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Oxford Law Citator

7 Anti-Suit Injunctions and Exclusive Forum Clauses

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 — Injunctions to restrain proceedings in England and Wales

(p. 157) 7 Anti-Suit Injunctions and Exclusive Forum Clauses

A. Introduction

7.01 The court’s approach to anti-suit injunctions is transformed where the injunction defendant is obliged by a contractual exclusive forum clause to resolve his disputes with the injunction claimant in an agreed forum.¹

7.02 There are two principal types of exclusive forum clause. An exclusive jurisdiction clause obliges parties to resolve disputes covered by the clause before a chosen court. An arbitration clause obliges them to resolve disputes covered by the clause before an arbitration tribunal. In both cases, the clause imposes negative as well as positive obligations, and so in general prohibits the contracting parties from litigating other than in the chosen forum.² Exclusive forum clauses are to be contrasted with non-exclusive forum clauses, under which the parties agree positively that each will submit to a particular jurisdiction if the other commences proceedings covered by the clause there, but do not expressly agree negatively that such proceedings shall not be brought in any other forum.³

7.03 In contrast, so far, choice of law clauses have not been interpreted to include any correlative negative obligation. In substance the courts have concluded that choice of law clauses are a (p. 158) direction to a court or tribunal to apply the chosen law, if its choice of law rules so permit. But if a party litigates in a forum whose choice of law rules would apply a different law to that chosen by the clause, that is not a breach of the choice of law clause.⁴

7.04 This chapter considers claims for anti-suit injunctions in cases where it is contended that an exclusive forum clause applies. It addresses the following topics:

• the effect of the Brussels–Lugano regime;
• other international conventions;
• choice of law;
• the Angelic Grace principles;
• the scope and limits of exclusive forum clauses;
• injunctions in support of a foreign forum;
• injunctions to enforce arbitration clauses;
• foreign proceedings to obtain security.

7.05 The related question of what can amount to ‘strong reasons’ not to enforce an exclusive forum clause by injunction is addressed in Chapter 8.

B. The Effect of the Brussels–Lugano Regime

7.06 The decisions of the European Court of Justice (ECJ) in Turner v Grovit⁵ and The Front Comor⁶ have imposed important substantive limitations on the power to grant anti-suit injunctions in cases connected to the Brussels–Lugano zone (at least until Brexit, which may, but may also not, bring an end to the operation of European jurisdictional law and the Lugano Convention in the UK⁷). The detailed consequences of this are considered in Chapter 12. In brief summary, the current law is as follows, so long as the Brussels–Lugano regime, or any materially similar regime, continues to apply.

7.07 Where proceedings before the courts of another member state of the Brussels–Lugano regime fall within the material scope of the Brussels–Lugano regime, no anti-suit injunction may be granted by the English court, even if those proceedings are in breach of an exclusive jurisdiction or arbitration clause. However, this preclusive doctrine does not apply where the proceedings in respect of which the injunction is claimed are before a court in a state outside the Brussels–Lugano zone, or do not fall within the material scope of the Brussels–Lugano regime, or are before an arbitration tribunal, even if the seat of the arbitration is within the Brussels–Lugano zone. Where the Brussels–Lugano regime does not prohibit an anti-suit injunction, it has no effect on the exercise of the court’s discretion. Further, the preclusive effect of the Brussels–Lugano regime has no effect on arbitrators who are not governed by its provisions and are entitled to make orders and awards akin to anti-suit injunctions irrespective of the Brussels–Lugano regime.

(p. 159) 7.08 The following analysis of the English case law does not repeat these points at each stage, but should always be read as stating the position subject to the restrictions which (so long as it continues to bind) are imposed by the Brussels–Lugano regime. If and to the extent that the effect of Brexit is that European jurisdictional law or any similar regime ceases to apply, then these shackles will be removed.

C. Other International Conventions

7.09 It is submitted that the Hague Convention on the Choice of Court, where it applies, will not preclude the grant of anti-suit injunctions to enforce exclusive jurisdiction clauses.⁸ Whether it will affect the applicable principles for the grant of anti-suit injunctions, or the exercise of the court’s discretion, where the English court is the chosen court under a jurisdiction clause but the other proceedings are in another contracting state, remains to be seen.⁹

7.10 It has been decided, correctly, that the New York Convention does not preclude the grant of anti-suit injunctions to enforce arbitration clauses.¹⁰

D. Choice of Law

7.11 Where an exclusive forum clause selects English arbitration or English exclusive jurisdiction, and its proper law is English law, then English law and equitable principles will apply to determine the grant or refusal of an anti-suit injunction.¹¹ This is so even if under the law of the country where the target proceedings are brought there are mandatory rules of law that purport to override the exclusive forum clause.¹²

7.12 Exclusive forum clauses that select an English forum but are themselves governed by a foreign law are rare. If a claim were made to enforce such a clause by injunction, the proper law of the clause would determine the scope and effect of the contractual obligations it (p. 160) created. The grant or refusal of an injunction is at least arguably determined by the lex fori rather than the law of the contract,¹³ but the nature of the contractual obligations under the law of the contract should provide the foundations for the consideration of injunctive relief. Consequently, it can be doubted whether an anti-suit injunction should be granted to enforce a contractual forum clause under whose proper law anti-suit injunctions are unknown. Arguably it would be inappropriate if application of the lex fori were to create such a powerful extension to the contractual obligations, in a way that the lex contractus would not envisage.¹⁴

E. The Angelic Grace Principles

7.13 Even when foreign proceedings are in breach of an exclusive forum clause, the decision whether or not to grant an anti-suit injunction is always discretionary,¹⁵ and it must always (p. 161) be in the interests of justice to grant the injunction.¹⁶ However, where an anti-suit injunction is sought to enforce an English exclusive forum clause, the court’s discretion is governed by a distinct set of principles.¹⁷ These will, for convenience, be referred to as the Angelic Grace principles, after the decision of the Court of Appeal in which the English courts laid aside, in contractual cases, the caution which had historically determined their approach to anti-suit injunctions.¹⁸

(p. 162) 7.14 These tests are specific to anti-suit injunctions. While there are considerable conceptual similarities to the common law tests to be applied to stays in favour of exclusive jurisdiction clauses (with the same language of ‘strong reasons’ being used), the issues are not the same, because of the indirect interference with the foreign court created by the anti-suit injunction, and because discretionary considerations can always lead to the refusal of the injunction.¹⁹

7.15 Under the Angelic Grace principles, where actual or likely²⁰ foreign proceedings are or will be in breach of an English exclusive jurisdiction clause, or an agreement to arbitrate in England, the court will ordinarily²¹ exercise its discretion to grant an anti-suit injunction to restrain the party in breach from commencing or continuing with those proceedings, unless the injunction defendant can show that there are ‘strong reasons’²² why the anti-suit (p. 163) injunction should not be granted. The concept of ‘strong reasons’ frames the analysis of many possible factors, in particular those that relate to the injunction defendant’s reasons for suing in the foreign court. But (as discussed further in Chapter 8) it does not subsume all possible discretionary considerations. As the qualification ‘ordinarily’ allows, there can be discretionary considerations allowing exceptions to the robust general rule, in particular those relating to the conduct of the claimant.²³ Thus, if anti-suit injunctions are not applied for promptly, in such a way as to make it just that the injunction should be refused, or if the injunction claimant has acted unconscionably (eg if he has ‘unclean hands’), the injunction can be refused on such grounds alone, independent of the concept of ‘strong reasons’.²⁴

7.16 The burden of proof is on the party in breach to show that there are ‘strong reasons’.²⁵ Where an injunction would otherwise cause some injustice to the injunction defendant, the court may require appropriate undertakings from the injunction claimant before granting relief.²⁶

7.17 In contrast to the position in non-contractual cases, the court is not obliged to exercise caution²⁷ before granting an anti-suit injunction to enforce a contractual forum clause, (p. 164) and indeed has ‘no good reason for diffidence’ in enforcing the injunction defendant’s promise.²⁸ Further, there is no need to make a prior application for a stay to the foreign court.²⁹ However, the full rigour of this approach only applies where there has been a determination that the exclusive forum clause has been breached, or where at the interim stage there is sufficient confidence—probably, a ‘high degree of probability’—that this is so.³⁰

7.18 In a number of the cases, particularly the older ones, the more expansive approach to anti-suit injunctions in contractual cases was justified on the grounds that breach of a contractual exclusive forum clause was in itself vexatious and oppressive (or unconscionable).³¹ On this interpretation, the law in contractual cases would merely be a specialized application of the general equitable principles governing anti-suit injunctions.³² However, the preponderance of the authorities, in particular in more recent times, treat the injunction as justified by the force of the contractual obligation itself,³³ and it is submitted that this is the better view in principle. The tendency to square the circle by equating vexation or oppression (or unconscionability) with breach of contract is neat but unsound. There may well be nothing vexatious or oppressive or unconscionable about a breach of contract.³⁴ Nevertheless, since (p. 165) an anti-suit injunction to enforce an exclusive forum clause is necessarily a discretionary equitable remedy, it will only be granted if the ends of justice so require.³⁵ The Angelic Grace principles are merely a crystallization into a general rule of what the ends of justice will ordinarily require in contractual cases.³⁶

7.19 There is a debate as to whether in more marginal cases, where special comity concerns arise, the Angelic Grace approach can be displaced, even if a contractual forum clause is found to apply, so that it may remain appropriate for the court to exercise ‘caution’. This is supported by a number of authorities, including observations of the House of Lords and Supreme Court.³⁷ However, there is also a line of Court of Appeal authority, led by Longmore LJ, holding that once it is concluded that an exclusive forum clause applies, there is little or no room to take further account of comity, as comity in fact mandates enforcement of the exclusive forum clause.³⁸ It is submitted that the best approach is that of Rix J in Credit Suisse: ‘in a straightforward [contractual] case there is little mileage in a “ritual incantation” … of the doctrine of comity’, but comity should always remain a relevant consideration.³⁹

7.20 In any event, the case law suggests that if the contractual injunction is a foreign anti-enforcement injunction, after the foreign judgment, rather than a normal anti-suit injunction, then ‘caution’ is appropriate.⁴⁰

7.21 Subject to one differentiation, these principles apply in essentially the same fashion whether the injunction is sought to enforce an arbitration clause or an exclusive jurisdiction clause.⁴¹ (p. 166) The fact that an international arbitration clause will usually have mandatory effect under the New York Convention, and so should preclude any discretion not to grant a stay, is a practical consideration affecting what happens if no injunction is granted,⁴² which may influence whether there are ‘strong reasons’ not to enforce the clause, but it does not change the test. There is, however, one material dimension of difference introduced by the position of the arbitrators. As discussed below, when an injunction is sought to support an arbitration, the power to grant anti-suit injunctions must be exercised with sensitivity to the role of the arbitrators, and whether or not they are better placed to intervene.⁴³

7.22 The approach in The Angelic Grace has not met with universal enthusiasm. In Toepfer v Cargill, Phillips LJ, although accepting that he was bound by The Angelic Grace, went out of his way to indicate that he thought its correctness was open to doubt, because ‘there was much to be said for the view that, as a matter of comity and in the interests of procedural simplicity, the appropriate course was to leave the injunction claimant to seek a stay of the foreign proceedings in reliance on Article II.3 of the New York Convention’.⁴⁴

(p. 167) 7.23 However, it seems insufficient to rely on the prospect that the foreign court will enforce the arbitration clause under the New York Convention, and therefore will stay the proceedings before it. Article II.3 of the New York Convention permits foreign courts to hold that arbitration clauses are invalid on the basis of their own domestic law, and there can be real risks that the foreign court will not enforce the arbitration clause, even though the English court would do so.⁴⁵ In practice, claimants in foreign proceedings who resist an anti-suit injunction to enforce a contractual forum clause often do so precisely because they hope the foreign court may adopt a different view on whether the forum clause is binding.

7.24 Further, the injunction defendant has agreed not even to invoke the jurisdiction of the other court, so there is no injustice in restraining him from doing so, while conversely there would be injustice in compelling the injunction claimant to defend himself in a court where it had been agreed that he would not have to appear.⁴⁶ Many jurisdictions do not have simple procedures for enforcing a jurisdiction clause in favour of another forum, or do not separate the procedures for determining jurisdictional and substantive defences. In such cases, requiring injunction claimants to wait until after the determination of foreign stay applications before bringing an injunction would impose an unfair burden, not least because of the ever-present risk that one false step in the foreign court might be viewed as a voluntary submission to its jurisdiction.⁴⁷ Indeed, in recognition of the seriousness of this problem, the English courts have regarded the unavailability of an easy and cheap procedure for enforcing an exclusive forum clause before the foreign court as a significant factor in favour of the grant of an injunction.⁴⁸

7.25 In truth, the force of Phillips LJ’s point arises out of the deeper concern as to whether it is appropriate, in principle, for the English court to impose its conclusion that the arbitration clause or exclusive jurisdiction clause should be enforced, irrespective of the views of the foreign court.⁴⁹ If it is accepted that this is legitimate, as under current English law it clearly is, then the mutually binding obligations under the New York Convention do not provide a strong reason for awaiting a foreign stay decision. Either there is no reason to believe that the foreign court will not enforce the arbitration clause and grant a stay, in which case there is no good reason for the English court to permit the proceedings to proceed,⁵⁰ or there is a real risk that the foreign court will override or ignore the clause, which to English eyes should be respected under the New York Convention; and in the latter case, provided that (p. 168) the English court is willing to impose its own view of the force of the clause, the only way in which the contractual clause will be given full effect is if the injunction is granted.⁵¹

7.26 It is also clear that Phillips LJ’s comments do not reflect the current law, which has enshrined the Angelic Grace principles. The courts have repeatedly concluded that, even where the competing proceedings are in a New York Convention state, the New York Convention does not create a bar to the enforcement of arbitration clauses by way of anti-suit injunction, and further does not provide even a significant factor against the exercise of the court’s discretion to grant the injunction.⁵²

F. The Scope and Limits of Exclusive Forum Clauses

7.27 The Angelic Grace approach only applies directly if the foreign proceedings are in breach of the exclusive jurisdiction clause or can be treated as such. So, for it to apply, the injunction claimant must be entitled to enforce the clause, the injunction defendant has to be party to or otherwise in substance bound by the clause, the clause must be binding and not invalid, and the claim in the foreign proceedings must fall within its terms.

1. Parties and Third Parties

7.28 In recent years a developing line of case law has tested the boundaries of the effect of exclusive forum clauses with respect to third parties. The key questions are, first, when a non-party can enforce the clause; second, when a non-party can be bound by the clause; and third, when the contractual effect of the clause covers litigation with respect to non-parties.⁵³ The first two questions are covered in detail in Chapter 10. In brief summary, third parties can claim to enforce an exclusive forum clause where they have legal or equitable rights to do so, in a number of defined situations, for example as subrogees, assignees, or as third parties under the Contracts (Rights of Third Parties) Act 1999.⁵⁴ There are also cases where an apparent third party on analysis is a primary party to the contract, such as contracts through agency. Conversely, third parties can (in substance) be bound by the clause in a range of situations, in particular in cases where they seek to claim contractual rights in the shoes of one of the original contracting parties, for example as assignee, or under third-party rights statutes.

(p. 169) 7.29 This section addresses the linked but different question of when an exclusive forum clause covers litigation with respect to non-parties. It is different, because even if the clause does cover litigation against non-parties, that does not mean the third party necessarily has the right to enforce it. It may be that, even if A and B’s contract includes a clause protecting C as well as B, only B can enforce it by injunction, which B can do if he has a sufficient interest in doing so.⁵⁵ It is linked, because the considerations affecting whether a third party C can enforce a clause interrelate with those underlying whether the clause covers litigation against or by him; and because if the clause does not cover C, then any rights to enforce are without relevant content.

7.30 The true principle is, or should be, relatively simple: in a contract between A and B the starting point should be that the exclusive forum clause only contractually requires litigation between A and B to be brought in the chosen forum,⁵⁶ but specific terms, or the express and implied terms of the contract and exclusive forum clause properly construed to apply to particular situations, may mean that on its true interpretation the contract also requires certain litigation against a connected party C to be brought in the chosen forum, or at least prohibits such litigation against C being brought in any other forum.⁵⁷ But there will be many situations where the exclusive forum clause only covers the parties to it.⁵⁸ In particular, there is a potential difficulty with giving the negative effect of arbitration clauses a broad reading with respect to litigation against third parties. Unless the third party is also itself bound by, and entitled to enforce, the exclusive forum clause, interpreting the negative effect of the clause to prevent litigation against the third party in any forum other than that chosen could create a gap in judicial protection.⁵⁹ There is generally no need to distort (p. 170) contract law, so as to protect exclusive forum clauses from evasion,⁶⁰ since contrived claims against connected third parties, brought to evade an exclusive forum clause, may in appropriate cases be treated as vexatious or oppressive and liable to be injuncted for that reason.⁶¹ It is apparent, however, that there is a tension in the case law, with different judges taking different approaches and a more expansive attitude to construction tending to be adopted in cases where the injunction defendant’s conduct is viewed as an illegitimate attempt to evade the forum clause.⁶²

7.31 A complication has been created by obiter comments of Lord Scott in Donohue v Armco, where on one reading he suggested that in general, a jurisdiction clause between A and B will cover litigation against any C arising out of the matters substantively covered by the forum clause.⁶³ But it is submitted that those comments do not drive us to such a rigid doctrine. They were obiter, and a minority view; the point was not even argued before the House of Lords, and the other Lords made it clear they were not deciding it;⁶⁴ and they were made in the context of very specific facts, where B would be jointly and severally liable for A’s claim against C. They are also difficult to reconcile with the views of Lord Goff in The Mahkutai, which was not cited in Donohue.⁶⁵ Although some cases have picked up these comments—perhaps without fully appreciating their controversial nature and fragility as authority⁶⁶—the more persuasive decisions have treated them sceptically,⁶⁷ and in most of the case law they have not even been cited. The correct approach is to treat the question of whether C is protected as a matter for construction of the contract in each case.⁶⁸

(p. 171) 2. Exclusive and Non-Exclusive Clauses

7.32 In order directly to trigger the Angelic Grace principles, the foreign proceedings must be an actionable breach of contract (although quasi-contractual situations may be treated in the same way, as discussed in Ch 10). This will usually require that the clause is construed as exclusive as opposed to non-exclusive, as by definition foreign proceedings are generally not a breach of the express or even implied terms of a non-exclusive jurisdiction clause.⁶⁹

7.33 It is not necessary, under English principles of contractual construction, for an exclusive jurisdiction clause expressly to state that it is exclusive. The question is one of construction of the words of the clause in the context of the contract as a whole, and against its factual background.⁷⁰

3. The Scope of the Clause

7.34 Whether a particular claim in foreign proceedings is covered by the clause must be resolved by analysis of the nature of the foreign proceedings in the light of the construction of the particular words used. As a starting point:

the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator’s jurisdiction.⁷¹

These principles apply just as much to the construction of jurisdiction clauses.⁷²

7.35 However, ‘the essential task is to construe the jurisdiction clause in the light of the transaction as a whole’, and the presumption is capable of being rebutted without excessive difficulty in appropriate cases,⁷³ and may well not apply at all in less conventional situations,⁷⁴ such as where different parts of the same commercial relationship are governed by conflicting dispute resolution provisions.⁷⁵

(p. 172) 7.36 By way of example, proceedings to enforce a judgment in an ‘unchosen’ forum, or to resist enforcement there, are not a breach of an exclusive jurisdiction clause, provided that they are not attempts to determine or relitigate the merits.⁷⁶ Further, it has been held that an application in insolvency proceedings in Canada, seeking a declaration that certain provisions of a contract should be overridden in the context of an insolvency, was not in breach of an English exclusive jurisdiction clause, because the disputes between the parties were not disputes ‘under’ the contract, nor a ‘contractual issue’.⁷⁷

4. Evasion of Exclusive Forum Clauses

7.37 Where concocted non-contractual claims are brought abroad in an abusive attempt to evade an English exclusive forum clause, or to interfere with proceedings in the chosen forum, they may be restrained on the grounds that they are vexatious and oppressive.⁷⁸ One example of this which has already been discussed is abusive claims on the same subject matter against connected third parties.⁷⁹ Another example is the use of foreign proceedings to effect a collateral attack on an arbitration.⁸⁰

5. Clauses Prohibiting any Litigation at All

7.38 It is rarer, but not unknown, for parties to provide that no litigation at all may take place in relation to a particular matter. The court is unlikely to conclude that this was what was agreed without unusually clear language.⁸¹ Even if an immunity has been contracted for, it will generally mean only that any claim should fail if brought, not that it would be a breach of contract for a claim even to be made before any court or tribunal.

7.39 Nevertheless, where clear language is used, the courts can give effect to such a clause by an injunction restraining foreign proceedings.⁸² The principles set out in The Angelic Grace, or (p. 173) closely analogous principles, appear to apply.⁸³ If the English court has finally determined that the foreign proceedings are in breach of an agreement not to sue anywhere in respect of a matter, an injunction will usually be granted to restrain the continuance of those proceedings.⁸⁴ Further, a clause by which it is agreed that the only litigation in relation to a matter shall be conducted within a particular action has the understandable purpose of ensuring finality, and will be enforced without hesitation.⁸⁵ Similarly, where proceedings have been settled by a settlement agreement under which it is agreed that there will be no further litigation in relation to a dispute, the courts have restrained the pursuit of foreign litigation in breach of the settlement agreement.⁸⁶

6. Challenging the Exclusive Forum Clause

7.40 A possible strategy for an injunction defendant confronted with an alleged exclusive jurisdiction clause is to attempt to impeach the validity of the clause itself, or of the contract in which it sits. The issues created by such arguments are most pressing in the context of interim injunctions (to which end they are discussed in Ch 13 ⁸⁷), but can also arise on the trial of a final injunction, in particular where the claim for a final injunction is heard before the trial of the substantive dispute.

7.41 If the exclusive forum clause is contained in a separate contract which can be shown not to be binding, then it will have no contractual force, and thus cannot provide a contractual basis for an anti-suit injunction.⁸⁸ But where an exclusive forum clause is part of a broader contract, its validity is ‘separable’. A ground of challenge that renders the main contract invalid, void, avoided, or unenforceable does not in itself render the forum clause invalid, unless the challenge either necessarily involves an attack on both the main agreement and the severable forum clause (for example where it is alleged that no contract was ever agreed), or unless the challenge directly and specifically undermines the agreement to the forum clause itself.⁸⁹

7.42 There is some authority to suggest that, if the exclusive forum clause is specifically affected by a ground of challenge which justifies voidability, then even if the injunction defendant has not rescinded the contract as a whole, the clause will not be enforced by injunction against him. Either the separable forum clause can be separately rescinded, or its force has (p. 174) been sufficiently ‘impeached’ for it not to support a contractual anti-suit injunction on Angelic Grace principles.⁹⁰

G. Injunctions in Support of a Foreign Forum

7.43 The case law has not yet resolved whether, or if so when, the English courts should grant an anti-suit injunction to enforce an exclusive jurisdiction clause in favour of a foreign court or an arbitration clause in favour of an arbitration with a foreign seat.

7.44 The general principle, established in Airbus v Patel, is that the English court should have a sufficient interest in or connection with the matter in question to justify the indirect interference with the foreign court which an anti-suit injunction entails.⁹¹ In Airbus v Patel, the House of Lords held that the third-party court will usually have no sufficient interest in deciding before which of two foreign courts a matter should be heard, even if the injunction defendant is resident within its territorial jurisdiction, and even if the foreign court which would be most appropriate to hear the substantive case will not be able to grant effective anti-suit relief.⁹² Lord Goff expressly observed that he was not reaching any conclusions as to the contractual situation,⁹³ but this is not a positive conclusion that the principle of sufficient interest does not need to be satisfied where there is a foreign exclusive forum clause. In CSAV v Hin-Pro the Court of Appeal of Hong Kong concluded that the requirement of sufficient interest derived from Airbus was applicable to, and should discourage, the grant of anti-suit injunctions to enforce a foreign jurisdiction clause, as a matter of comity.⁹⁴

7.45 There is little English case law relating to the problem. David Steel J’s reasoning in The MSC Dymphna suggests that it was his view that where the English court is a third-party court, it would be inclined not to enforce the foreign exclusive forum clause by injunction.⁹⁵ But the point was not explored in any depth.

(p. 175) 7.46 The point has been explored more fully in other common law countries. In IPOC v CT-Mobile the Court of Appeal of Bermuda held that an injunction could be granted to enforce a Swedish arbitration clause, where the Bermudan courts had personal jurisdiction over the injunction defendant,⁹⁶ and a similar decision was reached by the Eastern Caribbean Supreme Court in another case.⁹⁷

7.47 The Singapore courts have been more reticent. In People’s Insurance v Akai Mr Judicial Commissioner Choo Han Teck of the High Court of Singapore dismissed an application for an anti-suit injunction to restrain proceedings in Australia in order to enforce an English exclusive jurisdiction clause, saying that the application should be made to the English court, as ‘the Singapore Court should not assume the role of an international busybody’, and ‘where there are two courts having jurisdiction a third court with tenuous connection should not influence the course unless there are strong reasons to do so’.⁹⁸ More recently, in R1 International v Lonstroff, Judith Prakash J, before whom the point was not argued fully and who was not required to decide it, did not exclude altogether the grant of an injunction to enforce a foreign arbitration clause. Yet she considered that strong reasons would be required to justify the Singapore courts granting such an injunction, with one possible situation being where the courts of the arbitration lack the power to grant effective interim measures in support of arbitration⁹⁹ Finally, as noted, in CSAV v Hin Pro¹⁰⁰ the Hong Kong courts concluded that it was necessary for them to have a ‘sufficient interest’ to grant an injunction in support of an English jurisdiction clause; but the fact that the injunction defendant was within the territorial grip of the Hong Kong courts and not the English courts, so that an English injunction would be ineffective or less effective, was not enough.

7.48 It is suggested that Mr Judicial Commissioner Choo Han Teck’s approach has much to commend it, at least in relation to exclusive jurisdiction clauses in favour of a foreign court and governed by foreign law. There is no obvious reason why the requirement of a ‘sufficient interest’ established in Airbus v Patel should not apply in the contractual case. While the existence of a jurisdiction clause in favour of the English courts or an English arbitration clause may diminish or even eliminate comity concerns about interfering with litigation in (p. 176) an ‘unchosen’ forum, it does not follow that comity becomes irrelevant where the English forum has not itself been chosen.¹⁰¹

7.49 For an injunction by a ‘third’ court to be consistent with comity, there would need to be some factor which gave the third-party court a legitimate interest in intervention. The primary rationale that has been so far articulated in the case law is the overriding importance of the principle of pacta sunt servanda. But this creates no specific connection between the third court and the dispute. Further, even if the injunction defendant were resident within the third court’s jurisdiction, it is uncertain whether this will be sufficient to justify, as a matter of comity, the indirect interference with the assessment by the other court of whether or not the proceedings before it are in breach of contract or should be stayed. Finally, it is doubtful that it will be sufficient that the contractually chosen court cannot itself grant anti-suit injunctions as a matter of its own law, as arguably this lacuna is part of the ‘package’ to which the parties have agreed.¹⁰²

7.50 The Commonwealth cases where injunctions in support of a foreign forum have been granted so far all involve foreign arbitration clauses, and it could be argued that concerns about being an ‘international busybody’ are mitigated where the English court is not intervening to protect another court, but instead in support of an arbitration tribunal that cannot protect itself. Yet it is submitted that the English court, in general, does not have a sufficient interest to intervene by injunction in favour of a foreign arbitration clause. As Judith Prakash J suggested, some other specific good reason should be required to justify intervention.

H. Injunctions to Enforce Arbitration Clauses

7.51 The effect of the case law, in summary, is that the Angelic Grace principles apply in much the same fashion to injunctions brought to enforce arbitration clauses and to those brought to enforce exclusive jurisdiction clauses.¹⁰³ Foreign substantive proceedings which are brought in breach of an agreement to arbitrate in England will therefore be restrained by injunction, unless there are ‘strong reasons’ not to do so. The one significant difference is that, in the arbitration context, the court must exercise sensitivity to the role of the arbitrators, and whether or not they are better placed to intervene.¹⁰⁴ But in general the court is not dissuaded from the grant of anti-suit injunctions by the overlapping role of the arbitrators, and anti-suit injunctions are frequently granted to protect arbitration.

(p. 177) 7.52 The issues arising from the interplay between the role of the court, the role of the arbitrators, and the arbitration clause, will be considered in the following sections, which address in particular the following linked questions: (1) Does arbitration law or the arbitration clause itself preclude the grant of anti-suit injunctions by the court?; (2) What powers do the arbitrators have to grant anti-suit injunctions and when should they be exercised?; and (3) How should the arbitrators’ role shape the parameters of when the court should and should not intervene?

7.53 We also discuss two other issues specific to the arbitration context: (4) injunctions sought to protect arbitrations from vexatious relitigation of, or collateral attacks on, the arbitration process; and (5) injunctions to protect the English court’s supervisory jurisdiction over the arbitration.

1. Does Arbitration Law or the Arbitration Clause Preclude an Anti-Suit Injunction?

7.54 The power to grant final¹⁰⁵ anti-suit injunctions to enforce arbitration clauses by restraining court proceedings or arbitrations abroad¹⁰⁶ is contained in section 37(1) of the Senior Courts Act 1981.¹⁰⁷

7.55 This power is not excluded by section 1 of the Arbitration Act 1996, which provides that the courts ‘should not intervene’ in arbitrations. Section 1 provides guidance, rather than a jurisdictional restriction, and an anti-suit injunction to restrain the pursuit of other proceedings does not ‘intervene’ in the arbitration it seeks to protect.¹⁰⁸

7.56 The grant of anti-suit injunctions by the court to protect arbitration clauses is also consistent with, and not precluded by, the contractual agreement to submit disputes to arbitration, even if that agreement is worded in broad terms.¹⁰⁹ Anti-suit injunctions have frequently been granted to enforce arbitration clauses.

(p. 178) 7.57 However, although the result is clear, the exact juridical rationale has been more troublesome. In Toepfer v Cargill the Court of Appeal had, in obiter comments, justified the grant of anti-suit injunctions by the court to enforce an arbitration clause by saying that, as a matter of construction, claims for an anti-suit injunction to enforce the arbitration clause itself do not fall within the scope of even a broadly worded arbitration clause.¹¹⁰ However, if a claim that foreign proceedings are in breach of an arbitration clause did not fall within the scope of the agreement to arbitrate, there would be surprising and unfortunate side effects. It would preclude arbitrators from granting a declaration that a given claim brought in a foreign court fell within the scope of the arbitration clause, or from awarding damages for breach of the clause; and it would also prevent arbitrators issuing final anti-suit injunctions themselves under section 48(5) of the Arbitration Act 1996. This is not the law.¹¹¹

7.58 Instead, it is submitted that the correct analysis is as follows. While claims that foreign proceedings are in breach of the obligation to arbitrate do generally fall within the scope of arbitration clauses, nevertheless, when contracting for arbitration in England under English law on normally worded arbitration clauses, the parties will generally be taken to have accepted that the usual ancillary proceedings may also be brought before the English court (as the natural supervisory court) to assist and protect the arbitration. The permitted ancillary proceedings will include claims for an anti-suit injunction,¹¹² and also a claim for a (p. 179) declaration as to the binding force of the arbitration clause,¹¹³ so that bringing such claims before the English court is therefore not a breach of normal broadly worded arbitration clauses choosing London arbitration. This construction, or implied term, operates as an exception to the general scope of the arbitration clause, and permits the court and the arbitrators to exercise a concurrent jurisdiction. This line of analysis, as advanced in the first edition of this work, has been approved by the courts on two occasions, in Sheffield United v West Ham and Nomihold v Mobile Telesystems.¹¹⁴

2. Can an Anti-Suit Injunction be Sought from the Arbitrators?

7.59 Despite earlier but now outdated hesitation, it is now clear that arbitrators who have been granted jurisdiction by an arbitration agreement subject to English law have the power to grant anti-suit awards to enforce the arbitration agreement.

7.60 First, it is now clear that the arbitration agreement contains a negative contractual obligation not to litigate elsewhere,¹¹⁵ and there is no good reason why arbitrators cannot enforce that obligation. Second, under section 48(5) of the Arbitration Act 1996, ‘the tribunal has the same powers as the court—(a) to order a party to do or refrain from doing anything’, and so since the court has power to grant final anti-suit relief, the arbitrators have a parallel power.¹¹⁶ Third, it is arguable that the power to grant anti-suit awards or similar (p. 180) protective orders is inherent in the arbitrators’ powers to control their own proceedings.¹¹⁷ Consequently, arbitrators have the power to make a final¹¹⁸ anti-suit award as regards matters within their jurisdiction.¹¹⁹

7.61 This may not have been the position before the Arbitration Act 1996. At that time, it was unclear whether arbitrators could grant any injunctions,¹²⁰ a problem section 48(5) was included to correct. Further, in the pre-1996 Act case law the courts had suggested that arbitrators could not grant anti-suit injunctions, although the issue had not been fully thought through.¹²¹ But in the case law under the 1996 Act, it has been held without question that arbitrators do have such a power.¹²²

7.62 Some scholars from civil law systems have contended that arbitrators do not have the power to grant anti-suit injunctions, on the basis that in their domestic systems the arbitration (p. 181) agreement is given a procedural classification.¹²³ However, this misses the point: an arbitrator whose powers are conferred by English arbitration law as the applicable law of an English arbitration agreement will have the powers that English contract law confers.

7.63 The grant of anti-suit injunctions or equivalent awards by arbitration tribunals was in the past relatively uncommon. There were perhaps three main reasons for this: first, the relative powerlessness of an ‘anti-suit award’, which in itself merely creates a contractual obligation and does not give rise to a contempt of court sanctions, in contrast to a court injunction; second, a lingering perception that it was somehow inappropriate for arbitrators, as opposed to courts, to interfere indirectly with foreign judicial systems in this way; third, to international arbitrators with a civilian education, an anti-suit injunction was a strange and foreign remedy.

7.64 However, the situation has changed. There is a growing number of recent reported decisions where arbitrators have granted anti-suit or equivalent relief.¹²⁴ Arbitrators from non-common law jurisdictions have become more comfortable with the remedy. Such orders are now sought and granted with some frequency in practice.¹²⁵

3. Sensitivity to the Arbitrators’ Role

7.65 In AES Ust-Kamenogorsk, the Supreme Court made clear that the power to grant final or interim anti-suit injunctions under section 37(1) of the Senior Courts Act ‘must be exercised sensitively and, in particular, with due regard for the scheme and terms of the 1996 Act when any arbitration is on foot or proposed’. In appropriate cases, this could require consideration of whether the arbitrators are better placed to grant any necessary final anti-suit relief, or whether the relief granted by the court should only be interim pending further (p. 182) awards by the arbitrators.¹²⁶ However, the existence of the arbitrators’ overlapping powers to grant anti-suit awards has not in general led the courts to refrain from granting final, or indeed interim, anti-suit injunctions.¹²⁷ The court’s power to grant injunctions can achieve results an award by arbitrators will not, because it is directly backed by punishment for contempt of court if breached,¹²⁸ and because in cases where anti-suits are relevant, the injunction respondent will usually be contesting the jurisdiction of the tribunal. As the Court of Appeal put it in Wilson v Emmott, the English court is ‘the judicial guardian of the integrity of an arbitral process in London’.¹²⁹ In Nori v Otkritie, Males J concluded that availability of anti-suit relief from the arbitration tribunal did not affect the basic principle that, absent strong reasons to the contrary, an anti-suit injunction would ordinarily be granted by the court to enforce the arbitration clause.¹³⁰

4. Injunctions to Restrain Relitigation of, or Collateral Attacks on, Arbitration

7.66 The court will grant injunctions to restrain proceedings which are a vexatious relitigation of matters decided in arbitration or a vexatious collateral attack on the arbitration process or the arbitration awards.¹³¹ Injunctions on this ground can be granted even if the foreign litigation does not itself breach the arbitration clause, in which case they will be non-contractual injunctions justified on general principles, such as vexation, independent of the contractual logic of The Angelic Grace.¹³²

7.67 However, in many cases foreign litigation which does amount to vexatious relitigation will also fall within the arbitration clause. Further, it may also be possible to view vexatious relitigation of the arbitration or a collateral attack on the arbitration as conduct which breaches obligations emanating from the arbitration clause or implied terms thereof, although the law is undeveloped in this regard, and the boundaries of any such terms are not yet clear. Thus, in one undefended case, conduct which was vexatious relitigation was also (p. 183) viewed as a breach of an implied term of the arbitration agreement that the award should be respected and performed, and of the parallel express obligation in the London Court of International Arbitration (LCIA) rules.¹³³ As these lines of argument develop, non-contractual and contractual justifications for such injunctions may overlap.

5. Injunctions to Protect the Court’s Supervisory Jurisdiction

7.68 By agreeing to arbitrate in England, the parties have submitted their substantive disputes within the scope of the clause to an arbitration tribunal whose seat will be in England, and have positively accepted the limited supervisory powers of the English courts under the Arbitration Act 1996. In a line of case law made binding precedent by C v D, the courts have held that by doing so the parties have also implicitly agreed to accept the exclusive supervisory jurisdiction of the English courts, creating an obligation ‘analogous to an exclusive jurisdiction clause’ so that attempts to engage the supervisory jurisdiction of other national courts will be a breach of contract,¹³⁴ and can be restrained by a contractual anti-suit injunction.¹³⁵ In some cases, the argument can be reinforced by institutional rules or terms of the arbitration agreement which require the parties to respect the award or preclude court challenges to awards.¹³⁶ This contractual line of justification involves an adventurous use of implied terms, but is established by precedent at the Court of Appeal level. In the past, injunctions have been granted to protect English arbitrations from wrongful supervisory interference by foreign courts, on grounds of vexation and oppression, without reliance on an implied contractual agreement that the English courts would have exclusive supervisory powers.¹³⁷ Such cases might now be analysed differently in terms of this new implied contractual obligation.

7.69 The scope of such a principle, if it exists, is inherently limited, as implied terms can be stretched only so far. On the current case law it appears to cover at least attempts to ask a foreign court to exercise a supervisory or appellate jurisdiction in competition with the powers conferred on the English courts in sections 67–69 of the Arbitration Act 1996,¹³⁸ and applications for other supervisory relief such as applications to remove an arbitrator on grounds of bias.¹³⁹ But it should not prevent a party from resisting enforcement of an award (p. 184) before a foreign court in the normal way, even if that involves a contention that the award is unenforceable.¹⁴⁰

7.70 Further, it is submitted that the C v D principle probably does not mean that normally worded arbitration clauses will preclude applications for interim relief to foreign courts in support of the arbitration. They may give implied exclusive supervisory jurisdiction, but that is not the same as exclusive supportive jurisdiction. So the most persuasive recent first instance decisions suggest that applications for interim relief in support of the arbitration in foreign courts are not precluded by any implied term of the arbitration agreement,¹⁴¹ save perhaps where they amount to a collateral attack on the arbitration clause,¹⁴² and instead should be regulated where necessary by non-contractual principles for anti-suit injunctions such as vexation and oppression. Some first instance decisions so far have suggested that applications for interim relief to a court other than the court of the seat should not be permitted save in ‘exceptional’ circumstances.¹⁴³ It is submitted that this goes too far. In general, the court of the seat will have the primary supportive role, and will be the most appropriate forum for interim relief in support of the arbitration.¹⁴⁴ In turn, if another court is not an appropriate forum, this will be a factor in support of a finding that seeking interim relief there is vexatious and oppressive. But it is too rigid to suggest that, outside ‘exceptional circumstances’, seeking relief before another court is inappropriate; and formulation of a contractual implied term along these lines would be difficult to justify on standard contractual logic.

I. Foreign Proceedings to Obtain Security

7.71 If the sole purpose of the foreign proceedings is to obtain security for a substantive claim to be brought in the agreed forum, the court will not normally grant an injunction to restrain their pursuit.¹⁴⁵ The pragmatic reason for this is obvious. Where a defendant’s assets are (p. 185) located outside the jurisdiction, security can often only be obtained effectively by application to the foreign court. However, the jurisprudential rationale for the court’s approach needs some tidying up.

7.72 The case law has historically been troubled by the effects of the decision in Mantovani v Carapelli, where it was held that proceedings brought before the Italian courts for security had been in breach of the arbitration clause, and therefore gave rise to a liability in damages,¹⁴⁶ even though the clause made no specific reference to prohibiting ancillary proceedings such as claims for security. However, the Court of Appeal’s approach to construction in Mantovani v Carapelli depended on the presence of a Scott v Avery clause,¹⁴⁷ which prohibited any ‘action or other legal proceedings’ before the giving of the arbitration award.¹⁴⁸ It is also possible that the Court of Appeal’s decision should be read only to apply to extreme measures such as the burdensome order for the sequestration of assets which had been obtained from the Italian courts in that case.¹⁴⁹

7.73 In most of the subsequent case law, Mantovani v Carapelli has been distinguished. It is confined to the unusual, and very broad, wording of Scott v Avery clauses, which have been held to exclude even applications for security to the English courts as the courts of the seat.¹⁵⁰ But in contrast, the modern case law suggests that arbitration clauses on normal wordings will be read to permit foreign proceedings for security only, provided that they are truly ancillary to, and assist, and do not hamper, the substantive proceedings in the chosen forum.¹⁵¹ (p. 186) On this approach, it has been held that seeking security in an unreasonable amount will not for that reason alone be a breach of contract.¹⁵² In contrast, foreign security proceedings which go beyond seeking security only, including attempts to determine the merits, and probably also other collateral attacks on the forum clause, will be a breach of normally drafted exclusive forum clauses.¹⁵³ In particular, where the foreign security proceedings are aimed at, or include, compelling the injunction claimant to provide security to the foreign court in terms which will waive the injunction claimant’s contractual rights to arbitrate or litigate in England, they will go beyond the scope of legitimate security proceedings, and will be a breach of contract that may be restrained.¹⁵⁴

7.74 If foreign proceedings to obtain security are not a breach of contract, then there will be no contractual right to an injunction, and thus anti-suit relief will only be granted if the foreign security proceedings are vexatious or oppressive.¹⁵⁵ If adequate alternative security has been offered in England, this can mean the foreign security proceedings are vexatious and oppressive.¹⁵⁶

7.75 This modern approach to construction is sensible. In general, businessmen will not wish to conclude an exclusive forum clause that excludes legitimate proceedings to obtain security in foreign courts, although there can be specific reasons to do this. It is only a partial answer to say that, even if the foreign security proceedings are a breach of contract, the English court will not normally grant an injunction to restrain them as a matter of discretion, because this could still allow a claim for damages as of right.¹⁵⁷ Consequently, the (p. 187) parties to a normal exclusive forum clause, even one in broad form,¹⁵⁸ should be taken to have impliedly accepted that it would not be a breach of the clause to bring proceedings in foreign courts whose sole purpose is to obtain appropriate security¹⁵⁹ to secure payment of the judgment of the chosen court or tribunal.

7.76 Even if a particular form of wording precludes foreign security proceedings, there may well be ‘strong reasons’ for bringing the foreign proceedings provided that they are intended only to obtain security pending the determination of the agreed forum.¹⁶⁰ Further, where it is appropriate to grant an injunction in respect of foreign security proceedings, for example if they are not confined to seeking security only, it may be a condition of any injunction that the injunction claimant is willing to provide alternative security.¹⁶¹ (p. 188)

Footnotes:

¹ National Westminster Bank v Utrecht-America Finance [2001] 3 All ER 733 (CA) 744–45.

² AES Ust-Kamenogorsk Hydropower Plant LLC v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [1], [21]–[28] and Pena Copper Mines v Rio Tinto (1911) 105 LT 84 (CA) 850–51, 852.

³ The question of whether negative implied terms can be implied into non-exclusive jurisdiction clauses is considered in Ch 9, section B, ‘Implied Terms’.

⁴ Navig8 v Al-Riyadh Co for Vegetable Oil Industry [2013] 2 Lloyds Rep 104 [22]; Golden Endurance Shipping v RMA Watanya (The Golden Endurance) [2015] 1 Lloyds Rep 266 [42]–[45].

⁵ Case C-159/02, Turner v Grovit [2004] ECR I–3565, [2005] 1 AC 101.

⁶ Case C-185/07, Allianz (formerly Riunione Adriatica di Sicurta) v West Tankers (The Front Comor) [2009] ECR I-663.

⁷ The possibilities are addressed in more detail in Ch 16, section B, ‘Brexit’.

⁸ Ch 1, section G, ‘The Hague Convention on the Choice of Court’.

⁹ However, in contrast, if the court before which the proceedings sought to be restrained is the chosen court in another Hague Convention contracting state, this could militate against the grant of an anti-suit injunction to interfere with the pursuit of proceedings in the chosen court. See Minutes No 9 of the Second Commission Meeting of Monday 20 June 2005 (morning) in Proceedings of the Twentieth Session of the Hague Conference on Private International Law (Permanent Bureau of the Conference, Intersentia 2010), 622, 623–24; and M Ahmed and P Beaumont, ‘Exclusive Choice of Court Agreements: Some Issues on the Hague Convention on Choice of Court Agreements and its Relationship with the Brussels I Recast Especially Anti-Suit Injunctions, Concurrent Proceedings and the Implications of BREXIT’ (2017) 13 JPIL 386, 398. It would take something unusual to justify an injunction to restrain proceedings in a court chosen under an exclusive jurisdiction clause in any event.

¹⁰ Ch 1, section H, ‘The New York Convention’.

¹¹ There is no authority considering this point expressly, but this result is obviously right. Although there is a debate as to whether the applicable law is determined by the lex fori or the law of the contract, this makes no difference where the proper law of the clause is English law and the injunction is sought from the English courts. The English courts have always applied English law without question to the direct enforcement of English jurisdiction and arbitration clauses by way of anti-suit injunction: see eg OT Africa Line v Magic Sportswear [2005] 1 Lloyds Rep 252 [38]–[41], [2005] 2 Lloyds Rep 170 (CA) [50], [73]; West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2005] 2 Lloyds Rep 257 [31]–[52]. As to the position in quasi-contractual cases, see Ch 10, section D, ‘Third-Party Rights under Foreign Law’.

¹² Bankers Trust International v RCS Editori [1996] CLC 899, 904–06; Shell International Petroleum v Coral Oil (No 1) [1999] 1 Lloyds Rep 72, 78. For the relevance of foreign mandatory laws to whether there are ‘strong reasons’ not to grant the injunction, see Ch 8, paras 8.31–8.44.

¹³ Under the traditional common law rules for choice of law, the grant or refusal of an injunction to enforce a contractual obligation is a matter of procedure and remedy, and is thus a question for the lex fori and not the law of the contract: Huber v Steiner (1835) 2 Bing NC 202, 135 ER 80, 83 (‘so much of the law as affects the remedy only, all that relates to the “ad litis decisionem”, is taken from the “lex fori” of the country where that action is brought’); Don v Lippmann (1837) 5 Cl & Fin 1, 7 ER 303, 307 (‘the law on this point is well settled in this country, where this distinction is properly taken, that whatever relates to the remedy to be enforced, must be determined by the lex fori’); Baschet v London Illustrated Standard [1900] 1 Ch 73, 78; Boys v Chaplin [1971] AC 356 (HL) 378G–379A, 394C–F.

Under the Rome I Regulation the line between lex fori and the law of the contract is drawn differently, because under Article 12, ‘the law applicable to the contract by virtue of this Regulation shall govern in particular’ ‘within the limits of the powers conferred on the court by its procedural law, the consequences of a total or partial breach of obligations, including the assessment of damages in so far as it is governed by rules of law’, as to which see Actavis UK Ltd v Eli Lilly & Co [2016] RPC 2 (CA) [143]. But by Article 1(2)(e), arbitration agreements and ‘agreements on the choice of court’ are excluded from the scope of the Regulation. This exclusion means that the ‘formation, validity, and effects’ of the forum clause are also outside the scope of the Regulation: see Report on the Rome Convention by Professors Mario Giuliano and Paul Lagarde (OJ 1980 No C282/1) (the ‘Giuliano-Lagarde Report’), 12. So, it seems strongly arguable that the question of the applicable law for injunctions to enforce an exclusive forum clause falls outside the scope of the Rome I Regulation, remains determined in the English courts by the common law choice of law rules, and is therefore a matter for the lex fori. (NB, it is likely that the Rome I and II Regulations will in substance remain English law after Brexit, irrespective of how Brexit is resolved: see Ch 1, section I, ‘Brexit’.)

Consistently with the common law’s application of the lex fori, even in those rare cases where anti-suit injunctions have been sought to enforce exclusive forum clauses with a foreign proper law, English law has so far governed the conditions for the grant of the contractual anti-suit injunction: A/S D/S Svendborg v Wansa [1996] 2 Lloyds Rep 559, 563, 569–71, 575, [1997] 2 Lloyds Rep 183 (CA) 186–88; The Owners of the ‘MSC Dymphna’ v Agfa-Gevaert (David Steel J, 19 December 2001); and the courts of the British Virgin Islands and Bermuda have applied their own law to the enforcement by anti-suit injunction of English arbitration clauses: Finecroft v Lamane Trading (Eastern Caribbean SC, 6 January 2006) [36]–[47]; OAO ‘CT-Mobile’ v IPOC International Growth Fund (Bermuda SC, 6 October 2006) [77]–[92], [175], upheld in IPOC International Growth Fund v OAO ‘CT-Mobile’ (Bermuda CA, 23 March 2007) (although the argument that the lex causae, not the lex fori should apply appears not to have been advanced in any of these cases). See also the rather unclear decision in Atlas Power v National Power and Despatch [2018] EWHC 1052 [34]–[41], although that may be explained on the basis that the court may have found that the applicable law of the arbitration clause was English, not Pakistani law (notwithstanding that Pakistani law was the law of the contract).

¹⁴ See Phrantzes v Argenti [1960] 2 QB 19, 35–36, and see also Talleyrand v Boulanger (1797) 3 Ves Jun 448, 30 ER 1099, 1100. However, cf contra OAO ‘CT-Mobile’ v IPOC International Growth Fund (Bermuda SC 6 October 2006) [11], [21], [175], [190], upheld in IPOC International Growth Fund v OAO ‘CT-Mobile’ (Bermuda CA, 23 March 2007) [5], [38], [40], where an anti-suit injunction was granted in part in support of a Swedish arbitration clause, even though Swedish law did not provide for the grant of anti-suit injunctions. (However, the injunction was also in part granted in support of English law agreements for Swiss arbitration.)

¹⁵ The injunction claimant is not entitled to an anti-suit injunction as of right, even where he seeks to enforce a contractual clause. The conventional rule of equity that the court has no discretion to refuse an injunction to enforce a clear negative covenant, laid down in Doherty v Allman (1878) 3 App Cas 708 (HL) 719–20, does not apply to injunctions to restrain foreign proceedings because of the tensions with comity which are inherent in the indirect interference with the foreign court which the anti-suit injunction involves: Settlement Corp v Hochschild [1966] 1 Ch 10, 17G–18A; Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA) 549, 550–51, 551; Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1994] 1 Lloyds Rep 168, 175 (Rix J), upheld on appeal, it appears, without argument to the contrary on this point [1995] 1 Lloyds Rep 87 (CA) 95–96; Mediterranean Shipping v Atlantic Container Line (CA, 3 December 1998); Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) [16], [23]; National Westminster Bank v Utrecht-America Finance [2001] CLC 442 [51], [2001] 3 All ER 733 (CA) [73]; Skype Technologies v Joltid [2011] ILPr 8 [30]–[31]; Ecobank Transnational v Tanoh [2016] 1 Lloyds Rep 360 (CA) [137]; ADM Asia-Pacific Trading v PT Budi Semesta Satria [2016] EWHC 1427 [34]; Hamilton-Smith v CMS Cameron McKenna [2016] EWHC 1115 [71].

In Elektrim v Vivendi Holdings No 1 [2009] 1 Lloyds Rep 59 (CA) [81], a case concerning a ‘no action’ clause, it was conceded by the injunction defendant that if the ‘no action clause’ was applicable, then an injunction to restrain foreign proceedings was the appropriate remedy ‘because the court would ordinarily enforce a negative covenant by injunction’. The Court of Appeal noted that the question of whether a party can sue at all is different to the question of appropriate or chosen forum. It can be doubted, however, whether this concession was correct, and the Court of Appeal was not referred to National Westminster Bank v Utrecht-America Finance [2001] CLC 442, [2001] 3 All ER 733 (CA), which also concerned a ‘no action’ clause but applied The Angelic Grace: see [30]–[35], [73]–[74]). It is submitted that, in principle, the same comity concerns underlying the earlier authorities should apply where an injunction is sought to restrain foreign proceedings on the basis of a ‘no action’ clause as where the injunction is sought to enforce an exclusive jurisdiction clause.

Similarly, the discretion to decline to grant an injunction continues to exist, even though the court from which the injunction is sought has jurisdiction over the merits under Article 25 of the Brussels I Recast, or under Article 5(1) of the Hague Convention of the Choice of Court (so that no forum non conveniens stay of English proceedings would be available). Whether a court should stay proceedings before itself, and whether it should restrain foreign proceedings, are inherently different questions, because the considerations of comity arising from the indirect interference with the foreign court caused by the injunction deserve independent attention: Ultisol Transport Contractors v Bouygues Offshore [1996] 2 Lloyds Rep 140, 146–48; Skype Technologies v Joltid [2011] ILPr 8 [21]–[28]. In Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [105] Males J suggested that the tests for the grant of a stay or an injunction to enforce an exclusive forum clause should be essentially the same, subject to questions of delay (in the common law context, not considering Art 25). It is respectfully submitted that this is wrong, even under the common law (see para 7.14 and n 19), and it would clearly be wrong under Article 25 or under the Hague Convention (which Males J was not considering; and the authorities mentioned above were, it seems, not cited to him.). Stays are different, and injunctions should have their own tests, whether Article 25 or the Hague Convention apply or not, although the necessity for a specific test for injunctions is most obviously clear in the Article 25 or Hague Convention context.

Nor does the New York Convention remove the court’s discretion not to grant the injunction where it is sought to enforce an arbitration clause: see Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98, 110, where, although Colman J suggested that the mandatory effect of the New York Convention should limit the criteria which could be relied on as reasons to refuse to grant an injunction (a suggestion which it is submitted is wrong—see at n 41), he accepted that the court retained a discretion.

It is suggested that it is a fallacy to infer from the fact that a jurisdiction clause or arbitration clause would be mandatory in the context of stays that there is any mandatory or near-mandatory need to grant an injunction. The two situations are different, and the assessment of whether or not to grant an anti-suit injunction must always be discretionary.

¹⁶ See Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) [19], [24].

¹⁷ Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) [23].

¹⁸ The key authorities are Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 96; Donohue v Armco [2002] 1 Lloyds Rep 424 (HL) [24] (Lord Bingham) [45] (Lord Hobhouse); and AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [25], [58]. In West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2007] 1 Lloyds Rep 391 (HL) [8], The Angelic Grace was viewed as stating the law. For recent examples of the application of the test, see Dell Emerging Markets (EMEA) v IBMaroc.com [2017] EWHC 2397 [21] and Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [28], [103]–[114].

In Philip Alexander Securities & Futures v Bamberger [1997] ILPr 73 [79], Waller J commented that, ‘the Court of Appeal in The Angelic Grace would appear to have relaxed the historic caution urged upon the English courts …’; although in Toepfer International v Molino Boschi [1996] 1 Lloyds Rep 510, 516, Mance J commented that, ‘The Angelic Grace itself only eliminated some of the diffidence previously felt about granting injunctive relief’. For earlier examples of the trend, see Sohio Supply v Gatoil (USA) [1989] 1 Lloyds Rep 588 (CA) 592; Continental Bank v Aeakos Compania Naviera [1994] 1 Lloyds Rep 505 (CA) (the Lloyds report of this case is preferable to the Weekly Law Reports version at [1994] 1 WLR 588, which accidentally omits some text).

¹⁹ As held in Skype Technologies v Joltid [2011] ILPr 8 [28] and American International Specialty Lines Insurance v Abbott Laboratories [2003] 1 Lloyds Rep 267, 275; and as explained by Goff J (as he then was) in Marazura Navegacion v Oceanus Mutual Underwriting Association (Bermuda) [1977] 1 Lloyds Rep 283, 287–88. It is submitted that this is the best reading of Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) [24]. Further, it is submitted that these authorities are to be preferred to the comments in Ultisol Transport Contractors v Bouygues Offshore [1996] 2 Lloyds Rep 140, 148–49; Akai v People’s Insurance [1998] 1 Lloyds Rep 90, 105; Donohue v Armco [1999] 2 Lloyds Rep 649, 655–56, [2000] 1 Lloyds Rep 589 (CA) 595; and Society of Lloyds v White (Cresswell J, 3 March 2000), to the extent that those say the contrary.

Although it is tempting to assimilate the tests for stays and injunctions to each other, it is a temptation to be resisted. The interference with foreign proceedings created by the grant of an anti-suit injunction, and the consequences for comity between national courts, mean that additional factors need to be taken into account, and indeed that the nature of the discretion to be exercised is different. Indeed, it is one of the major themes of the anti-suit case law since Aérospatiale that an injunction requires greater justification than a stay: see Ch 4, section J, ‘Forum non Conveniens’ and para 4.77; Ch 2, section D, ‘Forum non Conveniens and the Castanho Heresy’.

In Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [103]–[105], Males J suggested that the tests for stays and injunctions to enforce a jurisdiction clause should be applied in the same way, apart from the impact of ‘general equitable considerations’ such as delay. It is submitted that even this modified assimilation is not correct. While the same language of ‘strong reasons’ is used in both tests and can be applied in broadly similar fashion, there is no broader identity of test. The House of Lords’ decision in Donohue v Armco [2002] 1 Lloyds Rep 425 (HL), cited by Males J, does not demand any identity of test, even under the common law; and it seems the authorities mentioned above were not cited to Males J.

In addition, Males J was considering only the tests for stays under the common law, and not the mandatory impact of Article 25 of the Brussels I Recast (or the Hague Convention on the Choice of Court). It is clear that the mandatory effect of Article 25 will not be applied, by reflection, to anti-suit injunctions in cases where Article 25 would apply to questions of jurisdiction (see n 13). But following the coming into force of the Brussels I Recast, and so long as the Brussels–Lugano regime remains English law, Article 25 rather than the common law will now apply to questions of jurisdiction in the vast majority of cases involving English exclusive jurisdiction clauses. (Previously, under the Brussels I Regulation, Art 23 would only apply if one of the parties was domiciled in an EU state, but that limitation has now been removed.) If Brexit occurs, and the Brussels–Lugano instruments cease to apply, the Hague Convention on the Choice of Court (discussed in more detail at Ch 17, para 17.46) will probably become the dominant instrument. It also creates a mandatory jurisdiction (see Art 5), but again this should not deform the tests for injunctions.

²⁰ Navigation Maritime Bulgare v Rustal Trading (The Ivan Zagubanski) [2002] 1 Lloyds Rep 106, 124–25.

²¹ Donohue v Armco [2002] 1 Lloyds Rep 424 (HL) [23]; Royal Bank of Canada v Centrale Raiffeisen-Boerenleenbank [2004] 1 Lloyds Rep 471 (CA) 475; though cf contra Mediterranean Shipping v Atlantic Container Line (CA, 3 December 1998) (where the Court of Appeal propounded a liberal reinterpretation of The Angelic Grace which has not been followed).

²² There has been a rather arid debate as to the exact phrasing of this test. In Continental Bank v Aeakos Compania Naviera [1994] 1 Lloyds Rep 505 (CA) 512, Steyn LJ used the language of ‘special countervailing factors’. In Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 96, per Millett LJ (with whom Neill LJ agreed: at 97), originally used the language of ‘good reason’, and this was the test applied in many cases. However, in Donohue v Armco [2000] 1 Lloyds Rep 579 (CA) 588–89, 592, 594, the Court of Appeal held, drawing on the language used in older stay cases, that the test should be whether there was ‘strong cause’ or ‘strong reason’. Confusion reigned for a while, with some judges, in catholic fashion, using a combination of some of these phrases, or all of them together: see OT Africa Line v Hijazy (The Kribi) (No 1) [2001] 1 Lloyds Rep 76, 91. When Donohue was decided by the House of Lords, the wording ‘strong reasons’ was used: Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) [24], [53], and this is the test on which most, but not all, of the subsequent case law has settled: see eg Bank of New York Mellon v GV Films [2010] 1 Lloyds Rep 365 [16]; Oceanconnect UK v Angara Maritime (The Fesco Angara) [2011] 1 Lloyds Rep 399 [41]; Star Reefers Pool v JFC Group [2012] 1 Lloyds Rep 376 (CA) [25]; AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [25]; ADM Asia-Pacific Trading v PT Budi Semesta Satria [2016] EWHC 1427 [34]; Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [28], [103]–[114]. But for a recent case using ‘good reasons’, see Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) v Containerships Denizcilik Nakliyat ve Ticaret (The Yusuf Cepnioglu) [2016] 1 Lloyds Rep 641 (CA) [22]. All the various formulations mean much the same thing, and it is suggested that one should be chosen. If so, the best candidate is probably the phrase ‘strong reasons’, used by the House of Lords in Donohue v Armco, and the Supreme Court in AES Ust-Kamenogorsk.

From time to time, additional glosses have been put on this test, but it is submitted that they are not helpful: Bouygues Offshore v Caspian Shipping (No 3) [1997] 2 Lloyds Rep 493, 501–03 (‘near certainty’ that an exclusive forum clause would be enforced); Bouygues Offshore v Caspian Shipping (Nos 1, 3, 4 and 5) [1998] 2 Lloyds Rep 461 (CA) 464, 467 (an English exclusive jurisdiction clause ‘exerts a powerful and all but irresistible pressure on both Bouygues and Ultisol to bring their disputes to England’ and had a ‘near-conclusive’ effect). In Donohue v Armco and AES Ust-Kamenogorsk (and most other cases) the test of strong reasons was stated without any such gloss.

²³ For the relationship between strong reasons and discretion, see further Ch 8, paras 8.01–8.04.

²⁴ Donohue v Armco [2002] 1 Lloyds Rep 424 (HL) [33]–[34]; ADM Asia-Pacific Trading v PT Budi Semesta Satria [2016] EWHC 1427 [34]; Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [103]–[118]. For unclean hands see Royal Bank of Scotland v Highland Financial Partners [2012] 2 CLC 109 [175], [2013] 1 CLC 596 (CA) [158].

²⁵ Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 96; Shell International Petroleum v Coral Oil (No 1) [1999] 1 Lloyds Rep 72, 78; Ecom Agroindustrial v Mosharaf Composite Textile Mill [2013] 2 Lloyds Rep 196 [19] (adopting this passage of the first edition).

²⁶ Tracomin v Sudan Oil Seeds (Nos 1 and 2) [1983] 1 WLR 1026 (CA) 1037; Schiffahrtsgesellschaft Detlev von Appen v Voest Alpine Intertrading (The Jay Bola) [1997] 1 Lloyds Rep 179, 189 (injunction claimant required to undertake to pay the injunction defendant’s legal costs in the foreign jurisdiction where he had delayed before seeking the injunction; not challenged on appeal [1997] 2 Lloyds Rep 279 (CA)).

²⁷ In non-contractual cases, ‘caution’ is required: see Ch 4, paras 4.02 and 4.05, and para 4.79. Before The Angelic Grace, ‘caution’ or even ‘great caution’ had been required even in some contractual cases: Settlement Corp v Hochschild [1966] 1 Ch 10, 15; Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA) 549, 551; Tracomin v Sudan Oil Seeds [1983] 1 WLR 1026 (CA) 1035; Marc Rich v Societa Italiana Impianti (The Atlantic Emperor) (No 2) (Hobhouse J, 11 November 1991); but there were cases where no such threshold was imposed: Pena Copper Mines v Rio Tinto (1912) 105 LT 846 (CA) 850–51; Royal Exchange Assurance v Compania Naviera Santi (The Tropaioforos) (No 2) [1962] 1 Lloyds Rep 410, 418.

However, the decision of the Court of Appeal in The Angelic Grace [1995] 1 Lloyds Rep 87 (CA) was and is binding authority that ‘caution’ is not required in contractual cases. This approach was implicitly adopted in Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) and explicitly in AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [25]. See eg recently Essar Shipping v Bank of China (The Kishore) [2016] 1 Lloyds Rep 427 [35].

From time to time ‘caution’ has surfaced in the contractual context (see eg Navigation Maritime Bulgare v Rustal Trading (The Ivan Zagubanski) [2002] 1 Lloyds Rep 106, 124; Markel International v Craft (The Norseman) [2007] Lloyds Rep IR 403 [30]), but it is submitted that this is not the law.

²⁸ Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 96 (per Millett LJ, with whom Neill LJ agreed: at 97); but cf Leggatt LJ at 91, although even he was careful in his approach to the word ‘caution’.

²⁹ Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 95, 96, 97, restrictively distinguishing World Pride Shipping v Daiichi Chuo Kisen Kaisha (The Golden Anne) [1984] 2 Lloyds Rep 489; see also Credit Suisse First Boston (Europe) v MLC (Bermuda) [1999] 1 Lloyds Rep 767, 780–81; Horn Linie v Panamericana Formas e Impresos (The Hornbay) [2006] 2 Lloyds Rep 44 [25]. This issue is discussed in more detail in Ch 8, paras 8.45–8.46. For the question of whether a prior application for a stay to the foreign court is required in non-contractual cases (it is submitted not), see Ch 5, section F, ‘Stay Applications in the Foreign Court’.

³⁰ See Ch 13, paras 13.51–13.56.

³¹ Royal Exchange Assurance v Compania Naviera Santi (The Tropaioforos) (No 2) [1962] 1 Lloyds Rep 410, 418; Sohio Supply v Gatoil (USA) [1989] 1 Lloyds Rep 588 (CA) 592: ‘it seems to me that the continuance of foreign proceedings in breach of contract may well be vexatious and oppressive in any given case’; Continental Bank v Aeakos Compania Naviera [1994] 1 Lloyds Rep 505 (CA) 512; Bouygues Offshore v Caspian Shipping (No 2) [1997] 2 Lloyds Rep 485, 489–90; National Westminster Bank v Utrecht-America Finance [2001] 3 All ER 733 (CA) 745. In Donohue v Armco [1999] 2 Lloyds Rep 649, 655, 664, Aikens J viewed all anti–suit injunctions as deriving from the same sources of unconscionability, within which the existence or not of contractual obligations were merely factors in the exercise of the discretion. But his approach was not followed on this point in either the Court of Appeal ([2000] 1 Lloyds Rep 589 (CA)) or the House of Lords ([2002] 1 Lloyds Rep 425 (HL)).

³² Trafigura Beheer v Kookmin Bank (No 1) [2005] EWHC 2350 [42(ii)].

³³ Pena Copper Mines v Rio Tinto (1912) 105 LT 846 (CA) 850–51; Castanho v Brown & Root [1980] 1 WLR 833 (CA) 865–66 (overturned on other grounds [1981] AC 557 (HL); British Airways Board v Laker Airways [1985] AC 58 (HL) 81C–E; South Carolina Insurance v Assurantie Maatschippij ‘de Seven Provincien’ [1987] 1 AC 24 (HL) 40C–G; Airbus Industrie v Patel [1999] 1 AC 119 (HL) 138F; Toepfer International v Société Cargill France [1998] 1 Lloyds Rep 379 (CA) 384; Credit Suisse First Boston (Europe) v MLC (Bermuda) [1999] 1 Lloyds Rep 767, 779–80; Donohue v Armco [2000] 1 Lloyds Rep 589 (CA) 594–95, [2002] 1 Lloyds Rep 425 [23], [45], [53]; OT Africa Line v Magic Sportswear [2005] 2 Lloyds Rep 170 (CA) [33]; West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2007] 1 Lloyds Rep 391 (HL) [14]; AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [21]–[28]; Crescendo Maritime v Bank of Communications [2016] 1 Lloyds Rep 414 [41]; Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) v Containerships Denizcilik Nakliyat ve Ticaret (The Yusuf Cepnioglu) [2016] 1 Lloyds Rep 641 (CA) [33].

³⁴ In Toepfer International v Société Cargill France [1998] 1 Lloyds Rep 379 (CA) 384, the Court of Appeal drew a clear distinction between ‘intrinsically unconscionable’ conduct and conduct which can be injuncted because it is in breach of contract, relying on comments of Scott VC in Schiffahrtsgesellschaft Detlev von Appen v Voest Alpine Intertrading (The Jay Bola) [1997] 2 Lloyds Rep 279 (CA) 292. However, see the contrary views of Rix LJ in OT Africa Line v Magic Sportswear [2005] 2 Lloyds Rep 170 (CA) 183–84. Further, if unconscionability is interpreted broadly, so as to refer to anything equity will restrain, it follows trivially that, as equity will restrain a breach of contract, the breach of contract is in that sense unconscionable (see Lett v Lett [1906] 1 IR 618).

³⁵ Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) [19], [24].

³⁶ Crédit Suisse First Boston (Europe) v MLC (Bermuda) [1999] 1 Lloyds Rep 767, 780.

³⁷ Credit Suisse First Boston (Europe) v MLC (Bermuda) [1999] 1 Lloyds Rep 767, 780–81; Deutz v General Electric (Thomas J, 14 April 2000); Donohue v Armco [2002] 1 Lloyds Rep 425 [25]; AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [61]; Ecobank Transnational v Tanoh [2016] 1 Lloyds Rep 360 (CA) [100], [106], [134], [135]; and see S Males QC, ‘Comity and Anti-Suit Injunctions’ [1998] LMCLQ 543, 550–51. A Briggs, ‘Anti-Suit Injunctions in a Complex World’ in F Rose (ed), Lex Mercatoria (2000) 219, 236–39, argues that caution should be exercised even in standard contractual cases.

³⁸ OT Africa Line v Magic Sportswear [2005] 2 Lloyds Rep 170 (CA) [31]–[33]; Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) v Containerships Denizcilik Nakliyat ve Ticaret (The Yusuf Cepnioglu) [2016] 1 Lloyds Rep 641 (CA) [25], [34]–[35]; and also Royal Bank of Scotland v Highland Financial Partners [2012] 2 CLC 109 [154–158].

³⁹ Credit Suisse First Boston (Europe) v MLC (Bermuda) [1999] 1 Lloyds Rep 767, 780–81. See further the discussion in T Raphael, ‘Do as You Would be Done By: System-Transcendent Justification and Anti-Suit Injunctions’ [2016] LMCLQ 256, 260–61.

⁴⁰ Akai v People’s Insurance [1998] 1 Lloyds Rep 90 [104] and Ecobank Transnational v Tanoh [2016] 1 Lloyds Rep 360 (CA) [110], [136]. See also the general discussion of anti-enforcement injunctions in Ch 5, section I, ‘Anti-Enforcement Injunctions’.

⁴¹ Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 94, 96; AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [23]; Essar Shipping v Bank of China (The Kishore) [2016] 1 Lloyds Rep 427 [33]; Aline Tramp v Jordan International Insurance (The Flag Evi) [2017] 1 Lloyds Rep 467 [33]. See also American International Specialty Lines Insurance v Abbott Laboratories [2003] 1 Lloyds Rep 267, 275; Through Transport Mutual Insurance Association (Eurasia) v New India Assurance (No 1) [2005] 1 Lloyds Rep 67 (CA) 84 (‘almost identical’); Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA) 549 (‘similar’).

In Toepfer International v Societé Cargill France [1997] 2 Lloyds Rep 98, 110, Colman J suggested that, since under the Convention the English court would have no discretion whether or not to stay English proceedings brought in breach of the arbitration clause, it followed that when assessing whether or not there were ‘strong reasons’ not to enforce the arbitration clause by the grant of an anti-suit injunction, considerations of forum non conveniens and the risk of inconsistent decisions should be given little or no weight. This suggestion has attracted some limited sympathy: the Court of Appeal left the point open in Mediterranean Shipping C v Atlantic Container Line (CA, 3 December 1998); and see also Credit Suisse First Boston (Europe) v MLC (Bermuda) [1999] 1 Lloyds Rep 767, 780; Welex v Rosa Maritime (The Epsilon Rosa) (No 2) [2002] 2 Lloyds Rep 701 (Steel J) 706 (but see [2003] 2 Lloyds Rep 509 (CA) [45], [51], where the Court of Appeal did not adopt this aspect of Steel J’s reasoning); S Males QC, ‘Comity and Anti-Suit Injunctions’ [1998] LMCLQ 543, 548.

However, any such approach is probably precluded by The Angelic Grace, which envisages no such restriction on strong reasons in the arbitration context, and in the bulk of the case law, the principles have been applied to arbitration clauses in the same way as jurisdiction clauses, with no rigid restriction on the discretionary considerations that can be borne in mind. While it is, of course, true that the relevance of factors like forum conveniens will be considerably restricted by the parties’ contractual agreement on a chosen forum, which will often be taken to have borne in mind and catered for questions of convenient forum (see Ch 8, paras 8.09–8.11), this is no more nor less so than for injunctions to enforce jurisdiction clauses. Cases where forum conveniens factors were thought to be potentially legitimate in appropriate cases in considering whether to refuse injunctions to enforce arbitration clauses include Donohue v Armco [1999] 2 Lloyds Rep 649 [23]; and Welex v Rosa Maritime (The Epsilon Rosa) [2003] 2 Lloyds Rep 509 (CA) [45], [51]; and this appears to be the better reading of Crescendo Maritime v Bank of Communications Co [2016] 1 Lloyds Rep 414 at [46]–[48] (there seems to be a missing ‘not’ before ‘apply’ in [47]). In Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) [25], [53] and AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [23] there was no suggestion that the analysis to be applied to arbitration clauses and exclusive jurisdiction clauses should be different.

In principle, extrapolating the rigid mandatory approach required by the New York Convention in stay cases so as positively to demand the imposition of an injunction seems inappropriate. Different considerations apply to stays as compared to injunctions (as explained by Goff J (as he then was) in Marazura Navegacion v Oceanus Mutual Underwriting Association (Bermuda) [1977] 1 Lloyds Rep 283, 287–88).

Recently, in Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [106], Males J cited Toepfer and took the approach that while the tests were the same, they might be applied differently because of the mandatory nature of arbitration clauses, which brought other considerations into play. There is no objection to this as such. It is plainly correct that where there will be no stay of matters submitted to arbitration in forum X, then this may affect the pragmatic considerations involved in assessing whether or not there are ‘strong reasons’ not to grant an injunction to restrain proceedings in forum Y. But it is submitted it would be wrong, if the mandatory nature of the arbitration clause with regard to stays was thought to bring with it a different test when enforcing it by injunction, such that the grant of an injunction was viewed as mandatory or closer to mandatory. Indeed, most exclusive jurisdiction clauses in favour of the English courts will now be mandatory under Article 25 of the Brussels I Recast (so long as it remains effective in English law), and the Hague Convention on the Choice of Court similarly precludes a court chosen under an exclusive jurisdiction clause within its scope from staying proceedings on grounds of forum non conveniens: see Article 5.

⁴² It is submitted that this is the correct interpretation of Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [106].

⁴³ See AES Ust-Kamenogorsk Hydropower Plant LLC v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [60] and para 7.51.

⁴⁴ Toepfer International v Société Cargill France [1998] 1 Lloyds Rep 379 (CA) 386; see also Sokana Industries v Freyre [1994] 2 Lloyds Rep 57, 66.

⁴⁵ If the foreign state is not party to the New York Convention, it has been stated that ‘the primary remedy’ must be to apply for an injunction: Schiffahrtsgesellschaft Detlev von Appen v Voest Alpine Intertrading (The Jay Bola) [1997] 2 Lloyds Rep 279 (CA) 285.

⁴⁶ Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA) 96; West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2007] 1 Lloyds Rep 391 (HL) [30] (per Lord Mance).

⁴⁷ Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1994] 1 Lloyds Rep 168, 180, upheld without specific discussion of this point [1995] 1 Lloyds Rep 87 (CA).

⁴⁸ In Continental Bank v Aeakos Compania Naviera [1994] 1 Lloyds Rep 505 (CA) 511–12 the rules of Greek procedure were such that it was impossible to make a jurisdictional challenge without filing an expensive defence to the action at the same time. The Court of Appeal would have treated this as a factor in favour of an injunction if necessary.

⁴⁹ See Ch 1, paras 1.50–1.59.

⁵⁰ Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1994] 1 Lloyds Rep 168 (Rix J) 182–83, upheld, albeit in different terms, at [1995] 1 Lloyds Rep 87 (CA).

⁵¹ Continental Bank v Aeakos Compania Naviera [1994] 1 Lloyds Rep 505 (CA) 512. For arguments of principle supporting the application of the Angelic Grace principles, see S Males QC, ‘Comity and Anti-Suit Injunctions’ [1998] LMCLQ 543, 549–50.

⁵² Navigation Maritime Bulgare v Rustal Trading (The Ivan Zagubanski) [2002] 1 Lloyds Rep 106, 124, holding that this is the effect of The Angelic Grace; Donohue v Armco [2002] 1 Lloyds Rep 425 (HL) [23]–[25], [53] (ratifying the Angelic Grace approach); Welex v Rosa Maritime (The Epsilon Rosa) (No 2) [2003] 2 Lloyds Rep 509 (CA) [52]; West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2005] 2 Lloyds Rep 257, 268–69, upheld [2007] 1 Lloyds Rep 391 (HL) [8]. Following the comments of the ECJ in The Front Comor, an attempt was made to re-argue the New York Convention point but this was rejected by Cooke J in Shashoua v Sharma [2009] 2 Lloyds Rep 376 [35]–[39] and by the Court of Appeal in Midgulf International v Group Chimique Tunisien [2010] 2 Lloyds Rep 543 (CA) [66]–[69]. The principles involved are discussed at Ch 1, section H, ‘The New York Convention’.

⁵³ For discussion, see A Briggs, ‘The Subtle Variety of Jurisdiction Agreements’ [2012] LMCLQ 364.

⁵⁴ In Horn Linie v Panamericana Formas e Impresos (The Hornbay) [2006] 2 Lloyds Rep 44, [29], [34(2)], Morison J held, obiter, that a third party could be entitled to claim a contractual anti-suit injunction under an exclusive forum clause where he was entitled to be treated as a party to the contract by virtue of a Himalaya clause, and where he was joined to the proceedings as an additional party.

⁵⁵ See eg Royal Bank of Scotland v Highland Financial Partners [2012] 2 CLC 109 [153]; Dell Emerging Markets (EMEA) v IBMaroc.com [2017] EWHC 2397 [21].

⁵⁶ Credit Suisse First Boston (Europe) v MLC (Bermuda) [1999] 1 Lloyds Rep 767, 777–78; Team Y&R Holdings Hong Kong v Ghossoub [2017] EWHC 2401 [82].

⁵⁷ For examples of claims against third parties being covered, see eg Deutsche Bank v Highland Crusader Offshore Partners [2009] 1 CLC 535 [34] (held arguable; this point was not addressed on appeal [2010] 1 WLR 1023 (CA) where, however, the first instance decision was generally overturned); Vitol v Arcturus Merchant Trust [2009] EWHC 800 [36]; Bannai v Erez [2013] EWHC 3689 [13], [31]; ICBCL Financial Leasing v CG Commercial Finance [2014] EWHC 3156; Starlight Shipping Co v Allianz Marine and Aviation Versicherungs (The Alexandros T) (No 2) [2015] Lloyds Rep IR 54 [39] and [41]–[51]; Dell Emerging Markets (EMEA) v IBMaroc.com [2017] EWHC 2397 [14]–[21]. In Royal Bank of Scotland v Highland Financial Partners [2012] 2 CLC 109 [147]–[153], Burton J considered the contractual arguments, and appeared to be attracted by them, but in the end granted the injunction without distinguishing between contractual and non-contractual justifications: see the ‘and/or’ at [153].

It is worth briefly commenting on Himalaya clauses, on which there is case law pointing in different directions. In The Mahkutai [1996] AC 650 (JCPC) 665–68, Lord Goff concluded that an exclusive jurisdiction clause would not fall within the protection which the Himalaya clause afforded to the servants and agents of the carrier; as an exclusive jurisdiction clause was not a relevant ‘provision’. Notwithstanding this, in the Hornbay, Morison J made the obiter suggestion that an exclusive jurisdiction clause would arguably be protected by the slightly different words of the Himalaya clause there: Horn Linie v Panamericana Formas e Impresos (The Hornbay) [2006] 2 Lloyds Rep 44 [29]–[30]. Finally, in Whitesea Shipping and Trading v El Paso Rio Clara (The Marielle Bolten) [2010] 1 Lloyds Rep 648 [21], the court concluded that an obligation in a Himalaya clause not to sue the connected third party could be enforced by anti-suit injunction by the original party to the contract.

⁵⁸ For examples of a connected party C not being covered by the A–B contract, see Credit Suisse First Boston (Europe) v MLC (Bermuda) [1999] 1 Lloyds Rep 767; Citigroup Global Markets v Amatra Leveraged Feeder Holdings [2012] 2 CLC 279 [55]; Morgan Stanley v China Haisheng Juice Holdings [2010] 1 Lloyds Rep 65; Rochester Resources v Lebedev [2014] EWHC 2926 [48]; Crescendo Maritime v Bank of Communications Company [2016] 1 Lloyds Rep 414; Team Y&R Holdings Hong Kong v Ghossoub [2017] EWHC 2401 [69]–[84]; and possibly Bannai v Erez [2013] EWHC 3689 at [32] (contrast [31]).

⁵⁹ cf Morgan Stanley v China Haisheng Juice Holdings [2010] 1 Lloyds Rep 65 [21]; Crescendo Maritime v Bank of Communications [2016] 1 Lloyds Rep 414 [56]; and see also Team Y&R Holdings Hong Kong v Ghossoub [2017] EWHC 2401 [78]–[82].

⁶⁰ We do, however, assume that there is personal jurisdiction under CPR Part 6 PD 6B para 3.1(6) in respect of injunctions to prevent vexatious evasion of exclusive forum clauses (cf Ch 18, paras 18.48–18.52). If such jurisdiction did not exist, there would be greater pressure to impose a contract in A–B–C cases.

⁶¹ A number of the ‘A–B–C’ cases justify the injunction directly on vexation or oppression, such as eg Bannai v Erez [2013] EWHC 3689 [32] and ICBCL Financial Leasing v CG Commercial Finance [2014] EWHC 3156; and some do not distinguish between a contractual and a non-contractual justification: see eg Royal Bank of Scotland v Highland Financial Partners LP [2012] 2 CLC 109 [147]–[153]. But the mere fact of B being connected to A and/or B does not necessarily mean that it is vexatious for A to sue B in a forum different to that chosen between A and B, and this will depend on all the facts. The point is sometimes expressed in terms of whether the proceedings against the third party are a ‘collateral attack’ on the clause. See Crescendo Maritime v Bank of Communications [2016] 1 Lloyds Rep 414 [56]–[59] and Midgulf International v Groupe Chimiche Tunisien [2010] 2 Lloyds Rep 543 (CA) [52] (regarding collateral attack as a non-contractual ground for an injunction).

⁶² For a recent example of the expansive approach, see Dell Emerging Markets (EMEA) v IBMaroc.com [2017] EWHC 2397. For a more doctrinally conservative approach to contractual interpretation, see Team Y&R Holdings Hong Kong v Ghossoub [2017] EWHC 2401 [69]–[83]. It is difficult to view the thoughtful analysis in Ghossoub as representative of much of the recent case law.

⁶³ Donohue v Armco [2002] 1 Lloyds Rep 425 [60]–[62].

⁶⁴ Donohue v Armco [2002] 1 Lloyds Rep 425 [14], [23], [30, [48].

⁶⁵ The Mahkutai [1996] AC 650 (PC) 665–68.

⁶⁶ Winnetka Trading v Julius Baer International [2009] Bus LR 1006 [28]–[29] (although the facts involved a very close connection between the A–B and the A–C claims and it is not clear that a contractual relationship was found); Royal Bank of Scotland v Highland Financial Partners [2012] 2 CLC 109 [147]–[153], at [151] (although in the end Burton J granted the injunction without distinguishing between contractual and non-contractual justifications: see ‘and/or’ at [153]); Dell Emerging Markets (EMEA) v IBMaroc.com [2017] EWHC 2397 [12].

⁶⁷ Morgan Stanley & International v China Haisheng Juice Holdings [2010] 1 Lloyds Rep 65 [30]; Crescendo Maritime v Bank of Communications [2016] 1 Lloyds Rep 414 [56]; Team Y&R Holdings Hong Kong v Ghossoub [2017] EWHC 2401 [72]–[75].

⁶⁸ As Teare J put it in Morgan Stanley & Co International v China Haisheng Juice Holdings [2010] 1 Lloyds Rep 65 [21]:

The true construction of the jurisdiction clause in the Master Agreement must depend on its terms. … The key question is whether clause 13 would reasonably be understood to mean that MSIP and CH promised each other that claims arising out or in connection with the Master Agreement would be brought in England regardless of whether the claims were against the other or a nonparty to the Master Agreement.

See also Dell Emerging Markets (EMEA) v IBMaroc.com [2017] EWHC 2397 [14] and the recent analysis in Team Y&R Holdings Hong Kong v Ghossoub [2017] EWHC 2401 [69]–[83].

⁶⁹ See Ch 9, section B, ‘Implied Terms’. Article 25 of the Brussels I Recast (so long as it remains effective in English law) and Article 3(b) of the Hague Convention on the Choice of Court provide similar but slightly different wording which deem jurisdiction clauses to be exclusive for the purposes of jurisdiction unless the contrary has been provided. The effect of a clause which has acquired deemed exclusivity in this way has not yet been explored in the reported decisions on anti-suit injunctions.

⁷⁰ The cases are reviewed in Companhia Sub-America de Vapores v Hin-Pro International Logistics [2015] 2 Lloyds Rep 1 (CA) [43]–[78]. Good illustrations of the modern approach are found in BNP Paribas v Anchorage Capital [2013] EWHC 3073 [82]–[88] and Global Maritime Investments Cyprus v OW Supply and Trading [2015] EWHC 2690 [46]–[52].

⁷¹ Fiona Trust & Holding Corp v Privalov [2008] 1 Lloyds Rep 254 (HL) [5], [6]–[8], [13].

⁷² See eg Skype Technologies v Joltid [2009] EWHC 2783 [14]–[19]; UBS v HSH Nordbank [2009] 2 Lloyds Rep 272 (CA) [82]–[84]; Trust Risk Group v AmTrust Europe [2015] 2 Lloyds Rep 154 (CA) [15]–[16], [40]–[49].

⁷³ UBS v HSH Nordbank [2009] 2 Lloyds Rep 272 (CA [82]–[83].

⁷⁴ Ryanair v Esso Italiana [2013] 2 CLC 950 (CA) [42]–[49] (tortious claims unconnected to any viable contractual claim falling within the forum clause); followed by Microsoft Mobile Oy v Sony Mobile [2017] 5 CMLR 5 [47]–[54].

⁷⁵ Deutsche Bank v Sebastian Holdings [2011] 1 Lloyds Rep 106 (CA) [39]–[49]; Trust Risk Group v AmTrust Europe [2015] 2 Lloyds Rep 154 (CA) [16]–[17], [44]–[49].

⁷⁶ Shashoua v Sharma [2009] 2 Lloyds Rep 376 [40]–[41]; Vitol v Capri Marine (No 2) [2010] EWHC 458 [29]–[35].

⁷⁷ AWB (Geneva) v North America Steamships [2007] 2 Lloyds Rep 315 (CA) [25]–[28]; see similarly the nuanced approach taken in Team Y&R Holdings Hong Kong v Ghossoub [2017] EWHC 2401 [69]–[85] in relation to foreign winding-up proceedings.

⁷⁸ Shell International Petroleum v Coral Oil Co (No 2) [1999] 2 Lloyds Rep 606, 609–610; Horn Linie v Panamericana Formas e Impresos (The Hornbay) [2006] 2 Lloyds Rep 44 [25], [28]–[32]; Starlight Shipping v Tai Ping Insurance (The Alexandros T) [2008] 1 Lloyds Rep 230 [42] (although the court held that it had no personal jurisdiction over such a claim); BNP Paribas v Russian Machines [2012] 1 Lloyds Rep 61 [79]–[92], [2012] 1 Lloyds Rep 649 (CA) [49]–[58]; Mace (Russia) v Retansel Enterprises [2016] EWHC 1209 [12]; for examples where such an argument failed, see Malhotra v Malhotra [2013] 1 Lloyds Rep 285 [177]–[179]; Team Y&R Holdings Hong Kong v Ghossoub [2017] EWHC 2401 [85]–[88].

⁷⁹ Paragraphs 7.29–7.30.

⁸⁰ Michael Wilson v Emmott [2018] 1 Lloyds Rep 299 [55]–[58] and paras 7.66–7.67.

⁸¹ Crédit Suisse First Boston (Europe) v MLC (Bermuda)[1999] 1 Lloyds Rep 767, 778; National Westminster Bank v Rabobank Nederland (No 1) [2007] EWHC 1056 [425]–[440]; National Westminster Bank v Rabobank Nederland (No 3) [2008] 1 Lloyds Rep 16 (a damages case); Elektrim v Vivendi Holdings No 1 [2009] 1 Lloyds Rep 59 (CA) [78]–[95]. In Apple Corps v Apple Computer [1992] RPC 70, 73, 77, the legality of a ‘no challenge’ clause in relation to trade marks was disputed.

⁸² Apple Corps v Apple Computer [1992] RPC 70, 73, 77; National Westminster Bank v Utrecht-America Finance [2001] 3 All ER 733 (CA) 739; Elektrim v Vivendi Holdings No 1 Corp [2009] 1 Lloyds Rep 59 (CA) [78]–[95]; Whitesea Shipping & Trading v El Paso Rio Clara (The Marielle Bolten) [2010] 1 Lloyds Rep 648 [56]–[64]; and see also Nippon Yusen Kaisha v International Import & Export (The Elbe Maru) [1978] 1 Lloyds Rep 206.

⁸³ National Westminster Bank v Utrecht-America Finance [2001] 3 All ER 733 (CA) 744–45 [26]–[35], differing in this respect from National Westminster Bank v Utrecht-America Finance [2001] 2 CLC 442 [52]. In Settlement Corp v Hochschild [1965] 1 Ch 10, a ‘cautious’ approach was applied; but this was before the later development of the modern doctrine in Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1995] 1 Lloyds Rep 87 (CA).

⁸⁴ National Westminster Bank v Utrecht-America Finance [2001] 3 All ER 733 (CA) [31]–[38], [73]–[74]. National Westminster Bank v Utrecht-America Finance Co [2001] 2 CLC 442 [49]–[56].

⁸⁵ Royal Exchange Assurance v Compania Naviera Santi (The Tropaioforos) (No 2) [1962] 1 Lloyds Rep 410.

⁸⁶ Lett v Lett [1906] 1 IR 618. See also by analogy Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 2 Lloyds Rep 544 (CA) (a damages claim).

⁸⁷ See Ch 13, paras 13.57–13.58.

⁸⁸ Settlement Corp v Hochschild [1966] 1 Ch 10, 19D–F (although the actual decision on the facts in that case probably would not be followed today); Harbour Assurance (UK) v Kansa General International Insurance [1992] 1 Lloyds Rep 81, 86.

⁸⁹ Fiona Trust & Holding v Privalov [2008] 1 Lloyds Rep 254 (HL) [17]–[19], [33]–[35]; Deutsche Bank v Asia Pacific Broadband Wireless Communications [2009] 2 All ER 129 (CA) [24]–[25], [27], [29].

⁹⁰ Donohue v Armco [1999] 2 Lloyds Rep 649 [34] (Aikens J); the point was not considered on appeal [2000] 1 Lloyds Rep 579 (CA), [2002] 1 Lloyds Rep 425 (HL).

⁹¹ Airbus Industrie v Patel [1999] 1 AC 119 (HL) 138–41.

⁹² Airbus Industrie v Patel [1999] 1 AC 119 (HL) 141A–C. See also Evialis v SIAT [2003] 2 Lloyds Rep 377 [139(i)]: ‘the English court has no sufficient interest in protecting any interest that Evialis might have to be sued in France rather than Italy to protect it with injunctive relief’, where the ‘right’ in question was a supposed ‘right’ to be sued in a particular jurisdiction under the Brussels Convention. Where the English court is the chosen court under an exclusive jurisdiction clause, it will ipso facto have a sufficient interest.

⁹³ Airbus Industrie v Patel [1999] 1 AC 119 (HL) 138F–G.

⁹⁴ Compania Sudamerica de Vapores v Hin-Pro International Logistics [2015] HKCA 107 [35]–[64]. This specific point was not disputed on appeal in the Court of Final Appeal [2016] HKCFA 79, which, however, overturned the Court of Appeal on other points, in ways that affect its overall reasoning.

⁹⁵ The Owners of the ‘MSC Dymphna’ v Agfa-Gevaert NV (David Steel J, 19 December 2001), where David Steel J held (in an unreserved judgment) that the court had no ‘jurisdiction’ to grant an injunction restraining proceedings in Belgium once he had held, contrary to the injunction claimant’s submissions, that the relevant exclusive jurisdiction clause was actually a clause for exclusive US jurisdiction. The Judge observed that the claimant could apply to the US courts for any injunction.

In OT Africa Line v Magic Sportswear [2005] 2 Lloyds Rep 170 (CA) [32], Longmore LJ made obiter comments which, at least on one reading, suggest that the English courts will not hesitate to grant injunctions to protect exclusive jurisdiction clauses in favour of third-party courts. But it is doubtful that Longmore LJ was considering the third-party court situation. The case before Longmore LJ involved an exclusive jurisdiction clause in favour of the English courts. The issues of comity involved in interfering on behalf of another court were not considered.

In the unusual case of A/S D/S Svendborg v Wansa [1996] 2 Lloyds Rep 559, 563, 575, [1997] 2 Lloyds Rep 183 (CA) 186–88, an injunction was granted to restrain proceedings in Sierra Leone which were in breach of an Estonian exclusive jurisdiction clause. However, the injunction was not granted to force the parties to litigate in Estonia, but rather to ensure that the substantive claims were heard in England together with other linked substantive claims which were governed by English exclusive jurisdiction clauses. It could thus be said that the English court did have ‘sufficient interest’, because of the intended proceedings before it. Even so, Svendborg v Wansa must be viewed as a marginal decision, arising out of very unusual facts; the injunction defendant had boasted of his ability to subvert the process of the courts of Sierra Leone: [1996] 2 Lloyds Rep 559, 566, 574, [1997] 2 Lloyds Rep 183 (CA) 188–89. If the parties have agreed to a jurisdiction other than England, that should be a factor against the grant of an injunction restraining proceedings in a third country in favour of English proceedings. At the very least, it is unlikely to be right to apply the Angelic Grace principles without qualification in such a situation (as Clarke J may have done: [1996] 2 Lloyds Rep 559, 568–70, 574–75, since no separate test was articulated for the Estonian situation).

⁹⁶ IPOC International Growth Fund v OAO ‘CT-Mobile’ (Bermuda CA, 23 March 2007) upholding OAO ‘CT-Mobile’ v IPOC International Growth Fund (Bermuda SC, 6 October 2006) [105]–[108].

⁹⁷ Finecroft v Lamane Trading (Eastern Caribbean SC, 6 January 2006). However, Airbus v Patel was not referred to and may not have been cited to the court.

⁹⁸ People’s Insurance v Akai [1998] 1 SLR 206 (Sing HC) [12]–[13], quoted with apparent approval in Akai v People’s Insurance [1998] 1 Lloyds Rep 90, 108. See the discussion in Ch 19, section G, ‘Injunctions in support of foreign courts and tribunals’.

⁹⁹ R1 International v Lonstroff [2014] SGHC 69 [53]–[55].

¹⁰⁰ Compania Sub Americana de Vapores v Hin-Pro International Logistics[2015] HKCA 107 [35]–[64]. At [64] the Hong Kong Court of Appeal approved the corresponding passages in the first edition of this work. The point was not disputed on appeal in the Court of Final Appeal: [2016] HKCFA 79, but that decision overturned the Court of Appeal on other points, in ways which affect and potentially undermine its overall reasoning.

¹⁰¹ Little consideration appears to have been given to the problem that claiming an injunction from a third-party court may be a breach of the exclusive jurisdiction or arbitration clause itself. In Akai v People’s Insurance [1998] 1 Lloyds Rep 90, 107, Thomas J was prepared to envisage that a ‘justifiable’ anti-suit injunction brought before the courts of Singapore to enforce an English exclusive jurisdiction clause ‘might not’ have been a breach of the clause, but this is not the last word. The somewhat parallel issues arising in relation to arbitration clauses are discussed at paras 7.55–7.58.

¹⁰² See West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2007] 1 Lloyds Rep 391 (HL) [17]–[18] and, in a different context, The Bergen (No 2) [1997] 2 Lloyds Rep 710, 718. In addition, if under the proper law of the clause anti-suit injunctions cannot be granted, it can be argued that the lex fori should not depart from the law of the contract in this respect: see paras 7.11–7.12.

¹⁰³ Paragraph 7.21.

¹⁰⁴ Paragraphs 7.21 and 7.65.

¹⁰⁵ Interim injunctions to enforce arbitration clauses are also granted under s 37 Senior Courts Act 1981, and not under s 44 Arbitration Act 1996: Ch 13, paras 13.10–13.12.

¹⁰⁶ Injunctions to restrain arbitrations in England are discussed in Ch 11, section A, ‘Introduction’. They will generally be granted, if at all, under s 72 of the Arbitration Act 1996.

¹⁰⁷ Welex v Rosa Maritime (The Epsilon Rosa) (No 2) [2003] 2 Lloyds Rep 509 (CA) [40]; West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2007] 1 Lloyds Rep 391 (HL) [10]; Starlight Shipping v Tai Ping Insurance (The Alexandros T) [2008] 1 Lloyds Rep 230 [16]; Nomihold Securities v Mobile Telesystems Finance [2012] 1 Lloyds Rep 442 [25]; AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [48], [55]–[59]; Southport Success v Tsingshan Holding Group [2015] 2 Lloyds Rep 578 [19]–[25]; Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [28].

¹⁰⁸ Steamship Mutual Underwriting Association (Bermuda) v Sulpicio Lines [2008] 2 Lloyds Rep 269 [28]; Nomihold Securities v Mobile Telesystems Finance [2012] 1 Lloyds Rep 442 [25]; AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [31]–[41], [55]–[62]; recently HC Trading Malta v Tradeland Commodities [2016] 1 Lloyds Rep 3120 [18] and Starlight Shipping v Tai Ping Insurance (The Alexandros T) [2008] 1 Lloyds Rep 230 [43]. Consequently, applications under s 9 of the Arbitration Act 1996 to stay claims for such anti-suit injunctions will fail: Sheffield United FC v West Ham United FC [2009] 1 Lloyds Rep 167 [37]–[41]; Nomihold, at [33]–[49].

However, for arguments that Article 5 of the UNCITRAL Model Law (and thus, by inference, its partial implementation in s 1 of the 1996 Act) should be read to preclude anti-suit injunctions to enforce an arbitration clause, see F Bachand, ‘The UNCITRAL Model Law’s Take on Anti-Suit Injunctions’ in E Gaillard (ed), Anti-Suit Injunctions in International Arbitration (Juris 2005) 87 (hereafter ‘Gaillard (2005)’).

¹⁰⁹ BNP Paribas v Russian Machines [2012] 1 Lloyds Rep 61 [39]–[40] and [2012] 1 Lloyds Rep 649 (CA) [46], where the Court of Appeal said that there was ‘neither dispute nor doubt’ on the question; Sheffield United FC v West Ham United FC [2009] 1 Lloyds Rep 167 [39]–[40]; Nomihold Securities v Mobile Telesystems Finance [2012] 1 Lloyds Rep 442 [46]–[47]; and Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98, 107, [1998] 1 Lloyds Rep 379 (CA) 384–85, where the argument that an anti-suit injunction was precluded by the arbitration clause itself was described as ‘a submission not lacking in effrontery’, given that it came from a party who was himself in breach of the clause. Any suggestion that the arbitration clause itself precludes the grant of an anti-suit injunction to enforce it would also be inconsistent with the result in AES Ust-Kamenogorsk Hydropower Plant LLC v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC), where (although this particular point does not seem to have been taken) the ability to grant anti-suit injunctions to enforce an arbitration clause was resoundingly affirmed.

The analogous submission that a freezing injunction was also precluded by an arbitration clause in normal wording was also unsurprisingly rejected: In Re Q’s Estate [1999] 1 Lloyds Rep 931, 933–38.

¹¹⁰ Toepfer International v Société Cargill France [1998] 1 Lloyds Rep 379 (CA) 384–85, where the clause referred to arbitration of ‘all disputes arising out of or under this contract’. The Court of Appeal referred the question to the ECJ, but the case settled before the reference was determined.

The two main reasons given by the Court of Appeal in Toepfer v Cargill do not seem to be valid under the Arbitration Act 1996 (which was not yet in force when it was decided). First, Phillips LJ argued that the issues arising on an injunction would probably be issues as to the arbitrators’ jurisdiction, which are not suitable issues for the arbitrators to determine (at 385). But under the Arbitration Act 1996, ss 30–31, it is the general position that arbitrators can determine their own jurisdiction. Second, Phillips LJ suggested that an anti-suit injunction does not fall within the relief which arbitrators are in a position to provide (at 385). But that is not the modern law under the Arbitration Act 1996: see paras 7.59–7.64.

There was also an earlier line of authority in which it was held, in a yet broader approach, that even broadly worded arbitration clauses only applied to substantive ‘proceedings to establish liability’: Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA) 548, per Lord Denning MR; Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98, 107 (Colman J). However, these decisions are not binding precedent: in The Lisboa only Lord Denning MR actually held this (at 548); the other two Lords Justices concluded only that the point was arguable (at 550–51). It is respectfully submitted that this approach is too broad, as the Court of Appeal in Toepfer v Cargill suggested (at 385). It would mean, for example, that arbitrators could not themselves grant anti-suit injunctions.

¹¹¹ It is generally accepted that damages can be awarded, including by arbitrators, for breaches of arbitration clauses committed by bringing proceedings in a foreign jurisdiction: Mantovani v Carapelli [1980] 1 Lloyds Rep 375 (CA) 381–84; London Arbitration 8/04, LMLN 14 April 2004; London Arbitration 11/06 (2006) 697 LMLN 2; CMA CGM v Hyundai Mipo Dockyard [2009] 1 Lloyds Rep 213 [10], [39]–[40] (point unchallenged); West Tankers v Allianz (The Front Comor) [2012] 2 Lloyds Rep 103 (where the point may not have been contested under English law). See also the difficult authority of Sokana Industries v Freyre [1994] 2 Lloyds Rep 57, 64, 66. Further, arbitrators do have the power to grant anti-suit awards: see paras 7.59–7.64. For further discussion, see Ch 14, para 14.04.

¹¹² And also, declarations as to the meaning and effect of an award: see Noble Assurance v Gerling-Konzern General Insurance [2008] Lloyds Rep IR 1 [97].

¹¹³ See Ch 15, paras 15.21–15.33.

¹¹⁴ Sheffield United FC v West Ham United FC [2009] 1 Lloyds Rep 167 [39]–[40]; Nomihold Securities v Mobile Telesystems Finance [2012] 1 Lloyds Rep 442 [46]–[47]. See also earlier Comdel Commodities v Siporex [1997] 1 Lloyds Rep 424 at 425–29 and Re Q’s Estate [1999] 1 Lloyds Rep 931, 937. It is submitted that it is also supported by the obiter discussion in Toepfer International v Societé Cargill France [1998] 1 Lloyds Rep 379 (CA) 381–85, despite the contrary views of Flaux J in B v S [2011] 2 Lloyds Rep 18 [51]–[57]. In BNP Paribas v Russian Machines [2012] 1 Lloyds Rep 61 [39]–[40], where an interim injunction was sought under s 44 of the Arbitration Act 1996, Blair J reached a similar result on the basis that the court’s statutory powers to support an arbitration under s 44 were not removed by an agreement to arbitrate in normal wording; and also relied on the fact that the arbitrator had given permission for the application for an injunction to be made to the court. It is suggested that Blair J’s reasoning is consistent with, and can be seen as a specific example of, the analysis here. (On appeal, [2012] 1 Lloyds Rep 649 (CA) [25], [79] the Court of Appeal recorded that it was not disputed that the arbitration clause did not remove the power to grant the injunction, but did not analyse the juridical basis of that position.) Further, this approach is consistent with the principle in C v D [2007] 2 Lloyds Rep 367, [2008] 1 Lloyds Rep 239 (CA) (discussed at paras 7.68–7.70), under which the supervisory court of the seat has a special role in granting ancillary relief.

The reasoning of Flaux J in B v S [2011] 2 Lloyds Rep 18 is not wholly consistent with this logic. He concluded that a Scott v Avery arbitration clause (which precludes ‘any action or other legal proceedings’ before the arbitration award) prevented not only substantive proceedings but also ancillary proceedings for security, and he did not accept that there was a distinction between ancillary proceedings before the English courts and foreign courts. However, he was not concerned with anti-suit injunctions; and to the extent necessary, it is submitted that the analysis herein is to be preferred, at least in respect of arbitration clauses in normal wording, and at least so far as regards anti-suit injunctions. Indeed, in Toepfer v Cargill, both Colman J and the Court of Appeal firmly concluded that a Scott v Avery clause should not preclude the grant of an anti-suit injunction to enforce and protect the arbitration clause: Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98, 107, [1998] 1 Lloyds Rep 379 (CA) 384–85.

It can also be noted that in Akai v People’s Insurance [1998] 1 Lloyds Rep 90, 107, Thomas J was prepared to envisage that a ‘justifiable’ anti-suit injunction brought before the courts of Singapore to enforce an English exclusive jurisdiction clause ‘might not’ have been a breach of the clause.

¹¹⁵ AES Ust-Kamenogorsk Hydropower Plant LLC v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [1], [21]–[23], [24].

¹¹⁶ Welex v Rosa Maritime (The Epsilon Rosa) [2003] 2 Lloyds Rep 509 (CA) [35]; AES Ust-Kamenogorsk Hydropower Plant LLC v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [40].

For the (incorrect) argument that the wording of s 48(5), which derives the arbitrators’ powers from the court’s powers, might limit the power to grant anti-suit awards where the court is prevented from granting an injunction by the Brussels–Lugano regime, see Ch 12, paras 12.52–12.55.

¹¹⁷ See R Moloo, ‘Arbitrators Granting Antisuit Orders: When Should They and on What Authority?’ (2009) 26 J Intl Arb 676, 678–81 and Ch 12, para 12.56.

¹¹⁸ It appears that the combined effect of ss 39 and 48(5) of the 1996 Act is that arbitrators do not have power to grant interim injunctions absent express provision in the arbitration agreement or institutional rules: Starlight Shipping v Tai Ping Insurance Co (The Alexandros T) [2008] 1 Lloyds Rep 230 [20], [26]. However, the issue may not matter that much as the flexibility of arbitration procedure means the difference between final and interim proceedings is fluid. Further, many of the major institutional arbitration rules will contain powers to grant interim measures which can be construed to cover powers to make interim anti-suit awards: see M Black and R Reece ‘Anti-Suit Injunctions and Arbitration Proceedings’ (2006) 72 Arbitration 207, 213. For example, there is scope to grant such orders under the ICC Rules, Article 23. However, an interim decision by arbitrators may well not be an enforceable award under the New York Convention: see Starlight Shipping v Tai Ping Insurance (The Alexandros T) [2008] 1 Lloyds Rep 230 [26].

¹¹⁹ See paras 7.34–7.38.

¹²⁰ Departmental Advisory Committee on Arbitration Law Report on the Arbitration Bill, February 1996 (hereafter ‘DAC Report’), para 234 and Ch 12, para 12.56 n 81.

¹²¹ In Tracomin v Sudan Oil Seeds Co (Nos 1 and 2) [1983] 1 WLR 1026 (CA) 1036–37, the Court of Appeal considered that it was a strong factor in favour of the grant of an anti-suit injunction to restrain proceedings brought in breach of the arbitration clause before the Swiss courts, that if the injunction were not granted, and the Swiss courts gave judgment on the claim, the Federation of Oils, Seeds & Fats Associations (FOSFA) arbitrators would have to decide whether the Swiss courts’ judgment was right or wrong. The Court of Appeal considered that this would be a ‘rather unseemly spectacle’, ‘and one which neither these courts, nor the Swiss courts if they were in a position to consider the matter, could contemplate with any degree of equanimity whatsoever’. In Toepfer International v Société Cargill France 1997] 2 Lloyds Rep 98, 107 and [1998] 1 Lloyds Rep 379 (CA) 385 both Colman J and the Court of Appeal thought that an anti-suit injunction was not within the relief that arbitrators are in a position to provide. However, this case appears to have been decided under the pre-1996 Act law.

¹²² Steamship Mutual Underwriting Association (Bermuda) v Sulpicio Lines [2008] 2 Lloyds Rep 269 [28] (an uncontested hearing); Welex v Rosa Maritime (The Epsilon Rosa) [2003] 2 Lloyds Rep 509 (CA) [35]; AES Ust-Kamenogorsk Hydropower Plant LLC v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [40]; Nori Holding Limited v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [35]. There are many cases where the existence of the arbitrators’ power is assumed (see eg Southport Success v Tsingshan Holding Group [2015] 2 Lloyds Rep 578 [27]).

In support of the existence of the power, see S Dutson and M Howarth, ‘After West Tankers—Rise of the “Foreign Torpedo” ’ (2009) 75 Arbitration 334, 345.

However, Professor Charles Debattista has suggested (relying on Kastner v Jason [2005] 1 Lloyds Rep 397 (CA) [16]) that, as the arbitrators’ powers under s 48(5) of the 1996 Act are confined to ‘substantive awards’, the powers thereby conferred cannot extend to anti-suit injunctions: see C Debattista, ‘Arbitrators’ Powers to Order Interim Measures Including Anti-Suit Injunctions’ (2010) 76 Arbitration 421, 425. It is respectfully submitted that this does not follow. Kastner v Jason held only that s 48(5) was confined to ‘final awards and substantive remedies on the merits’—which it was held did not include a freezing injunction. It is indeed correct that s 48(5) does not give power for an interim anti-suit award to be made by arbitrators. But there is no doubt that (as discussed in Ch 3 of this work) anti-suit injunctions can be granted by the court by way of final relief. In the circumstances, there is no reason why they should not be awarded by way of final award by arbitrators under the powers conferred by s 48(5).

¹²³ L Levy, ‘Anti-Suit Injunctions Issued by Arbitrators’ in Gaillard (2005), 115; P Ortolani, ‘Anti-Suit Injunctions in Support of Arbitration under the Recast Brussels I Regulation’, Max Planck Institute Working Paper 6 (2015) 11–12.

¹²⁴ A striking recent example is the arbitral anti-suit award held to be consistent with EU law in the ECJ’s decision in Case C-536/61, Gazprom OAO, EU:C:2015:316, AG [37], [63]–[67], ECJ [18], [38]–[40]. L Mistelis and J Lew, Pervasive Problems in International Arbitration (Kluwer 2006) paras 10.2–10.13, refer to the ‘spectacular development’ of such awards, and discuss various cases. For discussion of a number of ICC arbitration awards granting or refusing anti-suit injunctions, see M Scherer and W Jahnel, ‘Anti-Suit and Anti-Arbitration Injunctions in International Arbitration: A Swiss Perspective’ [2009] Int ALR 66, 70–73 and ‘Procedural Decisions in ICC Arbitration: Anti-Suit/Anti-Arbitration Injunctions’ [2014] ICC Court of Arbitration Bulletin Vol 24, Suppl. Numerous anti-suit awards have been granted by ICSID tribunals, and by the Iran–US claims tribunal: see D Joseph QC, Jurisdiction and Arbitration Agreements and their Enforcement (3rd edn, Sweet & Maxwell 2015) paras 12.149–12.169 (hereafter ‘Joseph’).

For general discussion, see E Gaillard, ‘Anti-Suit Injunctions Issued by Arbitrators’ in International Arbitration 2006: Back to Basics, ICCA series no 13, at 235ff; M Black and R Reece, ‘Anti-Suit Injunctions and Arbitration Proceedings’ (2006) 72 Arbitration 3, 207, 213–14 (supporting the grant of anti-suit injunctions by arbitrators); T Landau, ‘ “Arbitral Lifelines”: The Protection of Jurisdiction by Arbitrators’ in International Arbitration 2006: Back to Basics, ICCA series no 13, at 282ff (arguing that arbitrators should grant relief of this type but that it should be conceptualized and structured differently to court injunctions); L Levy, ‘Anti-Suit Injunctions Issued by Arbitrators’ in Gaillard (2005), at 115ff; R Moloo, ‘Arbitrators Granting Antisuit Orders: When Should They and on What Authority’ (2009) 26 J Intl Arb 676. In 2004, the Uncitral Working Group on arbitration proposed that the Model Law be amended to give some recognition to anti-suit awards: see UNCITRAL Working Group on Arbitration, ‘Report of the Working Group on Arbitration 40th Session’, A/CN.9/547 (23–February 2004) paras 76–83, www.uncitral.org.

¹²⁵ This is the lesson of experience. See also ‘Procedural Decisions in ICC Arbitration: Anti-Suit/Anti-Arbitration Injunctions’ [2014] ICC Court of Arbitration Bulletin Vol 24, Suppl, 5.

¹²⁶ AES Ust-Kamenogorsk Hydropower Plant LLC v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [60].

¹²⁷ See Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [32]–[42]. For another recent example of final anti-suit relief to support an arbitration, see Mobile Telecommunications v Prince Hussam bin Saud bin Abdulaziz bin Saud [2018] 2 Lloyds Rep 192 [18], [20].

Similarly, the arbitrators’ coeval powers have not discouraged the court from granting interim anti-suit injunctions: see Ch 13, paras 13.13–13.15.

¹²⁸ The availability of the circuitous route of requiring a party to get an anti-suit award from the arbitrators, then enforcing it as a judgment of the court under s 66 of the Arbitration Act 1966, and then using the court’s contempt jurisdiction to enforce that subsequent judgment, was not regarded as appealing, or an answer, by the Supreme Court in Ust-Kamenogorsk. Instead, it was better for the court to grant any necessary injunction directly: AES Ust-Kamenogorsk Hydropower Plant LLC v Ust-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR 1889 (SC) [40]–[41].

¹²⁹ Michael Wilson v Emmott [2018] 1 Lloyds Rep 299 [55].

¹³⁰ Nori Holding Limited v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [32]–[42].

¹³¹ Michael Wilson v Emmott [2018] 1 Lloyds Rep 299 [55]–[58], in part upholding Emmott v Michael Wilson [2017] 1 Lloyds Rep 21 [57]–[59], [62]. See also Noble Assurance v Gerling-Konzern General Insurance [2008] Lloyds Rep IR 1 [95]; Nomihold Securities v Mobile Telesystems Finance [2012] 1 Lloyds Rep 442 [42]–[43], [63] (injunction rejected on the facts; reasoning rather confused); Midgulf International v Groupe Chimiche Tunisien [2010] 2 Lloyds Rep 543 (CA) [52]–[53]; Crescendo Maritime v Bank of Communications [2016] 1 Lloyds Rep 414 [50]–[51]; Mobile Telecommunications v Prince Hussam bin Saud bin Abdulaziz bin Saud [2018] 2 Lloyds Rep 192 [13].

¹³² See eg Michael Wilson v Emmott [2018] 1 Lloyds Rep 299 [41]–[50], [55]–[58].

¹³³ Mobile Telecommunications v Prince Hussam bin Saud bin Abdulaziz bin Saud [2018] 2 Lloyds Rep 192 [12]–[13]. See also the rather confused discussion in Nomihold Securities v Mobile Telesystems Finance [2012] 1 Lloyds Rep 442 [16], [30]–[31], [50], [62], where arguments along these lines were viewed as strongly arguable; the undeveloped one-sentence comment in Midgulf International v Groupe Chimiche Tunisien [2010] 2 Lloyds Rep 543 (CA) [52]; and the analysis in Dreymoor Fertilisers Overseas v Eurochem Trading [2018] EWHC 2267 [50], [84]–[85].

¹³⁴ A v B (No 1) [2007] 1 Lloyds Rep 237 [111(ii)], [112]; A v B (No 2) [2007] 1 Lloyds Rep 358 [16]–[19]; C v D [2007] 2 Lloyds Rep 367 [27]–[41], [51]–[54], [2008] 1 Lloyds Rep 239 (CA) [16]–[17], [33], followed inter alia in Shashoua v Sharma [2009] 2 Lloyds Rep 376 [14], [23], 41], [44]; Nomihold Securities v Mobile Telesystems Finance [2012] 1 Lloyds Rep 442 [29]–[31]; Terna Bahrain Holdings v Al Shamsi [2013] 1 Lloyds Rep 161 [131]–[135]; Atlas Power v National Transmission and Despatch [2018] 2 Lloyds Rep 113.

¹³⁵ C v D [2007] 2 Lloyds Rep 367, [54]–[58], [2008] 1 Lloyds Rep 239 (CA) [30].

¹³⁶ See eg Nomihold Securities v Mobile Telesystems Finance [2012] 1 Lloyds Rep 442 [29]–[31], [62], although the reasoning is not clear.

¹³⁷ Tonicstar v American Home Insurance [2005] Lloyds Rep IR 32; Noble Assurance v Gerling-Konzern General Insurance [2008] Lloyds Rep IR 1 [87]–[88], [95], [108].

¹³⁸ C v D [2007] 2 Lloyds Rep 367 [27]–[41], [51]–[54], [2008] 1 Lloyds Rep 239 (CA) [16]–[17], [33].

¹³⁹ Midgulf International v Groupe Chimiche Tunisien [2009] 2 Lloyds Rep 984 [59], referring to Weissfisch v Julius [2006] 1 Lloyds Rep 716 (CA).

¹⁴⁰ See by reverse analogy HJ Heinz v EFL [2010] 2 Lloyds Rep 727 [22].

¹⁴¹ U&M Mining Zambia v Konkola Copper Mines [2013] 2 Lloyds Rep 281 [56]–[61]; and see also Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98, 107–08. In Evergreen Marine (Singapore) v Fast Shipping & Transportation [2014] EWHC 4893 (QB) [9]–[12], Leggatt J suggested that the C v D principle did apply to prevent applications for interim relief being made to foreign courts other than the court of the seat—save in a wide range of supposedly ‘exceptional’ cases where it would be appropriate—but the point was not contested. Further, the court’s reasoning appears to be based on a misinterpretation of the previous case law, which was not reasoned in contractual terms: neither U&M Mining v Konkola nor Orient Express Lines (Singapore) v Peninsular Shipping Services [2013] EWHC 3855 [23] framed matters in contractual terms. With respect, it is submitted that Evergreen is an illegitimate extension of the C v D principle and not reconcilable with normal contractual logic.

¹⁴² Nomihold Securities v Mobile Telesystems Finance [2012] 1 Lloyds Rep 442 [29]–[31]; although it may be better to rationalize such cases in terms of vexation and oppression: see eg Noble Assurance v Gerling-Konzern General Insurance [2008] Lloyds Rep IR 1 [28].

¹⁴³ Orient Express Lines (Singapore) v Peninsular Shipping Services [2013] EWHC 3855, [23], purporting to apply U&M Mining Zambia v Konkola Copper Mines [2013] 2 Lloyds Rep 281 [63]; and Evergreen Marine (Singapore) v Fast Shipping & Transportation [2014] EWHC 4893 (QB) [9]–[12], applying Orient Express in turn. However, it is submitted that the U&M Mining case is actually more nuanced and does not support any more definitive rule other than the proposition that the court of the seat has the primary supportive role: see at [64]. This is the better approach.

¹⁴⁴ Econet Wireless v Vee Networks [2006] 2 Lloyds Rep 428, [19]; U&M Mining Zambia v Konkola Copper Mines [2013] 2 Lloyds Rep 281 [63]–[64].

¹⁴⁵ Marazura Navegacion v Oceanus Mutual Underwriting Association (Bermuda)[1977] 1 Lloyds Rep 283; Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA); Petromin v Secnav Marine [1995] 1 Lloyds Rep 603, 613; Ispat Industries v Western Bulk [2011] EWHC 93 [41]–[45]; Sam Purpose v Transnav Purpose Navigation (The Sam Purpose) [2017] 2 Lloyds Rep 50 [24]–[30].

¹⁴⁶ Mantovani v Carapelli [1978] 2 Lloyds Rep 63, 72–73, [1980] 1 Lloyds Rep 375 (CA) 381–84. No injunction had been sought.

¹⁴⁷ The clause was clause 26 of Contract 119 of the Grain and Feed Trade Association (‘GAFTA’) and provided:

(a) Any dispute arising out of or under this contract shall be settled by arbitration in London in accordance with the Arbitration Rules [of GAFTA] … (b) neither party hereto, nor any persons claiming under either of them, shall bring any action or other legal proceedings against the other of them in respect of any such dispute shall first have been heard and determined by the arbitrators … and it is expressly agreed and declared that the obtaining of an award from the arbitrators, umpire or Board of Appeal, as the case may be, shall be a condition precedent to the right of either party hereto or of any person claiming under either of them to bring any action or legal proceedings against the other of them in respect of any such dispute.

The second limb of clause 26 (b) was a form of Scott v Avery clause, named after the case of Scott v Avery (1856) 5 HLC 811, 10 ER 1121, as it goes beyond providing for an exclusive forum and additionally specifically prohibits the bringing of ‘legal proceedings’ in any other forum until after a decision has been given by the chosen forum.

¹⁴⁸ Mantovani v Carapelli [1980] 1 Lloyds Rep 375 (CA) 381, 382, per Lawton and Browne LJJ (although see Megaw LJ at 383–84). This ground of distinction appealed to Dunn LJ in Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA) 551 (Lord Denning MR and Waller LJ also did not follow Mantovani v Carapelli, but without expressly explaining how they distinguished it: at 549–50). This distinction was also adopted by Rix J in Re Q’s Estate [1999] 1 Lloyds Rep 931, 933–38, after a detailed examination of the case law.

¹⁴⁹ Mantovani v Carapelli [1980] 1 Lloyds Rep 375 (CA) 381, per Lawton LJ: ‘… I can see no reason at all for making an exception … in favour of the kind of sequestration proceedings which were taken by the sellers in the Italian courts’; adopted by Browne LJ at 382; although see the broader approach of Megaw LJ at 383–84, adopting the reasoning of Donaldson J at first instance: Mantovani v Carapelli [1978] 2 Lloyds Rep 63, 72–73.

¹⁵⁰ See the controversial decision in B v S [2011] 2 Lloyds Rep 18, where it was concluded that a Scott v Avery clause excluded the application of the court’s supportive powers under s 44 of the Arbitration Act 1996, and that the previous case law permitting supportive applications to the English but not foreign courts was to be explained by the different wording of s 12(6) of the previous Arbitration Act 1950. The result was, however, in large part driven by the conclusion that this was the effect of the binding precedent of Mantovani v Carapelli [1978] 2 Lloyds Rep 63. B v S has since been followed by Cooke J in A v B (27 November 2015).

¹⁵¹ Marazura Navegacion v Oceanus Mutual Underwriting Association (Bermuda)[1977] 1 Lloyds Rep 283, 288–89; Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA) 548–49, 550–51; Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98, 107; Re Q’s Estate [1999] 1 Lloyds Rep 931, 933–38; Bankgesellschaft Berlin v First International Shipping (Langley J, 21 September 2000); Green Flower Navigation Malta v SC Santierul Naval Constanta (7 June 2002); Kallang Shipping v Axa Assurances Senegal (The Kallang) [2007] 1 Lloyds Rep 160 [17]; Kallang Shipping v Axa Assurances Senegal (The Kallang) (No 2) [2009] 1 Lloyds Rep 124 [79], [86]; Ispat Industries v Western Bulk [2011] EWHC 93 [41]–[45]; Sam Purpose v Transnav Purpose Navigation (The Sam Purpose) [2017] 2 Lloyds Rep 50 [24]–[30], [32]. However, cf partially contra Petromin v Secnav Marine [1995] 1 Lloyds Rep 603, 612–14.

¹⁵² Ispat Industries v Western Bulk [2011] EWHC 93 [47].

¹⁵³ Kallang Shipping v Axa Assurances Senegal (The Kallang) [2007] 1 Lloyds Rep 160 [21]–[24], [36], [39]; Kallang Shipping v Axa Assurances Senegal (The Kallang) (No 2) [2009] 1 Lloyds Rep 124 [78]–[79], [86]; Sotrade Denizcilik Sanayi ve Ticaret v Amadou LO (The Duden) [2009] 1 Lloyds Rep 124 [55], [62]; Sam Purpose v Transnav Purpose Navigation (The Sam Purpose) [2017] 2 Lloyds Rep 50 [24]–[25], [32]. In Ispat Industries v Western Bulk [2011] EWHC 93 [41]–[45], it was suggested that only proceedings that amounted to an attempt to determine the merits could be a breach of contract. But The Kallang, The Kallang No 2, The Duden, and The Sam Purpose support the proposition that the principle goes wider and includes forms of collateral attack on the arbitration clause other than seeking to determine the merits.

Similarly, even where a clause expressly permits proceedings to obtain security, it is unlikely to be interpreted to permit the bringing of in rem proceedings which go beyond the obtaining of security and aim also at a determination of the merits: Ultisol Transport Contractors v Bouygues Offshore [1996] 2 Lloyds Rep 140, 145–46 (reversed in Bouygues Offshore v Caspian Shipping (Nos 1, 3, 4 and 5) [1998] 2 Lloyds Rep 461 (CA), but not on this point).

¹⁵⁴ Kallang Shipping v Axa Assurances Senegal (The Kallang) [2007] 1 Lloyds Rep 160 [36], [39] (where this was viewed as a breach of implied terms of the arbitration agreement, and also as oppressive); contrast Kallang Shipping v Axa Assurances Senegal (The Kallang) (No 2) [2009] 1 Lloyds Rep 124 [78]–[79], [86] (where this was viewed as breach of the express terms of the arbitration agreement on their true construction); similarly, Sotrade Denizcilik Sanayi ve Ticaret v Amadou LO (The Duden) [2009] 1 Lloyds Rep 124 [55], [62].

¹⁵⁵ Petromin v Secnav Marine [1995] 1 Lloyds Rep 603, 613–14.

¹⁵⁶ Kallang Shipping v Axa Assurances Senegal (The Kallang) [2007] 1 Lloyds Rep 160 [6], [36], [39] (where the attempt to insist on security that responded to the judgment of a court other than that agreed was also viewed as a breach of contract). In Aggeliki Charis Compania Maritima v Pagnan (The Angelic Grace) [1994] 1 Lloyds Rep 168, 176, Rix J suggested that ‘the decision [in The Lisboa] would probably have been different if there had been an offer of alternative security in England’.

¹⁵⁷ In Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA) 549, Lord Denning MR (but not the other two Lords Justices: see Dunn LJ at 550) suggested that there should be no right for damages in respect of the bringing of foreign security proceedings. But the justification for such a restriction on the ability to claim damages as of right for a breach of contract (if there is such) is unclear. An argument might be made that in such circumstances a damages claim would be contrary to public policy (cf Union Discount Co v Zoller [2002] 1 WLR 1517), but it would be novel and radical, and in some tension with Mantovani v Carapelli [1980] 1 Lloyds Rep 375 (CA).

¹⁵⁸ It is possible for security proceedings in foreign courts to be expressly prohibited, as was the case in Ellerman Lines v Read [1928] 2 KB 144 (CA) 145, and also appears to be the case under Scott v Avery clauses (if Mantovani v Carapelli [1980] 1 Lloyds Rep 375 (CA) is right). However, if they address the point at all, it is more common for exclusive forum clauses to expressly provide that proceedings in other courts to obtain security are permissible: Ultisol Transport Contractors v Bouygues Offshore [1996] 2 Lloyds Rep 140, 144–45, reversed in Bouygues Offshore v Caspian Shipping (Nos 1, 3, 4 and 5) [1998] 2 Lloyds Rep 461 (CA), but not on this point. See also LCIA Arbitration Rules (Effective 1 January 1998), clause 25; ICC Rules, Article 23.

¹⁵⁹ In Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98, 107–08, Colman J suggested that any application to a foreign court for provisional or protective measures under Article 24 of the Brussels Convention (Art 35 of the Recast) would not be a breach of the GAFTA arbitration clause in that case (even though it contained a Scott v Avery clause; Mantovani v Carapelli was not cited). It is submitted that this decision may go too far and is to be treated with care. Provisional or protective measures in other jurisdictions may well interfere with litigation in the chosen forum, and be a collateral attack on the arbitration clause, and if so, there would be a cogent argument that they could be a breach of contract. It is also difficult to reconcile Colman J’s decision in Toepfer v Cargill with Mantovani v Carapelli, as a Scott v Avery clause was present in both cases.

¹⁶⁰ Mike Trading and Transport v R Pagnan & Fratelli (The Lisboa) [1980] 2 Lloyds Rep 546 (CA) 548, 550, 551; for a case where this was not so, see Kallang Shipping v Axa Assurances Senegal (The Kallang) [2007] 1 Lloyds Rep 160 and Kallang Shipping v Axa Assurances Senegal (The Kallang) (No 2) [2009] 1 Lloyds Rep 124.

¹⁶¹ Petromin v Secnav Marine [1995] 1 Lloyds Rep 603, 613–14; Ultisol Transport Contractors v Bouygues Offshore [1996] 2 Lloyds Rep 140, 146, 152 (reversed in Bouygues Offshore v Caspian Shipping (Nos 1, 3, 4 and 5) [1998] 2 Lloyds Rep 461 (CA), but not on this point).

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