Anti-suit injunctions: lessons from two recent cases

The High Court has a general power to grant injunctions under s. 37(1) of the Senior Courts Act 1981. An “anti-suit injunction” orders a party to cease to pursue, or not to commence, court proceedings. It may be granted where foreign proceedings will infringe a relevant substantive legal or equitable right (such as a contractual jurisdiction clause). Where no substantive legal or equitable right is infringed, an anti-suit injunction will generally only be granted where England is the natural forum for the proceedings and the foreign proceedings are “vexatious” or “oppressive”.

Two recent judgments, considered by Christopher Fleming, provide a useful insight and overview of the issues surrounding applications for anti-suit injunctions. This article reviews the observations made in both decisions that deal with issues of delay and the principles of comity in such applications.

Introduction

Both cases have complicated and lengthy factual backgrounds which this article will not deal with. For present purposes they can be summarised as follows:

Daiichi Chuo Kisen Kaisha v Chubb Seguros Brasil SA [2020] EWHC 1223 (Comm): Daiichi sought a mandatory anti-suit injunction requiring Chubb to discontinue proceedings brought in Brazil against Daiichi. Daiichi alleged the proceedings had been brought in breach of an undertaking given by Chubb that they would not pursue any contractual claim against Daiichi except in London arbitration.

SAS Institute Inc v World Programming Ltd [2020] EWCA Civ 599: SAS appealed against the granting of an anti-suit/anti-enforcement injunction restraining SAS from seeking orders from courts in the USA to enforce a judgment obtained in their favour in an action before the United States District Court for the Eastern District of North Carolina.

Principle of Comity

The principle of comity relates to the practice of mutual recognition among courts in different jurisdictions. It is well summarised by the following evocative image from Lord Donaldson judgment in British Airways Board v Laker Airways[1]: “Judicial comity is shorthand for good neighbourliness, common courtesy and mutual respect between those who labour in adjoining judicial vineyards.” Comity is a central (albeit vague) principle underlying the consideration by the courts when deciding on whether or not to make an anti-suit injunction.

In SAS Institute Inc v World Programming Ltd, Males LJ set out the relevant strands the court should have regard to when considering the issue of comity in this context:

• To grant an injunction which will interfere, even indirectly, with the process of a foreign court is a strong step for which a clear justification must be required. [101] The mere fact that things are done differently elsewhere does not begin to justify an injunction [103].

• There is a relationship between comity and delay. In general, the greater the delay in seeking relief, the further the foreign proceedings will have advanced, and the more justifiable will be the foreign court’s objection to an order by the English court which is liable to frustrate what has gone before and waste the resources which have been expended on the foreign proceedings [104].

A foreign court may justifiably take objection to an approach under which an injunction, which will (if obeyed) frustrate all that has gone before, may be granted however late an application is made. … An applicant for anti-suit relief needs to act with appropriate despatch.

Ecobank Transnational Inc v Tanoh[2]

• Comity requires that in order for an anti-suit injunction to be granted, the English court must have “a sufficient interest” in the matter in question [¶108], though this is this is only a general rule, which must not be interpreted too rigidly (Airbus Industrie G.I.E. v Patel[3]). The existence of a sufficient interest “will generally be self-evident” [at ¶109]. In Bank of Tokyo Ltd v Karoon (Note)[4], Robert Goff LJ described the importance of protecting the jurisdiction of English courts as follows:

without attempting to cut down the breadth of the jurisdiction, the golden thread running through the rare cases where an injunction has been granted appears to have been the protection of the jurisdiction; an injunction has been granted where it was considered necessary and proper for the protection of the exercise of the jurisdiction of the English court.

• Comity is a two-way street, requiring mutual respect between courts in different states. This need for mutual respect means that comity requires a recognition of the territorial limits of each court’s enforcement jurisdiction, in accordance with generally accepted principles of customary international law [111]:

Just as it is inconsistent with comity for the English court to purport to interfere with assets subject to the local jurisdiction of another court, so it is inconsistent with comity for another court to purport to interfere with assets situated here which are subject to the jurisdiction of the English court.

Exclusive Jurisdiction Clauses

In Chubb v Daiichi, Henshaw J reviewed the specific considerations the court should bear in mind when hearing an application for an anti-suit injunction where such an injunction is sought to enforce an exclusive jurisdiction clause. The judgment provides a helpful review of the relevant principles and case law (see [49]-[62]).

The starting point when considering any such application is set out by Millett LJ in The Angelic Grace[5]:

In my judgment, where an injunction is sought to restrain a party from proceeding in a foreign Court in breach of an arbitration agreement governed by English law, the English Court need feel no diffidence in granting the injunction, provided that it is sought promptly and before the foreign proceedings are too far advanced.” [emphasis mine]

The question of delay and promptness is therefore central to any such application.  Per Lord Bingham in Donohue v Armco[6]: “a party may lose his claim to equitable relief by dilatoriness or other unconscionable conduct“.

As readers will note from the following cases  (considered in Chubb), the issue of promptness and the principle of comity are closely linked in such applications:

• In The Skier Star[7] an anti-suit injunction was refused on the basis that the party seeking the injunction had participated in a court survey process in Antwerp in 2005, at the same time serving recourse proceedings and positively disputing the jurisdiction of the Antwerp court. They were still disputing the Antwerp court’s jurisdiction when they applied for injunctive relief 2 years later in 2007.

• In Essar Shipping Ltd v Bank of China Ltd (The Kishore)[8], Walker J refused to grant an injunction where the claimant had failed to act promptly, failing to seek an injunction until 7 months after they lodged a jurisdiction challenge in Qingdao (and 9 months after proceedings were issued). The application was not made until after the jurisdiction challenge had been rejected. Citing Leggatt LJ in Angelic Grace, the claimant’s behaviour was described as ‘not only invidious but the reverse of comity’.

• In ADM Asia-Pacific Trading Pte. Ltd v PT Budi Semestra Satria[9] Phillips J dismissed an application noting:

“The task for the Court is not to look at periods of delay and attribute blame for them, but to consider whether the application was made promptly and how far and with what consequences the foreign proceedings have progressed. Whilst ADM was plainly entitled to challenge the jurisdiction in Indonesia, doing so did not remove the need to apply promptly for an anti-suit injunction”.

• In Ecobank Transnational Incorporated v Tanoh[10], a claim for an anti-enforcement injunction, Christopher Clarke LJ addressed considerations of comity and delay as follows:

Injunctive relief may be sought (a) before any foreign proceedings have begun; (b) once they have begun; (c) within a relatively short time afterwards; (d) when the pleadings are complete; (e) thereafter but before the trial starts; (f) in the course of the trial; (g) after judgment. The fact that at some stage the foreign court has ruled in favour of its own jurisdiction is not per se a bar to an anti-suit injunction […]. But, as each stage is reached more will have been wasted by the abandonment of proceedings which compliance with an anti-suit injunction would bring about. That being so, the longer an action continues without any attempt to restrain it the less likely a court is to grant an injunction and considerations of comity have greater force.

• The relevant principles are summarised by Bryan J in Qingdao Huiquan Shipping Co v Shanghai Dong He Xin Industry Group Co Ltd[11]:

1. There is no rule as to what will constitute excessive delay in absolute terms. The court will need to assess all the facts of the particular case.
2. The question of delay and the question of comity are linked. The touchstone is likely to be the extent to which delay in applying for anti-suit relief has materially increased the perceived interference with the process of the foreign court or led to a waste of its time or resources.
3. When considering whether there has been unacceptable delay a relevant consideration is the time at which the applicant’s legal rights had become sufficiently clear to justify applying for anti-suit relief.

• In a similar vein, Raphael notes in “The Anti-Suit Injunction” (2nd ed, 2019) at §8.21:

[…] prejudice to the injunction defendant due to delay is significant, and if delay is not prejudicial it may be given significantly less weight. But delay is not necessarily immaterial in the absence of prejudice to the injunction defendant. The need to avoid delay arises from a variety of reasons including, in addition to prejudice to the injunction defendant, waste of judicial resources, the need for finality, and comity towards the foreign court. […] perhaps most importantly, the courts will take into account the extent to which the delay was justifiable or excusable in the circumstances; and will weigh delay against the importance of enforcing the forum clause. Even delay that can be criticized will often not be sufficient to justify refusing an injunction and thus permitting a breach of contract to continue. It seems that time taken in challenging the foreign court’s jurisdiction does not in itself justify delay in applying for an anti-suit injunction. [emphasis mine]

Decisions

In Chubb, the injunction was granted on the basis that, inter alia, although Daiichi did not seek an anti-suit injunction against Chubb for a period of some months after becoming aware that Chubb did not intend to withdraw its claim against Daiichi in Brazil, Chubb had provided an express undertaking (in lieu of an order) not to pursue that claim. With respect to the question of comity, the court found that the Brazilian courts had not yet assumed jurisdiction over the defendant.

In SAS, the injunction was deemed inappropriate on the basis that the terms of the injunction were too wide. A more limited anti-suit injunction, under which an order could not be sought by SAS for the assignment of debts from UK customers, was granted. Such an injunction was necessary to protect the territorial enforcement jurisdiction of the English court.

[1] [1984] QB 142 (at 185-6)

[2] [2015] EWCA Civ 1309, [2016] 1 WLR 2231

[3] [1999] 1 AC 119, at 140 B-D

[4] [1987] A.C. 45, 60 at ¶134 and ¶137

[5] [1995] 1 Lloyd’s Rep 87

[6] [2002] 1 Lloyd’s Rep 425

[7] [2008] EWHC 213 (Comm), [2008] 1 Lloyd’s Rep 652

[8] 2015] EWHC 3266 (Comm), [2016] 1 Lloyd’s Rep. 427

[9] [2016] EWHC 1427 (Comm) at (§ 54)

[10] [2015] EWCA Civ 1309, [2016] 1 WLR 2231 at [§133]

[11] [2018] EWHC 3009 (Comm); [2019] 1 Lloyd’s Rep. 520 at ¶29