- (1.) The equitable remedy by way of an injunction whether mandatory or interlocutory in nature, is discretionary in nature and is never granted as a matter of course. Lord Diplock's speech in the American Cyanamid's case (American Cyanamid Co. v. Ethicon Ltd. (1975) 1 All ER 504) lays down certain guidelines for the grant of interlocutory injunctions. According to these guidelines the plaintiff must first satisfy the Court that there is a serious issue to decide and that if the defendants were not restrained and the plaintiff won the action, damages at common law would be inadequate compensation for the plaintiffs loss. Once satisfied of these matters, the Court will then consider whether the balance of convenience lies in favour of granting the injunction or not, that is, whether justice would be best served by an order of injunction. The great value of the Cyanamid case lies in its treatment of interlocutory injunctions as an aid to doing justice in the litigation. The demands of justice when it comes to the question of whether or not to maintain the status quo until the trial, cannot be governed by rules. What should be borne in mind in addition to the test phrased by Lord Diplock, is his reminder that at this stage the Court does not and cannot judge the merits of the parties' respective cases and that any decision on justice will be taken in a state of uncertainty about the parties rights. It would seem to follow from this that, if there is uncertainty, the Court should be doubly reluctant to issue an injunction, the effect of which is to settle the parties' rights once for all.
(2.) In order to, however, appreciate the true scope and effect of Lord Diplock's speech in Cyanamid case (1975-1 All ER 504), it would be worthwhile to recapitulate the law as it stood prior to the decision in Cyanamid case. The House of Lords in the case of J. T. Stratford and Sons Ltd. v. Lindley, reported in 1965 AC 269 laid down that in the matter of grant of an interlocutory injunction, the plaintiff had to show a strong prima facie case, that is, his rights had been infringed. He was then required to show that damages would not be an adequate remedy, if he succeed in the trial and that the balance of convenience favoured the grant. In other words, House of Lords held that an interlocutory injunction would not be granted, unless the plaintiff could show that it was more likely than not that he would succeed in obtaining a final injunction at the trial.
(3.) It is at this juncture, however, the precise effect of Lord Diplock's speech in Cyanamid case (1975-1 All ER 504) ought to be considered. Lord Diplock observed "..........the governing principle is that the Court should first consider whether if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant's continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff's claim appeared to be at that stage. If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial, the Court should then consider whether, on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right to do that which was sought to be enjoined, he would be adequately compensated under the plaintiff's undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason on this ground to refuse an interlocutory injunction." Lord Diplock, however, went on to say further : "It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, that the question of balance of convenience arises, it would be unwise to attempt even to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relative weight to be attached to them. These will vary from case to case.";