English Court refuses to grant an injunction against the enforcement of a s1782 US Evidence Order

In a decision dated 24 August 2018, the English Commercial Court (the “Court“) dismissed Dreymoor Fertilisers Overseas PTE Ltd’s (“Dreymoor“) application to continue an injunction preventing the enforcement of an order of a U.S. court granting discovery under section 1782 of the United States Code (the “Order“). The Order required one of Dreymoor’s employees to be deposed and produce evidence for use in various international proceedings by Eurochem Trading GMBH (“ECTG“) against Dreymoor. Dreymoor argued that enforcing the Order would constitute unconscionable conduct as it would interfere with its preparation for arbitration proceedings against ECTG.

The Court accepted that the enforcement of orders such as the Order could potentially be unfair, as they would effectively provide an opportunity to cross-examine the same witness twice. However, whether to injunct the enforcement of such an order required a careful case-by-case analysis. Based on various case-specific factors, the Court decided that it would not be unconscionable to allow ECTG to enforce the Order and dismissed Dreymoor’s application to continue the injunction.

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English Commercial Court orders stay of Lebanon-seated arbitration in ‘exceptional’ case

In the most recent decision in the Sabbagh family feud, Sabbagh v Khoury & Ors [2018] EWHC 1330 (Comm), the English Commercial Court ordered the stay of parallel Lebanon-seated arbitration proceedings. This was despite the tribunal in that case having found that it had jurisdiction to hear it. In granting the interim injunction to restrain the pursuit of the arbitration proceedings, Mr Justice Knowles was quick to acknowledge the significance of a court that is not the supervisory court granting an injunction to prevent parties prosecuting a foreign arbitration.

 

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English Court confirms power to grant anti-enforcement injunction but application fails due to unnecessary delay

The English Commercial Court (the Court) in Ecobank Transnational Inc v Tanoh [2015] EWHC 1874 (Comm) refused to restrain the enforcement of two foreign judgments because of unnecessary delay. The application was made on the basis that the subject matter of both judgments fell within the scope of an arbitration agreement.

Although the Court dismissed the request, the judgment confirms the English courts’ jurisdiction to grant injunctive relief post-judgment (in relation to judgments of non-EU countries at least). It also gives helpful guidance on what factors the English courts will take into account in exercising their discretion to grant an anti-enforcement injunction.

The judgment confirms the risks of letting foreign proceedings play out and seeking to neutralise any unfavourable judgment at the enforcement stage only. The Court highlighted that where the applicant does not apply, pre-judgment, for an anti-suit injunction in relation to the substantive proceedings it will need to provide a good reason for the delay. Anti-enforcement injunctions are not therefore to be considered an ‘after the event’ alternative to anti-suit relief.

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Tanzanian Courts Injunct ICSID Proceedings

On 23 April 2014, the Tanzanian High Court ordered both parties in on-going ICSID arbitration proceedings, Standard Chartered Bank (Hong Kong) Limited (SCB HK) and the Tanzania Electric Supply Company (Tanesco), to refrain from “enforcing, complying with or operationalising” a decision made by the Tribunal in those ICSID proceedings on 12 February 2014.

This injunction was granted on an ex-parte basis. It is a clear breach of the ICSID Convention and of Tanzania’s international law obligations. If it is not reversed, it will be of significant concern to other international investors in Tanzania, and will likely discourage new investment.

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Singapore Court of Appeal sets aside injunction against Maldivian state-owned company in airport dispute

The Singapore Court of Appeal has set aside an interim injunction granted by the High Court against a Maldivian state-owned corporation (“MACL“), by which MACL had been restrained from interfering with the operation of the Maldives airport by the relevant concession holder (“GMIAL“), a joint venture entity partly owned by the India-based infrastructure group, GMR. (A copy of the decision can be found here).

In deciding the injunction application, the Court of Appeal had to consider the question of whether it had the power to grant an injunction – in light of the fact that MACL was a state-owned corporation; and whether the circumstances of the case justified grant of an injunction.

The Court of Appeal rejected MACL’s claim to state immunity and found that it had jurisdiction to grant an injunction. In reaching this conclusion, the Court of Appeal laid particular emphasis on the fact that MACL had waived any right it may have had to sovereign immunity and that in any event the transaction with GMIAL was purely contractual and commercial in nature and therefore no sovereign immunity was available.

However, in the exercise of its discretion, it found that GMIAL had not demonstrated that the balance of convenience lay in favour of an injunction. The substantive dispute was referred to arbitration.

The decision has been met with some disappointment inside India by those who see it as lessening Singapore’s attraction as an arbitral seat.  This appears to be an unfair reading.  The ultimate decision of the Singapore Court of Appeal involved a balancing of the competing interests of the parties, coupled with recognition of the limits of the court’s powers in purporting to restrain actions in a foreign jurisdiction.  The Court also concluded that it would be possible, albeit not easy, for expert evidence to be used to assess the monetary value of any harm caused to GMIAL; in other words, monetary damages would be an adequate remedy if GMIAL succeeded on its arbitration claim.

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