The Madras High Court has cleared the decks for Advantage Strategic Consulting Singapore Private Limited to prosecute a defamation suit filed against former Union Minister Subramanian Swamy before the High Court of Singapore for having named it in the Aircel Maxis scam. A Division Bench of the court has set aside an interim injunction granted against the company by a single judge in 2014.
Justices S.S. Sundar and P.B. Balaji allowed the Singapore firm’s appeal pending since 2014 and held that the Madras High Court lacks the jurisdiction to grant an anti suit injunction against a foreign entity. They said the single judge had granted the injunction just because the appellant company happened to be a subsidiary of Advantage Strategic Consulting Private Limited based in Chennai.
The Division Bench said the Supreme Court had time and again reiterated that a subsidiary should be considered as a distinct entity in relation to its transactions. Despite being fully owned by a parent or holding company, a subsidiary would not lose its identity as a separate legal entity and it could not be considered just as a puppet of the parent company merely because of its administration.
“Therefore, we are convinced that the appellant, a foreign company, even though fully owned by the 1st defendant is not amenable to the jurisdiction of this court... The judgment of the learned single judge cannot be approved for the simple reason that he has simply presumed that the appellant is amenable to the jurisdiction of this court as it is a subsidiary of the 1st defendant, an Indian company,” the Bench wrote.
Recalling the history of the case, the judges pointed out that Mr. Swamy had addressed a press conference in New Delhi on April 26, 2012 regarding the Aircel Maxis scam. Thereafter, the defamation suit was filed against him in the Singapore High Court for the charge of having damaged the reputation of the consulting firm. He, in turn, approached the Madras High Court seeking an anti suit injunction.
Mr. Swamy had contended that he stood by every statement made during his press conference and was willing to face the defamation suit if it had been filed in Chennai. He, however, objected to being forced to face the suit instituted in Singapore. Since the press conference had happened in New Delhi, he claimed that the suit too ought to have been filed only in India and not in Singapore.
Desisting from answering that question, the judges said, it was up to the High Court of Singapore to decide whether it had the jurisdiction to entertain the defamation suit. “It will be better if this court expresses no opinion on the issue,” the verdict authored by Justice Sundar read.
