In a recent decision, the High Court refused to grant an anti-suit injunction to restrain Cypriot court proceedings brought in breach of an arbitration clause, but granted an injunction in respect of Russian proceedings: Nori Holdings Limited et al v PJSC Bank Okritie Financial Corporation  EWHC 1343 (Comm).
The court found that there was nothing in the Recast Brussels Regulation (Council Regulation 1215/2012) to cast doubt on the continuing validity of the decision in West Tankers Inc v Allianz SpA (Case C-185/07)  AC 1138. An anti-suit injunction directed at an EU Member State court’s proceedings, while not itself within the scope of the Regulation, undermines the effectiveness of the Regulation and is, therefore, prohibited.
At the same time, the court found alleged Russian mandatory jurisdictional rules referring an insolvency dispute to the Moscow Arbitrazh Court insufficient to displace the wide and general wording of an arbitration clause, with the result that it granted an anti-suit injunction in relation to the Russian proceedings.
For more information see this post on our Arbitration Notes blog.
The Court of Appeal has given a wide interpretation to the meaning of 'employer' in the recast Brussels Regulation (No 1215/2012), holding that a company which provides benefits to employees of associated group companies may be regarded as an employer if it provides the benefits to reward and encourage the employees for the benefit of their employer and the group as a whole: James Petter v EMC Europe Limited and EMC Corporation  EWCA Civ 828.
A US parent company providing stock options could therefore be sued as an 'employer' in England by a former employee of its English subsidiary, and it could not rely on an exclusive jurisdiction agreement in favour of the Massachusetts courts. An anti-suit injunction was also granted, prohibiting the parent company continuing US proceedings brought against the employee.
The facts of the case are similar to those in Samengo-Turner v J & H Marsh and McLennan (Services) Ltd [2007 EWCA Civ 723 which has attracted substantial academic debate and criticism over the years. The Court of Appeal in the present case considered itself bound by Samengo-Turner to grant the anti-suit injunction. Given a free hand, Lord Justices Moore-Bick and Sales would have reached the same conclusion as the court in Samengo-Turner. Lord Justice Vos, however, clearly had doubts over whether the case was correctly decided, so the controversy over that decision continues.
The Petter case is a reminder that the court will look at substance rather than form in deciding who is an employer under the Regulation and that a jurisdiction agreement, whether in favour of an EU or non-EU court, is unlikely to be effective from an employer's perspective. The case also shows that, in order to protect an employee's rights, an anti-suit injunction will ordinarily be granted restraining an employer from bringing or continuing proceedings outside the EU. That injunction may even extend to ordering the employer to withdraw motions filed in the overseas proceedings, at least where there is evidence that it is seeking to pre-empt the English proceedings (as confirmed in the supplementary judgment of the Court of Appeal in this case). Continue reading
The Court of Appeal has held that it did not infringe EU law to bring a claim for damages for breach of a settlement agreement, and the jurisdiction provisions in that agreement, against a party who had wrongfully commenced proceedings in Greece. The court also gave immediate effect to a contractual indemnity by upholding the setting up of a fund to reimburse costs on an ongoing basis: In the matter of the Alexandros T  EWCA Civ 1010.
The potential abuses of the lis pendens provisions in the Brussels I Regulation are well documented. Where proceedings are commenced in an EU Member State which is not the chosen country under a jurisdiction agreement, no anti-suit injunction restraining those proceedings can be granted (as established by the European Court of Justice decision in Turner v Grovit  2 Lloyds Rep 169). This is because an injunction is considered an unwarranted interference in the proceedings of the foreign court and contrary to the scheme of the Regulation. Moreover, if the non-chosen court’s proceedings were commenced first, the chosen court must stay its own proceedings until the jurisdiction of the first court is established; this is the so-called “Italian torpedo”.
The present case confirms that those on the receiving end of a torpedo action can at least claim damages for breach of contract and, if the contract so provides, an indemnity. This may deter to some extent the launching of torpedoes. Proceedings brought in breach of a jurisdiction agreement should in any event become less common when the recast Brussels Regulation comes into effect on 10 January 2015 (see post). Under new article 31(2) the chosen court can take jurisdiction even if proceedings are commenced first in another EU Member State: it is for the other court to stay its proceedings and await the decision of the chosen court as to whether it has jurisdiction.
In the meantime, however, this decision is a welcome confirmation that damages for a breach are available and an indemnity is effective, at least before the English courts. Continue reading
The High Court has interpreted a jurisdiction clause as granting exclusive jurisdiction to the English courts in respect of claims made by a hedge fund. It therefore granted an anti-suit injunction restraining proceedings commenced in New York: BNP Paribas SA v Anchorage Capital Europe LLP and others  EWHC 3073.
The court reached this conclusion despite the absence of the word “exclusive” in the clause in question; the essential question was whether on its proper construction the clause obliged the parties to resort to the jurisdiction of the English courts. A jurisdiction clause will normally be expressed to be “exclusive” where the parties intend to confer exclusive jurisdiction on a particular country’s courts. This decision shows, however, that the absence of the word need not be determinative. Continue reading
The Court of Appeal has upheld an anti-suit injunction against a non-party to an arbitration clause on the grounds that Russian proceedings being pursued by that non-party were vexatious and oppressive: Joint Stock Asset Management Company Ingosstrakh Investments v BNP Paribas SA  EWCA Civ 644. This decision demonstrates that, in some circumstances, the English courts may be willing to grant an anti-suit injunction against a third party who (unlike the defendant) is not bound by a dispute resolution clause and who has attempted to undermine the effect of the clause by bringing competing proceedings elsewhere. Click here to read more about the decision on our arbitration blog.
The Court of Appeal has held that the English Courts will not intervene, by way of anti-suit injunction, to restrain the pursuit of foreign proceedings by a party to a non-exclusive English jurisdiction agreement, unless there are factors, over and above the choice of non-exclusive English jurisdiction, which drive the court to conclude that the pursuit of the foreign proceedings is vexatious or oppressive.
It has long been acknowledged that an exclusive jurisdiction clause, which gives a party a right not to be sued outside the chosen forum, may be enforced by an anti-suit injunction, at least in cases outside the ambit of the Brussels I Regulation. In Highland Crusader Offshore Partners LP and ors v Deutsche Bank AG and anor  EWCA Civ 725 the trial judge, Mr Justice Burton, had relied on an emerging line of authority which extended that approach to cases where the jurisdiction agreement was non-exclusive. In a judgment handed down earlier this week, the Court of Appeal overturned the judge’s decision. It held that in the context of applications for anti-suit relief, there is no presumption that proceedings brought in a foreign jurisdiction by a party to a non-exclusive English jurisdiction agreement are vexatious or oppressive and no burden on the party prosecuting the foreign proceedings to justify them on strong grounds not foreseeable at the time when the contractual jurisdiction was agreed.
The jurisdiction clause under consideration was in a form common to many widely-used standard form contracts. As such, the decision has wide implications for the conduct of litigation in the English courts, particularly transatlantic litigation. Continue reading
The European Court of Justice (“ECJ”) has today issued its judgment confirming the Advocate General’s (“AG”) Opinion of 4 September 2008 that anti-suit injunctions should not be brought to restrain court proceedings in another EU Member State even where they are brought apparently in breach of an arbitration agreement (Case C-185/07, Judgment of the Court (Grand Chamber) of 10 February 2009). Continue reading