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Oxford Law Citator

14 Claims for Damages

Thomas Raphael

From: The Anti-Suit Injunction (2nd Edition)

Thomas Raphael QC

Previous Edition (1 ed.)

Content type:: Book content

Product:: Private International Law [PRIL]

Series:: Oxford Private International Law Series

Published in print:: 12 September 2019

ISBN:: 9780198778936

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Subject(s):: Exclusive forum clauses — Claims for damages and anti-suit injunctions — Injunctions to restrain proceedings in England and Wales

(p. 313) 14 Claims for Damages

A. Damages for Breach of Contract

1. Principles

14.01 Damages are, in general, an inadequate remedy for breach of an exclusive forum clause, ‘since its very nature requires the parties to have their disputes determined in [the chosen forum]. A party to such an agreement should not be put to the trouble of having disputes determined elsewhere in a manner contrary to the express contract between the parties.’¹ In STX v Woori, Flaux J observed that ‘in cases such as this it is almost impossible to ascertain what the impact might be upon a claimant if, in breach of the arbitration agreement or in breach of the obligation to arbitrate, the defendant persists in taking proceedings in a foreign jurisdiction’.² One problem among many is the danger that if the injunction claimant is forced to defend the proceedings abroad he may end up submitting to the jurisdiction of the foreign court either inadvertently or due to the pressures of litigation,³ which may in turn affect the ability to claim damages for breach of the forum clause.⁴

14.02 Exclusive forum clauses are viewed by English law as creating independent contractual obligations which have, in principle, the same contractual force as any other contractual (p. 314) obligation.⁵ The obligations created include a positive obligation to litigate in the chosen forum and also a correlative negative obligation not to litigate in a different forum.⁶ Consequently, where proceedings have been brought in breach of an exclusive forum clause, the innocent party is entitled to recover damages for any sufficiently proximate losses caused by the breach,⁷ except where this is precluded by public policy.⁸ Damages are available even if the party in breach has not sued elsewhere but has refused to cooperate in an agreed dispute resolution procedure.⁹

14.03 However, there are uncertainties which have not yet been fully clarified in relation to what can amount to a breach, what kinds of losses are sufficiently proximate, and what the (p. 315) relevant rules of public policy should be.¹⁰ Two main categories of loss need to be considered, namely legal costs and legal liabilities.

14.04 The law appears to be substantially the same for exclusive jurisdiction and arbitration clauses. Arbitrators can award damages for breach of an arbitration agreement.¹¹ The court would also be able to award such damages, although it may be that such claims are at least primarily a matter for the arbitrators, and if damages are sought from the court, the claim may be susceptible to a stay in favour of arbitration.¹²

14.05 The grant of damages by courts for breach of jurisdiction or arbitration agreements is not (on the current English case law) inconsistent with the Brussels–Lugano regime (while it remains English law), even where the competing proceedings are in the Brussels–Lugano zone and within the scope of the Brussels–Lugano regime.¹³ It is clear that the Brussels–Lugano regime does not prevent the award of damages by arbitrators.¹⁴

(p. 316) 2. Legal Costs in Respect of Proceedings Abroad in Breach of a Forum Clause

14.06 If proceedings abroad have been commenced in breach of an exclusive forum clause, the English courts will award damages in respect of the costs and expenses of having to resist the foreign litigation, unless public policy precludes recovery.¹⁵ Despite some initial caution,¹⁶ the recent case law suggests that (leaving aside the effect of the Brussels–Lugano regime¹⁷) public policy will not create a barrier to recovery in most situations. The main possibilities will be considered in turn.

(a) Foreign proceedings dismissed on jurisdictional grounds

14.07 If foreign proceedings, in breach of an English exclusive forum clause, have been dismissed by the foreign court for want of jurisdiction, the English court or arbitration tribunal can award damages for the costs of those proceedings in appropriate cases provided, at least, the foreign court does not award costs in such case,¹⁸ or can only award very limited costs.¹⁹ The same approach would presumably apply where the foreign proceedings have been discontinued.

14.08 Further, even if the foreign court has the power to award substantial sums in respect of costs upon such a dismissal, it appears that the claim in damages will still lie, provided at least that the award of costs by the foreign court is not compensatory in principle, although credit will be given for any costs recovery abroad. There is an argument that, by analogy to the traditional exclusionary rule in relation to proceedings in England,²⁰ a damages claim for the (p. 317) difference should be precluded by the public policy against double adjudication. But this has, so far, not been adopted in relation to prior foreign determinations.²¹

14.09 In Natwest v Rabobank, Colman J held that where foreign proceedings were in breach of contract, there was no reason of public policy why he should not award by way of damages all costs that were reasonably incurred abroad. He also concluded that, in the case before him, the foreign costs decision could not create an issue estoppel, as the logic of the costs assessment abroad was wholly different and not compensatory.²² This result can also be supported by those cases on damages in respect of liabilities abroad which suggest that the relevant counterfactual is where the foreign proceedings have not been brought at all.²³

14.10 The final permutation is where the foreign jurisdiction has costs rules which award costs on an essentially compensatory basis. The reasoning of Colman J in Natwest v Rabobank suggests that, even here, a claim for damages should still lie for any difference—for example if the foreign court has declined to award costs on discretionary grounds, or if it limited costs recovery on grounds of ‘proportionality’. Colman J thought that if there was ‘demonstrable disparity between what, if anything, has been or will be recoverable in respect of costs in the foreign jurisdiction and what would be recoverable in damages in here, there is no policy reason for preventing proceedings in the English courts to recover as damages any such shortfall’.²⁴ This result is arguably also supported by the cases, on damages for liabilities abroad, holding that the relevant counterfactual is the position where the foreign proceedings were not brought at all.²⁵

14.11 However, Colman J’s reasoning depends, to a considerable extent, on a basic disagreement with the logic of the older cases supporting the traditional exclusionary rule in respect of prior English proceedings.²⁶ When in Carroll v Kynaston the Court of Appeal upheld the rule in relation to prior English proceedings, they distinguished Natwest v Rabobank and the other decisions on prior foreign proceedings, commenting obiter that in those cases, ‘the foreign costs arose in foreign proceedings where there was no possibility of having them awarded in the foreign proceedings if so ordered’.²⁷ This does not fit with Colman J’s (p. 318) reasoning in Natwest v Rabobank, which had adopted a broader policy, and it leaves open the possibility of foreign costs decisions having a exclusionary effect provided that the foreign cost rules were capable in principle of allowing for the award of costs in full. Yet the authority of Carroll v Kynaston has now been undermined by Willers v Joyce, where the Supreme Court has, it seems, qualified and possibly reshaped the traditional English rule in unclear terms, without analysing the previous case law (and with important cases not having been cited).²⁸ What this means for costs of foreign proceedings is unclear. So, the case law is in a state of some confusion, and we do not know where things will end up. One possibility, in the light of Lord Toulson’s reasoning in Willers, is that it may be that recovery in damages for additional costs not awarded by the foreign court will only be precluded if such recovery is prevented by issue estoppel, Henderson v Henderson abuse of process, and/or perhaps a more flexible case by case operation of the principle against double adjudication.

(b) Foreign proceedings have failed on the merits

14.12 If the foreign proceedings brought by the other party have failed on the merits, rather than being dismissed on jurisdictional grounds, it appears that damages in respect of costs are recoverable in principle,²⁹ although the same questions as to whether and when the foreign court’s approach to costs should have a preclusionary effect will recur. But if the defendant abroad has submitted to the jurisdiction of the foreign court or voluntarily participated in the foreign litigation, this may, although will not necessarily, amount to a waiver of the exclusive forum clause, or a breach of the chain of causation, which may on appropriate facts defeat claims for damages in respect of costs of the foreign proceedings.³⁰

(c) Foreign proceedings are ongoing

14.13 The English courts have thus far had no hesitation in awarding damages, and declarations as to prospective damages, in respect of the ongoing costs of foreign litigation which has been brought in breach of an exclusive forum clause.³¹ Arguments that the award of damages would be an unacceptable challenge to the authority of the foreign court have not gained any traction, at least in cases outside the scope of the Brussels–Lugano regime. English arbitration tribunals have also awarded damages for the breach of an arbitration agreement in respect of the costs of ongoing foreign proceedings.³²

(p. 319) (d) Foreign proceedings successful

14.14 What if the foreign proceedings have been successful? It could be argued that the award of damages would be an unacceptable challenge to the authority of the foreign court, and contrary to comity. But such arguments have not found favour, at least in respect of foreign proceedings outside the Brussels–Lugano zone. Further, in Natwest v Rabobank, Colman J did not consider that a temporary stay of Californian proceedings, where the Californian courts might later consider costs, was reason not to award damages for breach of contract.³³ Consequently, the current authorities appear to suggest that, even where the wrongful foreign proceedings have been successful, the unsuccessful defendant abroad is entitled to damages in respect of costs and expenses,³⁴ at least in the absence of a submission to the jurisdiction of the foreign court, or an issue estoppel or abuse of process arising in some other way. (The effect of a foreign judgment is addressed in paras 14.17–14.22.)

14.15 If a jurisdiction challenge has been made before the foreign court and has failed, it is possible that claims for damages from the English court or tribunal may be precluded by an issue estoppel as to the binding force of the exclusive forum clause.³⁵ However, this will not be automatic: it will depend on the scope and nature of the foreign jurisdictional decision and on whether it is recognizable in England under the applicable rules for the recognition of judgments.

3. Legal Liabilities

14.16 It could be argued that principles of comity and public policy should preclude the award of damages in respect of any liability awarded by the foreign court in proceedings brought in breach of an exclusive forum clause. But this is not how English law has developed. The courts have accepted that, subject to the effect of res judicata or submission to the jurisdiction of the foreign court, and possibly questions of waiver or abuse of process arising from a submission (and leaving aside the effect, if any, of the Brussels–Lugano regime), damages (p. 320) should be recoverable in respect of any liability awarded against the damages claimant in the foreign proceedings.³⁶

14.17 There has been debate about the right measure of damages. If the contractual forum has been able to proceed to judgment on the merits notwithstanding the existence of competing proceedings in a non-contractual court, then the ‘correct’ answer is known. In such a case, damages can be given for the amount of any inconsistent liabilities which may arise under the foreign judgment which has been obtained in breach of the clause.³⁷ But if the contractual forum has not yet been able to reach a decision on the merits, the question arises of whether damages can be awarded in respect of the liabilities awarded abroad without proof, by some form of trial within a trial, that the foreign court has reached the ‘wrong answer’, which is different to that which would or should be reached in the contractual forum. This was the approach taken in some of the earlier decisions, and in particular by the Court of Appeal in Tracomin.³⁸ But in the recent cases, such as CMA CGM v Hyundai, and CSAV v Hin-Pro, the courts have mostly taken the approach that this is unnecessary: since the foreign litigation is in breach of contract it should never have happened and so damages can be awarded to neutralise any liabilities imposed without any finding as to what would have happened in litigation in the contractual forum.³⁹ But they have done so without (p. 321) considering the previous case law, and on two important occasions, at undefended hearings; and the two strands of authority have not been reconciled.

14.18 The correct approach to the measure of damages will influence, and perhaps determine, the consequences of an enforceable foreign judgment on the merits. Working with the notion that the measure of damages depended on proving the foreign court had reached the ‘wrong answer’, the earlier cases suggested obiter that if the judgment of the foreign court on the merits will be recognized in England, even though given in foreign proceedings in breach of an exclusive forum clause,⁴⁰ it would not be possible to claim damages for the liabilities awarded by the foreign court, as the party who lost abroad would be precluded by res judicata from showing that any different result is ‘correct’.⁴¹

14.19 But the potential shift away from the ‘wrong answer’ approach, in the cases following CMA CGM v Hyundai, might produce a different answer. In CMA CGM, the arbitrators had suggested that the potential res judicata effect of the foreign judgment might be irrelevant, because if the contractual arbitration clause had been complied with, the foreign judgment would never have existed, and so damages could be awarded on the basis that any res judicata effect of the foreign judgment could be ignored. Burton J appeared obiter to adopt the same reasoning, also relying on the principle that the party litigating abroad cannot be allowed to rely on his own wrong.⁴² However, neither the arbitrators nor Burton J were referred to the previous case law to the contrary effect, and this result is controversial, since it might be said that it is incoherent both to enforce a foreign judgment on the merits and also award damages to neutralize its result. Further, the specific situation that Burton J was dealing with in Hyundai, where the arbitrators had actually decided the merits, can also be dealt with a simpler fashion: it was a necessary condition of the arbitrators deciding the underlying merits in favour of the damages claimant, as they had, that they were not treating the contrary foreign judgment as a res judicata, and once they had done so any problem with respect to damages claims did not arise.

14.20 In The Alexandros T,⁴³ the Supreme Court touched on these issues without reaching a clear answer. The question was whether claims for damages or an indemnity for breach of a (p. 322) jurisdiction clause and a settlement agreement by litigating abroad were the same cause of action as the foreign claim on the merits and so should be stayed under what is now Article 29 of the Brussels I Recast. None of the judges thought Article 29 should apply. Lord Clarke for the majority concluded this was so without engaging with whether a foreign res judicata on the merits would preclude a damages claim. Lord Mance similarly concluded Article 29 did not apply, but floated without resolving the question of whether any damages claim was ‘subject to issues arising from the potential recognition of any Greek judgment …’ or, if the Greek proceedings were defended ‘subject to additional questions arising from any potential issue estoppel or application of the rule in Henderson v Henderson’. Lord Clarke did say that he generally agreed with Lord Mance on the Article 29 issues but without specifically identifying this aspect. Lord Neuberger, in contrast, did conclude that there was no inconsistency at all between a foreign judgment on the merit, and a damages or indemnity award in effect neutralizing any such liability. But his view was not positively that of the majority. Subsequently, in the Court of Appeal, Longmore LJ awarded summary judgment on the claims for damages, at an undefended hearing, on the basis that the breach of contract lay in bringing the claims at all; it was not necessary to prove a ‘wrong answer’ and so ‘whether they succeed in Greece or would have failed in England is irrelevant’.⁴⁴ But since the English court was ruling first, he was not engaging with the effect of a prior recognized foreign judgment and the words ‘whether they succeed in Greece … is irrelevant’ appear to deal with the ‘wrong answer’ proposition he was rejecting. He did not engage with the difference between Lord Neuberger and Lord Mance.

14.21 It seems, therefore, that the issue of whether a prior recognized foreign judgment would preclude a damages claim has been left open. The key competing arguments of principle are: (a) against damages, the contention that (even if it is unnecessary for a damages claim to prove the foreign court has reached a wrong answer), it is incoherent both to recognize a foreign res judicata on the merits, and also to award damages to reverse that result; (b) in favour of damages, Lord Neuberger’s opinion in The Alexandros T (at [132]) that there is no inconsistency and that the damages claim can coherently acknowledge (and indeed depend upon) the res judicata but then neutralize its practical result by a matching but not formally inconsistent liability in damages.

14.22 There is also some case law which suggests that submission to the jurisdiction of the foreign court may preclude a damages claim independent of res judicata, if the submission amounts to a waiver of the exclusive forum clause, or a breach of the chain of causation,⁴⁵ or means that the damages claim is an abuse of process.⁴⁶ It is suggested, however, that no absolute barrier should be created. A party may have no real choice to respond to wrongful foreign proceedings otherwise than by engagement and submission, in which case the cause of his losses is the wrongful commencement of those proceedings, not his involuntary submission.

(p. 323) 4. Other Losses

14.23 Where the foreign legal proceedings, in breach of a contractual jurisdiction clause, produce losses other than legal costs or legal liabilities, there is no reason of principle why such losses should not be recoverable, subject to the usual restrictions of causation, remoteness, and possibly scope of duty. In Ellerman Lines v Read, the damages recoverable for foreign proceedings, which were both fraudulent and in breach of contract, and which led to the loss of the damages claimant’s vessel, included consequential damages arising from the loss of the vessel.⁴⁷

5. Strong Reasons Not to Enforce the Clause

14.24 An important but often ignored question is whether damages can be awarded in cases where the court has concluded, or would have concluded, that there were strong reasons not to enforce the clause by injunction. Awkward results could follow if damages were awarded in such a case. Thus, if there were strong reasons to refuse an injunction because of other linked foreign litigation that would proceed anyway, and so the targeted proceedings were not restrained, it would arguably be inconsistent if damages were awarded in respect of the pursuit of the targeted proceedings—in particular if those damages included any liabilities awarded therein, independent of whether they were the ‘wrong answer’.⁴⁸ But on the other hand, while ‘strong reasons’ may defeat the discretionary grant of an injunction, it is more difficult conceptually to treat them as a defence to a claim for damages, which is a common law claim as of right. If arguments of this kind are to be capable of providing a defence to damages, this would presumably have to be justified as a sui generis doctrine of public policy. The case law is, at present, undeveloped and inconsistent. The Court of Appeal in The Lisboa appeared to assume that contractual damages will not lie if there are strong reasons not to grant the injunction.⁴⁹ This finds an echo in the case law holding that if the English court refuses a stay of English proceedings notwithstanding the existence of a foreign exclusive forum clause, there can be no claim in damages in England for the continuation of the English litigation.⁵⁰ However, the more recent cases appear rather to proceed on the untested assumption that, where foreign litigation is pursued in breach of an English exclusive forum clause, then even if an injunction is refused the damages remedy can lie.⁵¹ There is no clearly reasoned or binding decision on the point.

(p. 324) 6. Quasi-Contractual Situations

14.25 In quasi-contractual situations, a third party who was not the original contracting party to the original contract and its forum clause brings claims derived from the contract in a different forum to that chosen by the clause. Whether claims for damages for breach of the exclusive jurisdiction clause will be available against the third party will depend on the features of the particular quasi-contractual situation. In some cases, the issue is unproblematic, as the third party will be, or will deemed to be, subject to the burdens of the contract including the exclusive jurisdiction clause: for example where the third party is the holder of a bill of lading or a statutory successor. However, in many quasi-contractual cases, the third party is not directly subject to positive contractual obligations, and cannot be liable in damages for breach of contract: the Court of Appeal so held in the case of a third party rights against insurers statute in Through Transport.⁵² In such situations, damages will only be available if they can be claimed on a non-contractual basis: the extent to which this is possible is discussed in section B, ‘Non-Contractual Damages’.

14.26 Whether there is a direct contractual claim for damages in cases of assignment or subrogation or similar voluntary transfers is at present doubtful.⁵³ It is clear that the assignee takes the substantive rights assigned to him subject to the restrictions imposed on the chose of action by the original contract. Consequently, the assignee’s right to claim in respect of the assigned rights is inherently subject to any exclusive forum clause contained in the original contract, by a principle of conditional benefit.⁵⁴

14.27 What is less clear, however, is whether the assignee’s claim under the assignment can also be treated as creating a positive contractual obligation which can be enforced against the assignee independently. The conventional view in the case law on exclusive forum clauses would appear to be that it cannot: the assignee is ‘bound’ by the exclusive forum clause, but only in the sense that the duty to refer the claim to arbitration is ‘an inseparable component of the subject-matter transferred’⁵⁵: no independent contractual burden is imposed, and instead an anti-suit injunction in such a situation is not strictly a contractual injunction, but rather an injunction to enforce the assignee’s equitable obligation to respect the condition of his exercise of the assigned rights. This analysis does not support a contractual claim for damages if the exclusive forum clause is not respected. In The Jay Bola, Hobhouse LJ (with whom Morritt LJ agreed) was of the view that the remedy for breach of the relevant (p. 325) equitable obligation was an injunction only, in terms that seem difficult to reconcile with a claim for contractual damages,⁵⁶ and although Scott VC addressed the third party’s obligations in contractual terms, it is Hobhouse LJ’s approach which has generally been followed in the subsequent case law.⁵⁷

14.28 However, much of the exclusive forum clause case law has been developed in the rather different context of third-party rights statutes. There are decisions in the general law of assignment which suggest that principles of conditional benefit—by which an assignee who claims contractual benefits can only do so on the basis that he respects sufficiently closely linked contractual burdens—may be extended to allow imposition of independent contractual obligations on the assignee to respect such linked contractual burdens, or at least the imposition of an equitable obligation to accept the contractual force of the burden.⁵⁸ If applicable to contractual forum clauses, consistently with the analysis of Scott VC in The Jay (p. 326) Bola,⁵⁹ this approach could allow claims for contractual damages for breach of the forum clause in the quasi-contractual situation, at least in cases of assignment and similar voluntary transfers governed by the same equities.

14.29 The alternative possibility is that the equitable obligations imposed on the third party to respect the clause might themselves found a claim for equitable compensation or damages if the clause is not respected. This idea is addressed under ‘Non-Contractual Damages’ in section B. In the thin strand of case law in which damages have so far been awarded in quasi-contractual situations, it is this approach, not a contractual damages approach, which has been adopted.

B. Non-Contractual Damages

14.30 The possibility of awarding damages in respect of losses suffered as a result of supposedly ‘wrongful’ foreign proceedings which are not in breach of contract is territory which has only recently begun to be explored. There are three possible routes: damages in tort; damages or compensation in equity; or damages in lieu of an injunction under section 50 of the Supreme Court Act 1981.

1. Damages in Tort

14.31 Claims for damages in tort in respect of allegedly wrongful proceedings abroad are unlikely to be relevant in most situations. First of all, there are difficulties in showing that English law is the applicable law for any such tort. Second, with certain limited exceptions, the available tortious causes of action under English law do not seem to be relevant to, or capable of supporting, claims for damages for wrongful foreign litigation.

14.32 The relevant choice of law rules are contained in the Rome II Regulation.⁶⁰ Article 4(1) stipulates that the primary choice of law rule applies to the place where the direct damage occurred, which is likely to be the place where the allegedly wrongful litigation was pursued. Under Article 4(3), this primary rule can be displaced if the tort is ‘manifestly more closely connected’ with another country, but the European Court of Justice (ECJ) might not accept that the place where the litigation ‘should’ have happened is manifestly more closely connected to the tort than the place where it did happen.⁶¹ One case that may demand a different treatment is the tort of inducing a breach of contract: there is force in the suggestion that such a tortious claim is manifestly more connected to the law of the contract.

(p. 327) 14.33 If, however, the law of the place of litigation is applicable, then any claim in tort will generally be either self-defeating or pointless, because in the rare cases where a foreign court might accept that the bringing of litigation before it is actionably wrongful,⁶² it will usually itself provide procedural remedies to resolve the problem.

14.34 Even where choice of law difficulties could be surmounted, there would remain the problem in many situations of identifying a workable tort under English law. The tort of malicious prosecution, which now applies to civil proceedings generally,⁶³ requires that the criticized proceedings must have been brought maliciously and without reasonable and probable cause,⁶⁴ and must have failed.⁶⁵ Under the existing authorities, the same conditions apply in relation to foreign proceedings, so that if the claimant abroad has succeeded in his foreign proceedings, no cause of action will lie under English law.⁶⁶ The tort of abuse of civil proceedings, if it exists as a separate tort and generally,⁶⁷ has traditionally required the criticized proceedings to have been for an improper collateral purpose, which must be a purpose other than success in the action, although it may now best be viewed as merely an example of malicious prosecution and so require malice.⁶⁸ These limitations mean that those torts, even if they can be extended to proceedings abroad, cannot support general tortious liability for objectively vexatious and oppressive litigation abroad: there are many situations (p. 328) which the courts have been willing to call vexatious or oppressive for the purposes of the grant of an anti-suit injunction which go beyond the possible boundaries of such torts. It will also be arguable that, as a matter of public policy, such torts should in modern circumstances only be applicable to litigation in England, as foreign legal systems should in general have their own appropriate remedies to prevent malicious or abusive proceedings.⁶⁹

14.35 Other tortious causes of action, such as misrepresentation, which do not directly target vexatious or oppressive foreign litigation, could theoretically overlap in unusual factual situations.⁷⁰

14.36 It is therefore unsurprising that general non-contractual anti-suit injunctions have not in practice been based upon tortious causes of action.

2. Inducing a Breach of Contract and the Economic Torts

14.37 The tort of inducing a breach of contract, and possibly some of the other economic torts, may form a limited exception. In particular, where an exclusive forum clause is binding between A and B and a third party, C, who is in practical control of B, has directed B to breach the exclusive forum clause, some judges have accepted that anti-suit injunctions, or claims for damages, could be founded on the tort of inducing breach of contract, or possibly other economic torts.⁷¹

14.38 However, for this line of reasoning to work, the choice of law problem would need to be surmounted. In OT Africa Line v Magic Sportswear, Langley J faced an application to serve an (p. 329) anti-suit injunction out of the jurisdiction, on the contractual party to the exclusive forum clause, who had breached the clause by commencing proceedings in Canada, and also on its third-party insurers. One of the bases for the injunction against the third-party insurers was the tort of inducing a breach of contract.⁷² The judge applied the Private International Law (Miscellaneous Provisions) Act and concluded that under section 11, the ‘most significant elements’ of the tort occurred in Canada, where the insurers caused their insured to issue the proceedings. The claimants did not argue it was more appropriate for English law to apply under section 12; the judge observed that in his view they were right not to do so.⁷³ As a result Canadian law applied; and Langley J refused to accept that Canadian law would treat the Canadian proceedings as tortious, in a case where Canadian law treated the exclusive jurisdiction clause as non-binding. Had Langley J been considering the Rome II Regulation, it seems likely that he would have concluded that Canadian law applied under it as well.

14.39 This result is debatable; and even if correct it may not apply in all cases. It could be said that steps by insurers to manipulate a breach of an English exclusive forum clause are ‘manifestly more closely connected’ to England than to the place where the litigation occurs because of the connection with the forum clause, and therefore that Article 4(3) of the Rome II Regulation should displace the general rule in Article 4(1). If the third party or the contractual party had connections to England, then that could provide further support for applying Article 4(3).⁷⁴ There might also be cases where the third party’s conduct was wrongful under the foreign law.

14.40 In a number of subsequent cases, it has been assumed or held that the tort of inducing a breach of contract can support a claim for damages against a third party who has induced a breach of an English jurisdiction clause, applying English law, but the issue of choice of law was seemingly not raised.⁷⁵

3. Compensation in Equity

14.41 Monetary compensation (and possibly damages in equity⁷⁶) can be awarded in equity for infringements of equitable rights, independent of section 50 of the Supreme (p. 330) Court Act 1981.⁷⁷ In principle, therefore, compensation could be awarded in respect of foreign litigation that breached an equitable obligation not to pursue such litigation abroad.

14.42 However, if there is a general substantive equitable obligation not to commence vexatious and oppressive or unconscionable litigation abroad which is capable of supporting such a claim for compensation, it is a shy creature. There is no reported case where compensation or damages have even been sought in equity in respect of such wrongful foreign litigation independent of Lord Cairns’ Act;⁷⁸ and there is no principle of the traditional rules of equity on which a general claim for compensation could be based. The historical development of the anti-suit injunction is difficult to reconcile with the existence of a general claim for compensation or damages.⁷⁹

14.43 As discussed previously in this work, it is uncertain whether there is any substantive equitable right which underpins general non-contractual anti-suit injunctions.⁸⁰ But even if there is a substantive equity it does not follow that it is an equity which supports a cause of action for equitable compensation or damages. Not all equitable relationships can do this.⁸¹ It may well be, therefore, that any general substantive equity that may exist amounts to an equitable right to an injunction, but no more.⁸² Even the authorities which support a concrete equitable right that could support an injunction contain no hint of any broader equity that could support a claim in damages.⁸³

14.44 Further, if a general equitable right to compensation were to exist, it would confront and create serious problems. First, the scope of the equitable right would presumably have to match, or at least be related to, the scope of the injunction. But formulating a substantive right to compensation in terms which could flexibly mutate in accordance with the shaping of the discretion to grant an injunction, and the application of the principles of comity, would be challenging; and conversely, it would seem to be undesirable if an equitable right to damages were to exist in many cases where an injunction should be refused as a matter of comity or discretion.⁸⁴

(p. 331) 14.45 Second, if such a general equitable right to compensation or damages exists, it will confront potential problems of choice of law. The question of how choice of law rules apply to equitable claims is complex and uncertain. But the more substantive the supposed equitable right becomes, the more akin to a tortious right it looks, and so the more likely that the question of applicable law should be determined by the Rome II Regulation.⁸⁵ If so, it is arguable that the law of the place of the ‘wrongful’ litigation will be the applicable law, and if that is right, the foreign law will usually preclude any claim based on a substantive equity, or any analogous claim.

14.46 One way of resolving the tension between choice of law and equitable principles that arises if a substantive right not to be vexed by litigation abroad is considered to exist, is to attenuate the substantive content of the right. The more any right becomes a right to an injunction and nothing else, the easier it becomes to view it as not analogous to a claim in tort, but instead as akin to a matter of procedure, and thus legitimately a matter for English law alone, as the lex fori.⁸⁶ But if such an analysis is adopted, then any equitable right may well have been so hollowed out that it will be incapable of supporting a claim in damages.

14.47 Third, any equitable right to damages would confront the same logical problems, such as double adjudication, which confront claims for damages in the contractual case.

14.48 The landscape may be different in relation to specific equitable relationships which have a concrete existence independent of anti-suit injunctions and claims for damages, such as the equitable relationship which links an assignee of a contract to the debtor under the contract, or the subrogated insurer’s relationship to the defendant to the subrogated claim; and perhaps other quasi-contractual situations (in the sense discussed in Chapter 10 of this work). Equities of this nature may be sufficient to support a claim for damages.⁸⁷

14.49 In particular, in the assignment situation, there would be a credible argument that the assignee’s equitable obligation not to claim the substantive rights under the original contract without respecting the exclusive foreign clause to which those rights are inherently subject should be capable of supporting a claim for equitable compensation. If damages were not available in such a situation, it would be easier to weaken the force of an exclusive forum clause by assigning a contract to another linked party. It seems quite likely, therefore, that a remedy in damages or compensation will be held to exist through one analysis or another, and that failing a direct contractual claim, liability will be justified either on the basis that there is a claim for compensation in equity, or on the basis that the assignee is precluded by equity from denying his liability in contractual damages.⁸⁸

(p. 332) 14.50 In West Tankers, Flaux J thought there was a ‘strong case’ there would be a claim for ‘equitable damages’ against a subrogated insurer who claimed abroad in breach of an arbitration clause binding the assured, although it is possible (but unclear) that the damages were sought only in lieu under section 50 of the Senior Courts Act 1981. However, the juridical basis of the claim was not examined and the debate was focused on the question of whether European jurisdictional law barred the claim.⁸⁹

14.51 It may also be possible to justify claims for damages in other quasi-contractual situations, where the third-party litigant abroad is making substantive claims in the shoes of a party whose claims are contractually subject by an English exclusive forum clause, on the basis of other doctrines. As discussed in Chapter 10, the case law in quasi-contractual situations, although fluid and unsettled, appears to support the proposition that the third party is bound by a specific positive equitable obligation to comply with a forum clause which is an inherent condition of the derived contractual rights he wishes to assert against the debtor.⁹⁰ It should be borne in mind, however, that the existence of such an obligation is debatable, in particular in the situation of third parties under statutes transferring claims, where the imposition of equitable obligations is more ambitious than situations like assignment. In some of the case law, the courts have preferred to analyse the quasi-contractual situation on the basis that for the third party to litigate inconsistently with the forum clause which binds the original creditor would be vexatious and oppressive, without imposing any concrete positive obligation.⁹¹

14.52 Such a positive obligation, if and where it exists, is capable of supporting a declaration that the third party is ‘bound’ by the arbitration or jurisdiction clause.⁹² In turn, it is possible, but again debatable, that a positive equitable obligation could also support a claim for equitable compensation or damages. That result would be consistent with Flaux J’s decision in West Tankers, although at least if a foreign third-party rights statute was involved, would require consideration of the meaning of the Court of Appeal’s obiter comments about damages in Through Transport.⁹³

14.53 The current case law suggests that the applicable law of such questions should be the law of the right transferred.⁹⁴

(p. 333) 4. Damages in Lieu of an Injunction: Section 50 of the Senior Courts Act 1981—Personal Jurisdiction

14.54 Where the court has power to grant an injunction, it can in its discretion grant damages in lieu of an injunction under section 50 of the Senior Courts 1981,⁹⁵ which restates the powers granted by Lord Cairns’ Act.⁹⁶ It has been suggested that this power could justify the grant of damages in place of an anti-suit injunction.⁹⁷ It would have the advantage, in contrast to a substantive equitable right to damages, that the award of damages under section 50 is discretionary, and thus flexible.

14.55 However, in the current state of the case law it is uncertain whether section 50 is a legitimate independent basis for a claim for damages for ‘wrongful’ litigation abroad. First of all, there are conflicting authorities on the question of whether it is a precondition for the award of damages in lieu of an injunction under section 50 that a claim for damages would exist at common law (or equity) in respect of the wrong in question once it has occurred.⁹⁸ Second, (p. 334) while it seems that damages are available under section 50 for breaches of purely equitable obligations,⁹⁹ there is a real argument that it would be wrong to award damages in lieu of an injunction if not only is there no common law cause of action but there is not even a underlying substantive equitable right that could sound in damages.¹⁰⁰ Thus, it is uncertain that section 50 could create a damages claim out of nothing, in cases where there is no relevant concrete positive equitable obligation.

14.56 In the old case of Acraman v Price, the Court of Chancery held that damages in lieu of an injunction were not available in respect of the pursuit of an improper action in the common law courts, although on the basis of very limited reasoning.¹⁰¹ On the other hand, in West Tankers Flaux J was of the view that there was a ‘strong case’ that an equitable damages claim for wrongful litigation abroad in a quasi-contractual case would in principle lie under section 50, but the point of principle was apparently not contested, and Acraman was not cited.¹⁰²

14.57 Consequently, outside the contractual case, it is uncertain whether section 50 Senior Courts Act 1981 provides a useful route to claim damages in respect of supposedly wrongful foreign litigation.¹⁰³

C. The Brussels–Lugano Regime—Personal Jurisdiction

14.58 The effect of the Brussels–Lugano regime on damages claims (so long as the regime remains English law) is considered in Chapter 12.

Footnotes:

¹ Starlight Shipping v Tai Ping Insurance (The Alexandros T) [2008] 1 Lloyds Rep 230 [12]. See also Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 96; STX Pan Ocean v Woori [2012] 2 Lloyds Rep 99 [16]; AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [25]; Southport Success v Tsingshan Holding Group (The Anna Bo) [2015] 2 Lloyds Rep 578 [35]; and see Ch 13, para 13.64.

² STX Pan Ocean v Woori [2012] 2 Lloyds Rep 99 [16]. See also Skype Technologies v Joltid Ltd [2011] ILPr 8 [33].

³ A party participating in the foreign proceedings in an attempt to avoid a judgment against him, while nevertheless seeking to avoiding submission, has to tread ‘a legal tightrope’: as submitted arguendo by Peter Gross QC in Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1994] 1 Lloyds Rep 168, 180; and see P Gross, ‘Anti–Suit Injunctions and Arbitration’ [2005] LMCLQ 10, 13.

⁴ See paras 14.15, 14.17–14.21.

⁵ Owners of Cargo Lately Laden on Board the Ship or Vessel Eleftheria v The Eleftheria (Owners) (The Eleftheria) [1970] P 94 (CA) 99G (a stay case; referring to suing in England ‘in breach of an agreement to refer disputes to a foreign court’); Sohio Supply v Gatoil (USA) [1989] 1 Lloyds Rep 588, 592 (CA) (an injunction case; referring to ‘the continuance of foreign proceedings in breach of contract’); Continental Bank v Aeakos Compania Naviera [1994] 1 Lloyds Rep 505 (CA) 512 (an injunction case, referring to the injunction defendant’s ‘clear breach of contract’); Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 96 (an injunction case, stating that the injunction defendant had ‘promised not to bring’ the foreign proceeding); National Westminster Bank v Rabobank Nederland (No 1) [2007] EWHC 1056 [438]–[439]; National Westminster Bank v Rabobank Nederland (No 3) [2008] 1 Lloyds Rep 16 [20]–[27]; Kallang Shipping Panama v Axa Assurances Senegal (The Kallang) (No 2) [2009] 1 Lloyds Rep 124 [97]–[101]; Sotrade Denizcilik Sanayi Ve Ticaret v Amadou Lo (The Duden) [2009] 1 Lloyds Rep 145 [72]–[79]; Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 1 Lloyds Rep 223 (SC) [132], [156] and [2014] 1 Lloyds Rep 544 (CA) [19]–[20]; AMT Futures v Boural [2018] EWHC 750 [31]–[40].

See also E Peel, ‘Exclusive Jurisdiction Agreements: Purity and Pragmatism in the Conflict of Laws’ [1998] LMCLQ 182, 207–09.

Some continental thinking has treated exclusive forum clauses as procedural agreements only that do not give rise to claims for damages: Ch 1, para 1.53. For academic analyses doubting that breaches of exclusive jurisdiction clauses should sound in damages, see LC Ho, ‘Anti-Suit Injunctions in Cross-Border Insolvency: A Restatement’ (2003) 52 ICLQ 697, 707–09; CH Tham, ‘Damages for Breaches of English Jurisdiction Clauses; More than Meets the Eye’ [2004] LMCLQ 46, 60; J Harris, ‘Agreements on Jurisdiction and Choice of Law: Where Next?’ [2009] LMCLQ 537, 548.

⁶ AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [1], [20]–[21].

⁷ Doleman v Ossett [1912] 3 KB 257 (CA) 267–68 (although the case is not generally a sound guide to the law any more); Mantovani v Carapelli [1978] 2 Lloyds Rep 63, 72–73, [1980] 1 Lloyds Rep 375 (CA) 381–82, 383, 384 (distinguishing Heyman v Darwins [1942] AC 356 (HL) 374); Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA) 549, 552; A/S D/S Svendborg v Wansa [1996] 2 Lloyds Rep 559, 575; Industrial Maritime Carriers (Bahamas) v Sinoca International (The Eastern Trader) [1996] 2 Lloyds Rep 585, 600; Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) [48], [75] (although the point was apparently conceded: [36]); A/S D/S Svendborg v Akar [2003] EWHC 797 [37]; Sunrock Aircraft v Scandinavian Airlines System Denmark-Norway-Sweden [2007] 2 Lloyds Rep 612 (CA) [37] (damages for breach of an expert determination clause); National Westminster Bank v Rabobank Nederland (No 1) [2007] EWHC 1056 [438]–[439]; National Westminster Bank v Rabobank Nederland (No 3) [2008] 1 Lloyds Rep 16 [20]–[27]; CMA CGM v Hyundai Mipo Dockyard [2009] 1 Lloyds Rep 213 [39]–[40]; Starlight Shipping Co v Allianz Marine & Aviation Versicherungs [2012] 1 Lloyds Rep 162 (Burton J) [35]; [2014] CLC 492 (CA) [19] and [2014] CLC 503 (Flaux J) [83]–[94] (damages in lieu of an injunction), while the Supreme Court when considering the lis pendens issues appears to have considered the damages claims to be sound [2014] 1 Lloyds Rep 223 (SC), in particular at [132], [156]; Compania Sud Americana de Vapores v Hin-Pro International Logistics [2015] 1 Lloyds Rep 301 [38]–[40] (undefended); AMT Futures v Marzillier [2015] QB 699 (CA) [61]–[62] (tort damages for procuring a breach of contract); Swissmarine Services v Gupta Oil India Private Ltd [2015] 1 Lloyds Rep 456 [33]; Essar Shipping v Bank of China [2016] 1 Lloyds Rep 417 [31], [74]–[76]; AMT Futures v Boural [2018] EWHC 750.

In Ellerman Lines v Landi (The Falernian) (1927) 29 Ll L Rep 15, 22–24, overturned in part but not on this point Ellerman Lines v Read [1928] 2 KB 144 (CA) 153–54, 156–57, the courts awarded damages in respect of foreign litigation which was both fraudulent and in breach of contract, but without distinguishing between fraud and breach of contract.

⁸ Union Discount Co v Zoller [2002] 1 WLR 1517 (CA) [34]–[38].

⁹ Sunrock Aircraft Corp v Scandinavian Airlines System Denmark-Norway-Sweden [2007] 2 Lloyds Rep 612 (CA) [4]–[5], [36]–[38].

¹⁰ The arguments of principle for and against the use of damages to enforce exclusive forum clauses are considered in D Tan, ‘Damages for Breach of Forum Selection Clauses, Principled Remedies, and Control of International Civil Litigation’ (2005) 40 Tex Intl L J 623 and J Harris, ‘Agreements on Jurisdiction and Choice of Law: Where Next?’ [2009] LMCLQ 537.

¹¹ This is now commonplace and examples include: Mantovani v Carapelli [1978] 2 Lloyds Rep 63, [1980] 1 Lloyds Rep 375 (CA); London Arbitration 8/04, LMLN 14 April 2004; London Arbitration 11/06 (2006) 697 LMLN 2; CMA CGM v Hyundai Mipo Dockyard Co Ltd [2009] 1 Lloyds Rep 213 [10], [39]–[40] and the obiter comments in Whitworths v Synergy Food and Processing [2014] EWHC 2439 (QB) [73]–[74] (undefended). It was assumed damages in lieu of an injunction could be granted in a quasi-contractual case in West Tankers v Allianz [2012] 2 Lloyds Rep 103.

¹² The damages legitimated in West Tankers v Allianz [2012] 2 Lloyds Rep 103 were claimed from the arbitrators, not the court.

In relation to anti-suit injunctions, the law appears to be that standard arbitration agreements governed by English law permit (as a matter of construction or if necessary implied terms) the usual ancillary measures to be claimed from the English court as supervisory court without breach of the arbitration clause, including anti-suit injunctions in support of arbitration—and even though anti-suit awards would also fall within the scope of the arbitration clause and the arbitrators’ jurisdiction: see Ch 7, para 7.58. But only the court has powers to grant a full anti-suit injunction, which is an inherently different remedy to an anti-suit award. There is no case law which has yet addressed directly whether a claim before the court for damages for breach of an arbitration agreement could fall within any similar implied exception. Claims for damages might therefore be stayed in favour of arbitration. Further, it remains to be seen whether the grant of damages by the court would be consistent with the sensitivity to the role of the arbitrators demanded in AES Ust-Kamenogorsk Hydropower Plant LLC v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [60].

The case law has not yet taken a grip on this problem. In Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80, [101]–[102] Males J expressed tentative concerns as to whether the availability of damages from the arbitrators might make it inappropriate to seek damages from the court, at least within the context of the Brussels–Lugano regime, and deferred consideration of damages. But in Whitworths v Synergy Food and Processing [2014] EWHC 2439 (QB) [73]–[74] (an undefended case), Cooke J granted permission to amend to plead a case for equitable damages on the basis that it had been wrongful to arbitrate abroad inconsistently with an English arbitration agreement, although he considered this was a matter that would fall within the arbitration agreement (it is not clear why damages were claimed in equity). He considered that such damages should ‘primarily’ be a matter for the arbitrators, but envisaged that the court might award damages if the arbitrators were for any reason unable to do so. In Aqaba Container Terminal v Soletanche Bacy France [2019] EWHC 471 (Comm) [47], the question of whether damages for breach of the arbitration clause could be claimed from the court or should be claimed from the arbitrators was debated, but left over.

For court declarations as to the effect of the arbitration clause, see Ch 15, paras 15.21–15.33.

¹³ See Ch 12, section N, ‘Claims for Damages’.

¹⁴ Case C-536/15, Gazprom EU:C:2015:316, discussed at Ch 12, section B, ‘The Collision’, Ch 12, section G ‘Anti-Suit Injunctions Sought from Arbitrators’, and Ch 12, para 12.67.

¹⁵ Union Discount v Zoller [2002] 1 WLR 1517 (CA) [38].

¹⁶ See Union Discount v Zoller [2002] 1 WLR 1517 (CA).

¹⁷ See Ch 12, section N, ‘Claims for Damages’.

¹⁸ Union Discount v Zoller [2002] 1 WLR 1517 (CA) [38], not following in this respect the doubts expressed in Industrial Maritime Carriers (Bahamas) v Sinoca International (The Eastern Trader) [1996] 2 Lloyds Rep 585, 600, 602.

¹⁹ National Westminster Bank v Rabobank Nederland (No 1) [2007] EWHC 1056 [436]–[440] and National Westminster Bank v Rabobank Nederland (No 3) [2008] 1 Lloyds Rep 16 [20]–[27]; see in particular at [24]: ‘the Californian court had no power to award as costs more than very limited items of expenditure’. The case before Colman J actually concerned a promise not to sue at all rather than an exclusive forum clause; but he held that the same principles applied to both: [2007] EWHC 1056 at [436]–[440]. See also Campbell v Campbell [2017] EWHC 182 [179]–[181].

²⁰ The traditional position in relation to prior proceedings in England, developing from the cases of Cockburn v Edwards (1881) 18 Ch D 449, 459, 462; Quartz Hill Consolidated Gold Mining Co v Eyre (1883) 11 QBD 674 (CA) was summarized in Carroll v Kynaston [2011] QB 959 (CA) [23]–[31], where it was held that (leaving aside the case of prior criminal proceedings) damages would not in general be recoverable in respect of the costs of prior proceedings in England between the same parties. The recovery of those costs should be addressed by applications for costs in the prior proceedings under the court’s costs rules, and claiming damages in respect of those costs, or in respect of such costs that had not been awarded under the court’s cost rules, would in general involve double adjudication. This proposition was not affected by the fact that costs recovery under the CPR (like the RSC before it) does not in reality produce full compensation. The correctness of the analysis had been doubted in a number of cases (see Berry v British Transport Commission [1962] 1 QB 306 (CA); National Westminster Bank v Rabobank Nederland (No 3) [2008] 1 Lloyds Rep 16 [20]–[27]) but appeared to have been re-affirmed as a matter of binding precedent in Carroll v Kynaston.

However, in the recent decision of the Supreme Court in Willers v Joyce [2016] 3 WLR 477 (SC) [58] (over the dissent of Lord Mance at [124], [145]), damages were awarded in tort in respect of the costs of prior English proceedings where costs had been awarded on the standard basis only following a discontinuance, and an award of indemnity costs was not a matter the first instance judge was in a position properly to assess. The point was collateral to the main issues in debate, key authorities (including Carroll v Kynaston) were not cited to the Supreme Court, and the reasoning was brief. It is unclear, therefore, whether Willers creates merely an additional limited, fact-specific exception to the basic exclusionary rule, or whether it involves a new departure of principle. It is arguable, however, that it does involve a new approach. The new rule may be focused on whether the claim for additional costs involves an attempt at re-determination which is abusive.

²¹ Although the point had been left open in Union Discount v Zoller [2002] 1 WLR 1517 (CA) [38], the first instance case law has gone on to hold that damages could be awarded in such a situation: see A/S D/S Svendborg D/S Af 1912 A/S Bodies Corporate Trading in Partnership as ‘Maersk Sealand’ v Akar [2003] EWHC 797; Crystal Decisions (UK) v Vedatech (No 2) [2007] EWHC 1062 [62] (where Union Discount v Zoller was not cited, and the damages defendant was not represented by counsel); National Westminster Bank v Rabobank Nederland (No 1) [2007] EWHC 1056 [436]–[440]; National Westminster Bank v Rabobank Nederland (No 3) [2008] 1 Lloyds Rep 16 [20]–[27]; West Tankers v Allianz (The Front Comor) [2012] 2 Lloyds Rep 103 [77].

In Carroll v Kynaston [2011] QB 959 (CA) [23]–[31], the Court of Appeal commented obiter that prior foreign proceedings was distinguishable from the case of prior English litigation where there was ‘no possibility’ of the costs being awarded in the prior foreign proceedings. But the potentially restrictive force of this has now been undermined by Willers v Joyce [2016] 3 WLR 477 (SC) [58] which casts doubt on any attempt to cross-apply the traditional rule for prior English proceedings to the situation of foreign proceedings; and see also the broader approach in Campbell v Campbell [2017] EWHC 182 [179]–[181].

D Tan and N Yeo, ‘Breaking Promises to Litigate in a Particular Forum: Are Damages an Appropriate Remedy?’ [2003] LMCLQ 435, 440, suggest that the ability to recover substantial costs in the foreign jurisdiction should not preclude recovery in damages, but should be relevant, at most, to quantification.

²² National Westminster Bank v Rabobank Nederland (No 1) [2007] EWHC 1056 [436]–[440].

²³ See paras 14.17–14.22, where the issue is explored.

²⁴ See National Westminster Bank v Rabobank Nederland (No 3) [2008] 1 Lloyds Rep 16, at [24]. See also West Tankers v Allianz (The Front Comor) [2012] 2 Lloyds Rep 103 [77]; and Swissmarine Services v Gupta Oil India [2015] 1 Lloyds Rep 456 [33].

²⁵ See paras 14.17–14.20.

²⁶ See National Westminster Bank v Rabobank Nederland (No 3) [2008] 1 Lloyds Rep 16, at [25].

²⁷ Carroll v Kynaston [2011] QB 959 (CA) [30] and Campbell v Campbell [2017] EWHC 182 [179].

²⁸ Willers v Joyce [2016] 3 WLR 477 (SC) [58]. See n 20.

²⁹ Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) 443 [75] (per Lord Scott, obiter); see the rather more qualified views of Lord Hobhouse at [48]; and see Starlight Shipping v Allianz Marine & Aviation Versicherungs [2014] 1 Lloyds Rep 223 (SC) per Lord Mance at [156]. See also Ellerman Lines v Landi (The Falernian) (1927) 29 Ll L Rep 15, 22–23, where damages for legal expenses of an unsuccessful defence were awarded (not raised on appeal in Ellerman Lines v Read [1928] 2 KB 144 (CA)). However, in that case the foreign proceedings were not only in breach of contract, but also involved a fraud.

³⁰ See Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 94; Industrial Maritime Carriers (Bahamas) v Sinoca International (The Eastern Trader) [1996] 2 Lloyds Rep 585, 602; Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) 439, [48] (per Lord Hobhouse); Starlight Shipping v Allianz Marine & Aviation Versicherungs [2014] 1 Lloyds Rep 223 (SC) per Lord Mance at [156].

³¹ National Westminster Bank v Rabobank Nederland (No 1) [2007] EWHC 1056 [435]–[451]; A/S D/S Svendborg D/S Af 1912 A/S Bodies Corporate Trading in Partnership as ‘Maersk Sealand’ v Akar [2003] EWHC 797; Starlight Shipping Company v Allianz Marine & Aviation Versicherungs [2012] 1 Lloyds Rep 162 [35], [36], [48], and see [2014] 1 Lloyds Rep 223 (SC) at [156] and [2014] 2 CLC 492 (CA) [19]–[20] (although the appellant did not attend before the Court of Appeal); West Tankers v Allianz (The Front Comor) [2012] 2 Lloyds Rep 103 [77]–[78] (held that the tribunal had jurisdiction to award damages in respect of ongoing Italian proceedings); Compania Sud Americana de Vapores v Hin-Pro International Logistics [2015] 1 Lloyds Rep 301 [38]–[40] (undefended); AMT Futures v Marzillier [2015] QB 699 (CA) [59]–[63] (damages in tort). See also AMT Futures v Boural [2018] EWHC 750.

³² There are many examples of this in practice. For reported arbitral decisions, see London Arbitration 8/04, LMLN 14 April 2004; London Arbitration 11/06 (2006) 697 LMLN 2.

³³ National Westminster Bank v Rabobank Nederland (No 1) [2007] EWHC 1056 [435]–[451]. See also A/S D/S Svendborg D/S Af 1912 A/S Bodies Corporate Trading in Partnership as ‘Maersk Sealand’ v Akar [2003] EWHC 797.

³⁴ See the principles articulated in Union Discount v Zoller [2002] 1 WLR 1517 (CA) [31]–[32]; Ellerman Lines v Read [1928] 2 KB 144; Mantovani v Carapelli [1980] 1 Lloyds Rep 375 (CA); OT Africa Line v Magic Sportswear [2005] 1 Lloyds Rep 252 [25]. Such damages were awarded in Mantovani v Carapelli [1980] 1 Lloyds Rep 375 (CA) 382–84, although that related to a foreign interlocutory decision only. Similarly, in Donohue v Armco [2002] 1 Lloyds Rep 425, 439 [48], Lord Hobhouse considered that such damages could be recovered in principle in a case where the foreign action had succeeded, subject potentially to questions of res judicata, submission, and waiver; see also Lord Scott at [75]. However, the point was apparently conceded: cf [36]. In Tracomin v Sudan Oil Seeds (Nos 1 and 2) [1983] 1 WLR 1026 (CA) 1036–37, the question of costs was not considered; but a defeat abroad was not considered to be a bar to the recovery of damages for the liabilities under the foreign judgment (in a case where the foreign judgment would not be recognized: at 1030–31). See also A/S D/S Svendborg D/S Af 1912 A/S Bodies Corporate Trading in Partnership as ‘Maersk Sealand’ v Akar [2003] EWHC 797 [37] (where damages in respect of costs were awarded, although the damages claimant’s jurisdiction challenge abroad had failed up to that point). Finally, such damages were assumed to be possible by the Supreme Court (subject potentially to questions of waiver, submission, res judicata and abuse of process) in Starlight Shipping v Allianz Marine & Aviation Versicherungs AG (The Alexandros T) [2014] 1 Lloyds Rep 223 (SC) [39], [132], [156], and they are consistent with the reasoning of the Court of Appeal (at a hearing in the same litigation where the appellant did not attend) in [2014] 2 CLC 492 (CA) [19]–[20]. See also recently Compania Sud Americana de Vapores v Hin-Pro International Logistics [2015] 1 Lloyds Rep 301, [37] (undefended).

However, in AMT Futures v Marzillier [2015] QB 699 (CA) [63], the damages claimant deliberately chose to claim damages in respect only of those of the German actions which had not yet proceeded to judgment.

³⁵ Marc Rich v Societa Italiana Impianti (The Atlantic Emperor) (No.2) [1992] 1 Lloyds Rep 624.

³⁶ Tracomin v Sudan Oil Seeds (Nos 1 and 2) [1983] 1 WLR 1026 (CA) 1036–37; Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 94; A/S D/S Svendborg v Wansa [1996] 2 Lloyds Rep 559, 575, [1997] 2 Lloyds Rep 183 (CA) 189 (the quantum covered by a freezing injunction included potential damages in respect of liabilities that might be ordered in the wrongful foreign proceedings). In CMA CGM v Hyundai Mipo Dockyard [2009] 1 Lloyds Rep 213 [9]–[10], [39]–[40], Burton J upheld an arbitral award granting such damages. In West Tankers v Allianz (The Front Comor) [2012] 2 Lloyds Rep 103, Flaux J accepted that arbitrators had power to award such damages (on a quasi-contractual basis). Burton J allowed for such damages for breach of a jurisdiction clause in Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2012] 1 Lloyds Rep 162 [35]; upheld [2014] 1 Lloyds Rep 544 (CA) [19]–[20] (appellant not represented). See also the comments of the Supreme Court in [2014] 1 Lloyds Rep 223 (SC), where no doubt was expressed about the availability of such damages in principle (at [39]) or where they were positively supported ([132], [156]). For a recent award of such damages for breach of a jurisdiction clause, see Compania Sud Americana de Vapores v Hin-Pro International Logistics [2015] 1 Lloyds Rep 301 [37]–[40] (undefended).

It has been suggested that if the foreign judgment is in reality unenforceable, theoretical liabilities imposed under it may have caused no loss: Industrial Maritime Carriers (Bahamas) v Sinoca International (The Eastern Trader) [1996] 2 Lloyds Rep 585, 600, 602.

³⁷ CMA CGM v Hyundai Mipo Dockyard [2009] 1 Lloyds Rep 213 [9]–[10], [39]–[40].

³⁸ Tracomin v Sudan Oil Seeds (Nos 1 and 2) [1983] 1 WLR 1026 (CA) 1036G–1037C (in the context of an arbitration clause, and as a collateral point while considering the justification for an injunction). In Marc Rich v Società Italiana Impianti (The Atlantic Emperor) (No 2) (Hobhouse J, 11 November 1991) (quoted in Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1994] 1 Lloyds Rep 168, 179–80), Hobhouse J considered that proving a wrong answer as to liability was a precondition for a damages claim, which was impossible in the case before him, due to the effect of the res judicata findings of the foreign court (the point was not considered on appeal [1992] 1 Lloyds Rep 624 (CA)). Lord Bingham proceeded obiter on the assumption that this might be the right analysis in his glancing comments in Donohue v Armco [2002] 1 Lloyds Rep 425 [48]. See also Toepfer International v Molino Boschi [1996] 1 Lloyds Rep 510, 518. More recently, see the reasoning in Essar Shipping v Bank of China [2016] 1 Lloyds Rep 417 [74].

In relation to breach of an expert determination clause, see Sunrock Aircraft v Scandinavian Airlines System Denmark-Norway-Sweden [2007] 2 Lloyds Rep 612 (CA) [36]–[42]. For academic discussion, see S Dutson, ‘Breach of an Arbitration or Exclusive Jurisdiction Clause: The Legal Remedies if It Continues’ (2000) 16 Arb Intl 89, 97–100; D Tan, ‘Damages for Breach of Forum Selection Clauses, Principled Remedies, and Control of International Civil Litigation’ (2005) 40 Tex Intl L J 623, 653–54.

³⁹ CMA CGM v Hyundai Mipo Dockyard [2009] 1 Lloyds Rep 213 [39]–[40]; Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 1 Lloyds Rep 544 (CA) [19]–[20] (appellant not represented); Compania Sud Americana de Vapores v Hin-Pro International Logistics [2015] 1 Lloyds Rep 301 [37]–[40] (undefended).

This is also consistent with the views of Lord Neuberger in Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 1 Lloyds Rep 223 [132], where he reasoned, while addressing lis pendens, that there was no inconsistency between a damages claim reversing a foreign liability judgment, and the foreign liability judgment. But this is not or not clearly part of the reasoning of the other judges, who approached matters differently: see [42]–[46] and [156].

However, the reasoning in Essar Shipping v Bank of China [2016] 1 Lloyds Rep 417 [74], is more redolent of the ‘wrong answer’ approach (again without referring to previous authority).

⁴⁰ As to when and whether this is the case, see Ch 15.

⁴¹ Marc Rich v Società Italiana Impianti (No 2) (Hobhouse J, 11 November 1991), stating (obiter) that if the foreign court’s decision would be recognized in England, then ‘damages would never be an adequate remedy since [the plaintiff] could not establish one of the essential steps to its success’. See also Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 94 (Rix J, who merely said that if there was a submission, then ‘all rights to arbitrate may be rendered nugatory’ (emphasis added); the point was not considered on appeal [1992] 1 Lloyds Rep 624 (CA)); OT Africa Line v Hijazy (The Kribi) (No 1) [2001] 1 Lloyds Rep 76 [87] (‘might be unfavourable’); Industrial Maritime Carriers (Bahamas) v Sinoca International (The Eastern Trader) [1996] 2 Lloyds Rep 585, 600, 602 (obiter); Donohue v Armco [2002] 1 Lloyds Rep 425 [48] (‘may’, obiter). If correct, this would be a striking example of a case where damages would not be an adequate remedy if an injunction is not granted.

⁴² CMA CGM SA v Hyundai Mipo Dockyard Co Ltd [2009] 1 Lloyds Rep 213 [37], [39]–[41]. See to similar effect E Peel, ‘Exclusive Jurisdiction Agreements: Purity and Pragmatism in the Conflict of Laws’ [1998] LMCLQ 182, 207–09.

⁴³ Starlight Shipping Co v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 1 Lloyds Rep 233 (SC) [44]–[46], [58]–[59] (Lord Clarke for the majority) [132] (Lord Neuberger), and [156] Lord Mance.

⁴⁴ Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 1 Lloyds Rep 544 (CA) [19]–[20] (appellant not represented).

⁴⁵ Marc Rich v Società Italiana Impianti (No 2) (Hobhouse J, 11 November 1991), (‘it could be said’ to amount to a waiver; quoted without being directly adopted in Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1994] 1 Lloyds Rep 168, 179–80; Industrial Maritime Carriers (Bahamas) v Sinoca International (The Eastern Trader) [1996] 2 Lloyds Rep 585, 600, 602 (obiter).

⁴⁶ As floated by Lord Mance in Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 1 Lloyds Rep 223 (SC) at [156].

⁴⁷ Ellerman Lines v Read [1928] 2 KB 144 (CA). Lord Mance’s reasoning in Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 1 Lloyds Rep 223 (SC) at [156] is also consistent with consequential loss being awarded.

⁴⁸ See D Tan, ‘Damages for Breach of Jurisdiction Clauses’ [2002] SALJ 342, 360–61, arguing that damages in this situation would not make sense.

⁴⁹ See the comments in Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA) 549, 552; and see by analogy (in the context of refusals to stay English proceedings) Banco de Honduras v East West Insurance [1996] LRLR 74, 85. The point is not clearly addressed in Navig8 d v Al-Riyadh Co for Vegetable Oil Industry (The Lucky Lady) [2014] 2 Lloyds Rep 104 [20]–[23].

⁵⁰ Mantovani v Carapelli [1980] 1 Lloyds Rep 375 (CA) 384; Banco de Honduras v East West Insurance [1996] LRLR 74, 85.

⁵¹ Donohue v Armco [2002] 1 Lloyds Rep 425 [48] (per Lord Bingham: ‘may’—but ‘complex’ and obiter) [75] (per Lord Hobhouse: ‘no reason in principle’ why damages in respect of costs should not be awarded; but the issues were it seems not fully explored); Essar Shipping v Bank of China [2016] 1 Lloyds Rep 417 [74]–[76] (injunction refused for delay, and claimant left to his claim in damages).

⁵² Through Transport Mutual Insurance Association (Eurasia) v New India Assurance [2005] 1 Lloyds Rep 67 (CA) [52], [65], where the non-party’s claim was based on a third-party rights statute and it was held the third party was not contractually bound, and so could not be sued in damages (or at least not for contractual damages); Charterers Mutual Assurance Association v British & Foreign [1998] ILPr 838, [53]; and see Through Transport Mutual Insurance Association (Eurasia) v New India Assurance (No 2) [2005] 2 Lloyds Rep 378 [25]–[28]; London Steam Ship Owners Mutual Insurance Association v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [136], [2015] 2 Lloyds Rep 33 (CA) [83]. The decision in Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) v Containerships Denizcilik Nakliyat ve Ticaret (The Yusuf Cepnioglu) [2016] 1 Lloyds Rep 641 (CA) [32]–[33], [56] does not appear to have departed from Through Transport on this point, but rather on the tests for injunctions.

⁵³ In Through Transport Mutual Insurance Association (Eurasia) v New India Assurance (No 2) [2005] 2 Lloyds Rep 378 [22], [28], Moore Bick LJ recognized that third-party rights statutes on the one hand, and doctrines such as assignment on the other, might be different in relation to this issue.

⁵⁴ Rhone v Stephens [1994] 2 AC 310 (HL) 322–23.

⁵⁵ Schiffahrtsgesellschaft Detlev von Appen v Voest Alpine Intertrading (The Jay Bola) [1997] 1 Lloyds Rep 179, 186–88; West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2005] 2 Lloyds Rep 257 [33].

⁵⁶ See Schiffahrtsgesellschaft Detlev von Appen v Voest Alpine Intertrading (The Jay Bola) [1997] 2 Lloyds Rep 279 (CA) 286.

⁵⁷ West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2005] 2 Lloyds Rep 257 [33]; STX v Woori [2012] 2 Lloyds Rep 99 [9]–[11] (undefended); Aline Tramp v Jordan International Insurance (The Flag Evi) [2017] 1 Lloyds Rep 467 [40]; and third-party rights statutes cases like Charterers Mutual Assurance Association v British & Foreign [1998] ILPr 838 [38], [53]. See generally Ch 10, section C, ‘An Obligation Not to Sue Elsewhere?’.

⁵⁸ This arises from the cases following Halsall v Brizell [1957] Ch 169 (discussed in N Gravells, ‘Enforcement of Positive Covenants Affecting Freehold Land’ (1994) 110 LQR 346; Davies v Jones 1 All ER (Comm) 755 (CA)).

The basic rule is that an assignee cannot be liable under the burdens of a contract unless he is a party to that contract: Rhone v Stephens [1994] 2 AC 310 (HL at 316H–317A. In IDC Group v Clark [1992] 1 EGLR 187, 190, it was said obiter that the only means of enforcement in linked burden and benefit cases is to prevent the successor in title from enjoying the correlated benefits, save upon conditions that they give effect to the correlated obligations. The same approach appears to underpin Lord Templeman’s reasoning in Rhone v Stephens, at 317F–318C, 322E–G. On this approach, there is no independent contractual obligation, and the correlated burden is enforced indirectly.

The question that arises, however, is whether such conditions can be imposed retrospectively on someone who has chosen to exercise the correlated benefit, where there is no prior occasion for putting them to their election as to whether to renounce the benefit or accept the condition. In a number of subsequent cases it has apparently been assumed that an assignee would become liable to perform appropriately linked burdens as independent contractual obligations, if he had elected to claim the linked benefits: see Baybut v Eccles Rigg Country Park (Times, 13 November 2006) [58]–[59]; Thamesmead v Allotey (2000) 79 P & CR 557 (CA) 564–65 (obiter); Elwood v Goodman [2014] 2 WLR 967 (CA) [24]–[31]; Budana v Leeds Teaching Hospitals NHS Trust [2018] 1 WLR 1965, [53] (obiter); and previously see Elliston v Reacher [1908] 2 Ch 665 (CA) 669 (obiter only). But the difference between the two approaches was in general not directly confronted.

In Davies v Jones [2010] 1 All ER (Comm) 755 [32]–[33], the Court of Appeal left open the possibility that the court would impose independent obligations, enforceable by a separate action, to perform correlated burdens, and doubted the comments in IDC v Clark. One jurisprudential mechanism envisaged in Davies v Jones was the imposition of a restitutionary obligation to pay for the benefit of the services received. But a neater and more coherent solution may be that the person who takes the linked benefit is obliged in equity to recognize the contractual force of the linked burden: this may be the analysis adopted in Elwood v Goodman [2014] 2 WLR 967 (CA) [24]–[31]; and Budana v Leeds Teaching Hospitals NHS Trust [2018] 1 WLR 1965 [53] (obiter).

However, it is unclear whether any such independent obligation doctrine, going beyond a purer conditional benefit analysis as per IDC v Clark, can be reconciled with Rhone v Stephens and the traditional rule that contractual burdens may not be imposed on assignors. And even if such a doctrine of positive obligation is sound in general, it is unclear whether it can apply to exclusive forum clauses, in particular in a situation where the damages defendant has claimed his positive rights abroad. As already discussed, the existing case law on assignment and exclusive forum clauses has as yet not adopted such an independent obligation analysis (with the partial exception of Scott VC’s minority analysis in The Jay Bola): see para 14.27.

Longmore LJ in The Yusuf Cepnioglu regarded the principle in Halsall v Brizell as applying to contractual forum clauses, and to a third party claiming under a third-party rights statute, such that that party was ‘bound’ by the exclusive forum clause in a way sufficient to justify an injunction: Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) v Containerships Denizcilik Nakliyat ve Ticaret (The Yusuf Cepnioglu) [2016] 1 Lloyds Rep 641 (CA) [24]. But he was not focusing on damages, nor on an analysis under which the contractual forum clause became treated as independently binding, and he treated both Hobhouse LJ and Scott VC’s analyses in The Jay Bola as correct.

⁵⁹ Schiffahrtsgesellschaft Detlev von Appen v Voest Alpine Intertrading (The Jay Bola) [1997] 2 Lloyds Rep 279 (CA) 291.

⁶⁰ EC Regulation No 864/2007 on the law applicable to non-contractual obligations (Rome II). As matters stand, the Rome I and Rome II Regulations appear likely to remain part of English conflicts rules, at least in substance, irrespective of how Brexit is resolved. See Ch 1, section I, ‘Brexit’.

⁶¹ See, by analogy, the reasoning of Langley J in OT Africa Line v Magic Sportswear [2005] 1 Lloyds Rep 252 [19]–[24]; and the similar reasoning in Congentra v Sixteen Thirteen Marine (The Nicholas M) [2008] 2 Lloyds Rep 602 [18]–[19]. This is also consistent with the reasoning of the Court of Appeal and Supreme Court on the similar question of the application of Article 7(3) of the Brussels I Recast in AMT Futures v Marzillier [2015] QB 699 (CA) [49]–[58], [2018] AC 439 (SC) [25]–[27].

⁶² See eg OT Africa Line v Magic Sportswear [2005] 1 Lloyds Rep 252, 256, where an argument that the tort of inducing a breach of contract could be made out under Canadian law in respect of litigation that the Canadian courts had refused to stay was thought to be ‘fanciful’.

⁶³ It had previously been understood that the tort was confined to criminal proceedings, and certain limited categories of civil proceedings: Martin v Watson [1996] 1 AC 74 (HL) 78; Gregory v Portsmouth City Council [2000] 1 AC 419 (HL) 432–33; Crawford v Jenkins [2016] QB 231 [48]–[49]. However, this has now changed following Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd [2014] AC 366 (PC) and Willers v Joyce [2016] 3 WLR 477 (SC).

⁶⁴ Martin v Watson [1996] 1 AC 74 (HL) 80; Crawford Adjusters (Cayman) v Sagicor General Insurance (Cayman) [2014] AC 366 (PC) [45], [55], [57]–[58], [105], [119], 129; Willers v Joyce [2016] 3 WLR 477 (SC) [54].

⁶⁵ Castrique v Behrens (1861) 3 El & El 709, 121 ER 608, 613; Basebé v Matthews (1867) LR 2 CP 684; Bynoe v Governor and Company of the Bank of England [1902] 1 KB 467 (CA); Everett v Ribbands [1952] 2 QB 198 (CA); Crawford Adjusters (Cayman) v Sagicor General Insurance (Cayman) [2014] AC 366 (PC) [129]. The restriction that the previous proceedings must have failed applies only to substantive foreign proceedings which determine the merits, not to ex parte applications or attachments: Congentra v Sixteen Thirteen Marine (The Nicholas M) [2008] 2 Lloyds Rep 602 [38]–[44].

⁶⁶ Castrique v Behrens (1861) 3 El & El 709, 121 ER 608, 613; Taylor v Ford (1872) 29 LT 390.

⁶⁷ The existence of this tort is open to question. Historically, there was only a thin basis of authority to support it: see Grainger v Hill (1838) 4 Bing (NC) 212, 132 ER 767, 773–74; Parton v Hill (1864) 10 LT 414; Goldsmith v Sperrings [1977] 1 WLR 478 (CA) 489H, 498; Speed Seal Products v Paddington [1985] 1 WLR 1327 (CA); Metall und Rohstoff v Donaldson, Lufkin & Jenrette [1990] 1 QB 391 (CA) 469–70; British Airways Board v Laker Airways [1985] AC 58 (HL) 65E (concession in argument); and there was also authority to the contrary: see De Medina v Grove (1847) 10 QB 172, 116 ER 66; Powell v Hoyland (1851) 6 Exch 67, 155 ER 456, 459; Digital Equipment v Darkcrest [1984] Ch 512, 522–24. In Land Securities v Fladgate Fielder [2010] Ch 467 (CA) [67]–[70], [73], [77]–[78], [95]–[101], [113], the Court of Appeal observed that the tort had never been extended beyond the cases of compulsion by arrest, imprisonment, or other forms of duress, and held that it did not apply to judicial review proceedings; leaving undecided whether it could have any broader application in other civil proceedings. They also confined the recoverable loss to injury to person, damage to property, and damage to reputation. However, in Crawford Adjusters (Cayman) v Sagicor General Insurance (Cayman) [2014] AC 366 (PC) [62]–[66], [149]–[158], the Privy Council concluded that the tort of abuse of process could allow recovery of economic loss; and apparently assumed, without engaging with the contrary decision in Land Securities in this respect, that such a tort could be of general application to civil proceedings. Most recently, the reasoning in Willers v Joyce would also suggest that any such tort is not confined to particular civil proceedings, by extension of the new position for malicious prosecution; but Lord Toulson’s obiter comments equally imply that the tort of abuse of civil process is not distinct to, and is merely an example of, the tort of malicious prosecution: Willers v Joyce [2016] 3 WLR 477 (SC) [25]. However, again Land Securities was not engaged with.

⁶⁸ Crawford Adjusters (Cayman) v Sagicor General Insurance (Cayman) [2014] AC 366 (PC) [62]–[66], [79]; Willers v Joyce [2016] 3 WLR 477 (SC) [23]–[25].

⁶⁹ It was argued in British Airways Board v Laker Airways [1985] AC 58 (HL) 65E–F that the tort of abuse of civil proceedings was confined to proceedings within the jurisdiction, but the point appears not to have engaged their Lordships’ interest. In Research in Motion UK v Visto [2008] ILPr 34 (CA), Lewison J considered a claim for a defence to infringement of a patent, and a counterclaim for damage, on the basis that prior parallel Italian proceedings were an abuse of process. The damages claim was stayed under Article 28 of the Brussels I Regulation, and in relation to the defence, Lewison J observed that ‘It is no part of the function of an English court to investigate whether the process of a foreign court has been abused’ [28]. This suggests that a claim for damages for an abuse of civil process in the foreign court would not have been well received. See also the brief obiter comments of the Court of Appeal at [2008] ILPr 34 [40].

CH Tham, ‘Damages for Breaches of English Jurisdiction Clauses; More than Meets the Eye’ [2004] LMCLQ 46, 62, suggests that it is possible the tort might be extended to cover civil proceedings maliciously brought in non-English courts in breach of an exclusive jurisdiction clause.

⁷⁰ Possible examples of this are the tort of malicious falsehood, the tort of deceit or fraudulent misrepresentation, and also the economic torts (as to which see paras 14.37–14.40). In A/S D/S Svendborg v Wansa [1996] 2 Lloyds Rep 559, 562, 575, [1997] 2 Lloyd Rep 183 (CA) 189, the claimants claimed damages for fraudulent misrepresentation (as well as breach of contract) arising out of alleged forgeries which gave rise to a fraudulent cargo claim that was pursued before the courts of Sierra Leone. Clarke J upheld the grant of a freezing injunction against the defendants, under which the amount secured included damages claimed in respect of the costs and liabilities arising out of the Sierra Leone proceedings. Clarke J appears to have thought that this ‘potential liability’ was not incoherent in principle; although he may only have been thinking of the contractual claims made. In Kallang Shipping Panama v Axa Assurances Senegal (The Kallang) (No 2) [2009] 1 Lloyds Rep 124 [90]–[94], an alternative claim for unlawful interference in business relations was dismissed on the grounds that it added nothing to a claim for inducement of breach of contract [94], and a claim for conspiracy was rejected on the facts [96]; see also the parallel decision in Sotrade Denizcilik Sanayi Ve Ticaret v Amadou Lo (The Duden) [2009] 1 Lloyds Rep 145 [65]–[70].

⁷¹ Kallang Shipping v Axa Assurances Senegal (The Kallang) [2007] 1 Lloyds Rep 160 [41]; Horn Linie v Panamericana Formas e Impresos (The Hornbay) [2006] 2 Lloyds Rep 44, [26]; Kallang Shipping Panama v Axa Assurances Senegal (The Kallang) (No 2) [2009] 1 Lloyds Rep 124 [90]–[94]; and Sotrade Denizcilik Sanayi Ve Ticaret v Amadou Lo (The Duden) [2009] 1 Lloyds Rep 145 [65]–[70]. However, the choice of law problem was not raised in these cases.

⁷² There was an alternative basis for relief against the insurers, which succeeded, namely the doctrine that there is jurisdiction to injunct those who threaten or intend to assist others to breach an injunction: see at [37].

⁷³ In OT Africa Line v Magic Sportswear Corp [2005] 1 Lloyds Rep 252 [19]–[25]. See also by analogy Congentra v Sixteen Thirteen Marine (The Nicholas M) [2008] 2 Lloyds Rep 602 [18]–[19].

⁷⁴ If both damages claimant and damages defendant were resident in the same country, then the law of that country will apply under Article 4(2), unless displaced by Article 4(3).

⁷⁵ In AMT Futures v Marzillier [2015] QB 699 (CA), the Court of Appeal assumed but did not decide (at [61]–[62]) that a tortious damages claim for inducing a breach of a contractual jurisdiction clause was an available claim in principle but questions of choice of law were not considered. Similarly, in Kallang Shipping Panama v Axa Assurances Senegal (The Kallang) (No 2) [2009] 1 Lloyds Rep 124 [90]–[94] and Sotrade Denizcilik Sanayi Ve Ticaret AS v Amadou Lo (The Duden) [2009] 1 Lloyds Rep 145 [65]–[70] damages claims for tortious inducement of a breach of contract were upheld but, as the Judge noted, it was assumed that English law applied. See also similarly Kallang Shipping v Axa Assurances Senegal (The Kallang) [2007] 1 Lloyds Rep 160 [41]; Horn Linie GmbH v Panamericana Formas e Impresos (The Hornbay) [2006] 2 Lloyds Rep 44 [26].

⁷⁶ It is probably better to refer to the remedy as one for equitable compensation rather than equitable damages, outside s 50 of the Senior Courts Act 1981. See Target Holding v Redferns [1996] AC 421, 434, 438–39; Vestergaard Frandsen v BestNet Europe [2010] FSR 2 [33]–[35] (partly overturned on appeal, but not on this point); Force India Formula One Team v 1 Malaysia Racing Team [2012] RPC 29 [392]–[393] (not challenged in this regard on appeal).

⁷⁷ Nocton v Lord Ashburton [1914] AC 932 (HL); Swindle v Harrison [1997] 4 All ER 705 (CA); Vestergaard Frandsen v BestNet Europe [2010] FSR 2 [33]–[35] (partly overturned on appeal, but not on this point); Force India Formula One Team Limited v 1 Malaysia Racing Team [2012] RPC 29 [392]–[424] (not challenged in this regard on appeal).

⁷⁸ In Whitworths v Synergy Food and Processing [2014] EWHC 2439 (QB) [73]–[74], permission to amend to plead a case in equitable compensation was granted but the claim was for direct breach of an arbitration agreement; it is not clear why it was claimed in equity at all, and Cooke J regarded it as in substance a contractual claim.

⁷⁹ The principle of granting an injunction where ‘the ends of justice’ demand it developed first in Bushby v Munday (1821) 5 Madd 297, 56 ER 908, 913, and entrenched into the modern law in Société Nationale Industrielle Aérospatiale v Lee Kui Jak [1987] AC 871 (PC) 892C–D, is difficult to construe as supported by a concrete right to damages in equity.

⁸⁰ Ch 3, section B, ‘A Legal or Equitable Right?’.

⁸¹ ICF Spry, Equitable Remedies (9th edn, Reuters 2014) 647; J McGhee QC, Snell’s Equity (33rd edn, Sweet & Maxwell 2017) para 20-028ff.

⁸² The dissenting advice of Lord Nicholls, in Mercedes Benz v Leiduck [1996] AC 284 (PC) 310G–H, suggests that there may be no more than a right to an injunction, despite the near-circularity of such a formulation.

⁸³ See the authorities discussed in Ch 3, section B, ‘A Legal or Equitable Right?’.

⁸⁴ In Research in Motion UK v Visto [2008] ILPr 34 (CA), Lewison J’s reasoning is hostile to the idea of a damages right based on a direct assessment of the internal abusiveness of the foreign litigation. See also the brief obiter comments of the Court of Appeal at [2008] ILPr 34 [40].

⁸⁵ See Ch 4, section B, ‘Applicable Law’.

⁸⁶ See generally Ch 4, section B, ‘Applicable Law’.

⁸⁷ In Whitworths v Synergy Food and Processing [2014] EWHC 2439 (QB) [73]–[74], permission to amend to plead a case in equitable compensation was granted, although the claim seems really to have been a claim for breach of an arbitration agreement and appears to have been so regarded by Cooke J.

⁸⁸ A claim for damages against an assignee was left to one side and did not need to be resolved in Royal Bank of Scotland v Highland Financial Partners [2012] 2 CLC 109 [141].

⁸⁹ West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2012] 2 Lloyds Rep 103 [3], [49], [63], [74], [76]–[78].

⁹⁰ See Ch 10, section C, ‘An Obligation Not to Sue Elsewhere?’.

⁹¹ See eg Teare J in Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) v Containerships Denizcilik Nakliyat ve Ticaret (The Yusuf Cepnioglu) [2015] 1 Lloyds Rep 567 [43]–[44], and the cases discussed in Ch 10, section C, ‘An Obligation Not to Sue Elsewhere?’, spara 10.18 n 27.

⁹² West Tankers v Ras Riunione Adriatica di Sicurta [2011] 2 Lloyds Rep 117; The London Steam Ship Owners Mutual Insurance Association v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309, [2015] 2 Lloyds Rep 33 (CA).

⁹³ In Through Transport Mutual Insurance Association (Eurasia) v New India Assurance [2005] 1 Lloyds Rep 67 (CA) [65], the Court of Appeal stated simply (and obiter) that there could be no claim for damages in a quasi-contractual situation where the third party’s claims were under a foreign third-party rights statute. But they seem to have been focusing solely on contractual damages and did not directly address equitable compensation or equitable damages independent of contract.

⁹⁴ See Ch 10, sections D, ‘Third-Party Rights under Foreign Law’ and F, ‘Inconsistent Contractual Claims’.

⁹⁵ Section 50 provides: ‘Where the Court of Appeal or the High Court has jurisdiction to entertain an application for an injunction or specific performance, it may award damages in addition to, or in substation for, an injunction or specific performance.’

⁹⁶ The power to grant damages in lieu of an injunction was originally granted to the Court of Chancery by the Chancery Amendment Act 1858, s 2, commonly known as Lord Cairns’ Act. It is often said that the relevant powers are now contained in s 50 of the Senior Courts Act 1981 alone: see eg Lunn Poly v Liverpool & Lancashire Properties [2006] EWCA Civ 430 [11]; Regan v Paul Properties DPF No 1 [2007] Ch 135 (CA) [24]; Force India Formula One Team v 1 Malaysia Racing [2012] RPC 29 [389]. This, however, is not quite right. The formal position is that the powers contained in Lord Cairns’ Act were transferred to the High Court, along with all the powers of the Court of Chancery, by s 16 of the Supreme Court of Judicature Act 1873 (and its successors, s 18 of the Supreme Court of Judicature (Consolidation) Act 1925, and s 19 of the Supreme Court Act 1981). Lord Cairns’ Act was then itself abolished by the Statute Law Revision and Civil Procedure Act 1883, but the power earlier transferred to the High Court remained: Leeds Industrial Co-operative Society v Slack [1924] AC 851 (HL) 861–63; Johnson v Agnew [1980] AC 367 (HL) 400B; Jaggard v Sawyer [1995] 1 WLR 269 (CA) 276–77; Attorney General v Blake [2001] 1 AC 268 (HL) 281A. Section 50 of the Supreme Court Act 1981 then re-granted the powers in Lord Cairns’ Act in modern language in 1981. Formally, therefore, the court has both the powers under s 50 and the powers derived from Lord Cairns’ Act via s 19; the position is analogous to the relationship between the powers to grant injunctions contained in s 37(1) of the Supreme Court Act and the powers to grant injunctions transferred to the High Court by the Judicature Acts. However, there is no basis for suggesting that the powers in s 50 are any narrower than the powers derived from Lord Cairns’ Act, and so separate discussion of the powers derived from Lord Cairns’ Act is otiose; consequently, the discussion will analyse the issues by reference to s 50 alone.

⁹⁷ C Ambrose, ‘Can Anti-Suit Injunctions Survive European Community Law’ (2003) 52 ICLQ 401, 416, sees no problems with the grant of damages under s 50. CH Tham, ‘Damages for Breaches of English Jurisdiction Clauses; More than Meets the Eye’ [2004] LMCLQ 46, 68, also considers that damages under these provisions should be available in an appropriate case. See also, in the context of the American case law, D Tan, ‘Damages for Breach of Forum Selection Clauses, Principled Remedies, and Control of International Civil Litigation’ (2005) 40 Tex Intl L J 623, 646–47.

⁹⁸ In favour of the proposition that damages may be available under s 50 even if no damages could be awarded at common law once the wrong has occurred, see: Eastwood v Lever (1863) 4 De GJ & Sm 114, 46 ER 859; Price v Strange [1978] Ch 337 (CA) 358E–H, 369B–D (damages could be awarded in lieu even if common law damages would be barred by the Statute of Frauds); Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 79; Jaggard v Sawyer [1995] 1 WLR 269 (CA) 278H–279A, 283G, 284D, 290H–291B (differing from Surrey County Council v Bredero Homes Ltd [1993] 1 WLR 1361, and explaining Johnson v Agnew [1980] AC 367 (HL) 400B–D). This is consistent with the words of Lord Cairns’ Act itself, which contain no limitation to the situation where an independent claim for damages would exist at common law or in equity. In Lawrence v Fen Tigers [2014] AC 822, the reasoning in Jaggard v Sawyer was generally referred to with approval (see [111]–[112], [120], [173]) and in terms that may imply agreement with the proposition that damages should be available under s 50 even if no common law claim for damages would lie (see [129], [159], [170]–[173], [248]), although without specific consideration of this point. One-Step (Support) v Morris-Garner [2018] 2 WLR 1353 (SC) [41]–[47], [95] regards damages in lieu of an injunction as targeted at replacing the injunction, but is not clear on whether an underlying common law right can be dispensed with (compare [46] to [95]).

However, other authorities support the proposition that damages cannot be awarded under s 50 unless a claim for damages would lie at common law or equity once the wrong has occurred: see Leeds Industrial Co-operative Society v Slack [1924] AC 851 (HL) 857 (Viscount Finlay for the majority); see also 868–69 (per Lord Sumner in the minority); Johnson v Agnew [1980] AC 367 (HL) 400B–D; Experience Hendrix v PPX Enterprises [2003] 1 All ER (Comm) 830 (CA) [34], [56]; WWF-World Wildlife Fund for Nature v World Wrestling Federation Entertainment [2007] Bus LR 1252 (CA) [54] (interpreting Wrotham Park Estate v Parkside Homes [1974] 1 WLR 79 as a case where damages were available at common law).

⁹⁹ In support of the award of damages under s 50 in support of a purely equitable right, see J McGhee QC, Snell’s Equity (33rd edn, Sweet & Maxwell 2017) para 20-062 and Eastwood v Lever (1863) 46 ER 859 (CA) 865; Attorney General v Observer [1990] 1 AC 109, 286; and Force India Formula One Team v 1 Malaysia Racing Team [2012] RPC 29, at [393]; the discussion in ICF Spry, Equitable Remedies (9th edn, Reuters 2014) 662, is open. But see contra Force India at [390], [393]; and JD Heydon, MJ Leeming, and PG Turner (eds), Meagher, Gummow & Lehane’s Equity Doctrines and Remedies (5th edn, LexisNexis 2015) paras 24-090–24-100. The reasoning in One-Step (Support) v Morris-Garner [2018] 2 WLR 1353 (SC) [41]–[47], [95] is unclear on the issue.

¹⁰⁰ J McGhee QC, Snell’s Equity (33rd edn, Sweet & Maxwell 2017) para 20-062. One-Step (Support) v Morris-Garner [2018] 2 WLR 1353 (SC) [41]–[47], [95] is unclear on the question.

¹⁰¹ Acraman v Price (1870) 18 WR 540. The court’s reasoning on the point is only one short, conclusory sentence.

¹⁰² West Tankers Inc v Allianz Spa (The Front Comor) [2012] 2 Lloyds Rep 103 [3], [63], [74]–[78].

¹⁰³ Choice of law issues would also need to be resolved. However, it is arguable that claims for damages in lieu of an injunction are a purely procedural matter and thus governed by the lex fori: see, under the existing law, Harding v Wealands [2007] 2 AC 1 (HL) and the discussion at Ch 4, section B, ‘Applicable Law’.

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