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Massachusetts Court Declines to Enter Injunction That Might Impact Proceedings in Foreign Jurisdiction

Discretion, they say, is the better part of valor. So, too, judicial discretion is the better part of equity. Last fall, despite acknowledging "the equitable power and authority" to issue an injunction, the Worcester Superior nonetheless chose to keep its powder dry.

Plaintiffs, who are residents of India, initiated the action to enforce the terms of a settlement agreement awarding them twenty percent of the defendant's forty percent stake in an Indian company that the defendant, a Massachusetts resident, refused to transfer. Simultaneously, "a serious and significant corporate dispute" between the parties regarding the company was pending before an Indian tribunal. The defendant planned to convene a special meeting of the company's shareholders, which the plaintiffs asked the Superior Court to enjoin, along with any related exercise of the defendant's voting rights on the disputed forty percent stake until the resolution of the Massachusetts litigation.

The Court found that the plaintiffs met their burden of showing a "reasonable likelihood of success on the merits" in the litigation but chose not to act - not because it lacked jurisdiction but rather because the exercise thereof might impact proceedings in a foreign jurisdiction.

"Although this court has power to act in persona upon residents of the Commonwealth to such extent as may be necessary to restrain them from prosecuting in a foreign country actions which unduly and inequitably interfere with the progress of litigation here in the United States the court ought not to exercise such power so as to deprive the parties of access to the appropriate tribunal which alone can determine the ultimate resolution of the issues."

The Court's reasoning shows both a practical and an equitable understanding of its own powers. Neither party could show what effect, if any, an injunction issued by the Worcester Superior Court might have under Indian law, thereby preserving the unappealing potential for a decree of the Trial Court of the Commonwealth to prove, effectively, meaningless. Equitably, the Court acknowledged the Indian tribunal more ably could resolve the Indian dispute between the parties in India, "based on the application of Indian law to the facts as determined from conduct which has occurred solely and exclusively in India." An injunction might impact the pending Indian litigation and thereby "deprive the parties of access to the appropriate tribunal which alone can determine the ultimate resolution of the issues" - thus breaching a bright line rule of judicial restraint. See Lydia E. Pinkham Med. Co. v. Gove, 298 Mass. 53, 66 (1937). Not only might Court action prove ineffective, but also it might inure to the parties' detriment. Courts dislike the empty exercise of judicial power - they like situations where such exercise stands to harm both parties even less.

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