Introduction
An arbitration agreement confers jurisdiction on the arbitral tribunal to resolve disputes between the parties to the agreement as stipulated in the agreement. Therefore, parties to an arbitration agreement have an obligation to submit their dispute to arbitration as contained in the agreement. However, there have been cases where a party to an arbitration agreement will initiate legal proceedings against the other party in another jurisdiction in breach of their arbitration agreement. A party to an arbitration agreement who is being sued or who is under imminent threat of being sued in another jurisdiction by the other party can seek and obtain an anti-suit injunction against the opposing party.
What is Anti-suit injunction?
Anti-suit injunction is an order issued by a court or an arbitral tribunal that restrains a party from commencing or continuing a legal proceeding in another jurisdiction or forum in respect of disputes that are subject of an arbitration
agreement. The UNCITRAL Model Laws and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Award make it mandatory for state courts to refer cases initiated by a party to an arbitration agreement to
arbitration on the request of the other party. See Article 5 of the UNCITRAL Model Law1985 (as amended in 2006) and Article II (3) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.
Anti-suit injunction is used in international commercial arbitration to ensure that parties are bound by their agreement to submit their dispute to arbitration, it is usually granted to enforce an agreement to arbitrate and to prevent breaches of
arbitration agreements. It should be noted that an anti-suit injunction is directed against the party to the agreement to arbitrate or a 3rd party and not against the foreign court.
Powers of Arbitral Tribunal to Grant Anti-Suit Injunction
The UNCITRAL Model Law gives the arbitral tribunal power to grant interim measures. Section 17(2)(b) of the UNCITRAL Model Law gives the arbitral tribunal powers to grant temporary measures whether in the form of an award or in another form at any time before issuance of the final award; to order a party to refrain from taking any action that is likely to cause current or imminent harm or prejudice the arbitral process. Although the UNCITRAL Model Law does not use the phrase ‘anti-suit injunction’, the arbitral tribunal can rely on the provisions of Section 17(2)(b) to restrain a party to the arbitration agreement or a 3rd party from instituting or continuing with a legal proceeding in breach of the agreement to arbitrate. Oftentimes, the need to obtain anti-suit injunction arises before an arbitral tribunal is constituted. A party to an arbitration agreement can approach the state court for anti-suit injunction before an arbitral tribunal is constituted.
Anti-Suit Injunction under the English Law
English courts have been supportive of commercial arbitration agreements and are always proactive in granting orders aimed at enforcing parties’ agreement to arbitrate. Section 37 of the Senior Courts Act 1981 gives the High Court of England and Wales powers to grant injunctions in all cases in which it appears to the court to be just and convenient to do so.
The courts in England have granted anti-suit injunction in plethora of cases, in Shell Petroleum Development Company of Nigeria Limited v Sunlink Energies and Resources Limited [2023] EWHC 3135 (Comm). This dispute arose from a joint operating agreement (the “JOA”) concerning oil prospecting and, subsequently, oil mining. The JOA is governed by Nigerian law and the ICC court designated London as the seat of arbitration, the Arbitration Clause provides that “Any dispute arising out of or in connection agreement ………shall be referred to and finally resolved by arbitration under the Rules of Conciliation and Arbitration of the International Chamber of Commerce effective at the time notice of arbitration is served and a tribunal comprising retired judicial figures of
standing, Queen’s Counsel practicing at the commercial Bar, or similar qualified Solicitors”. Sunlink initiated legal proceedings against Shell in a Nigerian court in a flagrant breach of the arbitration clause in the JOA. In response, Shell instituted this case seeking anti-suit and mandatory injunction against Sunlink.
The court granted anti-suit against Sunlink with a mandatory order directing Sunlink to withdraw or discontinue the legal proceeding against Shell in Nigerian court. In RSM Production Corporation v Gaz du Cameroun SA ([2023] EWHC 2820 (Comm)) This dispute arose from several agreements between RSM Production Corporation (‘RSM’) and Gaz du Cameroun SA (‘GdC’), to develop Logbaba hydrocarbons block in Cameroon. RSM sought an anti-suit injunction to restrain GdC from continuing legal proceedings in Cameroon in alleged breach of an arbitration agreement contained within a Settlement Agreement (SA) between the parties dated 27 September 2021. The court granted anti-suit injunction with a mandatory order against GdC, to withdraw or discontinue the legal proceedings against RSM in Cameroun.
In Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk litigation in another jurisdiction. See also Midgulf International Ltd v Groupe Chimiche Tunisien [2010] EWCA Civ 66, Riverrock Securities Ltd v International Bank of St. Petersburg [2020] EWHC 2483 (Comm).
Hydropower Plant LLP [2013] UKSC 35. the English Supreme Court upheld the powers of English courts under section 37 of the Senior Courts Act to grant antisuit injunction against a party to an arbitration agreement from resorting to litigation in another jurisdiction. See also Midgulf International Ltd v Groupe Chimiche Tunisien [2010] EWCA Civ 66, Riverrock Securities Ltd v International Bank of St. Petersburg [2020] EWHC 2483 (Comm).
Anti- Suit Injunction in Europe
EU Regulation No 44/2001 (the Brussel regulation) which has been replaced by Regulation (EU) No 1215/2012 governs the jurisdiction of courts in EU Member State over civil and commercial matters. In Allianz SPA v West Tankers Inc., Case No. C185/07, [2009] ECR I-633 the English Court granted an anti-suit injunction against an insurer that had initiated litigation in Italy in violation of a charterparty arbitration agreement.
However, on appeal, the House of Lords requested a preliminary ruling from the Court of Justice of the European Union (CJEU) on whether it is consistent with the Brussel Regulation for the court of a member state to prohibit a party from commencing or continuing legal proceedings in the court of another member state because of an arbitration agreement. In its judgement delivered on 10 February 2009, the Court of Justice of the European Union (CJEU) held that the law of Brussels regulation does not allow a member state’s court to give an order to restrain a person from commencing or continuing proceedings before the court of another member state on the ground that such proceedings would be contrary to the arbitration agreement. The EU Regulation No 44/2001 was later repealed by the EU Regulation 1215/2012 (Brussels I recast). In the latter case of Gazprom v Lietuvos Resplubika case C-536/13, the court distinguished the case from Allianz
SPA v West Tankers Inc and held that the Brussel 1 Regulation does prevent an EU court from giving effect to an anti-suit award issued by an arbitral tribunal seated in another EU Member State, it was further held that the New York Convention 1958 to which all EU Member States are party is the law that governs anti-suit award issued by an arbitral tribunal.
It therefore follows that while state courts in Europe cannot grant anti-suit injunctions against legal proceedings in another Member State of the EU, arbitral tribunals have powers to issue anti-suit injunctions to restrain a party to an arbitration agreement from instituting legal proceedings in another Member State of the European Union.
Conclusion
Anti-suit injunctions are primarily granted by courts or arbitral tribunals to enforce the agreement of the parties to submit their dispute to arbitration. When parties have agreed to submit their dispute to arbitration, the agreement may be enforced by seeking an anti-suit injunction when there is an imminent threat by the other party to commence or has commenced a legal proceeding in another jurisdiction.
In recent times, state courts especially English courts have been proactive in granting anti-suit injunctions against legal proceedings initiated by a party in another jurisdiction in defiance of an agreement to arbitrate. In conclusion, anti-suit injunction is a remedy that is available to a party to an arbitration agreement in the face of a breach of the agreement by the other party who instituted legal proceedings in another jurisdiction.
