Supreme Court Issues Notice On Subramanian Swamy's Plea Against Foreign Defamation Proceedings By Singapore Entity

The Supreme Court on Monday issued notice in an appeal by former MP Dr. Subramaniam Swamy against a Madras High Court order that allowed Advantage Strategic Consulting Singapore Private Limited to proceed with a defamation suit against in the High Court of Singapore. 

A division bench Justice Surya Kant and Justice Dipankar Datta, while issuing notice in the matter, orally stated that the Singapore entity would not proceed against Swamy in the meanwhile, on the submission of the counsel for the foreign entity who appeared on caveat.

A single bench of the Madras High Court had granted Swamy an anti-suit injunction, which was later vacated by a division bench of the High Court which paved the way for the Singapore entity to proceed against Swamy in Singapore.

The allegations pertain to certain remarks made by Swamy in April 2012 at a press conference against the company in connection with 2G Spectrum scam.

Senior Advocate Vibha Datta Makhija, appearing for Swamy, told the Court that the matter is at a precarious stage now that the stay has been vacated by the High Court.

“Because of the stay which was granted by the Single judge, he was not proceeded against. But now that the stay is vacated, so they are going to proceed against him in Singapore. It is at a very precarious stage.”

The matter has been posted after 6 weeks for hearing. 

“Issue notice. Let separate counter affidavits be filed by Respondent 1 [Indian entity] and 2 [Singapore entity] within 4 weeks. Rejoinder if any within 2 weeks. Post for hearing after 6 weeks.” The Court recorded in its order.

While hearing the appeal by Swamy the Top Court, asked the Counsel appearing for the Singapore entity (2nd Respondent in the SLP) on caveat to prove their bonafide as to why he is being proceeded against in Singapore, while being an Indian holding company having a subsidiary in Singapore.

“We want to know the status of this Indian holding company, vis-à-vis, the subsidiary company. You have to prove your bonafide. The needle of suspicion is on your bonafide, that you are an Indian holding company, you create a subsidiary in Singapore and then you start litigation there…barring it you can create another in Maldives, another in Mauritius and another in Europe. We would like to know who are the shareholders, what is the share capital, what are your assets, who are the directors, who are the managing directors. We need articles of association and all details of both the companies.” Justice Surya Kant said.

The Counsel for the Singapore entity, while opposing the issuance of notice in the matter, said that the alleged defamatory remarks were made in a press conference in 2012, when the Singapore entity was already in existence.

“The petitioner made certain remarks in a press conference in 2012. When the remarks were made, the entity in Singapore already existed. The Indian holding company does not run any of thebusiness in Singapore.”

However, the Court informed the counsel that he is not entitled to oppose issuance of notice, “You can oppose stay, but under what law can you oppose issuance of notice? You cannot say I am opposing issuance on notice.”

The counsel for the Singapore entity also argued that the burden of proof was on the petitioner to show that the entity has business interests in India:

“He (Swamy) makes scurrilous remarks against me and is unable to prove them. I am based in Singapore, I am an independent legal entity there and I sue him there. He runs away from there and he comes here. He is a meddlesome interloper. I call him to Singapore, because I am based in Singapore, my reputation is affected in Singapore. It is their burden to prove that the entity has interests in India. Which they did not do.”

The Special Leave Petition of Swamy was drafted by Advocate Satya Sabharwal.

Madras High Court Ruling

The Madras High Court in April this year had set aside a single judge order restrained Advantage Strategic Consulting Singapore Private Limited from proceeding with a defamation suit against Swamy in the High Court of Singapore.

"we are of the view that there is no prima facie case in favour of the 1st respondent/plaintiff to grant any interim order as this Court has no jurisdiction to grant anti suit injunction restraining a foreign company from prosecuting the defamation suit in a foreign country. We find balance of convenience in favour of the appellant/2nd defendant." the division bench of the High Court had said in its order. 

The division bench of Justice SS Sundar and Justice PB Balaji noted that the single judge had erred in holding that the company, incorporated and carrying out its operations in Singapore, was amenable to the jurisdiction of the Indian court as it was the subsidiary of an Indian company (which was one of the defendants in the suit by Swamy).

"This Court finds that the judgment of the learned Single Judge cannot be approved for the simple reason that the learned Single Judge has simply presumed that the appellant is amenable to the jurisdiction of this Court as it is a subsidiary of the 1st defendant, a company in India." The Division Bench had held. 

The company informed the court that in April 2012, Swamy had held a press conference to highlight the alleged illegalities in the “Aircel-Maxis” deal connected to the 2G Spectrum scam. It was submitted that Swamy had made several allegations against the company and impressed that it was an illegal company, causing damage to its reputation and loss of business in Singapore.

Following this, the company instituted a defamation suit in the High Court of Singapore. Swamy then approached the Madras High Court seeking the relief of injunction against the company from prosecuting him in Singapore. The single judge allowed the reliefs sought by Swamy.

The company had contended that the order of the single judge was erroneous. It was submitted that an anti-suit injunction could not be granted as it was not amenable to the jurisdiction of the court, being a Singapore-based company. The company also argued that the suit was barred by the principle of res judicata and laches. Further, it was also submitted that the High Court of Singapore alone had the jurisdiction to decide the defamation suit.

Objecting to the same, Swamy contended that no cause of action arose in Singapore as the Press Conference took place in New Delhi. Further, since he was residing in Chennai and New Delhi and since the holding company of Advantage Strategic had its registered office in Chennai, Swamy argued that the defamation suit was against the principle of “Forum Conveniens”.

The High Court, however, disagreed with this view taken by the single judge. The court held that the Supreme Court has, through various decisions highlighted that a Holding company and a wholly-owned subsidiary company are two different entities.

With respect to the jurisdiction of the Singapore Court, the High Court held that the same has to be decided by the High Court of Singapore and not by a foreign court. The court also noted that the issue of natural jurisdiction would have to be decided after taking into account the preliminary objections raised by Swamy and it would be proper for the High Court of Singapore to decide the same.

"The question whether the Court in Singapore has jurisdiction or not, cannot be decided by a foreign Court. When this Court is examining the jurisdiction of the Court in Chennai to grant an anti-suit injunction restraining a Singapore Company from prosecuting and proceeding further with the suit in Singapore, it will be better if this Court expresses no opinion on the issue whether the Court in Singapore alone has the exclusive jurisdiction to decide the issue…" The Madras High Court had held. 

Case Title: Dr. Subramanian Swamy V. Advantage Strategic Consulting Pvt. Ltd. And Anr, SLP (C) No. 16477-16478/2023

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