submitted, it is incumbent upon a party seeking an anti-suit injunction to do so “promptly and before the foreign proceedings are too far advanced”: see Transfield at [71], citing The Angelic Grace, ibid, and The Skier Star [2008] 1 Lloyd’s Rep 652, Teare J. In Transfield, an application for an anti-suit injunction which was made a week before the trial in the foreign court was refused. So, it is said that in the present case there is no justification at all for the delay that REC has allowed to take place. Proceedings in India are (it is said) far advanced and whatever entitlement REC may have had to seek injunctive relief from the English courts has been lost by the passage of time.

So far as the evidence is concerned, Mr Ghosh for REC suggests that the appellate process in the Allahabad High Court will not conclude in less than a year. In his first witness statement, Mr Tirado for Moser Baer said that it was not possible to provide clarification on the time lines for listing, which was in the hands of the court. Once listed, he said that he understood that the matter could be disposed of within one to three months. Mr Ghosh opined that an application for expedition would be pointless, but his view has been refuted by opinions of two eminent Indian jurists tendered on behalf of Moser Baer. I note however that neither party has applied for expedition. It is not possible on the evidence to express a firm conclusion as to when the appeal in the Allahabad High Court may be concluded, assuming it goes forward.

Moser Baer’s application to the English court aside, had an anti-suit injunction been sought at a time when the judgment of the Allahabad High Court was anticipated in May 2010, then this court might well have refused to grant an anti-suit injunction on delay grounds. But as mentioned, it is accepted that the effect of the release of the case by the Court on 20 May 2010 is that the appeal will likely need to be reargued before a new bench. In those circumstances, the facts are very different from Transfield, and I do not consider that the appeal is too far advanced to preclude the grant of an injunction now. In his third witness statement, Mr Tirado notes that there have been eleven hearings in the District Court since 9 December 2009, but the question of the injunction is now before the Allahabad High Court, not the District Court.

Notwithstanding the above, it seems to me to be important on the delay issue to identify the period in question. I agree with REC that the real period in this case is the time between the dismissal of Moser Baer’s English application on 27 May 2010 and the commencement of these proceedings on 4 August 2010. During this period, it seems that no substantive steps were taken in the Indian proceedings. (Mr Tirado’s third witness statement shows that there were two applications in the District Court within that time, both being applications for an adjournment by Moser Baer, unopposed by REC.) I agree that this is a relatively short period and that, in the circumstances, REC acted with reasonable promptness.

In my judgment, the case for an anti-suit injunction has been made out. I make clear that, “Where the court decides to grant an injunction restraining proceedings in a foreign court, its order is directed not against the foreign court but against the parties so proceeding or threatening to proceed” Donohue v Armco Inc, ibid, at [19], Lord Bingham. I will hear the parties as to the form of the order to be made, and in respect of any consequential matters arising.