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HCA000900A/1995
IN THE SUPREME COURT OF HONG KONG
HIGH COURT
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| BETWEEN |
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SUBHASH CHANDRA |
1st Plaintiff |
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RUBIES OVERSEAS LIMITED |
2nd Plaintiff |
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MICHAEL JOHNSON |
Defendant |
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Coram: Hon Mr Justice Cheung in Chambers
Date of Hearing: 7 January 1997
Date of Decision: 7 January 1997
Date of handing down Reasons of Decision: 10 January 1997
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REASONS OF DECISION
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The decision
1. On 7th January 1997, upon the Plaintiff's application, I stayed the Defendant's ("Mr Johnson") counterclaim on the ground that the court in Delhi, India is the appropriate forum. I now give reasons of my decision.
Background
2. The Plaintiffs are claiming, inter alia, against Mr Johnson US$300,000. The basis of the claim is that the 1st Plaintiff and Mr Johnson agreed that the sum was paid on condition that formal documentation relating to a joint venture between the parties should be signed. Mr Johnson failed to sign the documentation and the Plaintiffs claimed the return of this money. Mr Johnson was granted leave to defend the action upon payment into court of US$100,000.
3. Mr Johnson made a counterclaim. He said he was the designer of a satellite telecommunications system, ("the SMPC system"). The Plaintiffs had wrongly appropriated the information of the SMPC system and, against his wish, attempted the implementation of the SMPC system for India. Mr Johnson is seeking a inquiry as to damages for breach of confidence in relation to the information, delivery up of documents and an injunction to restrain the Plaintiffs from using the confidential information.
4. The Plaintiffs' action was commenced in January 1995. The counterclaim was filed in September 1996. In March 1995, Mr Johnson commenced action against seven defendants in India ("the Indian action"). The Plaintiffs were two of the defendants in the Indian action. The cause of action is the same as the one pleaded in Hong Kong counterclaim. This is seen from the pleadings in the two actions and confirmed by Mr Johnson's former solicitors: paragraph 4 of 2nd Affidavit of Mr Oldham (Page 267 of the Bundle). Mr Johnson applied for interim injunction against the seven defendants in the Indian action. The application failed. In 1996, Mr Johnson appealed against that decision. The adjourned hearing was due to take place in October 1996 but was adjourned at the Mr Johnson's application until February 1997.
The Spiliada and other cases
5. In The Spiliada [1987] A.C. 460, the House of Lords stated the principles in staying an action on the ground of forum non conveniens:
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The court will choose the forum in which the case can be tried more suitably for the interests of all the parties and for the end of justice. |
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Upon an application for a stay of English proceedings the burden of proof lies on the defendant to show that the court should exercise its discretion to grant a stay. Moreover the defendant is required to show not merely that England is not the natural or appropriate forum for the trial, but that there is another available forum which is clearly or distinctly more appropriate than the English forum. In considering whether there is another forum which is more appropriate the court will look for that forum with which the action has the most real and substantial connection, e.g. in terms of convenience or expense, availability of witnesses, the law governing the relevant transaction, and the places where the parties reside or carry on business. If the court concludes that there is no other available forum which is more appropriate than the English court, it will normally refuse a stay. If, however, the court concludes that there is another forum which is prima facie more appropriate, the court will normally grant a stay unless there are circumstances militating against a stay, e.g. if the plaintiff will not obtain justice in the foreign jurisdiction. |
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See also the Court of Appeal decision of Lanka Athula [1991] 1 HKLR 741.
6. In the earlier decision of The Abidin Daver [1984] 1 A.C. 398 Lord Diplock stated that:
" Where a suit about a particular subject matter between a plaintiff and a defendant is already pending in a foreign Court which is a natural and appropriate forum for the resolution of the dispute between them, and the defendant in the foreign suit seeks to institute as plaintiff an action in England about the same matter to which the person who is plaintiff in the foreign suit is made defendant, then the additional inconvenience and expense which must result from allowing two sets of legal proceedings to be pursued concurrently in two different countries where the same facts will be in issue and the testimony of the same witnesses required, can only be justified if the would-be plaintiff can establish objectively by cogent evidence that there is some personal or judicial advantage that would be available to him only in the English action that is of such importance that it would cause injustice to him to deprive him of it."
7. It was confirmed by the House of Lords in de Dampierre v. de Dampierre [1988] 1 A.C. that the principles enunciated in The Spiliada apply whether or not there are relevant proceedings already pending in an alternative forum. Lord Goff at page 108 stated that:
"However, the existence of such proceedings may, depending on the circumstances, be relevant to the inquiry. Sometimes they may be of no relevance at all, for example, if one party has commenced the proceedings for the purpose of demonstrating the existence of a competing jurisdiction, or the proceedings have not passed beyond the stage of the initiating process. But if, for example, genuine proceedings have been started and have not merely been started but have developed to the stage where they have had some impact upon the dispute between the parties, especially if such impact is likely to have a continuing effect, then this may be a relevant factor to be taken into account when considering whether the foreign jurisdiction provides the appropriate forum for the resolution of the dispute between the parties."
8. Cleveland Museum of Art v. Capricorn Art International S.A. and Another [1990] 2 Lloyd's L.R., 166 is an illustration of how the court's discretion was exercised when there were two pending proceedings in different jurisdictions. In Australian Commercial Research and Development Ltd. v. ANZ McCanghan Merchant Bank Ltd. [1989] 3 ER 65, Browne-Wilkinson V.C. held that the party which commenced identical proceedings in different jurisdiction must elect to continue on one set of proceedings.
India is the appropriate forum
9. It is clear that India is the more appropriate forum.
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Litigation had been conducted in the past two years in India with substantial costs incurred. The injunction hearing was heard over 12 days. Voluminous evidence were filed. A judgment was delivered in November 1995 against Mr Johnson. The High Court of Delhi held that: |
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".... on the materials placed before me, I, find no difficulty in coming to the prima facie conclusion that the plaintiff has not established that he had any intellectual property rights in any system, he did not hand over any materials to the first defendant in respect of the system and there is no question of first defendant copying from any system of the plaintiff." |
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The same issue should not be litigated in Hong Kong in a concurrent proceeding. Mr Johnson cannot be said to be deprived of any personal or juridical advantage in Hong Kong if the counterclaim is stayed. In respect of the same subject matter he had elected to sue in Delhi. It was a considered decision to sue in India (see 2nd Affidavit of Mr Johnson at paragraph 8). Obviously he had regard to the advantages of suing in India. |
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The real and substantial connection with the subject matter of the counterclaim is India. The appropriation of the confidential was said to have taken place in India and England. The SMPC system was said to be implemented in India. Hong Kong is at best a neutral forum. |
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The seven defendants in the Indian action came from various jurisdictions. Although no one jurisdiction could be said to be home to all the defendants, it would be more convenient for the Defendants to have the present counterclaim tried in India particularly when only two of the seven defendants in the Indian action were being sued in Hong Kong. |
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The seven defendants' contest to the jurisdiction of the Indian courts had been abandoned and there is no reason why the matter should not be continued in India. |
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The proper law of the dispute is either Indian or English law. Both are common law applied by the Indian courts. |
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10. For all these reasons the counterclaim is stayed.
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(P. Cheung) |
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Judge of the High Court |
Representation:
Mr Nigel Kat, inst'd by M/s Lovell White Durrant, for Plaintiffs
Defendant absent
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