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Anti-suit injunctions: latest guidance for claimants and defendants

The Angelic Grace was decided over 25 years ago, and the general principles governing the grant of anti-suit relief are well-established. Where foreign proceedings are brought in breach of an arbitration agreement, the court may intervene by granting injunctive relief unless there is good reason otherwise. The court’s power to do so is not an aspect of its supervisory jurisdiction over arbitrations seated within the jurisdiction, but arises as part of its general power to grant injunctive relief under section 37 of the Senior Courts Act 1981.

But just when you thought the principles governing anti-suits were clear, along comes a case that raises complex questions relating to jurisdiction and conflicts of law. The recent decision of Andrew Baker J in Enka v Chubb suggests that jurisdictional and forum conveniens considerations may feature more prominently in such disputes going forward. The judge also seemed to envisage an enhanced role for arbitral tribunals in the context of anti-suit relief.

In Enka, the defendants argued that the relevant arbitration clause was governed by Russian law, and that this was a “game changer” because the formulation of principle in The Angelic Grace was premised upon the breach of an arbitration agreement governed by English law. The judge, Andrew Baker J, disagreed. It was not necessary (nor sufficient) to establish that the arbitration agreement was governed by English law. What mattered was whether the English court was properly seised of the dispute, such that it would be appropriate for it to determine the application. In any event, the choice of an English seat would not necessarily amount to or evidence a choice of English governing law.

The judgment includes guidance for both claimants and defendants in anti-suit disputes. For claimants, the main point is that a party seeking anti-suit relief will normally be expected to have invoked that arbitration agreement by commencing arbitration and (possibly) by referring to the tribunal any issues falling within its jurisdiction. This, in the judge’s words, would be the “obvious course” for a party resisting the determination of issues by the foreign court, and it seems that failure to do so is likely to be scrutinised with care, particularly in a case where there is undoubtedly an arbitration clause, and the only issue is whether the clause extends to the particular dispute. The judge highlighted that the tribunal has jurisdiction to rule on the scope of the arbitration clause (and, indeed, to make an order restraining the pursuit of foreign proceedings) suggesting that failure to raise such issues with the tribunal may become more significant in future anti-suit cases.

The possibility of the tribunal ruling on the interpretation of the arbitration agreement raises the further question of whether the anti-suit proceedings should be stayed pursuant to section 9 of the Arbitration Act 1996. Identical issues have historically arisen in connection with section 9 applications, where the court may intervene only if there is a relevant “arbitration agreement” (a matter falling, prima facie, within the tribunal’s jurisdiction and remit). Interestingly, the judge disagreed with the view expressed in previous case law that there was a logical issue with an anti-suit defendant seeking a stay “while at the same time denying any breach of the arbitration clause”. While that logical problem might arise in situations where a defendant denied there was any arbitration agreement, the same was not true if the parties agreed there was an arbitration agreement but disagreed as to its scope. It is interesting to consider whether the principles developed in connection with section 9 are consistent with the judge’s general approach. In section 9 cases, the court will defer to the tribunal only if it is “virtually certain” that the arbitration agreement exists, whereas Enka appears to envisage a greater role for the tribunal in the anti-suit context.

Turning to the position of the defendant, it is clear from Baker J’s judgment that any forum non conveniens considerations should usually be raised at the acknowledgement of service stage, by applying to stay or set aside the claim under CPR 11. Following this very clear guidance, it will be incumbent on defendants to ensure that they follow the proper procedural chronology; forum conveniens arguments are unlikely to be readily admitted at a later stage.

In determining whether England is an appropriate forum, the court will inevitably consider the governing law of the arbitration agreement. However, this is not necessarily a straightforward inquiry. For a start, the Rome I Regulation does not apply to arbitration agreements. That means that the conflicts rules determining the law governing the arbitration clause differ from those determining the law governing the agreement as a whole. (Where the issue is determined by the tribunal, English conflicts rules may not apply at all (as the judge recognised in Enka)).

In the Sulamerica case, the Court of Appeal propounded a three step test for identifying the governing law of the arbitration clause (express choice, implied choice, and closest and most real connection), and characterised a choice of English seat as pointing towards an implied choice of English governing law. Enka suggests that a more nuanced approach is necessary. The overall thrust of the judgment is a move away from the Sulamerica concept of “implied choice” and towards a more general construction exercise, taking into account all the terms of the contract.

As the judge stated, there are “choices of seat and choices of seat”. The choice of England as a seat for a “delocalized” ICC arbitration is likely to carry less weight in determining the governing law of the arbitration agreement: indeed, in Enka it was not of “any real moment at all”. It might indicate a choice of English court as supervisory jurisdiction, though the delocalised nature of ICC arbitration meant that even that was a “stretch”. And, had the choice of law been designated by the ICC only after the dispute arose, the point would not even have been arguable.

Pulling these threads together, this is a significant decision that mandates a more rigorous examination of jurisdictional and conflicts rules than, perhaps, has hitherto been the case in anti-suit cases.

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