Airbus Industrie GIE v Patel

JurisdictionUK Non-devolved
JudgeLORD GOFF OF CHIEVELEY,LORD SLYNN OF HADLEY,LORD STEYN,LORD CLYDE,LORD HUTTON
Judgment Date02 April 1998
Judgment citation (vLex)[1998] UKHL J0402-1
Date02 April 1998
CourtHouse of Lords
Airbus Industrie G.I.E.
(Respondents)
and
Patel

And Others

(Appellants)

[1998] UKHL J0402-1

Lord Goff of Chieveley

Lord Slynn of Hadley

Lord Steyn

Lord Clyde

Lord Hutton

HOUSE OF LORDS

LORD GOFF OF CHIEVELEY

My Lords,

1

This appeal is concerned with the circumstances in which an English court may grant what is usually called an "anti-suit injunction." 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 appellants 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 appellants, 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. H.A.L. was criticised by the Court of Inquiry for failing to make adequate arrangements for dealing with accidents, and in particular for extinguishing fires such as that which broke out in the aircraft when it crashed; the Court considered that, if such arrangements had been in place, the loss of life and the injuries suffered would not have been so severe. On 6 March 1992 the appellants settled their claim against I.A.C. for the full amount recoverable up to the limit of I.A.C.'s liability. This resulted in a total recovery of £120,000 by all the appellants which, taking into account irrecoverable expenses, left a net sum of no more than £75,000. Little progress has been made in the proceedings against H.A.L.. This may be due to delay in the Indian proceedings; but there may also be difficulty in establishing that the death or injuries of the passengers in question were attributable to negligence on the part of H.A.L.

2

Meanwhile in February 1992 the appellants 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 respondent 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 appellants and the American claimants, and on 22 April 1995 the presiding judge made a number of declarations designed to deter the defendants in those proceedings (i.e. the appellants and the American claimants) from pursuing their claims in Texas. These included a declaration that the appellants 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 appellants from claiming damages from Airbus in any court in the world except the courts in India/Bangalore. However, since the appellants were not within the Indian jurisdiction, the injunction had little deterrent effect.

3

Airbus then issued an originating summons in this country with the purpose of (1) enforcing the Bangalore judgment against the appellants, and (2) obtaining an injunction from the English High Court restraining the appellants, who are resident in England, from continuing with their action against Airbus in Texas on the grounds that pursuit of that action by the appellants would be contrary to justice and/or vexatious or oppressive. The originating summons came before Colman J. who, on 23 April 1996, refused to enforce or to recognise the Bangalore judgment and also refused to grant an injunction. Airbus then appealed to the Court of Appeal against the refusal of Colman J. to grant an injunction, and on 31 July 1996 the Court of Appeal allowed the appeal and granted an injunction restraining the appellants from pursuing their action in Texas against Airbus. The appellants now appeal to your Lordships' House against that order, with the leave of this House.

4

The proceedings in Texas

5

Jurisdiction was established over Airbus in Texas on the basis that Airbus had in the past done business with a Texas-based corporation. Airbus nevertheless challenged the jurisdiction of the Texas courts under the United States Foreign Sovereign Immunity Act, on the ground that Airbus was a corporation which was more than 50 per cent. government-owned. The Texas State District Court upheld this challenge, but it failed before the Texas Court of Appeals. Airbus is now seeking to appeal to the Texas Supreme Court. There was, at the material time, no principle of forum non conveniens applicable in Texas on the basis of which Airbus could seek a stay of proceedings in that State. Legislation has been passed to remedy this deficiency, but it was not in force at the material date (the date of commencement of the proceedings). The claims in the proceedings were founded principally on allegations that the aircraft was physically defective and that Airbus was liable under United States product liability law, but also on alleged negligence by Airbus in the training of the pilots in the handling of the aircraft. It appeared to the Court of Appeal that the claim against Airbus in Texas was to be based simply on a principle of strict liability, under which the claimants would have to establish only that some part of the aircraft was in a defective condition and that the condition of that part was a cause of the claimants' injury. Furthermore, as regards the assessment of damages the principles applicable in Texas include a power to award punitive damages, and it was on this basis that the claimants were advancing their claim. Contingency fees are available in Texas, and it followed that the legal expenses of the appellants in Texas were covered by their Texas lawyers against an agreement to pay to the lawyers a percentage of any eventual recovery. Hobhouse L.J., who delivered the leading judgment in the Court of Appeal, observed (see [1997] 2 Lloyd's Rep. 8, 11):

"Such an arrangement is clearly very strongly influenced by, if not wholly dependent upon, the availability of strict liability in Texas and the ability to recover damages which exceed the claimants' actual loss and far exceed those recoverable in other jurisdictions. If the English Claimants [the appellants] had to prove fault on the part of Airbus Industrie and if their recovery was restricted to the actual loss suffered by the Claimants, the scope for a contingent fee arrangement might well be very different. It similarly is no doubt influenced by the fact that in Texas there is no opportunity for Airbus Industrie to object that for this action the forum is inappropriate."

6

The view of the Court of Appeal, as expressed in the judgment of Hobhouse L.J., was that, if the appellants were required to make their claims against Airbus in a jurisdiction which applied fault based principles of liability, their claims would probably be abandoned.

7

Colman J.'s reasons for refusing an injunction

8

Colman J. approached the matter as follows. He first of all concluded, in the light of the authorities, that the availability of the English courts for the conduct of the substantive proceedings was not an essential pre-condition for the exercise of the jurisdiction to grant an anti-suit injunction; but where, as here, the English court is being asked in effect to adjudicate between two foreign jurisdictions, the jurisdiction to grant an injunction would be exercised with very considerable caution and for that reason would probably be very rarely exercised, and an injunction should in such circumstances only be granted where the very clearest case of oppression is made out. In the present case he concluded that, although India was the natural forum for the resolution of the dispute, nevertheless Airbus had not established that it was obviously vexatious or oppressive for the appellants to pursue proceedings elsewhere, i.e. in Texas. In weighing the balance of justice between the parties, he recognised the force of an argument by Airbus that, if held liable in Texas, it would have to relitigate the question of its own liability in India if it sought contribution from I.A.C. or H.A.L., thus facing the risk of inconsistent decisions. On the other side of the balance, however, the appellants could rely on a number of factors, viz.: (1) Airbus was also being sued in Texas by the American claimants, and there was no reason to suppose that their action would not continue if the appellants were restrained from proceeding in Texas. (2) Without the benefit of the contingency fee arrangement which enabled the appellants to litigate in Texas, they could not litigate anywhere else. (3) There was a substantial risk that litigation in India would be subject to serious delay. On the whole of the evidence, Colman J. concluded that Airbus had failed to establish such a decisive balance of injustice as would justify the grant of an injunction restraining the appellants from proceeding in Texas.

9

The reasoning of the Court of Appeal

10

The principal judgment was...

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