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Laker Airways Limited V. Sabena
Journal article by Monroe Leigh; American Journal of International Law, Vol. 78, 1984
Journal Article Excerpt
LAKER AIRWAYS LIMITED v. SABENA
MONROE LEIGH
Application of American antitrust laws to foreign defendants — concurrent prescriptive
jurisdiction — defensive “antisuit” injunction upheld
, BELGIAN WORLD AIRLINES. 731 F.2d
909.
U.S. Court of Appeals, D.C. Cir., March 6, 1984.
Laker Airways Ltd., a British corporation in liquidation, filed an antitrust
action in the U.S. District Court for the District of Columbia against several
defendants including American, British and other foreign airlines. Laker alleged
conspiracies to destroy its business of providing low-fare transatlantic air services.
The foreign airlines, British Airways, British Caledonian Airways, Lufthansa
and Swissair, obtained an injunction in the Court of Appeal of the United
Kingdom restraining Laker from litigating its antitrust claims against them in
U.S. courts. The Court of Appeal also affirmed an order of the British Secretary
of State under the British Protection of Trading Interests Act, which prohibited
the foreign airlines from complying with any court orders issued in connection
with U.S. antitrust actions against UK airlines. In the meantime, Laker filed a
second antitrust suit in the U.S. district court naming as defendants KLM, Royal
Dutch Airlines, and Sabena, Belgian World Airlines. On Laker’s motion, the
district court entered a preliminary injunction to prevent the remaining de-
fendants from taking part in the British action designed to arrest prosecution
of Laker’s antitrust claims.
On appeal, Sabena and KLM argued that the district court’s order was an
abuse of discretion, violating international principles of comity and disregarding
Britain’s paramount right to apply British law to a British subject, Laker. The
U.S. Court of Appeals for the District of Columbia Circuit (per Wilkey, J.)
affirmed and held: that the antisuit injunction was justified to defend the legitimate
exercise of U.S. prescriptive jurisdiction.
The court first examined the two bases of prescriptive jurisdiction: territoriality
and nationality. The court found that both the United States and the United
Kingdom had legitimate grounds to assert jurisdiction to prescribe law relating
to the conduct in question. The “territorial effects doctrine” provided the basis
for U.S. jurisdiction, since the economic effects of the alleged conspiracies im-
paired significant American interests. These included the interests of American
consumers in economical transatlantic fares, of Laker’s American creditors in
the satisfaction of outstanding debts, and of the United States in the regulation
of the conduct of persons doing business within its territory. The basis for
British jurisdiction, on the other hand, rested primarily on the British nationality
of several parties to the suit. The court concluded that these overlapping interests
gave rise to concurrent jurisdiction to prescribe.
The court observed that ordinarily, where concurrent jurisdiction results in
parallel proceedings in the courts of two nations, both are free to proceed
-666-
simultaneously without interference. Although antisuit injunctions restraining
litigants from proceeding in another court are rarely issued, such injunctions
may be appropriate when necessary to preserve the court’s jurisdiction and to
prevent the evasion of important public policies of the forum. In this case, the
court determined, both of these reasons justified the district court’s injunction.
Because the sole purpose of the British proceeding was to terminate the American
antitrust action, the two actions “are not parallel proceedings in the sense the
term is normally used.”1 Instead, the U.S. court was the only forum in which
any party sought to adjudicate the claims on the merits. In addition, to acquiesce
to the British court’s attempt “to carve out exclusive jurisdiction”2 would permit
Sabena and KLM to evade culpability under statutes of fundamental importance
to the United States, upon which statutes Laker and others doing business in
the United States had the right to rely.3
The court next considered Sabena and KLM’s argument that the district
court was obligated to defer to UK jurisdiction by virtue of Laker’s nationality.
The court rejected the concept of “paramount nationality” proposed by the
defendants, finding that this “entirely novel rule” is “unknown in national and
international law.”4 Such a rule for resolving jurisdictional conflicts would in
fringe upon policies of the forum, “encourage chauvinism and discrimination”5
and be impractical to administer in light of competing methods of determining
a corporation’s nationality.
The court then addressed the principle of international comity. The obligation
of comity, which requires deference to and recognition of the acts of foreign
tribunals, is circumscribed by the domestic forum’s right not to enforce foreign
judgments that are fundamentally prejudicial to public policies of the forum.
Accordingly, the UK injunctions, being “purely offensive”6 since they were de
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