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Can Anti-Suit Injuctions Survive European Community Law?

Published online by Cambridge University Press:  17 January 2008

Clare Ambrose
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Extract

An injunction to restrain foreign proceedings is probably the most powerful remedy available in an English court for dealing with a jurisdictional dispute. It is certainly the most controversial because the court is interfering with proceedings in another jurisdiction and no comparable remedy exists in civil law systems. The influence of European Community law has intensified the controversy because it has become increasingly doubtful whether the remedy is compatible with the scheme for allocating jurisdiction under the Brussels Convention (or its successor, the Brussels I Regulation) The House of Lord's decision in Turner v Grovit is an important development because their Lordships have made a reference to the European Court of Justice asking, ‘Is it consistent with the Brussels Convention for the courts of the United Kingdom to grant restraining orders against defendants who are threatening to commence or continue legal proceedings in another Convention country when those defendants are acting in bad faith with the intent and purpose of frustrating or obstructing proceedings properly before the English courts?’ (The issue is probably identical to that which would arise under the Brussels I Regulation and references herein to the Convention are generally equally applicable to the Regulation).

Type
Research Article
Information
International & Comparative Law Quarterly , Volume 52 , Issue 2 , April 2003 , pp. 401 - 424
Copyright
Copyright © British Institute of International and Comparative Law 2003

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References

1 See generally Fawcett, , Declining Jurisdiction in Private International Law (Oxford: Clarendon Press, 1995), and in particular H Gaudemet-Tallon's contribution therein.Google Scholar For further German materials see Asariotis, R, ‘Antisuit Injunctions for Breach of a Choice of Forum Agreement: A Critical Review of the English Approach’ (2000) YBEL 447.Google Scholar

2 The Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters signed at Brussels on 27 Sept 1968, hereafter referred to as the Brussels Convention or ‘the Convention’. Very similar rules are set out in the Lugano Convention between EU member state and several non-EU states including Poland, Norway, Iceland, and Switzerland.

3 Council Regulation 44/2001, 22 Dec 2000, provisions on jurisdiction in force for legal proceedings started after 1 Mar 2002, provisions on recognition and enforcement apply to judgments given after 1 Mar 2002.

4 [2001] UKHL 65, [2002] 1 WLR 107, see Hartley, TC, ‘Antisuit Injunctions and the Brussels Jurisdiction and Judgments Convention’ (2000) 49 ICLQ 166 for comment on the Court of Appeal decision.CrossRefGoogle Scholar

5 Arbitration agreements raise further issues because injunctions giving effect to them may fall outside the scope of the Brussels Convention (see below under Section VIII).

6 [2001] 1 QB 345.

7 Case 351/89 [1992] QB 434.

8 Supreme Court Act 1981, s 37(1).

9 Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] 1 AC 871 at 892–3.

10 Eg, Continental Bank NA v Aeakos Compania Naviera SA [1994] 1 WLR 588, at 598.

11 Schiffahrtsgesellschaft Detlev Von Appen GmbH v Voest Alpine Intertrading GmbH, The Jay Bola [1997] 2 Lloyd's Rep 279, at 286, Bouygues Offshore SA v Caspian Shipping Co [1997] 2 Lloyd's Rep 485, 489, Toepfer International v Societe Cargill France [1998]1 Lloyd's Rep 379, 384, Bankers Trust Co v PT Jakarta International Hotel & Development [1999] 1 Lloyd's Rep 910, at 914.

12 In Turner v Grovit, para 24, Lord Hobhouse used the terms unconscionable, vexatious, and oppressive without distinction in describing the wrongful conduct that gives rise to the remedy of a restraining order. Such a distinction has sometimes, however, been drawn in the cases. The term unconscionable would be used more specifically to proceedings which can only be pursued in a single forum, Airbus Industrie GIE v Patel [1999] 1 AC 119, at 134. See North, PM and Fawcett, JJ, Cheshire & North's Private International Law 13th edn (London: Butterworths, 1999), 368 for a useful survey of the cases.Google Scholar

13 Charterers Mutual Assurance Association Ltd v British and Foreign [1998] I L Pr 839, at 851, Compagnie Europeene de Cereals Sa v Tradax Export SA [1986] 2 Lloyd's Rep 301, at 304.

14 Bremer Vulkan schiffbau Und Maschinenfabrik v South India Shopping Corporation [1981] AC 909, at 979, Schiffahrtsgesellschaft Detlev Von Appen GmbH v Voest Alpine Intertrading GmbH, The Jay Bola [1997] 2 Lloyd's Rep 279, at 286. However, Lord brandon in South Carolina Insurance Co v Assurantie Maatshappij de Zeven Provincein NV [1987] 1 AC 24, at 40 referred to acting unconscionable as an alternative ground for the jurisdiction, see Collins, Lawrence (ed), Dicey & Morris on the Conflict of Laws 13th edn (London: Butterworths, 2000), 12–59, Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] 1 Lloyd's Rep 291. at 295.Google Scholar

15 Toepfer International GmbH v Molino Boschi SrL [1996] 1 Lloyd's Rep 510.

16 Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] 1 AC 871, at 892, Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] 1 Lloyd's Rep 291, Turner v Grovit, paras 22 and 23.

17 See generally CPR, Part 6.20.

18 South Carolina Co v Assurantie Maatshappij de Zeven Provincien NV [1987] AC 24, at 40, World Pride Shipping Ltd v Daiichi Chuo Kisen Kaisha, The Golden Anne [1984] 1 Lloyd's Rep 489, at 498.

19 Airbus Industrie GIE v Patel [1999] 1 AC 119. Lord Goff stressed that he was not formulating principles for cases where the forum had been chosen by the parties. Shell International Petroleum Co Ltd v Caral Oil Co Ltd (No 2) [1999] 2 Lloyd's Rep 606 represents an exception to the general rule: England was not the only appropriate forum for determining the merits of the claim but the foreign proceedings were regarded as purely vexatious.

20 [1999] 1 AC 119.

21 In Turner v Grovit, paras 25 and 34, it was said that the appropriateness of the foreign forum would not be a relevant factor where it is in a Convention state, for difficulties with this see below 409.

22 Donohue v Armco Inc [2002] 1 Lloyd's Rep 425, Akai Pty Ltd v People's Insurance Co Ltd [1998] 1 Lloyd's Rep 90, at 105. (In enforcing an arbitration agreement it has been said that obligations under the New York Convention preclude factors of convenience being taken into account, Toepfer International GmbH v Societe Cargill France [1997] 2 Lloyd's Rep 98, at 110.) However, see Briggs, A, ‘Anti-suit injunctions in a complex world’, in Rose, FD (ed,) Lex Mercatoria: Essays on International Commercial Law (London: LLP, 2000), 219, at 239 suggesting that for the English court to intervene it must be the natural forum even where it is the chosen forum.Google Scholar

23 Turner v Grovit, para 27.

24 Lord Hobhouse had used the term ‘interest’ in the Court of Appeal in Airbus Industrie GIE v Patel [1998] 1 Lloyd's Rep 631, but his decision was reversed on appeal and there was some criticism of the term, Briggs, A, ‘Anti-suit Injunctions: a Pause for Thought’ (1997) LMCLQ 90, at 99. The new terminology was used by the Court of Appeal in Glencore International AG v Metro Trading International Inc, 18 Apr 2002.Google Scholar

25 Lord Hobhouse suggests that this was the point decided in Airbus Industrie GIE v Patel [1999] 1 AC 119, but the requirement there was different, namely that the English forum must have sufficient interest in the matter to justify interference with the foreign court. This allows for cases where there is only one forum where the claim could be made.

26 [1994] 1 WLR 588. The case has been firmly criticised, mainly for the court of Appeal's interpretation of the interplay between Arts 17 and 21 of the Convention, eg Briggs, A, ‘Anti-European Teeth for Choice of Court Clauses’ (1994) LMCLQ 158. Lord Hobhouse (paragraph 40) made clear that this point was not in issue in Turner v Grovit.Google Scholar

27 Toepfer International GmbH v Molino Boschi SrL [1996] 1 Lloyd's Rep 510, at 516.

28 Aggeliki Charis Compania Maritima SA v Pagnan SpA [1995] 1 Lloyd's Rep 87.

29 [2002] 1 Lloyd's Rep 425.

30 [1996] CLC 1757.

31 [1998] 1 Lloyd's Rep 379, at 388. Sokana Industries Inc v Freyre & Co Inc [1994] 2 Lloyd's Re 57 is also more cautious.

32 Case 351/89 [1992] QB 434.

33 Airbus Industrie GIE v Patel [1999] 1 AC 119.

34 Hartley, TC, ‘Comity and the Use of Antisuit Injunctions in International Litigation’, AJCL 35 (1987), 487, at 506 considers the distinction is ‘sophistry’. A briggs, in FD Rose (ed), Lex Mercatoria, 219 at 225, regards it as an ‘equitable myth’, doubting whether it was ever taken seriously.CrossRefGoogle ScholarLeggatt, LJ in Phillip Alexander Futures & Securities Ltd v Bamberger [1996] CLC 1757, para 48, queried the reality of the distinction when the defendant was not amenable to the jurisdiction.Google Scholar

35 Para 26.

36 Societe Nationale Industrie Aerospatiale v Lee Ku Jak [1987] AC 871, at 892, Fort Dodge Animal Health Limited v Akzo Nobel NV [1998] FSR222, para 37, Donohue v Armco Inc [2001] UKHL 64 [2002] 1 Lloyd's Rep 425, para 19.

37 Eg, Re The Enforcement of an English Anti-Suit Injunction, Oberslandesgericht, Dusseldorf [1996] I L Pr. 320, see also Schack, H and Gaudemet-Tallon, H, in Fawcett, Declining Jurisdiction (Oxford: Clarendon Press, 1995).Google Scholar

38 Airbus Industrie GIE v Patel [1999] 1 AC 119.

39 Turner v Grovit, para 25.

40 The remedies have the same source of jurisdiction, originally a stay would lie as a remedy for unconscionable conduct in English proceedings, Schiffahrtsgesellschaft Detlev Von Appen GmbH v Voest Alpine Intertrading GmbH, The Jay Bola [1997] 2 Lloyd's Rep 279, at 286.

41 Stricter principles apply to the discretion to grant an injunction as opposed to a stay, notably on grounds of comity, Societe Nationale Industrie Aerospatiale v Lee Kui Jak [1987] AC 871, Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460.

42 Turner v Grovit, para 26.

43 [1999] AC 119, at 132.

44 A Briggs, in FD Rose (ed), Lex Mercatoria, 219, at 229.

45 Turner v Grovit, paras 25 and 34.

46 Case 35189 [1992] QB 434.

47 Turner v Grovit, para 32.

48 Ibid, para 30.

49 Case 365/88 ECR [1990] ECR 1–1845. Lord Hobhouse also relied on Dicey & Morris op cit, 12–066.

50 See, eg, Craig, PP and de Burca, G, EU Law, 3rd edn (Oxford: Oxford University Press, 2002), ch 6.Google Scholar

51 Cheshire, and North, , op cit, 266,Briggs, A (1990) YEBL 487 and (1999) BYBIL 328.Google Scholar

52 Briggs, A, in Rose, FD (ed.) Lex Mercatoria, 219, at 236, also Conflict of Laws (Oxford: Oxford University Press, 2002), 89, at 111.Google Scholar

53 129/83 Zelger v Salinitri [1984] ECR 2397,148/84 Deutsche Genossenscaftsbank v Brasserie du Pecheur SA [1985] ECR 1981, 145/86 Hoffmann v Krieg [1988] ECR 645.

54 This was the language used by AG Lenz in his opinion (largely followed by the ECJ) in Kongress Agentur Hagen with reference to the same authorities.

55 Case 288/82 [1983] ECR 366.

56 432/93 [1995] ECR 1–2296.

57 Para 41.

58 Turner v Grovit, para 37.

59 Now in express terms in para 6 of preamble to the Brussels I Regulation.

60 Philip Alexander Futures & Securities Ltd v Bamberger [1996] CLC 1757, Waller J at para 112, in the Court of Appeal at para 43.

61 Re The Enforcement of an English Anti-Suit Injunction, Oberslandesgericht, Dusseldorf [1996] I L Pr 320, Van Houtte, H, ‘May Court Judgments that Disregard Arbitration Clauses and Awards be Enforced under the Brussels and Lugano Conventions?’ (1997) 13 Arbitration International 85, at 92.CrossRefGoogle Scholar

62 Lord Hobhouse, however, defended the use of restraining orders on grounds that it avoided the risk of irreconcilable judgments, Turner v Grovit, para 36.

63 Now in express terms in para 11 of the preamble to the Brussels I Regulation.

64 Gaudemet-Tallon, H, in Fawcett, Declining Jurisdiction (Oxford: Clarendon Press, 1995), 187.Google Scholar

65 Preamble to the Brussels I Regulation, para 16: ‘Mutual trust in the administration of justice in the Community justifies judgments given in a Member State being recognised automatically without the need for any procedure except in cases of dispute.’ See also A Briggs, in FD Rose (ed), Lex Mercatoria, 219 at 236, A Briggs, Conflict of Laws, at 111 and Toepfer International GmbH v Gargill France SA [1998] 1 Lloyd's Rep 379, at 386.

66 English judges have generally considered themselves as best placed to construe exclusive jurisdiction clauses in favour of England (and usually governed by English law), eg Continental Bank NA v Aeakos Compania Naviera SA [1994] 1 WLR 588. However, A Briggs, in FD Rose (ed) Lex Mercatoria, 219 at 239 argues that the foreign court whose jurisdiction has been derogated has an equal claim to decide whether the jurisdiction clause applies.

67 C-5/94 R v Minster of Agriculture ex parte Hedley Lomas [1996] ECR 1–2553, para 20.

68 Males, S, ‘Comity and Anti-suit Injunctions’ (1998) LMCLQ 543, at 552.Google Scholar

69 See generally Fawcett, Declining Jurisdiction.

70 Continental Bank NA v Aeakos Compania Naviera SA [1994] 1 WLR 588, Aggdeliki Charis Compania Maritima SA v Pagnan SpA, The Angelic Grace [1995] 1 Lloyd's Rep 87, Donohue v Armco Inc [2002] 1 Lloyd's Rep 425

71 Art 27(3) of the Convention, Art 34(3) of the Brussels I Regulation. Irreconcilable arbitration awards create different problems, possibly they could be treated as Convention judgments if enforced by the court (Van Houtte, art cit (1997) 13 Arbitration International, 85 at 91), or perhaps more realistically treated as outside the scope of the Convention and accordingly a defence of res judicata would be permissible.

72 However, see Waller, J in Philip Alexander Futures & Securities Ltd v Bamberger [1996] CLC 1757, paras 112–13.Google Scholar

73 Continental Bank NA v Aeakos Compania Naviera SA [1994] 1 WLR 588, Tracomin SA v Sudan Oil Seeds Co Ltd [1983] 2 Lloyd's Rep 624. CfPeel, E, ‘Exclusive Jurisdiction Agreements’ (1998) LMCLQ 182, 207–9.Google Scholar

74 Now embodied in s 50 of the Supreme Court Act 198, see Jaggard v Sawyer [1995] 1 WLR 269 for an application.

75 The Court of Appeal in Philip Alexander Futures & Securities Ltd v Bamberger [1996] CLC 1757, paa 48 recognised problems with anti-suit injunctions where the defendant is not resident within jurisdiction.

76 Eg, in Belgium, see MFallon, in Fawcett, Declining Jurisdiction, 117.

77 Choice of law issues principles applicable to equitable wrongs are not addressed in the authorities on anti-suit injunctions. English courts simply apply English law principles regardless of the place of performance or damage. However, the requirement that the English court has a substantial connection to the claim (Airbus Industrie GIE v Patel [1999] 1 AC 119) goes some way to justifying the use of English law. See Briggs, A, ‘The unrestrained reach of an anti-suit injunction: a pause for thought’ (1997) LMCLQ 90 and also in Rose, FD (ed) Lex Mercatoria, 219, at 243.Google Scholar

78 Turner v Grovit, para 37.

79 Hadkinson v Hadkinson [1952] P 285.

80 A Briggs, Conflict of Laws, 89 and 111.

81 British Airways Board v Laker Airways Ltd [1985] AC 58, at 81, Ashmore v BCC [1990] 2 QB 338, Turner v Grovit, para 24. The Court of Appeal in Glencore International Ag v Metro Trading International Inc, 18 Apr 2002 also recognised the overlap.

82 See Laddie J in Fort Dodge Animal Health Limited v Akzo Nobel NV [1998] FSR 222, at 226 (the Court of Appeal referred the matter to the ECJ but it appears to have settled).

83 190/89 [1991] ECR 3855, see also C-391/95 Van Uden Maritime BV v Kommanditgesellschaft in Firma Deco-Line ECR [1998] 1–7091.Google Scholar

84 Jenard Report, OJ 1979 C59/1. It was also envisaged that a separate European Convention providing a uniform law of arbitration would be adopted within Europe but this was never realised: the European Convention standardising the law relation to arbitration done at Strasbourg on 20 Jan 20 1966 was only ratified by Belgium.

85 See Particularly Kaye, P, ‘The Judgments Convention and Arbitration: Mutual Spheres of Influence’ (1991) 7 Arbitration International 289CrossRefGoogle ScholarAudit, B, ‘Arbitration and the Brussels Convention’ (1993) 9 Arbitration International 1CrossRefGoogle ScholarHascher, D, ‘Recognition and Enforcements of Judgments on the Existence and Validity of an Arbitration Clause under the Brussels Convention (1997) 13 Arbitration international 33CrossRefGoogle ScholarVan Houtte, H, ‘May Court Judgments that Disregard Arbitration Clauses and Awards be Enforced under the Brussels and Lugano Conventions?’ (1997) 13 Arbitration International 85CrossRefGoogle Scholar J-P Beraudo, ‘The Arbitration Exception of the Brussels and Lugano Conventions: Jurisdiction, Recognition and Enforcement of Judgments’ and Van Haerstolte-Van Hof, J, ‘The Arbitration Exception in the Brussels Convention: Further Comment’, in (2001) 13 Journal of International Arbitration, 13 and 27 respectively.Google Scholar

86 [1998] 1 Lloyd's Rep 379.

87 [2002] 2 Lloyd's Rep 106 (on appeal but this may settle), following Colman J in Toepfer International GmbH v Societe Cargill France [1997] 2 Lloyd's Rep 98. Aikens J distinguished Mance J in Toepfer International GmbH v Molino Boschi Srl [1996] 1 Lloyd's Rep 510, who considered that the injunction was essentially seeking to stop the foreign proceedings. See also Charterers Mutual Assurance v British Foreign [1998] ILPr 838.

88 PASF v Bamberger [1996] CLC 1757. In Partenreederei M/S Heidberg v Grosvenor Grain and Feed Cp Ltd, The Heidberg [1994] 2 Llody's Rep 287 (a case not involving an injunction) His Honour Judge Diamond QC considered that a foreign judgment on the validity of the arbitration agreement would require recognition under the Convention. Aikens J in The Ivan Zagubanski [2002] 2 Lloyd's Rep 106 disagreed with His Honour Judge Diamond QC's approach. See also doubts of Colman J in Toepfer international GmbH v Societe Cargill [1997] 2 Lloyd's Rep 98 and Clarke J in The Lake Avery [1997] 1 Lloyd's Rep 549. The editors of Dicey & Morris, op cit, 546 consider that The Heidberg is wrongly decided.

89 Re The Enforcement of an English Anti-Suit Injunction, oberslandesgericht, Dusseldorf [1996] DIL Pr 320.Google Scholar

90 See the preceding two footnotes.

91 [1998] 1 Lloyd's Rep 379. The issue was also raised in Toepfer v Molino Boschi [1996] 1 Lloyd's Rep 510 and Charterers Mutual Assurance v British Foreign [1998] IL Pr 838.

92 Re Harrods (Buenos Aires) Ltd [1992] Ch 72, Ultisol v Bouygues offshore SA [1996] 2 Lloyd's Rep 140, at 147 (reversed on appeal on a different ground in Bouygues Offshore SA v Caspian Shipping Co [1998] 2 Lloyd's Rep 461). The decision in Re Harrods regarding the English court's power to decline jurisdiction has been criticised, et, Cheshire & North, op cit, 264–5 but the objections do not apply in the converse case where the injunction is restraining foreign proceedings in favour of proceedings based on the Convention.

93 [2002] 1 Lloyd's Rep 425.

94 Cheshire & North, op cit, 267 and 272 consider that such an injunction would be permissible by analogy with Sarrio SA v Kuwait Investment Authority [1997] 1 Lloyd's Rep 13 and The Xin Yang [1996] 2 Lloyd's Rep 217, now see Haji-Ioannou v Frangos [1992] 2 Lloyd's Rep 337. However, A. Biggs, (1999) BYBIL 328 would argue that the Convention covers Art 4 jurisdiction.

95 Eg, reservations in Toepfer International GmbH v Cargill France SA [1998] 1 Lloyd's Rep 379.

96 Continental Bank NA v Aeakos Compania Naviera SA [1994] 1 WLR 588 and OT Africa Lines Ltd v Hijazy, The Kribi [2001] 1 Lloyd's Rep 76. although there is now a reference to the ECJ: Case c116/02 Erich Gasser Gesselschaft mbH v Firma Misal Srl.

97 14 Oct 2002, [2002] EWH 2033 (Comm).