Following oral argument this court reversed an order of the United States District Court for the Southern District of New York and vacated the injunction which had permanently enjoined Ssangyong Shipping Co., Ltd. (“Ssangyong”) from proceeding in the courts of Korea with its action against China Trade & Development Corp., Chung Hua Trade & Development Corp. and Soybean Importers Joint Committee of the Republic of China (collectively, “China Trade”).
The district court had granted the injunction because it found that (1) the parties in the Korean action are the same as the parties in this action; (2) the issue of liability raised by Ssangyong in the Korean court is the same as the issue of liability raised here; (3) the Korean litigation would be vexatious to the plaintiffs in the United States action, which was commenced first; and (4) allowing the Korean litigation to proceed would result in a race to judgment.
Because no important policy of the forum would be frustrated by allowing the Korean action to proceed, and because the Korean action poses no threat to the jurisdiction of the district court, we conclude that the interests of comity are not overbalanced by equitable factors favoring an injunction, and we hold that the district court abused its discretion when it enjoined Ssan-gyong, a Korean corporation, from proceeding in the courts of Korea. We therefore reverse.
BACKGROUND
In 1984 China Trade sought to import 25,000 metric tons of soybeans into the Republic of China from the United States. Ssangyong, a Republic of Korea corporation, agreed to transport the soybeans on its ship the M.V. CHOONG YONG. The vessel ran aground, however, and as China Trade contends, the soybeans, contaminated by seawater, became virtually valueless.
The litigation leading to this appeal began in 1985 when attorneys for China Trade attached the M.V. BOO YONG, another vessel owned by Ssangyong, which was then located in the Central District of California. To release the vessel, the parties agreed that China Trade would lift the attachment and discontinue the California action and, in exchange, Ssangyong would provide security in the amount of $1,800,-000, the approximate value of the attached vessel, and would appear in an action to be commenced by China Trade in the Southern District of New York and waive any right to dismissal of the new action on the ground of forum non conveniens.
China Trade then commenced this action in the southern district seeking $7,500,000 in damages from Ssangyong for failure to deliver the soybeans. Both parties proceeded to prepare the case for trial through extensive discovery that has included both depositions and document production that required trips to Korea and to the Republic of China. Trial was scheduled to begin in September 1987.
To determine whether to enjoin the foreign litigation, the district court employed a test that has been adopted by some judges in the southern district. In American Home Assurance Corp. v. The Insurance Corp. of Ireland, Ltd., 603 F.Supp. 636, 643 (S.D.N.Y.1984), the court articulated two threshold requirements for such an injunction: (1) the parties must be the same in both matters, and (2) resolution of the case before the enjoining court must be dispositive of the action to be enjoined.
When these threshold requirements are met, five factors are suggested in determining whether the foregoing action should be enjoined: (1) frustration of a policy in the enjoining forum; (2) the foreign action would be vexatious; (3) a threat to the issuing court’s in rem or quasi in rem jurisdiction; (4) the proceedings in the other forum prejudice other equitable considerations; or (5) adjudication of the same issues in separate actions would result in delay, inconvenience, expense, inconsistency, or a race to judgment.
American Home Assurance, 603 F.Supp. at 643. See also Garpeg, Limited v. United States, 583 F.Supp. 789 (S.D.N.Y.1984).
Judge Motley found after a hearing that the two threshold requirements were met, since in both actions the parties and the issues of liability are the same. She then considered the additional five factors and found that the Korean litigation in this case would (1) be vexatious to the plaintiffs and (2) result in expense and a race to judgment. Considering these findings sufficient, the district court permanently enjoined Ssangyong’s prosecution of the Korean action. This appeal followed.
DISCUSSION
Ssangyong relies first on the ancient rule that the district court, sitting in admiralty, lacks the power to issue an injunction. See The Eclipse, 135 U.S. 599, 10 S.Ct. 873, 34 L.Ed. 269 (1890); Schoenamsgruber v. Hamburg American Line, 294 U.S. 454, 55 S.Ct. 475, 79 L.Ed. 989 (1935). China Trade acknowledges this rule but urges us to reconsider it. While some circuits have reconsidered and abandoned this traditional limit on the power of a court in admiralty (see e.g., Lewis v. S.S. Baune, 534 F.2d 1115 (5th Cir.1976); Pino v. Protection Maritime Insurance Company, Ltd., 599 F.2d 10 (1st Cir.), cert. denied, 444 U.S. 900, 100 S.Ct. 210, 62 L.Ed.2d 136 (1979)), this circuit has not yet considered an appropriate case in which to reexamine the rule. See Eddie S.S. Co. Ltd. v. P.T. Karana Line, 739 F.2d 37 (2d Cir.1984). Based upon our determination that an injunction should not have issued in this case in any event, we do not believe that this is an appropriate case in which to reconsider our traditional rule that courts in admiralty lack the power to grant injunctions. We therefore assume, but solely for the purposes of this appeal, that the district court in this case had the same power to issue an anti-suit injunction as it would have in a nonadmiralty case.
The power of federal courts to enjoin foreign suits by persons subject to their jurisdiction is well-established. U.S. v. Davis, 767 F.2d 1025, 1038 (2d Cir.1985); Laker Airways, Ltd. v. Sabena Belgian World Airlines, 731 F.2d 909, 926 (D.C.Cir.1984). The fact that the injunction operates only against the parties, and not directly against the foreign court, does not eliminate the need for due regard to principles of international comity, Peck v. Jenness, 48 U.S. (7 How.) 612, 625, 12 L.Ed. 841 (1849), because such an order effectively restricts the jurisdiction of the court of a foreign sovereign, U.S. v. Davis, 767 F.2d
Concurrent jurisdiction in two courts does not necessarily result in a conflict. Laker v. Sabena, 731 F.2d at 926. When two sovereigns have concurrent in personam jurisdiction one court will ordinarily not interfere with or try to restrain proceedings before the other. Donovan v. City of Dallas, 377 U.S. 408, 412, 84 S.Ct. 1579, 1582, 12 L.Ed.2d 409 (1964), citing Princess Lida of Thurn and Taxis v. Thompson, 305 U.S. 456, 466, 59 S.Ct. 275, 280, 83 L.Ed. 285 (1939); Laker v. Sabena, 731 F.2d at 926-27; Compagnie des Bauxites v. Insurance Co. of N. Am., 651 F.2d at 887. “[Pjarallel proceedings on the same in personam claim should ordinarily be allowed to proceed simultaneously, at least until a judgment is reached in one which can be pled as res judicata in the other,” Laker v. Sabena, 731 F.2d at 926-27, citing Colorado River Water Conservation District v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 1246, 47 L.Ed.2d 483 (1976).
Since parallel proceedings are ordinarily tolerable, the initiation before a foreign court of a suit concerning the same parties and issues as a suit already pending in a United States court does not, without more, justify enjoining a party from proceeding in the foreign forum.
In general we agree with the approach taken by Judge Motley. She began by inquiring (1) whether the parties to both suits are the same and (2) whether resolution of the case before the enjoining court would be dispositive of the enjoined action. She apparently found that both of these prerequisites were met here. While there is some question as to whether the Korean courts would recognize a judgment of the southern district, it is not necessary to determine that question of Korean law because the injunction is deficient for another reason. Judge Motley found the necessary additional justification for this injunction in two of the five factors suggested in American Home Assurance Corp.: “vexatiousness” of the parallel proceeding to China Trade and a “race to judgment” causing additional expense. However, since these factors are likely to be present whenever parallel actions are proceeding concurrently, an anti-suit injunction grounded on these additional factors alone would tend to undermine the policy that allows parallel proceedings to continue and disfavors anti-suit injunctions. Having due regard to the interests of comity, we think that in the circumstances of this case two of the other factors suggested in American Home Assurance Corp. take on much greater significance in determining whether Ssan-gyong should be enjoined from proceeding in its Korean action: (A) whether the foreign action threatens the jurisdiction of the enjoining forum, and (B) whether strong public policies of the enjoining forum are threatened by the foreign action. See Laker v. Sabena, 731 F.2d at 927, 937.
A. Protecting Jurisdiction.
A long-standing exception to the usual rule tolerating concurrent proceedings has been recognized for proceedings in rem or quasi in rem, because of the threat a second action poses to the first court’s basis for jurisdiction. Donovan v. City of Dallas, 377 U.S. 408, 84 S.Ct. 1579, 12 L.Ed.2d 409 (1964), citing Princess Lida of Thurn & Taxis v. Thompson, 305 U.S. 456, 59 S.Ct. 275, 83 L.Ed. 285. When a proceeding is in rem, and res judicata alone will not protect the jurisdiction of the first court, an anti-suit injunction may be appropriate.
Even in in personam proceedings, if a foreign court is not merely proceeding in parallel but is attempting to carve out exclusive jurisdiction over the action, an injunction may also be necessary to protect the enjoining court’s jurisdiction. In the Laker litigation, for example, when the
In the present case, however, there does not appear to be any threat to the district court’s jurisdiction. While the Korean court may determine the same liability issue as that before the southern district, the Korean court has not attempted to enjoin the proceedings in New York. Neither the Korean court nor Ssangyong has sought to prevent the southern district from exercising its jurisdiction over this case.
B. Important Public Policies.
An anti-suit injunction may also be appropriate when a party seeks to evade important policies of the forum by litigating before a foreign court. While an injunction may be appropriate when a party attempts to evade compliance with a statute of the forum that effectuates important public policies, an injunction is not appropriate merely to prevent a party from seeking “slight advantages in the substantive or procedural law to be applied in a foreign court”, Laker v. Sabena, 731 F.2d at 931, n. 73.
The possibility that a United States judgment might be unenforceable in Korea is no more than speculation about the race to judgment that may ensue whenever courts have concurrent jurisdiction. Moreover, we cannot determine at this point whether a judgment of the United States court in an amount exceeding the 1.8 million dollar bond would be enforceable in Korea even if the Korean action were now enjoined. Should plaintiffs prevail, enforcement of any excess amount against Ssangyong in Korea may well require relitigation in the Korean courts of the issue of liability. In these circumstances, we are not persuaded that Ssangyong, the party seeking to litigate in the foreign tribunal, is attempting to evade any important policy of this forum.
CONCLUSION
The equitable factors relied upon by the district court in granting the anti-suit injunction are not sufficient to overcome the restraint and caution required by international comity. Because the Korean litigation poses no threat to the jurisdiction of the district court or to any important public policy of this forum, we conclude that the district court abused its discretion by issuing the injunction. Reversed.