In a judgment handed down in December 2009, but with a delayed publication, the Court of Appeal in SAB Miller -v- Tanzania Breweries Ltd and another ([2010] EWCA Civ 1564) considered whether the parties had, by agreement, conferred power on the Court to grant injunctive relief which were wider than that provided by section 44 of the Arbitration Act 1996. The case turned on a narrow point as to whether the applicant retained a right to appeal to the Court of Appeal. The Court rejected the application, holding that the injunction had, on the facts, been granted under section 44 and, as such was subject to its limitations including those relating to rights of appeal. However in his judgment Laws LJ went further and observed that very clear provision would be needed for parties to avoid the limitations set out in section 44.
The applicant had argued that provisions in its contracts (which expressly permitted the parties to apply to court for interim or final injunctive relief) allowed the court to grant injunctive relief on a wider basis and unfettered by the restrictions of section 44 of the Arbitration Act 1996. Section 44 sets out the court's powers exercisable in support of arbitration proceedings. Section 44 is, however, a non-mandatory provision and as such only operates unless the contrary is agreed by the parties. In this case, the applicant did not argue that section 44 has been specifically excluded by agreement, but argued that the contractual clauses themselves conferred wider powers than section 44 allowed. Laws LJ agreed that it was clear that the words used in the contractual provisions relied on referred to power or the exercise of power wider than that conferred by section 44. However, he held that if parties to an arbitration wish to agree that interim relief is to be granted free from the restrictions of section 44, then very clear provision would need to be made to that effect. He held that in this instance, the contracts did not clearly extend the court's power beyond what was available under section 44 and it followed that the restrictions imposed by section 44 remained in place.
This case was heard by two Court of Appeal judges. The other judge, Sir David Keene, considered the argument as to whether the relevant clauses conferred wider substantive powers as "less clear cut" and he chose not to "express any concluded view on that issue." That two Court of Appeal judges appear to have disagreed with each other creates uncertainty for parties on this important point.
This case highlights the need for parties to focus on dispute resolution provisions at the time they are entering into contracts. Until we receive further guidance from the courts on this point, if arbitration is chosen and a party wishes to retain the ability to seek the broadest range of injunctive relief from the English court in support of arbitral proceedings, that party should take advice as to whether it is in its interests to make clear that section 44 of the 1996 Arbitration Act should not be seen to limit its right to seek injunctive relief from the court in any respect.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 26/03/2010.
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