CSR America Inc v Cigna Insurance Australia Limited & Ors S124/1996 [1996] HCATrans 448 (14 November 1996)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney Nos S119 and S120 of 1996

B e t w e e n -

CSR LIMITED

Appellant

and

CIGNA INSURANCE AUSTRALIA LIMITED and those entities set out in Schedule A hereto

First Respondents

THE GENERAL INSURANCE COMPANY OF TRIESTE AND VENICE and those entities set out in Schedule B hereto

Second Respondents

CSR AMERICA, INC

Third Respondent

Office of the Registry

Sydney Nos S123 and S124 of 1996

CSR AMERICA, INC

Appellant

and

CIGNA INSURANCE AUSTRALIA LIMITED and those entities set out in Schedule A hereto

First Respondents

THE GENERAL INSURANCE COMPANY OF TRIESTE AND VENICE and those entities set out in Schedule B hereto

Second Respondents

CSR LIMITED

Third Respondent

BRENNAN CJ

DAWSON J

TOOHEY J

GAUDRON J

McHUGH J

GUMMOW J

KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 14 NOVEMBER 1996, AT 10.21 AM

(Continued from 13/11/96)

Copyright in the High Court of Australia

BRENNAN CJ: Yes, Mr Stitt.

MR STITT: As your Honours please. Could I briefly conclude the preliminary matter by making the following submission. My learned friend, Mr Jackson, in his written submissions in paragraph 4 sought a temporary stay pending the outcome of the New Jersey stay motion and he articulated that further at page 57 of the transcript. Our submission is that that is not open to him. That relief was not sought in the notice of motion, reference volume 2, page 285, and that relief was not sought in the Court of Appeal, page 786, and that relief ought not to be allowed now. Could I move now to my main submissions?

BRENNAN CJ: Yes, Mr Stitt.

BRENNAN CJ: As your Honours please. The Australian law recognises that the respondent insurers were entitled to commence the proceedings in New South Wales notwithstanding one, that there was arguably a prior filed proceeding in New Jersey; two, that the proceedings in New South Wales were partly negative in nature and, three, in the absence of seeking, first, a stay in New Jersey. In our submission, to understand why that is so, it is necessary to examine the nature of the New Jersey proceedings and, in particular, the relief there sought. It is inadequate as a vehicle to resolve the dispute between these parties. It is not correct to describe the New South Wales proceedings as the obverse of the New Jersey proceedings.

The New Jersey proceedings do not purport to resolve the question of indemnity for any non-US claims and in particular the Australian personal injury and property damage claims. The New Jersey proceedings do not raise the validity or the effect of the two letters and they do not seek to set aside the contract, if there be a contract, evidenced by those two letters.

GAUDRON J: Can I stop you there. It surely is not to the point that the proceedings do not. The question really is: is it open to your client to raise those issues in the New Jersey proceedings?

MR STITT: Your Honour, the answer to that question is to be found by looking at the way in which the New Jersey proceedings are structured. If I could take your Honour to the complaint, it starts at page 185 of volume 1.

KIRBY J: Do you say in answer to her Honour's question that it is impossible for you to include these issues in the New Jersey proceedings?

MR STITT: Yes, your Honour.

GAUDRON J: Particularly the letters.

MR STITT: Yes. If I could just take your Honours to the way in which the New Jersey complaint is structured. I do not want to go through the whole complaint, but if your Honours look firstly at the parties to the New Jersey proceedings at page 190, CIGNA Australia, INA and CIGNA are referred to as the CIGNA organisation. Then there are the various insurers. CIGNA Corporation is said to be the alter ego of CIGNA Insurance Australia. If your Honours go to paragraph 47 which is in the third count. Perhaps if your Honours just look at that and I come back to the counts. In paragraph 47 it says:

If coverage for the 1991 Claims is barred in whole or in part by The Coerced Withdrawal Letter -

and that means the correspondence which we have been calling either the contract not to sue or the release or whatever it is, but they call it The Coerced Withdrawal Letter. It is the same concept -

then CIGNA's wrongful and coercive conduct intentionally and maliciously interfered with CSR's contractual relations with CIGNA Australia and Other Underwriters, and deprived CSR of the economic advantages to which it was entitled and which it reasonably expected to obtain in the future from its agreements with CIGNA Australia and Other Underwriters.

Now, the effect of that is that paragraph 47 of the complaint is a negative, anticipatory, pre-emptive complaint. In other words, if you raise that as a defence, if you raise those letters as a defence then, over the page:

CIGNA is liable to CSR for damages caused by CIGNA's wrongful conduct.

In other words, the way in which it is being put is that we will be denied the right to raise that contract and if we do then the Sherman Act will apply and treble damages will be the consequences if that succeeded. Now, if you look at the counts, the first count on page 201, the relief sought is damages against CSR.

GUMMOW J: It is the defendants - - -

MR STITT:

Defendants are liable to CSR for damages -

count II - and it is only in count II that CSR America appears.

BRENNAN CJ: Before you leave count I, at the top of page 202, it says:

Defendants have failed and refused to provide coverage for any of the Asbestos Claims.

What does that mean, exactly?

MR STITT: What is being alleged is that there was insurance coverage which the insurer defendants have wrongfully failed to honour.

BRENNAN CJ: Failed to honour when they are contractually bound?

MR STITT: To do so, yes.

BRENNAN CJ: I see.

MR STITT: The asbestos claims are only those claims made in the United States. That is a defined term at page 188. Then count II, on page 202, CSR America there seeks "Declaratory and Injunctive Relief". Count III:

CIGNA is liable to CSR for damages -

count IV:

CIGNA and/or CIGNA Australia are liable to CSR for damages -

count V:

CIGNA and/or CIGNA Australia is liable to CSR for damages - - -

BRENNAN CJ: Just before you keep on going, count IV:

If the Coerced Withdrawal Letter operates to bar coverage in whole or in part -

is that a matter in issue?

MR STITT: Only if it raised.

BRENNAN CJ: Yes.

MR STITT: That is the point we seek to make, your Honour. Only if it is raised by us. In other words, it is held over our heads. Then count V - - -

KIRBY J: But does that not mean that within the ambit of what is being litigated in New Jersey, you could apply to raise it and on the principles that we understand, you would be given that facility?

MR STITT: Your Honour, if we do raise it, we then immediately lead into the Sherman Act; that is the way this is being - - -

KIRBY J: Well, that will then be resolved according to law. I just want to understand whether it is possible for you in the New Jersey proceedings. I realise there may be some forensic, strategic disadvantages for you, but it is possible for you, in law, to apply to the judges of the District Court in the United States to amend their process to allow you to litigate this matter.

MR STITT: Your Honour, that involves a number of consequences. That involves us going to New Jersey; it involves us lodging a bond; it involves us submitting to the jurisdiction; it involves us in being subjected to a regime where we would not recover costs.

KIRBY J: There are certain disadvantages, but there are disadvantages on the other side, this is the problem, it is the nature of international disputation.

MR STITT: But the point is that if you look at this complaint, it does not raise in terms the question of the validity of this contract and it does not seek, as my learned friend, Mr Jackson, yesterday said, to set that contract aside. The structure of the complaint does not raise that issue.

McHUGH J: I am not sure what effect the introductory clause in, say, paragraphs 50 or 47 has got to do with the case. It seems to me it is almost surplusage. There could be a tortious interference with contractual relationships, irrespective of whether or not the coverage for the 1991 claims is barred by that letter.

BRENNAN CJ: Is this the proposition, that if this question of the existence and effect of the letters is to be litigated in the United States, you can litigate it only at the price of incurring treble damages?

MR STITT: Yes, and only at the price of bringing down on our heads the Sherman Act.

GAUDRON J: At the price or at the risk?

MR STITT: At the risk, but the attendant factors are those other matters to which I have referred and it also depends, of course, on the pendant jurisdiction.

GUMMOW J: But the coerced withdrawal letter is defined in paragraph 38, is it not? That is part of a series of allegations about the boycott and then the first paragraph in the count VI dealing with the Sherman Act refers one back to paragraphs 1 to 55, which would include the circumstances leading up to the coerced withdrawal letter, and then allegations follow to found the Sherman Act claim and they seem to involve the circumstances in which the coerced withdrawal letter was brought into existence.

MR STITT: But it does not seek to set that agreement aside. It relies upon it as part of the Sherman Act claim. It is said that it is the conduct which gives the entitlement to a Sherman Act relief. If you look at page 206, at the end of count VI, which deals with the Sherman Act:

The CIGNA Organization is liable to CSR for statutory damages -

There is no claim by CSR America for statutory damages and there is no claim by CSR America under the Sherman Act.

BRENNAN CJ: Now, is this claim made against CIGNA or against all CIGNA companies?

MR STITT: It is made against the CIGNA organisation which is defined at page 190 line 25. It is instructive for the Court to look at the way in which those proceedings were actually commenced by CSR because it is relevant ultimately to the question as to why were those proceedings commenced in New Jersey; why did CSR sue in New Jersey. The starting point is to look at the minute of the CSR board which is set out in volume 1 page 119. At the bottom of page 119 the board minute of 11 April is set out verbatim and under the heading "CIGNA Proceedings - Asbestos Litigation Update" the board resolved there to commence proceedings:

in the United States against its former insurer, CIGNA, seeking indemnity in respect of asbestos related claims against the Company."

KIRBY J: So far, there is nothing in that, because that would be a natural thing, if you could do it, to bring in a disputing insurer into a claim in which you are being sued by lots of people who are claiming against you.

MR STITT: Well, your Honour, the minute authorises a claim against insurers for indemnity. It does not authorise a claim by CSR with CSR American as a co-plaintiff; and it does not authorise a claim for damages for tortious conduct, or for statutory damages, such as the Sherman Act. And CIGNA Corporation is not an insurer, and never was an insurer of CSR, or its subsidiaries. In our submission, the minute, as the starting point, when looked with the complaint - with the pleading and the way in which it is structured in the New Jersey court, highlights the way in which CIGNA Corporation and CSR American - the two American companies - have been joined in these proceedings for the purpose of adding American colour, and not for seeking the relief particularly in relation to CSR America under the Sherman Act.

GUMMOW J: There is declaratory judgment sought, is there not, on page 207, the second paragraph of the relief, line 45, 207? Now, in order to grant that declaration, would there not be brought into consideration the standing of the so-called coerced withdrawal letter?

MR STITT: Your Honour, only if we raise it as a defence. And if you look over the page, at 208, for the orders sought, it seeks relief, including injunctive relief. Now, that can only be an anti-suit injunction, or an anti-anti-suit injunction.

GAUDRON J: Mr Stitt, is this all going to establish that the appellants in this Court have a forensic advantage by suing in the United States?

MR STITT: No, it goes to establish that the appellants in this Court are seeking an illegitimate advantage and I want to come to - - -

DAWSON J: Why is it illegitimate?

GAUDRON J: Yes?

MR STITT: Because, your Honour, the real nature of the dispute between these parties relates to the nature and extent of the insurance coverage and whether or not that insurance coverage extends to these claims which is the United States claims, the Australian claims and the property damage claims. Now, the US proceedings do not even purport to deal with two of those, namely the Australian claims and the property damage claims and that is why I want to come at the moment to look at what the Australian proceedings are and what relief is sought in the New South Wales court.

DAWSON J: Is this the proposition, that the totality of the dispute can be dealt with in Australia whereas only part of it can be dealt with in America.

MR STITT: Yes, your Honour.

GAUDRON J: Well, is that true, because you cannot deal with the Sherman Act in Australia?

MR STITT: Your Honour, the Sherman Act claim is drafted in the complaint so as to encompass an extraterritorial jurisdiction and that was a finding by Mr Justice Rolfe at page 160, line 35 and CSR has never disavowed that they seek to use the Sherman Act extraterritorially. On the stay motion, CSR led lengthy evidence from the expert Professor Lowenfeld as to its extraterritorial reach and that was acknowledged by CSR in the Court of Appeal - - -

GUMMOW J: That may all be true, Mr Stitt, but I am not sure it is answering her Honour's question. Her Honour's question was could they, the CSR people, have started proceedings in Australia relying on the Sherman Act, whatever the Sherman Act - - -

MR STITT: Could they?

GUMMOW J: Yes.

MR STITT: No.

GUMMOW J: The answer must be no; therefore the proceedings, in answer to Justice Gaudron's question, are not coextensive, the totality is not the same. It might be a good thing or a bad thing, but it seems to be so. They are not coextensive.

MR STITT: Yes, your Honour. The New Jersey proceedings and the New South Wales proceedings do not entirely overlap and the New South Wales proceedings are not the obverse of the New Jersey proceedings, which is the submission that both my learned friends, Mr Jackson and Mr Bennett have put. When you look at the proceedings and look at the nature of the relief being sought in the two separate fora, it is plain that that is not so.

TOOHEY J: But how far does that take you? If there is a core of dispute that is common to both the New Jersey litigation and the Australian litigation, what do you ask us to conclude from the fact that one has some causes of action that do not exist in the other, and vice versa?

MR STITT: What ultimately we ask this Court to conclude is that the institution of the New Jersey proceedings in these circumstances is for an illegitimate purpose and it is in those circumstances unconscionable conduct in the concept of Midland Bank v Laker.

GAUDRON J: What is the illegitimate purpose?

MR STITT: The illegitimate purpose is to force my clients to litigate in a forum which is firstly, inconvenient; secondly, which requires the risk of a bond being lodged which requires us to submit to a jurisdiction which we would not normally wish to submit to. It requires us to litigate in circumstances where we could not recover our costs and it requires us to litigate in circumstances where we are at risk of a judgment being entered against us under the Sherman Act for triple damages.

GAUDRON J: Why is that illegitimate? You state it is illegitimate but, apart from stating it - - -

MR STITT: Because it is unconscionable.

GAUDRON J: That really is the dog chasing its tail. What precisely is unconscionable or illegitimate about those steps? I mean, they are factors that one would expect would occur in virtually any transnational litigation.

MR STITT: No, your Honour, not necessarily. If your Honour looks at what was said in Midland Bank v Laker by Lord Justice Lawton, it is precisely the proposition for which we contend. In Midland Bank v Laker (1986) 1 QB 689, the passage that we rely upon is that of Lord Justice Lawton at page 700 where he said this:

It still remains to consider whether the threatened antitrust suit if instituted would be unconscionable conduct on the part of the liquidator. What he is trying to do is to make the plaintiff banks liable to the heavy financial penalties which can be awarded in a United States antitrust suit for acts done in England and intended to be governed by English law and in respect of which he has no claim at all in England. In my judgment, this would be unjust and, in consequence, unconscionable; and the more so when, so far as can be seen from an English Bench, the liquidator has not, by English standards -

et cetera.

BRENNAN CJ: That I can understand. If you are saying - which I do not think you have said, but if you are saying that the consequences of the alleged agreement were that as between the parties and by Australian law there was a discharge of any existing liability or release, however you wish to put it, and that those rights are being infringed by litigating in a foreign forum where you are put at risk of enforcing your rights by the risk of treble damages, that I can understand. In other words, the extraterritorial operation of the Sherman Act impinges upon the order of rights that are governed by the law of New South Wales. It has got nothing to do with bonds and things like that.

MR STITT: Well, your Honour, it is part of it, in our submission, but that is the way in which we put it. If your Honour goes to page 160 in his Honour's judgment, it starts perhaps at line 25:

The damages are sought by CSR, so that I am confronted with a situation in which CSR is seeking to recover damages conformably with the law of the United States, including the legislation to which I have referred, notwithstanding that neither it nor many of the parties alleged to have perpetrated the misconduct are in the United States, in any relevant way, and that the activities said to give rise to the misconduct occurred in New South Wales.

So that his Honour has made a finding that the relevant conduct occurred in New South Wales.

GUMMOW J: But there are many torts which are tried in the jurisdiction other than the jurisdiction in which the tort was committed. Why does one recoil in horror from the prospect of wrongful acts being committed in one jurisdiction and tried in the other?

MR STITT: Your Honour, except that the Sherman Act is not one which would be tried in New South Wales in respect of conduct which occurred in New South Wales.

GUMMOW J: That is right, but it has to be the point that we have got no comparable legislation; that has to be the point.

MR STITT: Yes, but your Honour, the New South Wales court looks at the New South Wales conduct and that there is no Sherman Act entitlement.

McHUGH J: But what is it that makes it unconscionable? Is it the treble damages or is it the fact of bringing the action at all, because if it is the latter it would seem to indicate that it was always unconscionable for people to litigate in another country legislative causes of action which are not applicable in the country where the parties normally reside?

MR STITT: Well, your Honour, it is unconscionable to litigate in a jurisdiction where there is a contract or is a serious issue to be tried as to whether there is a contract not to sue, that is unconscionable, and it is also unconscionable to litigate in a jurisdiction where there is the treble damages and that there is extraterritorial operation.

DAWSON J: I do not understand that; that is really just saying the Sherman Act is unconscionable. Can you do that?

KIRBY J: I suppose you have this going for you, that if the parties who are involved in the writing of these letters looked at this in isolation, they would be entitled to say, we would never have expected that this would somehow end up in an American court and be subject to the Sherman Act. In writing their letters they would assume, looked at in isolation, that that would be dealt with according to the law of the place in which they wrote it, ordinarily, but the problem is that it is an ingredient in a complex international transaction and therefore it cannot be looked at in isolation, and a transaction in which there is major litigation, already begun in the United States, to which this is not an unnatural consequence or unnaturally associated.

MR STITT: But, your Honour, to talk of major litigation in the United States is to ignore what has happened in this matter. This matter has had a long history in this sense; that these claims arise out of the mining operations by Midalco at Wittenoom. Those mining operations ceased in 1966. Now, the mining operations involved mining and processing of blue asbestos that was shipped from Wittenoom and exported overseas, and there was a town, or there is a town of Wittenoom in which the people who worked in the mine and the processing and their families lived.

Now, the claims that have arisen are in the following categories: the people who worked in the mine and the processing; the people who were involved in the transporting, such as truck drivers and waterside workers; and a third category of the people who lived in the town. Now, those claims are still coming forth and being litigated in Australia. The most recent was in respect of a child who lived in Wittenoom, and she recovered damages in New South Wales in 1994. Now, in addition to that, the Western Australian Parliament has set up a select committee to investigate cleaning up Wittenoom and the Pilbara gorges, and it as recommended that CSR, and the Hancock group of companies, conduct an environmental clean up.

BRENNAN CJ: Do we need to go through all this?

MR STITT: Well, except, your Honour, that it is property damage relevant to the claim which we make in New South Wales proceedings, and we seek declarations that we are not liable for property damage. That is a very substantial part of this case. None of that will be litigated, or determined, or dealt with in the United States proceedings. So that, it is not true to say that New South Wales is merely the obverse; we seek relief which is not capable of being delivered in New Jersey. But the answer to your Honour's question - - -

KIRBY J: I understand that problem. Could that be excised by, as it were, having that part of it which deals with the plaintiffs who are suing in the United States, and the matters incidental to that, and the claim for indemnity in respect of their action dealt with in respect of those proceedings, and the other matters dealt with by Justice Rolfe?

MR STITT: No, your Honour, because what happened was these insurers only came on the scene in 1978, the operations having ceased in 1966, and the NZI insurers being on risk up until 1978. The NZI insurers were sued by CSR in New South Wales. They obtained a judgment from Mr Justice Cohen to the effect that NZI were liable to indemnify CSR in respect of all the claims that were made.

That litigation proceeded in New South Wales and was ultimately settled for $100 million. In the course of these proceedings, Mr Steele, the solicitor for CSR, acknowledged that there was a deliberate decision taken not to join these CIGNA insurers as defendants in the NZI litigation, and that was a decision deliberately taken. After the settlement of those proceedings, then the New Jersey proceedings were commenced. So, in answer to Justice Kirby, to say that the New Jersey proceedings is major litigation is to ignore all that has happened and gone before, so that the New South Wales proceedings, the declarations and the orders which are sought in those proceedings, deal with the entirety of the dispute. I am reminded that the NZI proceedings involved exactly the same claims which are now being sought to be litigated in New Jersey.

McHUGH J: Why do you not admit your liability, then?

MR STITT: Because they were against NZI. This is a different insurer.

McHUGH J: Yes, I know, but did not Justice Cohen hold them liable?

MR STITT: No, he did not hold them liable. What he found was that there were policies in existence which covered Wittenoom and the activities arising out of Wittenoom. That is what he found. Then there was to be a hearing about how those claims were to be quantified.

BRENNAN CJ: Do I take it that the terms of settlement were published?

MR STITT: Yes, your Honour. They were, and they were published by CSR and part of its accounts.

BRENNAN CJ: Now, is this the situation, Mr Stitt, that in the New South Wales proceedings there are three categories of claims involved: one is the American claims; the second is the Australian claims; the third is property damage claims? The New Jersey proceedings, on the other hand, comprise only of the American claims but they also comprise the Sherman Act? Is that the extent of the co-ordination of the two claims?

MR STITT: Yes, your Honour, and there is no order sought in the New Jersey proceedings for a declaration as to the validity of the coerced letter or the agreement not to sue or whatever one describes it.

GUMMOW J: Can I put this to you, Mr Stitt? In so far as you complain about the reach of the Sherman Act, we have to be fairly careful here because sections 5 and 6 of the Trade Practices Act 1984 on our part assert quite a long reach from our Trade Practices law, Part IV. We gave remedies in section 87 which include rewriting contracts which, I think, could shock Americans, so, forensic reliance on English complaints about the Sherman Act need not necessarily cut all that much ice, I think, here.

MR STITT: I suppose, your Honour, that is what this case is all about. All I can put is the submissions and if they do not find favour with your Honour, but our submissions are that the law is stated and we are entitled to the benefit of it.

BRENNAN CJ: I was only going to ask you this. If you are relying upon the unconscionability which appears in the Midland Bank Case you have to put this proposition, do you not, that if parties regulate their relationship by the law of New South Wales, and the law of New South Wales in its application would not accord to one of those parties either triple damages or the risk of liability to be sued for triple damages, the party who seeks that relief under the Sherman Act is acting unconscionably. Is that right?

MR STITT: Yes, your Honour.

BRENNAN CJ: Well, now, if that is so, your argument must go to this extent, must it not, that if this litigation were pursued solely in New South Wales and came to a conclusion in your favour then you would be entitled as further relief to an injunction against the bringing of proceedings against you in America based on the Sherman Act?

MR STITT: Yes, I think that follows.

BRENNAN CJ: Well, that is the essential point, is it not, that you have got to make.

McHUGH J: And you have to maintain that proposition even though by hypothesis your conduct must have affected United States commerce and, I assume, must have injured the plaintiffs in the United States.

MR STITT: Well, that is a matter for evidence and at the moment - - -

McHUGH J: I know, but that is the hypothesis, is it not? To prove their claim they have got to show that your conduct affected United States commerce and that they suffered damage as a result of that interference with US commerce.

MR STITT: Yes, that is so.

McHUGH J: Well, I cannot see myself for the moment how that can be regarded as unconscionable, either in this case or in the Midland Bank Case. I mean, how could it be unconscionable in the Midland Bank Case if what the banks did affected United States commerce and as a result injured the plaintiffs? It is a strange proposition, to me anyway.

MR STITT: Your Honour, the Sherman Act claim is not unconscionable per se, but to apply it extraterritorially and particularly when, at the time in 1992 of these events that relate to the withdrawing of the claims, the parties had no reasonable expectation that they would be sued in New Jersey or anywhere else other than in New South Wales.

McHUGH J: But you invoke the word "extraterritorial" but I am not sure it has got any relevance. If what you have done in New South Wales affects commerce in the United States and as a result the plaintiff suffers damage, I do not know that extraterritoriality has got much to do with it. It is just simply like saying that there is a conspiracy to import drugs made in Hong Kong. It is still an offence in this country if you import the drugs in here.

MR STITT: Your Honour, the finding which we have at this stage is that the conduct occurred in New South Wales. There is no evidence that there was any impact on the relevant US market. There is no evidence that there was any loss or damage suffered and, indeed, the expert witness, Professor Lowenfeld, who was called - we had a Professor Schmidt available to give evidence, but he did not have to give evidence as it turned out - but Professor Lowenfeld said that the Sherman Act claim as presently pleaded - he conceded that the Sherman Act claim as presently pleaded in this complaint was liable to be struck out because it did not show any cause of action under the Sherman Act. The relevant conspiracy being pleaded was between a holding company and one of its subsidiaries in breach of the Copperweld principle.

Now, that is another reason why my learned friend Mr Bennett's submission about amending has no real force because there is no other party that he can identify that would overcome the problem with Copperweld. So there is no evidence of damage. There is no evidence of relevant market. The conduct occurred in Australia. The complaint as presently pleaded on their own expert is liable to be struck out. The question is why should we be drawn to New Jersey in those circumstances, why - - -

KIRBY J: The answer to that is because the matter relating to your insurance is not the whole issue you want to litigate here but is said to be relevant. What is so inconvenient with your taking the course which the appellants urge on this Court as a general principle, going to New Jersey, saying that the Sherman Act should, as the professor said, be struck out, saying that you have lots of other fish to fry in Australia and it is more convenient and appropriate that it be dealt with in Australia? That court might well then agree to those submissions.

MR STITT: But when your Honour says "What is inconvenient", the fact is that it is only in New South Wales and only in a New South Wales court that we can challenge the unconscionability of the Sherman Act, so it is more than inconvenient.

KIRBY J: Unconscionability is a secondary issue if the Act does not attach. That is the primary question. If you have a professor's opinion that says that it is liable to be struck out, why is not the appropriate course, given that this is a United States Federal Court, appropriate as a general principle, that you should have to go there first? There is no question in this case of any problem of the integrity or independence of the court. That court will then just apply the law and you have apparently good arguments to suggest that you can have a knockout. As well as that you have the forum non conveniens issues that you have three other fish to fry that are more conveniently dealt with in a big case very pertinent to a big Australian company in Australia.

MR STITT: Your Honour asks me the question based on inconvenience. Immediately that, in our submission, throws up the question of what is involved if we have to go to New Jersey to do the things that your Honour is putting to me. That immediately throws up the question of the bond, submission to jurisdiction, no costs, inconvenience and all the rest of it, and particularly when the New Jersey proceedings do not seek any declaration as to the validity of this agreement which we - - -

KIRBY J: But those principles would stand, in your view, against any anti-suit injunction directed in respect of litigation in the United States because those problems are going to be true of every case: bond; cost rules.

MR STITT: It may or may not be. It depends on the State in which you litigate. These claims, for example, that have been made against CSR since the early 1980s fall in something like 30 States of the United States. New Jersey has been selected by CSR undoubtedly for a purpose. They have not selected Colorado or other States. It just so happens that in New Jersey there is a statute which requires non-registered insurers such as my clients to lodge a bond sufficient to meet the damages which are likely to be awarded before we can even start. Your Honour asks what is inconvenient about it. That is inconvenient.

KIRBY J: What would be the kind of bond you would be looking at here?

MR STITT: The extent of the US claims at the moment, most of them are being settled, but the extent of them are something of the order of 50,000 or 60,000 claims. As I say, most of them have been settled but there are a number of them - you are looking at tens of millions of dollars. I cannot be more precise than that but the Texas claims, for example, have just recently been settled. Most of them - there were 20,000-odd claims in Texas against CSR. So, you are looking at very, very substantial sums of money and that is why his Honour Mr Justice Rolfe posed the question, why would they commence in New Jersey? Why, in these circumstances, would New Jersey be regarded by CSR as the appropriate forum.

GUMMOW J: It is not New Jersey. It is the United States Federal Court, a question of which particular district it is brought in. That idea seemed to run through his Honour's judgment. It is a wrong idea, if I may say so.

MR STITT: It is the court in New Jersey. It is not the court in Texas, it is not the court in other States where CSR has been sued.

BRENNAN CJ: Does the bond apply by reason of the fact that it is a Federal Court or by reason of the fact that it is sitting in New Jersey?

MR STITT: Well, I think the latter.

BRENNAN CJ: That is a very curious result to think that the State law would operate differentially on the federal jurisdiction.

MR STITT: It is a question of the pendant jurisdiction, as I understand it.

KIRBY J: Did his Honour find that the New Jersey statute would be applied by the Federal Court in the United States?

MR STITT: He found that, yes, there was a risk and his Honour found that it was open to conclude that one of the reasons that New Jersey was chosen was that it would bring enormous pressure on the insurers to settle.

DAWSON J: Where does the requirement of the bond come from, Mr Stitt? I mean, I cannot believe it is some sort of reproduction of the Judiciary Act in the United States. They would not do that.

MR STITT: Where does it come from?

DAWSON J: Yes.

MR STITT: There is a New Jersey statute. It is dealt with in - - -

DAWSON J: It is a State statute, is it?

MR STITT: It is a statute, yes.

DAWSON J: State statute? A New Jersey statute?

MR STITT: I think that is correct.

DAWSON J: And how does it come to apply in federal proceedings?

MR STITT: It is picked up by the Federal Court.

McHUGH J: Yes, but how?

MR STITT: Your Honour, there is extensive evidence about this in the affidavit of Mr Coughlin.

DAWSON J: But can you summarise it for us.

MR STITT: Well, the effect of it is that the statute requires insurers that are not registered in New Jersey as insurers to lodge a bond before they are allowed in to defend; that bond to be of a sufficient amount to cover the likely damages to be awarded against - - -

DAWSON J: I understand what a bond is, but I am just wondering about where the requirement of lodgment comes from and how, because it seems to be the forefront of your argument.

MR STITT: Your Honour, it is page 879, volume 4.

BRENNAN And that is referred to in paragraph 21 of the affidavit at page 866, is that right? So perhaps you can tell us what NJSA is?

MR STITT: I am sorry, your Honour, I did not hear.

BRENNAN CJ: It seems that this is a statute which is called NJSA 1751-2; what does NJSA stand for? New Jersey something, I presume.

MR STITT: I am sorry, your Honour, I just cannot answer that question accurately at the moment; I will endeavour to do so.

BRENNAN CJ: Can I just ask you one other question, Mr Stitt? I am not sure whether your argument now is on the basis that it is unconscionable to disturb the legal relationships established by the law in New South Wales by imposing upon the respondents to this appeal the liability under the Sherman Act or whether it is said that the claim under the Sherman Act in America is misconceived and therefore, on grounds of inconvenience generally, it is undesirable that the American court should proceed. Which way are you putting it or are you putting it in the alternative?

MR STITT: Well, we put it, I think, your Honour, in the alternative - - -

BRENNAN CJ: I see.

MR STITT: - - - the Midland Bank point and, also, the inconvenient point. And as I have submitted, that it is only in the New South Wales court that we can challenge the unconscionability of the Sherman Act and that our proceedings, therefore, should not be stayed.

McHUGH J: It rather appears, from this affidavit, that there is no provision that automatically applies the bond. It seems to be done by a court order of the Federal Court. In paragraph 23 there is a reference to an order that:

the Order of the United States District Court -

for California -

directing foreign insurers to comply with the provisions of the California Insurance Code.

So, it seems it is just a matter of practice and procedure within an individual court. Not to mention some problems that you might have under the Privileges and Immunities clause in the United States Constitution as to whether or not you could enforce such a provision on an out-of-state insurer. I would have thought that would have been open to some challenge.

MR STITT: Nevertheless, your Honour, it is a relevant risk.

McHUGH J: Yes.

KIRBY J: You do not want to end up in the Supreme Court of the United States, as well as the High Court of Australia.

MR STITT: Your Honour Justice Kirby's last suggestion to me, perhaps, is really a statement of a first filed rule and, if that is convenient, I would like to move to that point now.

BRENNAN CJ: Yes, Mr Stitt.

MR STITT: If your Honours please. CSR's submission is that the first-filed proceedings should determine the forum, and that subsequent filed proceedings should, for that reason alone, be regarded as vexatious and offensive. That submission overturns the approach of this Court in Voth in the case of concurrent proceedings and, if that rule was applied, it would shift the focus of the inquiry - the relevant inquiry from the inappropriateness of the local forum to a mere mechanical identification of a temporal filing.

In our submission, to create such a large exception to the Voth principle would render Voth a hollow shell, because it would replace the need for the Court to examine the factors relevant and connecting to the local forum to determine whether it is a clearly inappropriate forum, with, as I say, a simple mechanical exercise of looking at which one started first.

That, in our submission, would leave the law in Australia with an internally inconsistent and an incoherent approach to the exercise of jurisdiction. The test completely alters, depending upon whether or not the proceedings in the alternative forum have been, (a) commenced, or (b) commenced first. The appellants' submissions do not identify whether the local proceedings are stayed if they are first in time, but the local court is a clearly inappropriate forum. That is a matter which is entirely unanswered.

GAUDRON J: That really does seem to be a matter that has been overlooked in the argument so far. If the local forum is a clearly inappropriate forum, then surely there would be no anti-suit injunction granted. It would seem, therefore, that albeit that there is never going to be anybody there at the anti-suit injunction stage to argue inappropriate forum, the very first step that a local court should do before considering the grant of an anti-suit injunction is to determine if the forum non conveniens application were made it would stay its own proceedings.

MR STITT: The first filed rule is directed, really, to the stay aspect rather than to the anti-suit - - -

GAUDRON J: Yes, I am not worried about the stay - perhaps it is, but surely that the stay must be considered before any - or the possibility of stay, must be considered first before you ever get to anti-suit injunction.

MR STITT: Yes, but my learned friend's rule would remove any question of consideration of appropriateness or inappropriateness of the forum.

GUMMOW J: That may be right; the question is, do you accept that proposition, I suppose, namely that the correct sequence faced with an order of events which is, action in New Jersey; action in New South Wales. The correct sequence then is New South Wales court asks itself, "Should New South Wales proceedings be stayed under Voth and Henry v Henry principles?" Answer, "Yes, it should". Consequence: no question of anti-suit injunction arises. Answer to the other effect, namely, "No, we are not going to stop our own proceeding". Question, "Should there then be an anti-suit injunction?" That is the way it should work out. Is that something that fits in with your submissions, or not? It may not fit in with Mr Jackson's or Mr Bennett's, I do not know, but that is what I have got on my mind.

MR STITT: Your Honour, it does not fit with our submissions if it simply applies a mechanical rule without the Court having to consider whether or not it is a clearly inappropriate forum.

BRENNAN CJ: It does not apply any mechanical rule, a question of whether it is a clearly inappropriate forum. That is not a mechanical rule.

MR STITT: The first filed rule would be.

BRENNAN CJ: The question that was put to you is do you accept the proposition that the order of thinking is whether or not the forum is clearly inappropriate and only then does one pass to the question, or does not pass to the question, of the granting of anti-suit injunction.

MR STITT: Yes, your Honour, we do accept that, but subject to the need for urgent relief, that that must be a matter which is relevant and, in any event, this was never put to Mr Justice Rolfe. This was never given to him as any submission and he was given no opportunity to deal with it. It was not put to the Court of Appeal. Similarly, it was not asked to deal with it.

GAUDRON J: You see, as I understood the submissions, leaving aside perhaps some remarks by Mr Bennett yesterday, the first filed rule really applies in relation to the Amchem principle, not the question of stay. Certainly there is no decision of this Court that suggests the first file rule determines the question of stay on forum non conveniens grounds.

MR STITT: I am sorry, your Honour, is that a question?

GAUDRON J: Yes. Well, perhaps not. It just seems to me that when you direct your argument on the first filed rule to the stay you are pushing against an open door; it is application in relation to Amchem that is the issue.

MR STITT: Well, your Honour, we are happy to push against an open door but the question is whether the first filed rule applies to the stay and then you move to the anti-suit injunction.

KIRBY J: There is a slight practical problem with that and that is it depends on - a judge does not just do what he thinks he ought to do, he deals with process. It depends on what process is before the judge. If it is not a forum non conveniens issue, then unless that is built into the process of reasoning on an anti-suit injunction summons, the judge may not, as it were, address his or her mind directly to the forum non conveniens question, he may just go straight to the issues that are raised by the anti-suit injunction application. I think that is, as I understand it, what happened here. You rushed along to Justice Rolfe, or rather the other side rushed along and sought to - you rushed along, sought to stop them preventing you from litigating this in the United States.

MR STITT: Yes, your Honour, that is so but in the course - - -

KIRBY J: Other way round.

MR STITT: - - - of the anti-suit injunction, in the course of what happened in this case when Mr Justice Rolfe was asked to grant the anti-suit injunction and there was a hearing and then a determination, in the course of that Mr Justice Rolfe did look at the forum non conveniens factors and his judgment reflects that. If your Honours go to page 157 that is to be found. It actually starts at the bottom of 156 and if your Honours then look at 157, 158 and 159, that his Honour did actually take those matters into account, which would be forum non conveniens matters.

BRENNAN CJ: So long as the argument turns on factors which are relevant to a stay application, I understand what you say, but if unconscionability depends upon substantive questions of entitlement, then it may be that the case cannot be confined to forum non conveniens considerations.

MR STITT: And the substantive entitlements are the equities which give rise to the anti-suit injunction entitlement, is that what - - -

BRENNAN CJ: No, I think if I understand your submissions correctly it may be what you would call the auxiliary jurisdiction point.

MR STITT: Yes. In answer to Justice Gaudron, the proposition which you were putting to me a while ago is supported in Aerospatiale (1987) AC at 896. At page 896F the sentence starts:

This presupposes that, as a general rule, the English or Brunei court must conclude that it provides the natural forum for the trial of the action; and further, since the court is concerned with the ends of justice, that account must be taken not only of injustice to the defendant if the plaintiff is allowed to pursue the foreign proceedings, but also of injustice to the plaintiff if he is not allowed to do so.

Our submission is that that is not an absolute rule. There is a need for qualification when there is urgent application and that that is supported by Airbus v Patel which I will come to. One of the disadvantages of the first filed rule is that it will lead to a race to file first. In our written submissions on the stay motion - and these submissions I am putting in relation to the stay aspect - page 8, we make submissions as to the reasons why a first file rule would not find favour with this Court.

It would discourage parties from attempting to settle matters prior to the commencement of litigation, particularly in a transnational context and since it would be crucial to have commenced the first set of proceedings, it would be in the interests of each party separately to commence the proceedings in the forum of its choice prior to attempting to settle or perhaps even notifying of the dispute. Of course, that is what happened here in our case. Here, we were not given any notice of an intention to make a claim under these policies which had been - - -

GUMMOW J: Like when we thought you had run off and get an anti-anti-suit injunction?

MR STITT: Well, presumably they thought that you had to be silent to win the race, that if you do not give any notice, you will win the race and you will be first filed and, in our submission, that leads to unsatisfactory consequences in the conduct of litigation generally. On page 8 we refer to the observation which is in the article in the footnote 11 and we adopt what was there said.

It is not correct to say, as my learned friend, Mr Jackson, did yesterday, that Mr Justice Rolfe wrongly relied upon the commencement of the proceedings without notice as being improper. Justice Rolfe did not take such a view and if the Court goes to page 707 of the judgment in volume 3, there the passage in his Honour's judgment refutes my learned friend's submission. It starts just under line 10, the paragraph, "What I have just said", and he then considers whether they:

were entitled to decide in which Court to sue and, thereafter, to require the insurers either to apply for a stay in that Court or to seek an injunction in the domestic Court. That submission, which is open in answer to the application for an anti-suit injunction, may be, and I put it no higher than that, appropriate if proceedings are regularly commenced and in circumstances where there could be no suggestion that the absence of any claim made by CSR and CSR America had led the insurers not to make a claim and to have their position determined by a Court previously. The significance of that in this case is that the insurers had a basis for seeking declaratory relief, which, however, only became justiciable when it appeared that CSR and CSR America were intending to adopt a stance different from that for which the insurers contend and which CSR and CSR America had not challenged for a number of years. I should add that this case is different, in my opinion, from one in which a party has a cause of action against another and, without notice to that other, decides to institute proceedings. That may lead to a different result from the one I have suggested in the present case because, prima facie, there is no obligation on a party to advise, generally speaking, of an intention to institute proceedings.

The submissions of my learned friends do not offer any solution to the problem thrown up by a first filed rule.

Could I come to Henry v Henry [1996] HCA 51; (1996) 70 ALJR 480, a decision of this Court. The facts, in our submission, which are relevant in understanding Henry v Henry are the facts as found by the Chief Justice at page 484. Under the heading "The Voth test in the present case" the Chief Justice found the facts that:

The parties to the marriage.....were not married in Australia. They have never lived in this country as man and wife. Their married life was lived in Europe, latterly in Monaco where they had their matrimonial home. In this country, there are no children of the marriage whose custody, maintenance or welfare might be affected by the making of a decree of dissolution. Nor is there here any substantial property of the spouses -

in this country -

the disposition of which might be affected by the making of a decree of dissolution. In short, there is no connection between the marriage of the parties and this country.

That, in our submission, is the starting point in relation to the way in which Voth should be considered.

The Chief Justice decided the case on the basis of a strict application of the Voth principles and on that Australia was clearly an inappropriate forum. The joint judgment decided on the basis that there was a clear error by the Judicial Registrar in failing to receive any evidence of the status of the foreign proceedings which had been stated by Voth to be a relevant consideration. In our submission, Henry v Henry did not establish the first filed rule for which the appellants contend.

The Chief Justice, at page 484G, expressly rejected it. It actually starts a little above G:

But that is a different case from one in which the jurisdictions of two fora have been invoked by parties because one of them favours the exercise of the jurisdiction of one forum, the other of whom favours the exercise of the jurisdiction of the other. That is the situation in the present case.

In this case, the wife has invoked the jurisdiction of the Monegasque court, the husband has invoked the jurisdiction of the Family Court. It matters not which proceeding was first commenced.

BRENNAN CJ: Mr Stitt, if you keep pushing, that door is going to come off its hinges. That is the proposition you are advancing, is it not, on the stay application?

MR STITT: Yes, your Honour.

BRENNAN CJ: Yes, well I think we are seized of that.

MR STITT: If your Honour pleases. Your Honour, could I then just deal with the way in which Henry v Henry has been analysed by us in relation to this case and could I take this Court to pages 25 to 29 of our written submissions, because it is easy, in this case, to lose sight of the facts. What we have done in the submissions between pages 25 and 29 is to take each of the propositions in Henry v Henry, stated them in bold type, and then analysed each one. I do not want to go through those in detail, but the analysis that we have done on that basis points that virtually every fact indicates that New South Wales is the appropriate forum.

GUMMOW J: Well, that is controverted in Mr Jackson's reply, so what do we do? We just look at both lists, I suppose. What is probably to be derived from that is that it is hard to find support for the proposition that there is only one natural forum. In other words, there are factors for various jurisdictions. It is an artificial construct to sit down - - -

MR STITT: I am sorry, your Honour, I did not hear.

GUMMOW J: It is an artificial construct, to sit down and make a list and say, "I am going to find as an absolute proposition the natural forum."

MR STITT: Your Honour, in our submission, it is a necessary exercise. Whether it is an artificial construct, it is a - - -

GUMMOW J: I mean, it is a question of relatively. It is not absolute. That is all I am putting to you.

MR STITT: If your Honour pleases. The facts also are set out in the judgment at 689, and these facts are stubborn and impressive. His Honour has found 15 factors connecting this litigation to New South Wales, and there has been no challenge to any of these factual findings. If your Honours go to page 689 of the judgment, it starts at line 35. Justice Rolfe set out the following factual matters, "which were either established by the evidence or not in issue" - and, as I say, there is no challenge to any of these - and he then lists them, and there are 15 of them.

Then, in page 692, his Honour then lists the matters that were put against New South Wales. It starts at the bottom. There were five; CSR America, et cetera. Now, items (b), (c) and (e) were considered by the trial judge and rejected, and there has been no appeal from those findings. So that the submission is that these facts are stubborn and impressive, and that there is no challenge to them, and that they are the relevant connecting factors to New South Wales. Could I give your Honours reference to authorities which show that the order of commencement of proceedings is not decisive?

BRENNAN CJ: Of what?

MR STITT: Not determinative of where the appropriate forum should be, and what should be the forum to hear the - - -

BRENNAN CJ: Of the stay?

MR STITT: Yes, your Honour.

BRENNAN CJ: We are back again, are we, on the open door?

MR STITT: Well, I am sorry, your Honour. Could I just then simply refer you to paragraph 4.5, and the cases that are there set out on page 7 of our written submissions? The cases are there set out, and the references. And could I also refer the Court to our written submissions, page 46? Yesterday Justice Kirby asked whether there were any New Zealand cases; we have set them out in our written submissions, paragraph 5.1.

The written submissions review the authorities for USA, Canada, New Zealand and Hong Kong, and in none of those places has the first file rule been applied. If, because of the first filed rule the Australian plaintiff is required to first seek a stay in a foreign court, in many situations that will produce an inadequate result.

GUMMOW J: Is not a real point about Amchem this, that in the Supreme Court of British Columbia there was no substantive proceeding commenced for a negative declaration. In other words, all that was before the Supreme Court of British Columbia was an application for an anti-suit injunction to restrain the proceedings in Texas. In other words, the steps that Justice Gaudron was putting to you as possibly applicable in this litigation would not have been applicable in the Canadian litigation because of the nature of the proceedings in the Supreme Court of British Columbia. They only had one element, not two.

MR STITT: And also in Amchem they had applied in Texas for a - - -

GUMMOW J: And they had been refused.

MR STITT: And had been refused.

GUMMOW J: Yes. They had gone to Texas.

MR STITT: Yesterday, my learned friend's submission focused upon corrupt courts and courts which would be otherwise unsatisfactory but, in our submission, the problem is much more fundamental than simply a question of whether a foreign court is a corrupt court or for other reasons may be unsatisfactory. There are many countries with which Australia trades or has contact in a commercial sense which have no forum non conveniens doctrine, for example, France, Germany, Italy, Switzerland, Greece, and in our anti-suit submissions, page 48, we deal with that aspect. It is in paragraph 6.19.1. In some countries, including many European countries in the civil law tradition, there is no equivalent of the doctrine of forum non conveniens. France, Germany, Greece, Italy and Switzerland, and in other countries the applicable doctrine is heavily biased towards a retention of jurisdiction, whether in terms or in its application.

In American Dredging Co v Miller, which is referred to in the footnote at the bottom of page 48 of our written submissions, that is reported, American Dredging Co v Miller, which is a decision of the Supreme Court of the United States. It is reported in 127 Lawyers Edition second series 285 but the passage to which I draw the Court's attention occurs at page 298.

GUMMOW J: This is all about the exclusivity of the Federal Admiralty jurisdiction, is it not, the mainspring of the debate in this case?

MR STITT: It is being cited by us for support of the proposition that you cannot rarely count on the fact that jurisdiction will be declined and at page 298, in paragraph 12, in the judgment of Justice Scalia delivering the opinion of the court, says this:

But to tell the truth, forum non conveniens cannot really be relied upon in making decisions about secondary conduct - in deciding, for example, where to sue or where one is subject to being sued. The discretionary nature of the doctrine, combined with the multifariousness of the factors relevant to this application, see the quotation from Gilbert, supra.....make uniformity and predicability of outcome almost impossible. "The forum non conveniens determination," we have said, "is committed to the sound discretion of the trial court. It may be reversed only when there has been a clear abuse of discretion; where the court has considered all relevant public and private interest factors, and where its balancing of these factors is reasonably, its decision deserved substantial deference."

Then it cites Piper v Reyno:

We have emphasized that "`each case turns on its facts'" and have repeatedly rejected the use of per se rules in applying the doctrine.....In such a regime, one can rarely count on the fact that jurisdiction will be declined.

And those statements, in our submission, reinforce what Chief Justice Posner referred to in Allendale and yesterday Justice McHugh referred to that at page 68.

BRENNAN CJ: You had better read the reference into the transcript, if you would, Mr Stitt?

MR STITT: Yes, your Honour. The reference is at page 68 of the transcript, commencing at line 30.

BRENNAN CJ: Yes, the reference to the case.

MR STITT: The reference, your Honour, is Allendale Mutual Insurance v Bull Data Systems [1993] USCA7 1229; 10 F 3d 425, it being a decision of the United States Court of Appeal Seventh Circuit.

KIRBY J: Which is the passage in this decision which you wish us to look at?

MR STITT: The passage is at page 431, which is the reference to the presumption against abstention.

BRENNAN CJ: 430, I think, was it?

MR STITT: Yes, I am sorry, your Honour. It is in the second column of page 430.

GUMMOW J: I thought we referred to this yesterday, this passage.

MR STITT: Yes, I was simply submitting that the statement in American Dredging Co v Miller reinforces what Chief Justice Posner says.

KIRBY J: You use these cases for the two purposes. First to show that in the United States an application for a stay on this basis would be a rather flimsy read. It would not really have the chances that it might have here.

MR STITT: It seems to be destined to failure, your Honour.

KIRBY J: Secondly, that it reminds us that running through all common law doctrine in America as well as here, it is the principle that the appellate court should not interfere readily in discretionary decisions of this character unless the discretion has been shown to have miscarried in some way.

MR STITT: In Laker Airways v Pan American World Airways 568 F.Supp 811, a passage at page 817:

As this Court observed in its March 9, 1983 Opinion, that is precisely the situation in this case. British courts could not and would not enforce the American antitrust laws. As for British substantive law, it fails entirely, for a number of reasons, to recognize liability for the acts which the defendants are alleged to have committed. That being so, this case is precisely within that group of cases which the Supreme Court in Piper Aircraft said should not be dismissed.

It is difficult to see how it could be otherwise. It would be a cruel hoax on the plaintiff to oust it from a court where its allegations, if proved, would entitle it to recovery, and to relegate it instead, in the name of "convenience" to a tribunal which, on the facts alleged, would not be justified under its own laws in entering judgment in plaintiff's favor.

KIRBY J: Would you give me the citation for that again, Mr Stitt?

MR STITT: Yes, your Honour, it is Laker Airways v Pan American World Airways 568 F.Supp 811. It is a decision of the United States District Court, District of Colombia. The opinion was that of Justice Greene and that was at page 817.

BRENNAN CJ: I do not think we have got that case, Mr Stitt.

MR STITT: I will make sure that your Honours do get it.

BRENNAN CJ: Yes, thank you.

MR STITT: I am sorry, your Honour, I thought you had it. In our written submissions on the anti-suit injunction, at page 48, paragraph 6.19.2 there is there set out the reference to American Dredging v Miller. Then, the next paragraph, in some jurisdictions it is not possible simply or solely to object to the jurisdiction or to apply for a stay or dismissal of the proceedings. In some jurisdictions a detailed defence on the merits, together with evidence, will need to be filed together with any stay application. This is another category or case.

The Greek proceedings were restrained from prosecuting in Continental Bank v Aeakos (1994) 1 WLR 588, the relevant passage being at 598D, and the position is similar in Japan, which emerged from the factual findings in Kawasaki v "Daeyang Honey" 120 ALR 109, the passage being at page 117. And even in jurisdictions where a stay application may be made, such an application would be expected to entail massive discovery and depositions or, as occurred in CSR's stay application in the present case, lengthy evidence, which entailed significant costs, which in countries such as the United States will generally not be recoverable.

BRENNAN CJ: Mr Stitt, could you give me the meaning of the reference to the second case in your footnote 172.

MR STITT: Is that the Megga Telecommunications, your Honour?

BRENNAN CJ: Yes.

MR STITT: Your Honour, that is cited for support of the proposition - - -

McHUGH J: No, what does HKC mean, Hong Kong Cases?

MR STITT: I am sorry. Yes.

GUMMOW J: Have we got it?

MR STITT: We can make a copy available, yes.

BRENNAN CJ: Yes, if you make a copy available.

MR STITT: We will make sure your Honours get that.

BRENNAN CJ: These are the only two cases of which you know in relation to the Japanese position?

MR STITT: They are the only two that we know of, your Honour. Then, your Honour, we rely on - - -

GUMMOW J: It is our main trading partner, anyhow.

MR STITT: Those are the only two cases of which I am aware, your Honour. We set out at paragraph 6.19.5 of the written submissions the situation where an application for a stay may be conditional; 6.19.6 there is the risk of having been taken to have submitted to the jurisdiction; 6.19.7 - - -

BRENNAN CJ: We can read these for ourselves, Mr Stitt, but if there is something you wish to develop on them then please do so.

MR STITT: No, your Honour. In relation to paragraph 6.20 could I respond to my learned friend's submissions in reply, particularly paragraphs 30 and 31, and just make this point, that contrary to the provisions of section 66 of the Supreme Court Act, the only circumstances in which an Australian court could grant an injunction restraining foreign proceedings, even if those proceedings were brought in breach of a legal right or vexatiously, is where the foreign court had denied that party natural justice in the hearing of the foreign stay application and, in our submission, the jurisdiction of equity is not to be fettered in that way.

Could I now deal with the submissions on the negative declarations? The position of the respondents is that section 75 of the Supreme Court Act, New South Wales, empowers that court to make relevant declarations. These declarations can be either positive or negative and it could be in the context of a dispute being either local or transnational and there may or may not be related foreign proceedings on foot. We have referred to the more modern authorities in paragraphs 4.17 to 4.21 of the stay submissions and I do not, at this stage, take the Court to them.

The real objection to a proceeding which seeks negative declarations should not be the form of the relief but, rather, whether that relief is being sought for the purposes of a forum shopping exercise. Forum shopping relevantly means the commencement and maintenance of proceedings in a forum which does not qualify as the natural forum or, alternatively, having regard - - -

GUMMOW J: That assumes there is a natural forum, you see.

MR STITT: That is an exercise which has, in our submission, ultimately to be determined.

GUMMOW J: Only one natural forum, and there has to be one?

MR STITT: There may be more than one, but it is an exercise which the Court has to look at as to whether or not there is a natural forum - - -

GUMMOW J: Any natural forum?

MR STITT: - - - or whether there is more than one. Where negative declaratory relief is sought in a clearly inappropriate forum, it is right that the proceedings be stayed, but this is for a jurisdictional reason unrelated to the form of relief. Negative declarations are not artificial in an insurance context if there is a question about liability to indemnify and that has been described by Lord Diplock as the classic form of relief. In British Airways Board v Laker Airways [1984] UKHL 7; (1985) AC 58 at page 81C, Lord Diplock said - and I will just read it without taking you to it:

This, being said in the context of an application for a Mareva injunction, omitted to mention the type of case that is of comparatively rare occurrence in the English courts in which the plaintiff seeks against a person amenable to the jurisdiction of the English High Court an injunction to restrain the defendant from bringing suit against him in a foreign court upon the ground that the plaintiff is entitled under English law to a legal or equitable right not to be sued in that foreign court by that person upon the cause of action that is the subject of such proceedings. A right not to be sued upon a particular cause of action in a particular foreign court by the person against whom the injunction is sought may be contractual in origin. A common example of this is an exclusive jurisdiction clause in a contract. Furthermore, if under English law a defence would be available to the injunction-seeker, that defence may be given anticipatory effect as a right not to be sued that is enforceable by injunction in an action for a declaration of non-liability. Of such defences it is not difficult to point to a number of examples most of them equitable in historical origin, such as estoppel in pais (which was also a defence at common law), promissory estoppel, election, waiver, standing by, laches, blowing hot and cold - to all of which the generic description of conduct that is "unconscionable" in the eye of English law may be given. I would accordingly agree, as I did in Castanho's Case (1981) AC 557, with the qualification to the statement of principle in the stark terms in which I expressed it in the Siskina Case (1979) AC 210, 256, that was added by Lord Scarman in Castanho's Case, at page 573:

"But the width and flexibility of equity are not to be undermined by categorisation. Caution in the exercise of the jurisdiction is certainly needed: but the way in which the judges have expressed themselves from 1821 onwards amply supports the view for which the defendants contend that the injunction can be granted against a party properly before the court, where it is appropriate to avoid injustice."

The situation, in our submission, as to whether or not relief is positive or negative depends upon the moving party. In the case of the contract not to sue, seeking an injunction to enforce the contract is not negative relief. In our summons we seek declarations in relation to liability to indemnify in respect of the various personal injury and property damage claims, we seek rectification, we seek positive relief under the Trade Practices Act which are positive and not negative. To the extent that negative declarations are ever artificial or vexatious, it would be only because they forced the other party to run its positive claim in a clearly inappropriate forum and, in our submission, that charge cannot be levelled against so much of the New South Wales proceedings as is negative because, as Mr Justice Rolfe found - and this finding, again, is unchallenged - the burden of the United States proceedings does not make New South Wales a clearly inappropriate forum.

But that charge can be levelled against the New Jersey proceedings, because the Sherman Act claim, which is negative or seeks to force the insurers to run in New Jersey their positive claim based on a New South Wales contract not to sue, and that New Jersey is, therefore, in every way an inappropriate forum in which to litigate the New South Wales contract. Could I deal now with the sole entrant rule, which is - - -

McHUGH J: Does not the plaintiff have to raise the question of the validity of the letters in its Sherman Act case to prove its damage?

MR STITT: Your Honour, what it is saying in the complaint is that if you raise those letters, then that entitles us to Sherman Act relief.

McHUGH J: Yes, but, unless they prove that they are bound by an agreement, they cannot prove their damage, can they? They cannot prove a large part of it.

MR STITT: But the Sherman Act conduct does not relate to an agreement; it relates to conduct which may have an adverse impact upon the relevant market in the US.

McHUGH J: I know, but plaintiffs get damages for the damage they suffer, do they not? The plaintiff has to show that as a result of the restraint of trade they have suffered damage in some way.

MR STITT: Your Honour, if one goes back to the complaint itself and looks at the way in which it is structured, if one looks at the counts and the relief that is sought, under count I damages are sought in an amount of $50 million. If we raised the letter under count VI, the damages sought are threefold. For example, if the damages were 50 million, if we raise the Sherman Act under count VI, then it would be threefold; it would be 150 million. That is the way in which it is structured.

McHUGH J: That is not the way I read it. I read it that they are in effect cumulative claims, or it might be alternative claims - it does not matter - but they say, "As a result of your conduct we have suffered damage". If the agreement is not binding, then they do not suffer any damage or they may suffer much less damage for Sherman Act purposes.

KIRBY J: For all we know, the claims that are being made are the sort of claims that one used to see in writs in the Supreme Court of New South Wales making huge claims that had no real potential ambit.

MR STITT: But it is the structure of the complaint, your Honour, the way it is put. It says if you raise it, this is what is going to happen. So that if we seek to rely upon the letters, whether it be a contract not to sue or whatever - - -

McHUGH J: Mr Stitt, I just do not understand this idea about you have a cause of action if somebody raises something. It just does not make any sense to me.

MR STITT: Your Honour, that is part of what we are saying. We should not be in New Jersey at all. The whole thing makes no sense. New South Wales is the appropriate place for all of these matters to be litigated; New Jersey is not the place where we should be. When you look at the totality of the dispute and the nature of the dispute and the characterisation of the dispute between these parties, New Jersey makes no sense at all. That throws up the very question which Justice Rolfe posed to himself, which is why would these proceedings have been commenced there in the first place.

McHUGH J: Supposing notwithstanding the anti-suit injunction, CSR decide to proceed in the United States and you did not turn up. Would they be able to get any damages under the Sherman Act? You put on no defence; you never entered an appearance. It seems to me that they would be if they can make out what they allege. Their cause under the Sherman Act does not depend upon whether you raise the letters.

KIRBY J: It may be in the nature of malice in defamation, that you aggravate the punitive damages by raising the very subject which is said to be the source of the oppression. It may be the basis of the pleading.

MR STITT: But if your Honour Justice McHugh looks at paragraph 50, that is exactly what they do. They say at page 204, "If The Coerced Withdrawal letter operates", et cetera.

McHUGH J: Yes, but they are just saying, "If that's the effect of it, then we have suffered damage".

MR STITT: Yes, but it can only - - -

McHUGH J: They have to prove what their damage is, and ultimately they have to put all this material before the court and a conclusion will be drawn about the effect of the letters.

MR STITT: Just stopping your Honour there, if I may, please.

McHUGH J: Yes.

MR STITT: When your Honour says they will put all this material before the court, does your Honour then mean all the evidence which relates to the surrounding circumstances that gave rise to that, which means all the evidence of Mr Tony Scotford and Mr Mutton and Mr Bennett and the people who took part in these negotiations?

McHUGH J: They will be selective but, if I was running the plaintiffs' case there, I might have to make a decision as to what issue you thought you were most likely to succeed on but, if you thought, "I'm gone on this agreement, this coerced letter", you would put it in. You would say, "Look, here it is. We were forced to enter into this, and this takes away our rights under the policies. Now we want damages".

TOOHEY J: That if that the pleadings had not been largely struck out. I mean, to the extent that they are anticipatory, they would not survive long, I would not have thought, in this country.

MR STITT: According to Professor Lowenfeld, they may not survive in New Jersey either.

BRENNAN CJ: Well, they could be perhaps rectified by pleading in the alternative.

MR STITT: That may be so but we have to deal with them as they are.

BRENNAN CJ: But is this not the proposition, that if you are liable for $50 million on the policies then there is judgment for $50 million against you. If, on the other hand, by the law of New South Wales that transaction was effective to discharge that liability then, under the law of the United States, you are liable for $150 million.

MR STITT: That is the way, yes.

BRENNAN CJ: Well then, your answer to Justice McHugh is, "Yes, it is dependent upon proof of the fact that under the law of New South Wales it was effective to discharge the liability." Is that not so?

MR STITT: Yes, your Honour. Could I come, as I say, to the sole entrant rule. The way in which it is put by my learned friend, Mr Bennett, is that there is only one entrant in the race to file, that being the party who can be identified as the natural defendant or the natural plaintiff. This rule, in our submission, is of such recent origin that its genesis arose when Mr Bennett came into this case and, in our submission, the notion that there is a natural defendant does not withstand critical analysis. First of all, CSRA has not identified the criteria by which a party can be categorised or labelled as the natural plaintiff or the natural defendant. Such an exercise, in our submission, in most cases would be difficult, if not impossible. Even prior to the Judicature Act, the natural plaintiff at law was the natural defendant in equity.

There was, thus, no single natural plaintiff for the entire controversy and certainly no party which, forever, retained the label of plaintiff or defendant but since the Judicature Act the concept of natural plaintiff or natural defendant is even more meaningless, in our submission. For example, under sections 57 and 58 of the New South Wales Supreme Court Act, every equitable claim can be administered in the same action as a legal claim whether by the plaintiff or by the defendant and those sections make the distinction which my learned friend, Mr Bennett, seeks to draw, in our submission, meaningless.

Section 63 of the Supreme Court Act, New South Wales, recognises that what is important is for the Court to determine finally all the matters in controversy between the parties and the Court looks to the entirety of the dispute rather than the claim of any particular party and section 75 empowers the Court to make declarations of right whether or not consequential relief is claimed.

GUMMOW J: Can I put this situation to you, Mr Stitt, which is uppermost in my mind at the moment. Assume this situation, which may be this case: there are proceedings in the United States and New South Wales; they have a certain common element which is significant but each proceeding has elements which are not found in the other proceeding and which could not be introduced into the other proceedings. Why should there be any anti-suit injunction granted by either jurisdiction?

MR STITT: Well, your Honour, that inevitably leads to this vexed problem of parallel proceedings, and it leads to the difficulty that the parties would be required, indeed, forced to litigate in both places at presumably the same time. Now, that is a matter that- - -

GUMMOW J: You say at the same time, but life does not quite work like that.

MR STITT: It inevitably means that both proceedings travel in parallel.

DAWSON J: To some extent.

MR STITT: To some extent. Now, that does not necessarily mean that it is unconscionable that they should do so but it is surely a consequence which this Court would strive to avoid if it can.

McHUGH J: I was going to say we should - just when Justice Gummow asked that, I was about to say much the same thing to Justice Kirby, because at the moment it seems to me that there are strong arguments for saying that New South Wales was not a clearly inappropriate forum and I have got some doubts as to whether you are going to have much luck with a stay application in the United States, having regard to their jurisdiction, so the problem is that you may well have two parallel sets of proceedings, but why should there be an anti-suit injunction? Unfortunate as it is and in the absence of some treaty between the two nations, why should not the litigation just take its course?

MR STITT: Your Honour, that would then ignore the equity. That would ignore the equity which - - -

McHUGH J: That assumes there is an equity.

MR STITT: Yes, but it gives no force or effect to a claimed equity which, for 100 years, the courts have said you are entitled to exercise and the court will allow you to do that. Now, if you get this - - -

McHUGH J: Yes, but this is a developing jurisdiction. I mean, doctrines developed in England in the last century, I mean, they were developed in an era when Lord Palmerston as Prime Minister or Foreign Secretary thought he could send off two gunboats to Naples to blockade Naples because they offended two British citizens. So it was a different era.

MR STITT: But, your Honour, in the modern era it would have little attraction to any businessman, any person conducting international business, to be told that he runs the risk every time that there may be parallel proceedings.

McHUGH J: One answer is, in the absence of an international commercial court, businessman have just got to put in clauses "litigated in Paris before commercial tribunals" or arbitration.

MR STITT: Or before arbitrators. The problem with that though, of course, is that those clauses do not always withstand attack in the US jurisdictions.

BRENNAN CJ: They would not be proof against the Sherman Act, would they? They would not be proof against the Sherman Act.

MR STITT: No, they would not. So that you then have a situation where this Court in effect says, "Well, I am sorry, but that is the result. You are both going to have to run your case."

GUMMOW J: Why does one have an equity if the other does not have an equity? Why are there not cross-equities? Why does one get the injunction and not the other in the respective jurisdictions? That is what I do not understand.

MR STITT: Well, in this case, our finding by the trial judge is that there is a seriously arguable, seriously triable question about what is the meaning of these letters. Now, does that amount to a contract not to sue? Does it amount to a release? What is the meaning of it? And he says, at a prima facie level, "You are entitled to rely upon that contract, and the force and effect of it is that you are not (a) liable under these policies, and not liable to be sued under these policies in respect of these claims which have been made."

Now, whether his Honour is right or wrong about that is not a matter, at the moment, which we need stay to debate. But that gives, in our submission, to my client an equity which he is entitled to enforce. Now, in addition to that, we have a finding - again, it may be right or it may be wrong, ultimately depending on the final hearing - but there is a finding by the trial judge that we have a second equity, namely - and it is set out at page 161 - that there is subjective - it starts at line 15:

CSR knows and intends that the New Jersey proceedings will lead inevitably to fragmentation; it does not even assert that they are capable of determining the claims made outside the Unites States; and it knows and intends that by pursuing the New Jersey proceedings it will place "enormous pressure on the insurers to force them to settle" and it will seriously disadvantage them legally and commercially.

In my view the evidence does not explain the many questions raised as to why CSR has commenced proceedings in New Jersey, rather than in New South Wales. The inference for which Mr Stitt contends is open and, in those circumstances, there is, in my opinion, a serious issue to be tried. It has some relationship to the type of issue which would arise on a stay application. However it is different from that.

et cetera. So that we have a second equity which we are entitled as a New South Wales citizen to enforce in New South Wales courts against CSR, which is also a New South Wales citizen and subject to the jurisdiction of the New South Wales courts, so that your Honour's question to me about why should we not simply allow parallel proceedings to run their course has a lot of commercial disadvantages. Apart from the obvious, you inevitably have a situation of a race to judgment and the first in time, presumably, wins and that is by no way - - -

GUMMOW J: Well, it depends what you mean by "win" because then you get to enforcement which is another universal discourse.

MR STITT: But you have to get to a judgment before you get to enforcement.

GUMMOW J: Yes, but it is not simply to say someone wins. They win when they have money in the bank.

BRENNAN CJ: Mr Stitt, could I ask you about the enforcement of the Sherman Act in Australia. Does the Australian legislation preclude enforcement of a judgment under the Sherman Act?

MR STITT: Your Honour, on our reading of it, I think the answer to that is yes.

BRENNAN CJ: Does that mean that by Australian law the parties who might be liable under American law pursuant to the Sherman Act are to be held immune from its operation?

MR STITT: Well, your Honour, they may be held immune from enforcement or execution but the problem that we would have is that we would not be immune from suit. We would have to defend. We would have to go to New Jersey and defend.

BRENNAN CJ: Yes, and you might be liable to suffer a recovery of a judgment against your assets in the United States also. I am just wondering what the state of the Australian law is which, after all, is the law which we have to administer on appeal from the Supreme Court of New South Wales.

MR STITT: Well, your Honour, section 9 of the Foreign Proceedings (Excess of Jurisdiction) Act deals with the:

Enforceability of judgments given in foreign antitrust proceedings -

and it provides for a procedure:

9(1) Where:

(b) the Attorney-General is satisfied that:

(i) the making of an instrument under this subsection in relation to the judgment is desirable for the protection of the national interest; or

(ii) the assumption of jurisdiction or the manner of exercise of jurisdiction by the foreign court, or the exercise of a power or the manner of exercise of a power by the foreign court, was contrary to international law or inconsistent with international comity or international practice -

BRENNAN CJ: It depends upon the Attorney-General's views of those subjects, does it?

MR STITT: Yes, your Honour, so therefore one could not give a firm view as to which way that was likely to be exercised because - - -

BRENNAN CJ: And it does not say anything about the nature of Australian substantive law with respect to rights arising under foreign judgments.

MR STITT: No, your Honour.

GAUDRON J: The situation, however, under the Sherman Act aspect of the claim would be, would it not, that the judgment, if the CSR plaintiffs are successful, would go against an American corporation and only against an American corporation?

MR STITT: No, that would not be right, your Honour, with respect; it would be a judgment against all the defendants.

GAUDRON J: And not simply CIGNA Corporation?

MR STITT: No.

GUMMOW J: CIGNA Corporation is the ultimate holding company now, is it not, the CIGNA group? They are in Pennsylvania.

MR STITT: No, your Honour, the defendants are all the insurers. If you look at - - -

GAUDRON J: Yes, but of the Sherman claim.

MR STITT: No, your Honour.

BRENNAN CJ: It is all those who participated in the securing of the letter of release, or whatever it may be, is that right?

MR STITT: Yes, your Honour, and it is not just CIGNA Corporation; it is against all the defendants. So that all the named insurer defendants would be liable to have whatever assets they had in the United States, and I have no idea what that might involve. All of those defendants would have those assets at risk in execution of a Sherman Act judgment. I do not know if I have completely answered - - -

BRENNAN CJ: Yes, thank you.

McHUGH J: Mr Stitt, some of the problems that arise in this case arise in any event in relation to enforcement of foreign judgments - judgments obtained in jurisdictions where there are questions about the competence or integrity of judicial systems. Have you had a look at the cases on that? Is there any assistance to be gained in that area of the law that is relevant?

MR STITT: We do have a section in our written submissions.

McHUGH J: That is right.

MR STITT: Page 26 of our anti-suit injunction submission. We set out in the middle of the page the statement from Professor Nygh, quoting from his "Conflict of Laws in Australia". Does that deal with what your Honour had in mind?

McHUGH J: No; I really had in mind more the principles upon which the court will really look at problems such as this and to how much detail they will go into.

MR STITT: Your Honour, as a matter of principle it would surely be undesirable, putting it at its lowest, for this Court to be engaged in that sort of - or an Australian court - to be engaged in that sort of exercise of attempting to weigh or assess the merits of a foreign court.

McHUGH J: But the fact is that it happens, and it has got to happen, I would imagine, fairly regularly, really, that people get judgments in other countries, they want to enforce them in this country. What are the principles upon which we act when there is some question as to the integrity of the foreign judicial system?

MR STITT: Your Honour, I cannot answer that question at the moment.

McHUGH J: No.

MR STITT: I will give your Honour an answer, if I may.

GUMMOW J: Now, on this question of the Sherman Act, looking at pages 205 and 206, I thought the complaint was against paragraph 62 on page 206 and paragraph 66 on 207. That identifies the CIGNA Organisation as the relevant party. Is that distinct from the Lloyds Insurers, for example? It is, is it not? Is not the CIGNA Organisation that which appears on page 189, line 50?

MR STITT: Your Honour, the defined CIGNA Organisation includes CIGNA Australia, INA, and CIGNA.

GAUDRON J: INA, is that a Pennsylvanian corporation?

MR STITT: No.

GUMMOW J: Yes, is it not?

BRENNAN CJ: According to page 189, paragraph 9 it is.

MR STITT: You have to draw a distinction between INA Australia Limited - - -

GUMMOW J: Licensed to do business in New Jersey, so no bond there.

MR STITT: If you go to the bottom of page 7 - - -

GUMMOW J: Of course there may be some Australian subsidiaries in the CIGNA group, so be it, but there are many, many other insurers here who are not caught up in that particular complaint. That is all that is being put to you.

MR STITT: But, your Honour, the way in which the Sherman Act claim is structured at the moment is an allegation of a conspiracy, a relevant conspiracy, between the head corporation and its subsidiaries. Now, that structure and those parties offend against the Copperweld principle and the effect of that should be that the way it is structured at the moment the Sherman Act claim should be struck out. Now, if it is subsequently to be amended with different parties then we have no knowledge of that, but all we can deal with is the way it is pleaded at the moment.

BRENNAN CJ: Mr Stitt, could you answer this question. If judgment were recovered under the Sherman Act in America, would an action lie to enforce that judgment by action in the Supreme Court of New South Wales?

MR STITT: We take the view that the answer to that would be no.

BRENNAN CJ: Can you give me reasons why not?

MR STITT: Your Honour, because the New South Wales Supreme Court would not allow execution of a judgment which did not accord with New South Wales law.

McHUGH J: That is not right, is it? It is not a penal law. The fact that it has got treble damages does not make it a penal law. There is no reason why they would not enforce it, it seems to me, subject to the exercise of a discretion by the Attorney under the 1984 federal Act.

MR STITT: Well, it is certainly not a penal law, your Honour. That is undoubtedly correct.

KIRBY J: A question might arise as to whether the New South Wales court would enforce the public policy of the United States. This was raised in the Spycatcher litigation as to whether the Sherman Act is of - - -

MR STITT: The policy of the Sherman Act is to give effect to the constitutional power of the United States in the Sherman Act and the Clayton Act and that that is a part of the policy of the United States of America but whether or not the Attorney-General in those situations would intervene would be a matter about which we could not speculate.

McHUGH J: You might be able to defend it under Heinemann's Case on public policy ground, but it be enforcing the public policy of the United States ,but I do not know about that.

BRENNAN CJ: It just occurred to me that according to the answer that might be given to the question that I asked you, it may be that you have or have not got an equity under New South Wales law. I only raise it for your consideration.

MR STITT: Could I digest that and deal with it?

BRENNAN CJ: It is edible?

MR STITT: Your Honours, could I now deal with the topic of the anti-suit? In his submissions, my learned friend yesterday conceded initially that there are two categories of cases where Amchem does not apply. That is to say where there is interference with the local proceedings and the second is where there was conflict in public policy between the two fora. The reference which my learned friend gave was Gau Shan at 1355. Those submissions impliedly recognised by those exceptions that the Amchem requirement would be either futile or harmful in those cases.

GUMMOW J: What is the Amchem requirement?

MR STITT: The Amchem requirement is to go first to the foreign - - -

GUMMOW J: In what circumstances?

MR STITT: To seek a stay before seeking an anti-suit injunction in Australia, in the local court.

GUMMOW J: In what circumstances as to the condition of the record in the local jurisdiction?

MR STITT: The submission, as I understand it, is that that first initial approach to the foreign court must take place before there are any local court proceedings.

GUMMOW J: Even any Voth or Henry v Henry application as to a stay of any concurrent proceeding in a local jurisdiction, of which there was none in Amchem? That is what I am worried about.

MR STITT: That is, as I understand, the way in which the submission is put; that the requirement is a condition precedent, as I understand the submission. But there were conceded yesterday two categories where that would not apply and, as I submit, those two categories did impliedly recognise that an Amchem requirement would be either futile or harmful in those cases, because only the local court could adjudicate upon the equity.

We accept and agree that at least in those cases there is no need first to go to the foreign court. At the final hearing of the injunction in this case, at least one of those bases will be relied upon by us, namely, on the Midland Bank Sherman Act point, and I have indicated that, already.

As the argument developed yesterday, my learned friend, Mr Jackson, in response to questions from the Bench, recognised a third category where the Amchem principle would not apply, that is to say, where the party seeking a stay or where seeking a stay, would be futile because the foreign court was shown to be corrupt or incompetent. Of course, we do not suggest that that third exception is relevant in this case. Further, in his submission - and again under questioning from the Bench - my learned friend, Mr Jackson, conceded a fourth exception, namely, an admitted contract not to sue. We, again, agree that that is a further equity which could establish an injunction. Is that a convenient point, Chief Justice?

BRENNAN CJ: Yes, Mr Stitt.

AT 12.47 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

BRENNAN CJ: Yes, Mr Stitt?

MR STITT: Before I resume my submissions on the anti-suit, could I just make one submission in relation to the stay, which I overlooked. It is in reply to my learned friend, Mr Jackson's, submission in paragraph 46 of his written submission in which he said that the approach taken by the trial judge was to have regard only to the issues raised by the insurers in the New South Wales proceedings, and the trial judge did not consider which forum can more effectively provide for a complete resolution. Your Honours, that is, in our submission, manifestly wrong. If your Honours look, firstly, at page 665 of his Honour's judgement, and I will just give you some page references. Page 665 is the index of his Honour's judgment. If your Honours look firstly at the subject matters, the complaint in the New Jersey proceedings, his Honour set it out and analysed it; the Sherman Act claim at page 63 and the evidence of Professor Andreas Lowenfeld at 71.

Each of those passages contains findings by the trial judge about the jurisdiction of New Jersey and its power to give declaratory judgments, findings about what law governed the various claims and the suitability of the alternative forum for the resolution of the dispute between the parties. At page 725 his Honour deals with the type of declaratory relief which the New Jersey court could give and at 727, he says, at line 10:

It cannot be correct, having regard to the terms of that opinion, to assert that the American Courts are prepared to grant declaratory relief, which would dispose of the totality of the proceedings.

The submission we make in reply is that it is not correct to say, as does my learned friend, that the trial judge fell into the same error as did the Family Court in Henry v Henry in not paying any sufficient attention to the foreign proceedings and to the foreign court.

In answer to a question from his Honour Justice McHugh before lunch about the enforceability of the Sherman Act judgment in New South Wales, the starting point is the finding of Mr Justice Rolfe at page 763. At page 763, Justice Rolfe, line 25, summarises the effect and finding which he makes about Professor Lowenfeld's evidence. He says:

Fourthly, that a determination of contractual and tortious conduct would be based on the application of New South Wales law as the place where the contract was entered into and the torts were committed.

The enforcement, in our submission, would be governed by the common law rules. Neither the Foreign Judgments Act 1991 , the Commonwealth Act, nor the Foreign Judgments Act 1973 , the New South Wales Act, would apply to judgments from the United States, the reasons being because, in respect of the Commonwealth Act, the United States is not included in the regulations extending the Commonwealth to US judgments and there is a statement about that to be found in Professor Nygh's book, 6th Edition, page 163, and the reason that the New South Wales statute would not apply is because the United States has not been declared a country to which that Act applies as section 5(3) and the statement about that is to be found in Ritchie Supreme Court Practice at page 6817.

Therefore, if one comes to consider it from the point of view of the common law rules, our submission is that the judgment would be prima facie enforceable in New South Wales if the defendants submitted to the New Jersey court which, in our submission, they would have to do in order to defend the claim, subject to the following, only: one, being denied natural justice in the foreign court; two, fraud; three, if the foreign judgment was contrary to the forum's public policy, and in that regard the evidence of Professor Lowenfeld at page 2197 line 55 was to the effect that the Sherman Act renders unlawful conduct done outside America which was lawful in the place where it occurred.

And fourth, possibly if the Sherman Act was characterised as a public law of the United States, that is in the Spycatcher test, that if it was sought to vindicate the governmental interests of the United States. Subject also, if the New South Wales court decides, or makes a finding, that the relevant contract is valid and not induced by unlawful conduct, and if the New Jersey court made a finding that the Sherman Act applied, then the New Jersey court judgment cannot be enforced in New South Wales on the ground of inconsistency with a New South Wales judgment, and subject also to whether the Attorney-General made a declaration in respect of the foreign judgment, that it was not enforceable in the national interest.

GUMMOW J: When one talks about enforceable in New South Wales, enforceable against whom?

MR STITT: Against the defendants in New South Wales.

GUMMOW J: They are not there, are they. Maybe some of them are.

MR STITT: Some of them are, your Honour.

GUMMOW J: Are we talking about the CIGNA subsidiaries in Australia? Is that what we are talking about? I would be very surprised if the head company of the CIGNA group was carrying on business in Australia. They would be surprised, too, I should think.

MR STITT: Yes, your Honour.

GUMMOW J: So we are really talking about the Australian subsidiaries, are we?

MR STITT: And those defendants in the New Jersey proceedings.

GUMMOW J: Yes, of the class of relevant defendants in the Sherman Act claim the New Jersey proceedings which are the CIGNA organisation members. They are talking about those CIGNA organisation members which are Australian corporations, are they?

MR STITT: Plus all the Australian insurers, your Honour.

GUMMOW J: Are they members of the CIGNA organisation against whom damages were sought under the Sherman Act?

MR STITT: They are parties to the action where the judgment would be obtained.

GUMMOW J: That is not what I am asking you. You are talking about enforcement at common law; you are talking about enforcement of a money judgment - the money judgment of the Sherman Act sought against the CIGNA organisation members, is it not?

MR STITT: In respect of the Sherman Act claim, yes.

GUMMOW J: Yes.

MR STITT: Then, of course, there is the other question as to the amendment which my learned friend, Mr Bennett, foreshadows. We do not know who the parties to that amendment would be, but that would be the position in relation to the Sherman Act claim.

If this Court is satisfied that either of the two equities found by the trial judge were sufficient to found the interlocutory injunction then this Court need not decide if the Midland Bank equity applies.

If it becomes necessary to decide that question, we submit that a serious question to be tried on the Midland Bank equity is sufficient to justify the injunction. In the submissions which my learned friend, Mr Jackson, made yesterday, he conceded that there was a fourth exception to the Amchem rule, that is to say, an admitted contract not to sue, and we again agree that that does represent another equity which can establish and found injunctive relief. What follows, however, in our submission, immediately from my learned friend's concession is that if the contract is a disputed contract, but it is subsequently upheld at a final hearing by the trial judge, then the necessary equity is established, at least at the final hearing.

At the very least, this means that my clients must be entitled to bring their claim for a final injunction based on the contract not to sue because in that situation the local court is entitled to award the injunction because injustice would occur if the plaintiff is left to argue the contract again in the foreign court. My learned friend Mr Jackson's submissions, in our submission, were conspicuous for the absence of any argument why vexation or oppression, understood in the strict sense, was not yet another case in which Amchem did not apply.

That is, there was no submission as to why Aerospatiale was wrong in saying that vexation or oppression remained a basis for an injunction even in the modern world. This means, on my learned friend's submission, if one New South Wales citizen is causing vexation or oppression to another New South Wales citizen by prosecuting proceedings in a foreign court, the second New South Wales citizen cannot do anything about that in a New South Wales court. In our submission, that fact points up the fallacy in the propositions for which my learned friend contends because that application of Amchem simply plays directly into the hands of a party engaged in the vexatious and oppressive conduct. That would apply even in the situation where that conduct was found to be deliberate, it was found to be mala fide and it was found to be brought for an improper purpose.

What this case has in common with the admitted or proven contract not to sue or the other admitted exceptions to Amchem is that it is only the New South Wales court exercising its in personam jurisdiction which can prevent that injustice from occurring because the foreign court on the stay motion will not be asking the same question. The vexation includes having to travel to the foreign court, pay a bond, not recover costs, suffer the sanction of treble damages, run the risk of being taken to have submitted to the jurisdiction.

The statements of Lord Scarman in Laker and Lord Goff in Aerospatiale include at least all five of the cases that my learned friend postulates. Lord Goff - and could I take your Honours to this - could I take your Honours to Aerospatiale, (1987) 1 AC 893B:

Another important category of case in which injunctions may be granted is where the plaintiff has commenced proceedings against the defendant in respect of the same subject matter both in this country and overseas, and the defendant has asked the English court to compel the plaintiff to elect in which country he shall alone proceed. In such cases, there is authority that the court will only restrain the plaintiff from pursuing the foreign proceedings if the pursuit of such proceedings is regarded as vexatious or oppressive.

And Lord Goff expressly rejected the confining of the jurisdiction solely to circumstances necessary to protect the jurisdiction of the local court. It follows, in our submission, that a central error in the appellant's submission is that their concept of injustice is restricted to the inability to obtain a fair trial in the foreign court; whereas, the foreign proceedings may cause injustice to the local plaintiff, even if they are otherwise worthy of respect.

We repeat the submission which we made in the stay submissions that in otherwise reliable courts forum non conveniens may not be recognised or may not be available as a discrete separate point prior to the hearing of the whole case on its merits and examples of that we gave. An obvious one is the courts in Japan where the jurisdiction is determined with the merits. Our submission does full service to comity and the principle of comity in a number of ways. Firstly, the test is strict and it recognises that the relief is exceptional. Second, unless the plaintiff moves immediately for anti-suit relief, it is likely to be denied on grounds of laches. That is - it means that there is not likely to be a problem of the foreign court investing time and resources and then being shut out.

Thirdly, our rule minimises the prospect of the New South Wales court having to state that a foreign court is unworthy of respect and Amchem has the potential to do more harm to comity than good, and could I refer the Court to our submissions on the anti-suit, pages 41 to 42, paragraph 6.3. If the grounds are treated strictly as we contend, there remains both a literal and practical truth in the notion that the order operates in personam. The foreign court will be able to recognise, just as an Australian court would in the reverse situation, that the reason for the injunction is the inequitable conduct of a party, not a perceived inadequacy of the foreign court.

Your Honours, could I take you to Smith Kline Ltd v Bloch (1983) WLR 730. The passage that we rely upon is at page 744 in the judgment of Lord Justice Ackner, and it is at the bottom of the page:

In my judgment, it was strictly unnecessary to add the American parent as additional plaintiffs to the English proceedings. It has provided Dr Bloch with the cri de coeur: how can it be right for an English court to seek to prevent the continuance of proceedings in Philadelphia against a Philadelphian company, when it is accepted that the Philadelphian court has jurisdiction to entertain the suit? The answer to that question is that what Dr Bloch, a British subject resident in this country, is seeking to do in relation to a contract which he made in England with an English company, to be performed in England and allegedly broken in England, is to enforce that contract in proceedings in Philadelphia, where on the available material it appears that the American parent company had been joined solely for the purpose of providing a pretext for instituting proceedings in that jurisdiction. The judge was thus wholly entitled to grant an injunction in favour of the first plaintiffs in the terms sought, restraining Dr Bloch from further prosecuting the claim currently pending in Philadelphia against the first plaintiffs and from making any claim whatsoever outside the jurisdiction in respect of the licensing agreement. Thus Dr Bloch, who is amenable to the English counts, is obliged to confine his litigation in respect of the licensing agreement to the English courts. The American parent having accepted the jurisdiction of the English courts and Dr Bloch having been granted legal aid, he has no legitimate complaint in being obliged to resort to the natural forum for this litigation.

Your Honours, in Aerospatiale the decision of the Privy Council, in our submission, the relevant principles are stated. Could I take your Honours to Aerospatiale (1987) 1 AC - - -

TOOHEY J: Mr Stitt, is it possible to tell us what principle you derive from these cases rather than perhaps read passages from the judgments?

MR STITT: Your Honour, these are cases that deal with the concept of vexation and oppression and what amounts to vexation and oppression - - -

TOOHEY J: You mean they are illustrative of the principle?

MR STITT: They do more than illustrate the principle. They state that vexation and oppression are capable of giving rise to the relevant equity to found the anti-suit injunction and, in our submission, Aerospatiale is a persuasive authority which this Court would give great weight to.

TOOHEY J: You mean for that principle?

MR STITT: Yes, your Honour, and could I just, without labouring the point too much, take your Honours to 892G and there it starts "The decided cases" and then it goes over the page:

to protect the jurisdiction of the English court. Indeed, one of their Lordships has been inclined to think that such an idea generally underlies the jurisdiction to grant injunctions.....Lord Goff of Chieveley; but their Lordships are persuaded that this is too narrow a view.

Then at 893E:

The old principle that an injunction may be granted to restrain the pursuit of foreign proceedings on the grounds of vexation or oppression, though it should not be regarded as the only ground upon which the jurisdiction may be exercised, is of such importance, and of such apparent relevance in the present case, that it is desirable to examine it in a little detail. As with the basic principle of justice underlying the whole of this jurisdiction, it has been emphasised that the notions of vexation and oppression should not be restricted by definition.

Then there is a quotation from Lord Justice Bowen in McHenry where he says:

it would be most unwise.....to lay down any definition of what is vexatious or oppressive, or to draw a circle, so to speak, round this court unnecessarily, and to say that it will not move outside it. I would much rather rest on the general principle that the court can and will interfere whenever there is vexation and oppression to prevent the administration of justice being perverted for an unjust end. I would rather do that than attempt to define what vexation and oppression mean; they must vary with the circumstances of each case."

And then, at page 894 starting at point C:

But their Lordships, bearing in mind the words of caution expressed by Bowen L.J. in McHenry v Lewis, quoted above, think it wise to remember the breadth of the jurisdiction. In particular, the possibility must be borne in mind that foreign proceedings may be restrained not only where they are vexatious, in the sense of being frivolous or useless, but also where they are oppressive; and also that, as Bowen L.J. observed, everything depends on the circumstances of the particular case, and new circumstances have emerged which were not, perhaps, foreseen by our Victorian predecessors. Their Lordships refer, in particular, to the fact that litigants may now be encouraged to proceed in foreign jurisdictions, having no connection with the subject matter of the dispute, which exercise an exceptionally broad jurisdiction and which offer such great inducements, in particular greatly enhanced, even punitive, damages, that they may tempt litigants to pursue their remedies there.

Then the next case to which I wish to refer is The "Angelic Grace" (1995) 1 Lloyd's Rep 87. The passage that I simply wish to take you to is at page 95 and we cite this case to show that the Amchem approach to comity is wrong. At page 95 the Amchem argument was put fairly and squarely and rejected. The passage that I rely upon starts in the first column about point 6:

Mr Simon crowns his submissions with the contention that "the proper approach", as he terms it, of the English Courts, is to leave to the local Court the question whether it should decline jurisdiction or not. Alternatively, he submits that this Court should defer the grant of an injunction until it is clear, as he puts it, that "something has gone wrong", in other words, that the Italian Court has accepted jurisdiction.

This Amchem-type argument was squarely rejected on the basis that it leads to a greater impairment to comity. If your Honours go to the second column of page 95, point 6, where it starts:

Mr Simon, by reference to that case in particular, urged us to conclude that by cutting the Gordian Knot, the Judge was not adopting "the proper approach". For my part, I do not contemplate that an Italian Judge would regard it as an interference with comity if the English Courts, having ruled on the scope of the English arbitration clause, then seek to enforce it by restraining the charterers by injunction from trying their luck in duplicated proceedings in the Italian Court. I can think of nothing more patronising than for the English Court to adopt the attitude that if the Italian Court declines jurisdiction, that would meet with the approval of the English Court, whereas if the Italian Court assumed jurisdiction, the English Court would then consider whether at that stage to intervene by injunction. That would be not only invidious but the reverse of comity. The Judge was not deterred from rejecting this approach by The Golden Anne and, in my judgment, he was right not to be deterred.

GUMMOW J: But there seems to have been a contractual submission to arbitration in London which was defied by the institution of proceedings in Venice, is that not right?

MR STITT: There was, yes. The disputes which were the subject matter of the arbitration clause - and the dispute was about the scope of that clause - and the Italian proceedings were disputes arising out of the contract. Your Honour, the other part of that judgment to which I wish to draw attention is at page 96. It actually starts at the bottom of page 95, where the learned Lord Justice speaks about The Golden Anne decision and then, over the page, he says:

it is wrong in principle to grant an injunction before the foreign Court has decided whether to assume jurisdiction or reject it in favour of arbitration. That it is not wrong in principle to do so is plain from the recent decision of this Court in Continental Bank.

Contrary to Mr. Bumble's view, the law is not normally "an ass" and comity does not require it to behave like one. In my judgment, the Judge's conclusion that the charterers' maintenance of proceedings in Venice are vexatious is correct in the circumstances, and his consequent exercise of discretion in favour of granting an injunction was unassailable.

Lord Justice Millett, on the same page starts - we rely on the parts where it says, "In my judgment," to the end of that paragraph. And in the same column, he goes on to say towards the bottom:

I cannot accept the proposition that any Court would be offended by the grant of an injunction to restrain a party from invoking a jurisdiction which he had promised not to invoke and which it was its own duty to decline.

In the second column, we rely upon the passage which starts, "We should, it was submitted, be careful not to usurp," down to the end of that paragraph, and we also rely on the next paragraph, which starts, "In my judgment, where an injunction is sought," to the end of that paragraph. We also rely on the case there cited, Continental Bank v Aeakos, as authorities supporting the proposition. The next authority to which I wish to take the Court is - - -

BRENNAN CJ: Was this case of The "Angelic Grace" a case where there was an acknowledged submission to arbitration clause, the breach of which consisted in the commencement of the proceedings in Venice?

MR STITT: The question was really the scope of the arbitration clause.

BRENNAN CJ: The scope of the arbitration clause.

MR STITT: The scope of it, yes, your Honour.

BRENNAN CJ: The existence and validity of it were not in question?

MR STITT: No, but the application of it was.

BRENNAN CJ: Yes.

GUMMOW J: This is really a case where the same matter is being agitated in two places, is it not? The consequence of what happened in the loading or whatever it was, it is really quite different from this case where there is a number of elements, some of which are present in one and some of which are not present in the other, some of which are present to both. So when you read us from Aerospatiale and it talks about the same matter, that involves some element of classification and abstraction which might be simple enough in Aerospatiale too; it is all about the crash of the helicopter or whatever it was, unless someone gets killed. It is hard to apply that reasoning directly to this sort of case here, the instant case.

MR STITT: The exercise ultimately is to determine the issue between the parties; the real dispute between the parties, and the real dispute between these parties is the question of insurance coverage. However you graft other things onto that, that is really what this is about, and whether or not there was an agreement not to sue, as to how one categorises those letters.

GUMMOW J: And whether or not that agreement not to sue is the product of wrongful conduct, it is said, within the meaning of the Sherman Act with an impact on United States commerce..

MR STITT: Which occurred in Australia. But all of that conduct occurred in Australia.

GUMMOW J: That may be so. You force one intellectually to perform a task one will not perform, which is an unnatural constriction. You can say it until dusk comes, but the fact is there are a number of factors involved.

MR STITT: Yes, your Honour.

BRENNAN CJ: Why do you say there is a common issue of whether there was unlawful conduct?

MR STITT: The question of whether or not the contract is valid and enforceable is a question to be decided in the light of the circumstances that surround that contract. The Americans say that that gives rise to a claim under the Sherman Act.

BRENNAN CJ: That does not arise under the New South Wales litigation, did it?

MR STITT: The enforceability of the contract arises under the New South Wales - - -

BRENNAN CJ: That is right.

MR STITT: Yes, your Honour.

BRENNAN CJ: The common issue here is whether or not the total liability of the insurers has been released. That is the common issue, is it not?

MR STITT: Yes; the extent of the coverage and whether it has been released, yes.

BRENNAN CJ: Why do you say extent of the coverage?

MR STITT: It is a shorthand way of saying whether or not the policies attach or whether they have been released.

BRENNAN CJ: That is right; whether they have been released, is the question, by the one instrument or the one transaction. That is the common issue, is that not right?

MR STITT: Yes, it is.

BRENNAN CJ: You want to litigate that in New South Wales in order to cover all the claims that have been made against you.

MR STITT: Yes, your Honour.

BRENNAN CJ: And they want to litigate it in New Jersey.

MR STITT: In respect of the US claims.

BRENNAN CJ: That is right, but there is no question in the New South Wales litigation about the unlawfulness of any conduct which might be proscribed by the Sherman Act.

MR STITT: No, your Honour. The next authority is Kaepa Inc v Achilles Corporatio [1996] USCA5 327; 76 F 3d 624, a decision of the United States Court of Appeal Fifth Circuit. The passages to which we refer are on page 626, the second column. It starts under the second paragraph under the heading, "Analysis", paragraph 2.3 which goes over to page 627 and the end of that paragraph says:

We decline, however, to require a district court to genuflect before a vague and omnipotent notion of comity every time that it must decide whether to enjoin a foreign action.

Then over on the next column we rely on the whole of that paragraph numbered 4. Then in Amchem - your Honours, the report that we have is the (1993) 1 SCR 897. The passages in Amchem to which we wish to come is at page 913- - -

BRENNAN CJ: Do you have the pagination for the DLR version?

MR STITT: It is page 105.

BRENNAN CJ: Thank you.

MR STITT:

Although both the remedy of a stay and an injunction have as their main objectives the selection of an appropriate forum for the trial of the action, there is a fundamental difference between them which is the crucial to the development of the principles which should govern each.

In our submission, the main objective on an anti-suit injunction is to prevent inequitable or unconscionable conduct by a party amenable to the court's jurisdiction, and his Lordship Justice Sopinka, where he stated the test at- - -

GUMMOW J: Page 117, I think.

MR STITT: Yes, thank you, at 117. A test which he sought to adopt was Aerospatiale but, in our submission, Aerospatiale did not confine the basis for intervention to various categories. In the next paragraph he said:

First, it is useful to discuss some preliminary aspects of procedure with respect to anti-suit injunctions. As a general rule, the domestic court should not entertain -

et cetera. But, in our submission, that does not say that it is invariable that it should do so. And on page 120, the sentence starting:

The appropriate inquiry is whether it is unjust to deprive the party seeking to litigate in the foreign jurisdiction of a judicial or other advantage, having regard to the extent that the party and the facts are connected to that forum based on the factors which I have already discussed. A party can have no reasonable expectation of advantages available in a jurisdiction with which the party and the subject-matter of he litigation has little or no connection.

And, in that regard, we also rely upon Airbus v Patel at pages 20 to 24, and I do not really need to take your Honours to those passages.

We gave the Court a copy of the Hong Kong decision of Choi Sai Yiu & Ors v Widepower Ltd & Ors, and that is merely an example of where Amchem has not been followed. In relation to the interlocutory anti-suit injunction - - -

KIRBY J: Who was the judge in the Hong Kong case?

BRENNAN CJ: It seems that it is Deputy Judge Cheung.

MR STITT: Yes, your Honour, and the passage that we rely upon is at page 892A at the top of the page, towards the bottom of the final paragraph of that page, and we simply refer to it. In relation to the interlocutory anti-suit injunction there are a couple of matters that we wish to submit.

The first is that this case is to some extent a rare case in that it contains findings by the trial judge of subjective bad faith and vexation. Those findings have not been challenged in this appeal and those findings are worth examining because they lie at the heart of the interlocutory anti-suit injunction. The starting point is his Honour's judgment at page 118. At line 35 he says this:

For vexation, oppression or harassment to operate to give rise to the necessary equity, it must be shown that the proceedings in the Court of a foreign jurisdiction have been brought with that express purpose or, alternatively, have that effect and, thereby, impact adversely on the preparation and presentation of the proceedings in this Court and, in that way, interfere, or seek to interfere, with the judicial processes of this Court. Thus the interference is defined as unconscionable.

Now, having posed that question to himself, the trial judge at page 147 said, having set out the submission, at line 36:

In my opinion there is a serious issue to be tried. It was submitted by Mr Stitt that damages would not be an adequate remedy with which I agree. Accordingly, subject to a consideration of other discretionary defences, it seems to me that the interlocutory injunction should be granted restraining CSR from pursuing the proceedings against the insurers, in so far as those proceedings seek indemnity under the policies of insurance.

Then at page 156 his Honour then makes the findings in relation to vexation, oppression and harassment and he, again, poses for himself the correct question and then over the page he says - - -

KIRBY J: Which page are we on now?

MR STITT: Page 157:

The question for consideration is whether the conduct of CSR and CSR America gives rise to a serious question to be tried, in the sense that it amounts to vexation, oppression and harassment, which is unconscionable.

Then he sets out the facts which he regards as relevant to that and that recitation continues over page 158 and he sets out the consequences of suing in New Jersey and then over the page 159 the top of the page:

there is a substantial overlap between the claims being made in the present proceedings and the claims being made in CSR v NZI and, in respect of that case, all documents relevant to it, which were discoverable, were brought to Sydney and have remained in Sydney.

Then at the bottom of that page he said:

I am satisfied, subject to several matters to which I shall refer, that there is a serious issue to be tried as to the reason why CSR would choose to institute proceedings in New Jersey rather in New South Wales. I also have regard to the fact that the sole explanation proffered by CSR for doing this is in the Board minute of 11 April 1995. That minute only makes reference to seeking indemnity and not to claiming damages under the Sherman Act and the other legislation upon which reliance is placed.

.....The first point I find strange about this is that CSR America is not claiming any such damages or relief.....no submission was put to the contrary.....It is further submitted that CSR America is entitled to seek indemnity in the United States. On any view CSR America's potential exposure to claims must be very limited. It was not incorporated until 1981 and.....it ceased being an insured in 1984-85. The role the claims against it in any litigation are likely to play must, almost of necessity, be quite small.

Then over the page at 161 his Honour said, line 15:

Mr Stitt suggested the answer to his rhetorical question -

which was "Why would they commence in New Jersey?" -

was that when one has regard to all the circumstances it is that CSR knows and intends that the New Jersey proceedings will lead inevitably to fragmentation; it does not even assert that they are capable of determining the claims made outside the United States; and it knows and intends that by pursuing the New Jersey proceedings it will place "enormous pressure on the insurers to force them to settle" - - -

DAWSON J: You have read all this before, Mr Stitt.

MR STITT: I was leading to the finding which his Honour made that there is a serious question to be tried as to the oppression. That is a matter which was open to his Honour. It was a part of his Honour's discretionary function and it is, in our submission, clear. If one looks at 161, he says this at line 30:

The inference.....is open and, in those circumstances, there is, in my opinion, a serious issue to be tried. It has some relationship to the type of issue which would arise on a stay application. However it is different from that. Of course, on a final hearing of the present application, the evidence may mean the inference is no longer open.

That was the finding which he made and, in our submission, it was open to him and that exercise of discretion ought not to be disturbed. He did weigh the matters which were relevant on the balance of convenience and he found that there was very little harm or risk of harm to CSR, very little prejudice to them, and a great deal or prejudice and harm to my clients, and those findings are at pages 167 and 168.

Your Honours, the decision of Apple (1992) RPC 70, in our submission, is a case with is on all fours with this case. The validity of the contract could be challenged in Germany and it was being challenged in the United Kingdom as well. The passages that we rely upon are in the judgment of Mr Justice Hoffman, as he then was, at page 77. In the middle of the page at line 20:

My conclusion is, therefore, that subject to the need for caution in granting injunctions to restrain foreign proceedings, the Cyanamid principles apply to this case, and that makes it really unnecessary for me to say much about the various grounds on which Mr Carr contended that the agreement was void.....they all involved either disputed questions of fact or what Lord Diplock in the Cyanamid case called "difficult questions of law which call for detailed argument and mature considerations".

Then at page 79 he found:

My conclusion is that there are serious and difficult questions to be determined at the trial -

which is the same as this case -

that if, pending trial, the defendants are allowed to push on with their foreign trade mark proceedings, the plaintiffs may suffer harm not easy capable of being compensatable in money; and that if the defendants were held up from prosecuting these proceedings for nine or 10 months until after trial they would suffer no clearly discernible prejudice -

which is the finding that Justice Rolfe has found here.

In those circumstances, I think that prima facie the injunction should be granted -

which is what the trial judge here found.

Is this conclusion affected by the need for caution in enjoining foreign proceedings? The reason for such caution is because, although the order operates in personam against the particular defendant, it is indirectly an interference with the foreign court. That reason is particularly strong in a case in which the English jurisdiction is preferred on the ground that England is the natural forum -

which is what his Honour here has found after an exhaustive application of what is in effect the Spiliada test.

GUMMOW J: This was not a two forum case.

MR STITT: Well, it was, your Honour, to the extent that the validity of the contract could have been challenged in Germany, and it was being challenged in the United Kingdom, and, in our submission, it is a two forum case and it is on all fours with this case presently before this Court. The final part in page 79:

But in a case like this in which a party has expressly contracted not to sue, the argument that the order merely operates in personam is at its strongest. It involves no finding whatever about the suitability of the foreign forum but merely the universal principle that until some good contrary reason has been shown, men should be held to their bargains.

Which was the approach that Justice Hoffman took; he granted the injunction, he adopted appropriate caution. It was the approach that Justice Rolfe took; he was cautious, he adopted the appropriate test, he exercised his discretion in a way which, in our submission, is not challengeable in these proceedings. If the Court pleases.

BRENNAN CJ: Thank you, Mr Stitt. Mr Jackson.

MR JACKSON: Your Honours, may I just say something in relation to the Apple case, while your Honours have it there? What your Honours will see, of course, is that the agreement was one that was expressed to be governed by English law and the parties submitted to the exclusive jurisdiction of the English courts. And it was also a case where there was an admitted breach of the agreement by undertaking the cancellation proceedings in the other jurisdictions. So, it was a relatively clear case.

Your Honours, may I move back to the point first mentioned by our learned friends yesterday and that is, was the Amchem point taken below. Your Honours, it is clear, in our submission, that that issue was, in fact, raised in both courts below. Could I give your Honours a copy of a document in which we endeavour to summarise our submissions in that regard? And, your Honours, since I intend to refer to a number of other documents, could I give your Honours a bundle, of which this is the first.

Your Honours will see that the document headed, "Was the Amchem point taken below?" is divided into three parts; Court of Appeal, at first instance, and then there is a note on the second page dealing with the application for leave to appeal from the grant of the anti-suit injunction. In view of the time, I shall not take your Honours through (a) or (c) - what happened in the Court of Appeal on both occasions - but may I go to what happened before the primary judge, at paragraph 6. Your Honours, one of our complaints in the case, of course, is that the primary judge's approach did not give the right prominence to the Amchem point.

We make that in our submissions in reply in this Court in paragraphs 7 and 8, but it is clear, in our submission, that the point was raised. Could I take your Honours to volume 1 and to Mr Justice Rolfe's reasons at page 116, first of all, lines 25 to 32. I think your Honour the Chief Justice referred to this passage yesterday and in the NZI Case his Honour had referred to Amchem and discussed it at some length. That is the first thing.

The second thing, your Honours, come more directly to the point. At page 120, your Honours will see between lines 45 and 50 a reference to there being "a more `aggressive' remedy" The word "aggressive" comes out of Amchem and your Honours will see that in Amchem 102 DLR at page 105, between letters A and B. Now, the third thing is on the same page of his Honour's reasons, page 120, a little further up the page under the heading "Objections to Foreign Jurisdictions", what your Honours will see is:

The usual way in which the jurisdiction of a foreign country is attached is by seeking a stay of the proceedings on the basis that that Court does not have jurisdiction or is a forum non conveniens. These concepts are thoroughly well understood and applied in the Courts of New Jersey.

The courts of New Jersey subscribes them:

By taking this course the Court in which the proceedings have been instituted is able to determine for itself whether it will entertain them.

It sounds a bit like Amchem, your Honours. Could I say also that Amchem, as perhaps the Court might expect, had been on our list of cases before the primary judge. You will see the list of cases at page 20 in the appeal book. It is the second case mentioned in relation to anti-suit injunctions. It was supplied to the judge on the first day of the hearing and your Honours will see, in fact, a date at the bottom of the page, page 20. Your Honours will also see case No 3 is Gau Shan there referred to, and the list will be seen referred to. I could go to the transcript of what happened at page 68 and at about line 45, Mr Bathurst says:

We gave your Honour a list.

And then, your Honours, at page 72, line 16, he says:

If they wish, as one gathers they might, apply for a stay or dismissal of the complaints on the ground of forum non conveniens in the United States, we are not going to take a point that amounts to a submission to jurisdiction.

Now, the whole proceedings are not recorded, but, your Honours, in the circumstances to which I have referred what we would submit is that it is really perfectly plain that the issue was raised.

McHUGH J: It may be, but can I tell you the way my mind is working at the moment, Mr Jackson. This case concerning these great points of principle which have been argued over two days seem to me really to resolve itself into an exercise of discretion at the moment. You may well have raised the matter, but the trial judge seems to have taken the view that there was a serious issue to be tried as to whether or not you were using the American proceedings to oppress the defendant and he thought there was a serious question to be tried and on that ground he decided to injunct you. Now, if that is the approach that he took, what is wrong with it?

MR JACKSON: What is wrong with it, your Honour, in the first place is that it does not give any account at all to the nature of the proceedings which we were bringing in the United States. What I mean by that is that the proceedings in the United States were proceedings in which we sought relief under the Sherman Act and they are proceedings which could be brought only in the United States. Now, what his Honour did was to prevent those proceedings going ahead and prevent those proceedings going ahead in a way which simply stopped us suing a United States company for conduct which occurred not just in Australia - and I will come to that in a moment - but conduct which occurred in the United States.

McHUGH J: I appreciate that, but was not the judge entitled to take the view on the evidence, or at least he thought he was, that you had instituted these proceedings and you were using them to force the present respondents to settle? That was the way he framed the issue at 161. It is an interlocutory application. He was not to write an essay on this branch of the law. He was dealing with a lot of facts and having to make a fairly urgent decision about the matter.

MR JACKSON: Your Honour, could I say in relation to that in dealing with the application what he was dealing with was simply proceedings that had been instituted in the United States and proceedings instituted, of course, at a time when no other proceedings were in being. Now, in instituting proceedings inevitably the attempt that is being sought to be made is to obtain judgment or another resolution of the proceedings, and for us to institute proceedings in the United States in an attempt to achieve a resolution of them, whether it be a resolution by a judgment of the United States or resolution by the parties ultimately settling, is not, in our submission, something that could properly fall within the concept of vexation or oppression. I will not go through the factors connecting the case with the United States again, of course, but, your Honour, if one looks at the nature of the proceedings we had there, they concerned activities in the United States.

McHUGH J: I know that, but he may well have taken the view, and appears to have taken the view, that there was an arguable case that you had launched these proceedings in the States for one purpose and one purpose only.

MR JACKSON: Your Honour, that is what we are trying to suggest, that if one looks at the proceedings, it is simply a view that could not properly be formed. It is a misapprehension of the case.

BRENNAN CJ: I do not know why you say that, Mr Jackson. To start with, the main issue between you and the insurers was whether or not there had been a release of the insurers. Is that not so?

MR JACKSON: Well, your Honour, it is an essential issue.

BRENNAN CJ: Let me put the question to you again. The critical issue, because it concerned not only the American claims, but other claims as well.

MR JACKSON: Your Honour is right; it is an issue that, one way or the other - and when I say one way or the other I mean, as a matter of construction, for example, of the documents that were entered into on the one hand or, on the other hand, by the application of the provisions of the Sherman Act - we obtain some relief in relation to that.

BRENNAN CJ: Well then, if the principal issue was whether or not there had been a release and that was susceptible of determination, either in New South Wales, where it would cover all claims, or in America, where it would cover only the American claims, and you choose to sue in America, which was not the place where the agreement was made nor the place of the law, which is the proper law of that agreement, if any, and you do so in proceedings which expose your opponents to the risk of treble damages if they should succeed on that point there. It seems to me that there is every reason in the world why the judge might come to the conclusions he did.

MR JACKSON: Your Honour, the exposure to treble damages arises from two things: one is, by engaging in the conduct that leads to the agreement upon which reliance is placed and, your Honour will recall, of course, that CIGNA Corporation, as is pleaded in the American proceedings, is said to have engaged in conduct in the United States and elsewhere to have arranged a boycott of us resulting in our entering into the documents in question. Now, your Honour, to separate that out from the documents themselves is really to divide the matter, as it were, into two separate parts and, your Honour, may I say in relation to that, that if one looks to see which court is able to resolve those two issues - and by those two issues I mean the effect of the documents on the one hand and whether there was a boycott organised on the other hand and thus a breach of the Sherman Act - that is the United States court and not the Australian court - and, your Honours, to resolve that issue would result, in substance, though perhaps not in form in relation to the non-US claims, the position in relation to liability.

Now, of course, there are, no doubt, separate issues that arise in relation to each of the claims, whether they be United States or elsewhere, but what your Honour has put to me as being the essential issue is the one that would be decided completely in the United States, not in New South Wales.

BRENNAN CJ: That is right.

MR JACKSON: Your Honours, that is why, in our submission, if one comes ultimately to look to see, no matter how one puts it - perhaps one says, "What is", if I can use a neutral term, "the clearly appropriate court to resolve the whole of the dispute?" which is a paraphrase of what was said by Justice Deane in Voth v Manildra. The answer to that question is, in relation to those two central issues which I have mentioned, the United States court.

McHUGH J: But, Mr Jackson, this approaches it in a very academic way and if I had been the trial judge, I might have taken the same view but this judge, starting with the CSR board minute, which indicates plainly that what they were after was an indemnity, has taken a very suspicious view about your client's conduct and if he did and he thought that these proceedings in the States were launched to oppress the respondents, well, why, on the authorities, could not he issue this anti-suit injunction of the investigator....trial?

R JACKSON: Your Honour, the point I would seek to make about that is this: if one looks at the proceedings themselves, first of all, they are proceedings that are perfectly appropriate to resolve the issue. The second thing is that the subject matter of the proceedings concerns things in the United States. The third thing about it is, your Honours, that there is no doubt we would like to have indemnity. That is one of the things referred to in the litigation in the United States and count II seeks indemnity but, your Honour, what I am seeking to say about that is that the only thing that the judge had to suggest that there was any reason other than trying to resolve the proceedings by starting in the United States is the minute to which your Honours referred and that just simply says, "We want to claim indemnity". No doubt meaning, one would think, indemnity, however we can get it, in the United States. These are United States claims; thousands of them. Your Honours, what we would seek to say is that for his Honour to have taken the view that those factors or the factors before him could in some way have given rise to some improper motive just could not arise on the facts.

BRENNAN CJ: Mr Jackson, could I just ask you one other question about the Sherman Act if you can answer it? Triple damages; triple of what? What amount? The total amount that was precluded from recovery by the terms of the agreement reached as the result of the conduct?

MR JACKSON: Yes, your Honour, meaning by that - and one would start, of course, from the indemnity that might have been obtained were it not for the agreement.

BRENNAN CJ: That is all indemnities?

MR JACKSON: Yes, your Honour.

BRENNAN CJ: So, it would be triple any claims American, Australian and property?

MR JACKSON: Yes, your Honour. Your Honour, it probably has not loomed much. I do not think it is mentioned in the New South Wales proceedings yet.

BRENNAN CJ: I am only assuming that there are other forms of claimers being put before us.

MR JACKSON: Yes. Your Honour, it may be future claims, of course.

BRENNAN CJ: Yes.

MR JACKSON: But, yes, your Honour, because it would relate to, first of all, any liability we had and, secondly, any costs and so on that would otherwise have been the subject of the policies, because one would start from what there would have been but for the release relied on, and then multiply it by three.

BRENNAN CJ: So, the claim for damages, if fully litigated - that is, if it was found that there was a liability for damages - if fully litigated would involve proof of the amount of the claims of all Australian and other claimants.

MR JACKSON: Your Honour, except that the claim is not made as widely as that. The claim in the United States complaint is in respect of the damages caused, I think, by the American losses - American litigation.

BRENNAN CJ: But that would be not necessarily the limit.

MR JACKSON: No. The way it is pleaded at the moment, your Honour, that is the claim that is made. And, your Honours, the American complaint relates to the various American proceedings. Now, could I move from that, your Honours, to another matter your Honours will see in the list of documents I have given you? That concerns the requirement for a bond. Could I just say, your Honours, that we endeavour to summarise what the evidence about the bond was in the first two paragraphs of it, and the findings by the judge are referred to in the second and third paragraphs, and if your Honours also look at volume 1, page 70.

KIRBY J: On that last line, has your client asked for a bond?

MR JACKSON: No, your Honour. In fact, what was said, your Honour, was that - and this appears at page 70 - that we had earlier offered not to seek the posting of a bond if there was a jurisdictional challenge. But the finding by the judge was one that really seemed to adopt Mr Chesler's evidence, rather than Mr Coughlin. Your Honours will see amongst the documents that I gave your Honours a document headed, "Appellant's note on juridical advantages lost if anti-suit injunction stands." That is simply in response to a question your Honour Justice Kirby asked me yesterday, I think.

I also said, your Honours, that I would give your Honours a reference to cases which expanded upon the proposition of what is meant by "an interference with the judicial domestic processes or policies," and your Honours will see a document so headed, giving various references, in the papers we have given your Honours.

Your Honours, so far as the enforcement of any judgment on the Sherman Act claim is concerned, the position, of course, in relation to that is that one would only have, as matters stand, one company, being one Australian company, being a company against whom enforcement would be sought in Australia, because two of the companies - CIGNA and INA - are American companies. That appears from the complaint itself.

In relation to the enforcement of such judgments it simply is a case where they are enforceable in Australia in accordance with the ordinary principles, unless it be that the Attorney-General, pursuant to the Act to which your Honours have been referred, takes the view it is against Australian public policy for that to happen.

BRENNAN CJ: There is no question of it being regarded as unenforceable by action in Australia by reason of it being penal or anything of that sort?

MR JACKSON: In our submission, no, your Honour.

BRENNAN CJ: Has there been any consideration of the problem, Mr Jackson?

MR JACKSON: Your Honour, not, I think in relation to that. We have given your Honours an extract from Nygh's Conflict of Laws, the sixth Edition 1995, which sets out the defences to enforcement. Your Honours will see they are summarised as being - unfortunately the page numbers have been cut off on the page I have, but the first is:

that the foreign judgment was obtained by fraud.

The second is:

that the foreign judgment is contrary to public policy.

And, then:

that the foreign court acted contrary to natural justice.

And:

that the foreign judgment is penal or a judgment for a revenue debt.

Or have acted perversely. Could I say in relation to the question your Honour asked me, I think the answer is no, but may we check it? If there are any cases we will give your Honours a reference for dealing with it.

BRENNAN CJ: Thank you, yes.

MR JACKSON: Of course, your Honours, one does really have an expression of the public policy of the law in relation to cases of this kind in the Foreign Proceedings (Excess of Jurisdiction) Act where the Commonwealth Parliament has, in effect, stated what the Australian public policy is, and that is something that the Court would, in our submission, treat as being the statement of whether the enforcement of an anti-trust judgement was against public policy because it is - - -

BRENNAN CJ: It is against the national interest, is it not?

MR JACKSON: Yes, your Honour.

BRENNAN CJ: I mean, that is where the Commonwealth law intervenes. Public policy might be a different consideration.

MR JACKSON: Yes, your Honour. However, our submission would be that if one looked at the Act in relation to that topic what it does tend to indicate is that anti-trust judgment which, of course, very frequently do involve considerable sums which in a loose sense may be regarded as penal, then it does seem to regard those sums as being ones which are, in effect, in the ordinary course recoverable unless the national view is taken otherwise. That is not a very unusual view to take because the Commonwealth Government in a sense may well be in the best position to decide how the enforcement or the non-enforcement of those sums would affect Australia.

Your Honours, I should say that there is one case actually which is referred to I think on the last page of that extract I gave your Honours, at the top of the page. It is the sixth line down:

Furthermore the award of treble damages authorised by the United States Antitrust legislation is considered excessive, although not penal in the conflictual sense.

The reference is to Huntington v Attrill.

BRENNAN CJ: That is a rather interesting comment. What does it mean? What is the significance of it being excessive? Is it only enforced to a limited extent? I suppose we can read the case for ourselves, Mr Jackson.

MR JACKSON: Your Honour, what it seems to mean is that the treble damages is something that falls within the Excess of Jurisdiction Act.

GUMMOW J: Huntington v Attrill, I think, is a case on the New York law about misleading prospectuses. I am not sure that it is on the Sherman Act. Its date would suggest that.

MR JACKSON: Your Honours, perhaps we could give your Honours a note about that particular point. Your Honours, there is a reference made to the Japanese situation in our learned friend's submissions. The case that your Honour Justice Gummow decided in the Federal Court does not really seem to make out the proposition that my learned friends cite it for and the Hong Kong decision seems to be based on the particular evidence before it. One of the documents we have given your Honours is an extract from Professor Fawcett's Declining Jurisdiction in Private International Law which deals with Japan in Chapter 14 and summarises the position in a few pages. It discusses particularly at page 308 and following what is called the "special circumstances" consideration and your Honours will see at page 309 under the heading "2. Comparison with the Doctrine of Forum Non Conveniens" that it is generally similar to forum non conveniens.

Now, your Honours, could I just say one further thing in relation to the interlocutory nature of the proceedings - sorry, in relation to proceedings. Of course the course taken in the present proceedings has had the result that it will be the Australian court which decides completely the effect of the re-lease or contract said to have been entered into and that that will be so is decided by the present orders.

DAWSON J: That is because it will be res judicata.

MR JACKSON: Yes, your Honour. I mean, it is decided as a practical matter is what I meant to convey in the sense that in - - -

DAWSON J: There would be no point in an injunction, a permanent injunction.

MR JACKSON: Yes. In deciding the case, namely, whether there should be, say, a file of anti-suit injunction, that must be based on the question of whether the contract is or is not efficacious to achieve what our learned friends suggest.

DAWSON J: And that is a distinction between this and the Apple Case.

MR JACKSON: Yes. Your Honours, could I just say a couple of other matters. First of all, considerable reference is placed on the in personam nature of the anti-suit injunction. Could I just say one further thing in response to the proposition that the anti-suit injunction operates simply in personam and does not operate on the foreign tribunal and it is this.

A foreign court, being aware of the existence of the injunction, may order the party restrained by the injunction to take a particular step, for example, to deliver a document in the possession of the court. Now, your Honours, if the party complied there would then be a breach of the injunction and the judge of the foreign court would be a knowing participant in that breach. Your Honours, one would not think for a moment that the Australian writ, as it were, would run against the judge in the foreign jurisdiction in the United States, and so on, but what about the situation if the judge, he or she, came to Australia to participate in a seminar on some topic or came to Australia for a holiday, your Honour, the point we are simply seeking to make is that it is correct to say that the anti-suit injunction operates in personam, but to treat that proposition as having the corollary that it has no operation in relation to the foreign court, is not completely correct.

Your Honours, could I also make one observation about paragraph 3.13 of our learned friend's written submissions. That appears at page 26 of those submissions and reference is there made to an observation of Sir Justice Hoffmann in Maxwell Communications Corporation plc (No 2) (1992) BCC 757 at page 762 D to H. The passage quoted in paragraph 3.13 is said to support the proposition that one should not go to the foreign court first, but, your Honours, if one looks at page 762 of that case, and looks at the two paragraphs immediately preceding it, commencing between C and D and going on from there, what his Lordship said was really the opposite, because he said, about halfway between D and E, that "today the normal assumption", and your Honours will see the passage goes on through the next two paragraphs. I shall not read it out.

And, your Honours, staying with page 26 and 27 of our learned friend's submissions for a moment, your Honours will see in footnote 78 the reference which I have just mentioned, but the other citation of British Airways Board v Laker Airways, also does not seem to contain any reference to any such principle as is stated in the text of the submission.

Could I go then, your Honours, to D, and I will endeavour to do so very briefly indeed, with the two English cases and the United States cases particularly relied on by our learned friends. The English cases are Continental Bank v Aeakos SA and The "Angelic Grace". Your Honours, both those cases were very clear cases, in our submission, where an injunction should have been granted in the first instance. Could I go to Continental Bank v Aeakos SA (1994) 1 WLR 588. That was a case, your Honours, where there was an exclusive jurisdiction clause and the only questions which arose were questions as to its application. That appears at page 592.

Your Honours will see under the heading "The alleged breach of the jurisdiction agreements" the two arguments that were put. If one goes then to page 597G to the bottom of the page what your Honours will see is that the argument was put that:

it would be wrong for the English court to decide that the Greek court does not have jurisdiction.

What is said on the next page in the paragraph above the heading "Conclusion" was that the decisive matter was that there was a clear breach of contract. Then at about letter F there was:

the total absence of special countervailing factors, this is the paradigm case for the grant of an exclusive jurisdiction agreement.

I think it means enforcement of an exclusive jurisdiction agreement.

Your Honours, in relation to The "Angelic Grace" (1995) 1 Lloyd's Rep 87, the charterers, who were the parties seeking to go to Venice, had already submitted to the jurisdiction of the English court for the purpose of determining whether their claim fell within the arbitration clause. If I could take your Honours to page 91, what your Honours will see in the right column in the second new paragraph:

The charterers had, it must be remembered, submitted to the jurisdiction of the English Court for the purpose of determining whether their claim in Italy was arbitrable, and they had participated fully in the trial of that issue.

Then at the top of page 92 in the first new paragraph:

The Judge mentioned that no reason for the persistence of the Italian proceedings had been advanced other than that the charterers wished to relitigate the question of the arbitration agreement's scope in relation to their claim in Italy.

Halfway down page 95, the second new paragraph, halfway down that paragraph:

It was an undisguised attempt by the charterers to have another bite at the same cherry, in the hope, presumably, that the domestic Court might irrationally come to a conclusion favourable to them.

I will not take your Honours further through that. If I could go then to the two United States decisions that were particularly relied on, the Allendale and Kaepa decisions, they too are decisions turning very much on particular facts. If I could take your Honours first to Allendale [1993] USCA7 1229; (1993) 10 F 3d 425, at page 427 once again your Honours will see that the party enjoined had already participated in proceedings in the domestic forum. That that is so appears from the left column on page 427. About halfway down your Honours will see:

BDS responded by filing its own suit in the district court -

and then towards the bottom of that paragraph, the two proceedings were consolidated and counter-claims were filed in the consolidated suit.

Also, at page 428 what your Honours will see in the last paragraph on the page that the company had:

seemed content if not necessarily ecstatic to litigate its entire dispute.....in the Northern District of Illinois.

And your Honours will see that is developed throughout that paragraph onto the next page and then, the first new paragraph on page 429, the question is asked why did they try to reactivate the suit, and so it goes on. Your Honours, also, as one sees at page 429, it was not the court at all that was dealing with the proceeding in France. It was a group of arbitrators. Your Honours, in relation to the other case, Kaepa, Inc v Achilles Corporation [1996] USCA5 327; (1996) 76 F 3d 624 at page 627 of that case at about halfway down, the paragraph numbered 4 on the right column the proceedings had been, as it was put:

long and firmly ensconced within the confines of the United States judicial system -

and there had been consent to jurisdiction in Texas. We referred yesterday, your Honours, I should say, to the observations of the dissenting judge in that case which, we would submit, are observations to which considerable weight should be given.

Your Honours, may I move from that very briefly back to the terms of the complaint in the United States District Court and deal with a couple of matters arising from it? The first is that it is clear, in our submission, that reliance on the release must be available to the respondents in the US District Court and that that is so appears from the claim for relief in paragraph 2 at page 207.

Your Honours will see a claim, for example, for a declaration that they must defend and indemnify us with respect to the claims. Your Honours will also see paragraph 1 of the claim for relief for damages for their costs and expenses and some of the paragraphs which support those things are, for example, paragraphs 41 and 44 which your Honours will see at page 201 and 202.

The second point, your Honours, is that the contention made by my learned friend is that the primary judge held that all the relevant conduct for the purposes of the Sherman Act took place in New South Wales and your Honours were referred to page 690. His Honour must have been referring only to the passage of the correspondence in Australia and, perhaps, to some other matters related to that because whilst those things may have occurred in Australia, the activities of CIGNA relied on, go beyond that and could I refer your Honours to page 2, paragraph 57 and page 205.

Your Honours, that is where we seek to say what possible reason is there for preventing us from suing in the United States a United States corporation for damage suffered by us in the United States in consequence of breaches in that jurisdiction?

GUMMOW J: Well, it may have been breaches in the United Kingdom as well.

MR JACKSON: Yes, your Honour. Could I deal with one other matter, your Honours, and it is this: I mentioned earlier that the Australian court could not deal with the Sherman Act claim and, in our submission, that must be a significant matter in a stay application in determining whether the Australian court is able to "deal with" - to use the expression of Justice Deane in Voth - the dispute between the parties. It also has the effect, in our submission, that it would be difficult to take the view that any injunction should issue to restrain the prosecution of the proceedings in the other jurisdiction.

Your Honours, if the Court takes the view in proceedings before it that it, itself, is not clearly inappropriate, it moves on then to the question whether the injunction should be granted. A most material factor in deciding that question, in our submission, is whether there has been an application to the foreign court to stay its hand. If there has not been such an application then, in our submission, it would only be in very restricted circumstances that the Court would enjoin further litigation in that jurisdiction.

Your Honours will recall our submission that until the point arrives at which one knows whether the foreign court is or is not going to deal with the matter, the issue has a rather academic being. Your Honours, those are our submissions. We have, of course, written submissions in reply, which your Honours have.

BRENNAN CJ: Yes. Mr Bennett.

MR BENNETT: Your Honours, we prepared at lunchtime some written submissions in reply in a two-column format which will shorten what I have to say.

BRENNAN CJ: Yes, Mr Bennett?

MR BENNETT: In relation to the first matter, your Honour, the explanation we gave Justice Rolfe for not making a Sherman Act claim initially is exactly the same as the one we gave to this Court. Your Honours will see the passage he cites refers to CSR America not being a proponent for insurance. That is a shorthand way of saying, "Therefore there was no consideration given by it and therefore it was assumed it wasn't bound by the letter." Now, that is exactly the point that we are making here. Once it was asserted that we were bound by it we indicated we wished to amend. We could not do so because of the anti-suit injunction. I have given your Honours - I will not take your Honours to it - an affidavit by Mr Arthur which was served and put before Justice Rolfe when the matter went back before him which states precisely what I said to this Court and I have given your Honours some transcript of a mention before Mr Justice Rolfe where my learned friend referred to that affidavit and to this very proposition.

In relation to what the New Jersey action might cover in relation to the Australian claims, we simply say that, of course, it might make findings in relation to the letter which could operate by way of issue estoppel or res judicata and thus affect the Australian claims. The letters, of course, are squarely in issue in New Jersey on any view of it. In relation to the bond, that was dealt with by my learned friend, Mr Jackson. I will not repeat it.

GUMMOW J: Now, you rely on paragraph 57 of the complaint to say that Copperweld, whatever Copperweld means, it does not sufficiently cover this?

MR BENNETT: Whatever?

GUMMOW J: Copperweld - a US Supreme Court decision about parents and subsidiaries conspiring.

MR BENNETT: Yes, your Honour, it is wider than that. It also refers to conduct which is possibly in the United Kingdom and elsewhere. My friend said CIGNA cannot defend without exposing itself to the risk of treble damages as if that was some sort of blackmailing effect of our claim. Of course, it has that risk whether it defends or not.

The way the claim is pleaded, the damage might be suffered if the letter were effective here or in America. My friend said it does not seek to set the letter agreement aside, it may not use those words but it certainly does by inference, and in any event, if the letter is pleaded, no doubt that will be a matter for reply.

My friend, again as part of the criticism of the pleading, says there is no claim for indemnity, well, we say there is. That is claim II and Mr Jackson has referred to that. My friend says the authorisation by the CSR board does not authorise a claim with CSR America as co-plaintiff. It would be hard to imagine a more captious submission than that, your Honours, and I refer to it rather for the purpose of denigratings by my friend's submissions than because it needs an answer. The resolution, of course, is in very general terms. Mr Justice Rolfe, my friend submitted, found that the Sherman Act claim related to conduct in New South Wales. Mr Jackson has dealt with that, and we give the answer. My friend then made a general submission that - - -

BRENNAN CJ: Mr Bennett, could I just take you back to your observation about the captiousness of the observation about the resolution?

MR BENNETT: Yes.

BRENNAN CJ: Having regard to the situation at the time of that resolution, there had been a claim for indemnity by CSR in relation to all its claims. There have been letter of release, and then this resolution. If the matter of the effectiveness of the release was then, in the view of CSR, to be litigated, why would that issue be litigated in the United States rather than in the place where the alleged release had taken place and his law would govern it?

MR BENNETT: Because, your Honour, once the lawyers came to implement the resolution, one would - - -

BRENNAN CJ: No, I am not asking what happens once the lawyers get hold of it. I am asking what the reason would be for litigating out of the jurisdiction.

MR BENNETT: Your Honour, there could be a number of reasons. One would be the presence of the many cases in the United States and the connection with American jurisdiction. One might be a knowledge that there were matters behind the letter, the letters of challenge in relation to the letter, as to which there would be an additional ground of challenge in the United States.

BRENNAN CJ: Meaning by that?

MR BENNETT: Meaning the Sherman Act, your Honour.

BRENNAN CJ: Yes.

MR BENNETT: One might be a feeling that the general attitude of courts towards claims in the economic duress area might be more favourable there than here and bearing in mind that the economic duress is part of the worldwide piece of economic duress. The significance of the suggestion that insurance would be refused by these dozens of insurers around the world, that is leaving CSR uninsured as to the future, is a very serious matter but it is a worldwide matter. CSR has got worldwide business itself and through its subsidiaries, it is dealing with this huge consortium of insurers from countries all over the world and the threat, if it be made good, of what amounts to a boycott in relation to renewal of insurance unless there is an abandonment is a very serious matter.

There is no reason, we would submit, why one would not say it is appropriate to deal with that in the context of the Sherman Act, and in the context of a legal system, being one of the applicable legal systems, one of the available legal systems, which regards that sort of conduct more seriously.

BRENNAN CJ: In other words, "We were forced to abandon our claims and, because we were forced, we will get damages under the Sherman Act." is that right?

MR BENNETT: That is one consequence, your Honour, yes; and that is a consequence United States law provides for. What I submitted was captious was that the resolution did not add the words, "as a co-plaintiff with CSR America." That was a submission which I submitted was captious.

McHUGH J: It just occurred to me, but in looking at this case, are there principles expressed in the Will of Gilbert about matters of practice and procedure, interlocutory injunctions being reviewed, applicable in this class of case?

MR BENNETT: No, your Honour, because here what is said is that, for a number of reasons, wrong principles were applied.

McHUGH J: Yes, you have got a point.

MR BENNETT: And we do that, your Honour. As was done in Henry v Henry. There is a shopping list we have of respects in which the judge failed to take matters into account, or give proper weight to them. Your Honours, my friend, on page - this is page 3 of the submissions in reply - submitted it was illegitimate for CSR to force CIGNA to litigate in a forum with five characteristics, and they have dealt with each of the five. I have dealt with the bottom of the page. In relation to the first filed rule, as it is so called, we never submitted for a first filed rule. What we rely on is what this Court said in Henry v Henry, which makes the second filer prima facie vexatious and oppressive in the strict sense of those terms.

I took your Honours to that passage in-chief and that is the passage we rely on. We do not suggest it is more than a substantial element to be taken into account, but it is an important element. It is also the rule in Europe and we remind your Honours of the Law Quarterly Review article we have made available which sets out the rule in Europe, which is a pure first filed rule. It just says if two courts have jurisdiction the first filing prevails and that is it.

KIRBY J: It is not a very good rule though, is it? That could lead to injustices.

MR BENNETT: That can lead to injustice, your Honour, and we do not suggest it should be as strong as that.

KIRBY J: I think that is deep in the different notions of law in Europe and things have to be regulated by a law.

MR BENNETT: Yes, it probably is, your Honour, but we do not submit for that rule. What we do submit is it is an important factor, as was said in Henry v Henry, and that is why the Court went to so much trouble in Henry v Henry to analyse the nature of the preliminary proceedings in Monaco to show that they were in substance the commencement of proceedings, although it was not actually the formal suit for divorce and those proceedings were first, the suit for the divorce in Monaco was subsequent. My friend says the rule leads to a race to file. We simply say maybe it does, but that is less unseemly than a race to get an anti-anti-suit injunction or a race to judgment or any of the other races that one may have. There are going to be races and we would submit that it is, in a sense, the least of the various evils.

My friend says Canada, New Zealand and Hong Kong do not have such a rule. Of course, they follow Spiliada which is more lenient in favour of the foreign jurisdiction than this Court's rule. So far as the Amchem rule is concerned, my friend say forum non conveniens is not available in some countries. Well, if it is not available, the submission will not run. If you have a country which has an absolute rule that there is no such thing as forum non conveniens, obviously one is not going to apply the Amchem rule and say you have got to seek a stay in that country, but that is not this case. It is irrelevant to this case.

In relation to Allendale, I will not take your Honours to it in view of the time but I would ask your Honours to look at the passage I have referred to which are different to those referred to by either of my learned friends and what they show is that the case applied a special rule because this was not really a court. This was, in effect, a private arbitration association which was described as the commercial court at Lyons and the court actually said it would expect a French court to take the same view if there was an American arbitral system such as - - -

McHUGH J: Might.

MR BENNETT: Might - involving the National Transportation Safety Board and the French court and some of the other statements in that court pay considerable respect to the doctrine of comity, and I have given your Honours one reference to that. The Aeakos Case is criticised in the Law Quarterly Review article. In relation to Japan, may I remind your Honours of the decision in Nagan (Panama) SA and Shinwa Shipping Co v Attica Shipping Co SA (1989) 32 Japanese Annual of International Law 161. It is a decision of the Tokyo District Court.

BRENNAN CJ: You will not be reminding me at all events, Mr Bennett.

MR BENNETT: Your Honour, I was hoping I was the first to have cited a Japanese case to this Court and that was the purpose. I may not be the first. It is referred to, your Honours, in the chapter my learned friend Mr Jackson has handed to your Honours in Professor Fawcett's book at page 306 of that and it is a case where, in effect, the court applied a forum non conveniens approach where there was a suit by a debtor in Japan in response to a foreign action seeking a negative declaration. So the debtor in Japan being sued overseas sought a negative declaration in Japan that he did not owe the matter and the court, in effect, applied a forum non conveniens approach and said it would not deal with it but your Honours can read the summary in the book which your Honours have.

We stress that the cases referred to in the footnote to my friend's submissions simply do not justify the submission, the broad submission made, and we invite your Honours to go to the cases. In relation to negative declarations, we simply say it is a powerful discretionary consideration. We do not say it is a bar, and we say substantively the New South Wales action is negative and we simply remind your Honours forensically that CIGNA has never claimed anything, any money against us. What it claims against us is immunity and that is all it has ever claimed, in one form or another. Certainly it may call it enforcing an agreement not to sue but all it seeks is not to be liable on claims. That is all it seeks. When one is talking of negativity it is hard to imagine anything much more negative.

My friend describes the sole entrant rule. He pays me the complement of inventing it. I did not invent anything of the sort or put anything of the sort. What I simply said was that where one has a natural plaintiff, if one likes, that person is normally the person who would be the plaintiff and it is part of the general approach of negativity. The Foreign Proceedings Act has been dealt with by Mr Jackson.

KIRBY J: Your submission seems to be different. I took him to say it did not apply. Do you say it does apply if the Attorney-General grants a certificate?

MR BENNETT: Your Honour, I do not say anything. I adopt what he says on whether it applies or not, I have not got into that at all. I have simply made this point that even if it did apply it would only apply if he were to grant a certificate. I had not intended to make the concession. I just have not addressed it. I had left that to Mr Jackson, who I adopt. It was, of course, introduced in relation to the BHP Westinghouse suit and that is well-known.

Your Honour Justice McHugh asked about foreign judgments obtained in corrupt or incompetent jurisdictions and what one would do with them. The answer is that there is no special rule but it is dealt with under the rule that a foreign judgment will not be enforced if there is a denial of natural justice. Obviously, if there is not an unbiased judge there is a denial of natural justice. In extreme cases there may be a question as to whether the body is a court, but there is certainly no discretion to say, "This is Ruritania and we know their judgments are dreadful so we won't enforce it." There is certainly no such discretion and never has been in English law or Australian law.

In relation to anti-suit injunctions, your Honour Justice Gummow asked about the absence of British Columbian proceedings in Amchem. What I have said in writing, I have to qualify slightly. What I have said there was.....the defendants did not seek negative relief that they were not liable to pay damages, and that should not make any difference. In fact, however, in the report of the hearing below, which is in 65 DLR (4th) 567 at page 573, there is a list of what is claimed, and one of the items that was claimed was damages for the abuse of process committed by suing them in Texas. So there was that attempt to introduce some sort of negative basis to it. We also point out that in both Barclays v Homan and in Allstate, there were local proceedings and there was no suggestion in either that one would not apply the Amchem rule merely because there were local proceedings.

Coming to my friend's submissions this afternoon, and I really have almost finished, my learned friend submitted that Amchem does not apply if the proceedings are vexatious and oppressive. Your Honours, that cannot be right; one of the two possible bases for applying for an anti-suit injunction is the exclusive jurisdiction under which it is, in the technical sense, vexatious and oppressive to have the proceedings overseas. To say that one does not apply Amchem in one of the two types of case in which it is applicable is, in our respectful submission, to deny it efficacy.

In relation to Kaepa, may I join with my learned friend, Mr Jackson, in inviting your Honours to read the dissenting judgment of Justice Garza, which is a very powerful plea for comity, and its importance is that it shows that in the United States there are, as everywhere else, two views on this area, and one cannot simply generalise and say that the other view is universally taken. In that case, of course, he was in dissent, but it was a three judge court and it is, we would submit, a very persuasive dissent.

Finally, your Honours, in relation to Apple, may I simply remind your Honours of the passages at the bottom of page 76 and the top of page 77, which make it absolutely clear that the decision was only given on the basis that there was no attempt to litigate the question of the validity or effect of the contract in Germany.

The fact that it may have been possible to do so does not seem to have been a factor, or at least raised as an argument, the way the judgment reads. The importance of the case is that it was a case where it was trademark applications which were the overseas proceedings. They were capable of causing irreparable damage and the issue as to the effect of the contract not to sue arose only in the English proceedings. That was specifically relied on by Justice Hoffmann when he distinguished the settlement case. We put it that the settlement case is precisely in point. May it please the Court.

BRENNAN CJ: Thank you, Mr Bennett. The Court will consider its decision in this matter.

AT 4.25 PM THE MATTER WAS ADJOURNED