UK: Holding Parties To Their Dispute Resolution Agreements: Another Way?

An alternative for parties is to await the conclusion of the proceedings and to then apply for an anti-enforcement injunction, preventing the enforcement of the judgment obtained in breach of the arbitration/jurisdiction clause. However, applications for anti-enforcement injunctions are rare in England.

A recent High Court decision, however, has considered this type of injunction .

In Ecobank Transnational Incorporated v Tanoh¹, the parties entered into a contract which contained an arbitration agreement. When a dispute arose, the defendant commenced litigation in the Republic of Cote d'Ivoire and the Togolose Republic, in breach of the arbitration agreement. The claimant unsuccessfully contested jurisdiction in those proceedings and commenced its own arbitration, but it did not seek an anti-suit injunction from the English courts. The defendant won in the foreign proceedings and then sought to enforce judgment. At that point, the claimant applied to the English court for an anti-enforcement injunction.

Usually an application for an anti-enforcement injunction will be made when a judgment has been obtained too secretly or too quickly for an anti-suit injunction to be sought. This case was different, in that the claimant had been aware of the foreign proceedings but had first tried to challenge the foreign courts' jurisdiction before those foreign courts.

The claimant argued that, although there had been a delay in making the application to the English courts, delay "does not include any period during which the applicant sought to challenge the jurisdiction of a foreign court and the period pending the foreign court's decision on that challenge".

That argument was rejected by Knowles J. It would be the "reverse of comity" for the foreign court to find that it had jurisdiction and for the English court to then consider at that stage whether to intervene by injunction. The longer the foreign court has spent time on the dispute the harder it is for the English court to intervene and once the foreign court has given judgment, it is a very serious matter for the English court to injunct the enforcement of that judgment. Furthermore, there is no requirement for the respondent to the application to demonstrate detrimental reliance on any delay. Accordingly, the application was refused.

This case is a reminder that applications to restrain the pursuit of proceedings brought in breach of a jurisdiction or arbitration agreement/or to prevent the enforcement of any judgment/award thereby obtained,  must be made promptly to the English court. It is not advisable to seek to challenge jurisdiction in the foreign court first before bringing an application to the English court for an injunction (if that challenge fails).

Footnotes

^{1 [2015] EWHC 1874 (Comm)}