Injunction to restrain commission of equitable wrong: general

In British Airways Board v Laker Airways Ltd, Lord Diplock also said that an injunction could be ordered if the applicant had an equitable right not to be sued in the foreign court.

Such a right, he said, may be found in estoppel, or in laches, and more generally in all conduct capable of being labelled as ‘unconscionable’. It is therefore necessary to ascertain the content of such ‘unconscionable’ conduct. By far the most important version of this particular wrong occurs when England is the natural forum for the resolution of the dispute between the parties, and the respondent vexes, or unjustifiably harasses, the applicant by suing him in a foreign court. There are other examples of unconscionable conduct, which will also be mentioned, but this is by far the most important example of it.

The terminology must not, however, be allowed to become a distraction or a straitjacket. Lord Diplock’s formulation reflected his view that, as injunctions are available only for the vindication of rights, legal or equitable, all anti-suit injunctions had to be fitted within this framework. A different analysis was proposed in South Carolina Insurance Co v Assurantie Maatschappij ‘de Zeven Provincieri NV,"⁵ namely that injunctions ordered as a remedy against vexatious or oppressive overseas litigation are doctrinally separate from those ordered to protect legal or equitable rights threatened with invasion. But these are merely differences of form, not of substance. The leading cases have been insistent throughout that classification may lead to a rigidity which is the very antithesis of what equity, and this particular remedy, requires. If that is so, the only category of injunction clearly calling for separate treatment is that which is founded on a legal right not to be sued in the foreign court, and which is obtained in equity’s auxiliary jurisdiction, and we have dealt with that.

The one point upon which there may be a distinction between injunctions to vindicate equitable rights and those ordered to restrain vexatious or oppressivebehaviour, is the role played by questions of applicable law.^[1] Where injunctions are ordered in aid of legal rights not to be sued, an anterior choice of law question arises, and has to be answered to say whether there really is a legal right to be enforced. Where equitable rights are concerned, it might have been supposed that there was a corresponding question of applicable law preceding any question of remedy, whereas where the complaint is founded on vexatious or oppressive behaviour, no such question necessarily arose. But even if this is a theoretical ground for distinction, there is (outside the context of an alleged legal right not to be sued) no indication in the case law that a question of applicable law ever arose or called for answer. When applying the equitable principle, the court will generally require England to be the natural forum for the dispute. It seems plausible that this forum requirement is a rational alternative to an applicable law rule, or even a surrogate applicable law rule, which means that English equity will only ever be applied in cases in which the English court has the closest and most real connection to the litigation. That connection will make the application of English equity (rather than foreign law) to assess whether it is wrongful to sue in the court objected to, rational.

Injunction to restrain equitable wrong: vexatious or oppressive conduct in bringing proceedings before a foreign court

The modern restatement of the law starts with the decision of the Privy Council in SNI Aerospatiale v Lee Kui Jak."'' An air accident had occurred in Brunei in which a local man had been killed. His widow commenced proceedings in Brunei, but vigilant American lawyers induced her to abandon the Brunei proceedings and sue in Texas instead. The Privy Council, on appeal from the courts of Brunei, reviewed the authorities upon the granting of an injunction in support of an equitable right not to be sued. It decided that whilst rigid categorisation was impossible, one type of unconscionable conduct was of particular relevance: that an injunction would be granted if (a) England were the natural forum for the trial of the action," and (b) it would not be unjust to deprive the respondent of the advantages sought in the foreign proceedings, and (c) it was vexatious or oppressive for the respondent to sue in the foreign court.

The requirement that England be shown to be the natural forum, as a general rule at least, was reiterated in Airbus Industrie GIE v Patel.'¹⁰ In that case an air accident in India had led to desultory litigation in India, but then, as before, to litigation in Texas. Though the Indian courts had issued an anti-suit injunction to restrain the parties bringing proceedings in Texas, and though the Court of Appeal encountered little difficulty in finding the Texas proceedings to be vexatious or oppressive in nature, Lord Goff explained that it was a general precondition to the grant of relief on this ground that England be the natural forum for the litigation. That condition was not satisfied, and the requirements of comity therefore meant that an English court had no business to interfere: the issue was, he might have said, res inter alios acta. Lord Goff explained that this was a general rule, not an invariable one;^[2] but aside from special cases, such as those ‘single forum’ cases in which the respondent argues that he can bring his claim only in the foreign court or nowhere at all, England will have to be shown to be the natural forum before it is proper for the court to act. It follows that the matters which make England the natural forum in the context of stays and service out are relevant here too; the applicant who alleges the unconscionable behaviour of the respondent and seeks relief against it will bear the burden of proof on this point. Again, it is true that advantages of which it would be unjust to deprive the respondent may be used to resist the application: these may be few in number, and mere advantages accounted for by the incidental differences between two systems should be disregarded. The real meat of the law is found in the definition of vexatious or oppressive conduct.

‘Vexation’ may exist if the foreign proceedings ‘are so utterly absurd that they cannot possibly succeed’, or if the respondent sues in two courts at the same time when there is no objective advantage to him in doing so. ‘Oppression’, as a term of art, has a wider meaning, and covers other varieties of conduct unfairly prejudicial to the applicant. In Aerospatiale, the consequence of the respondent’s suing in Texas would have been to deprive the applicant of a right to claim contribution from other parties, with some of whom there had already been a settlement. In subsequent proceedings which would have to be brought if a contribution were to be sought, it would be far from clear that a Texas judgment on the liability of the applicant would be recognised as conclusive on the question of the original liability of the contributors; that, taken together with the fact that Brunei was the natural forum (and the connection with Texas very weak), made it oppressive, and unconscionable, to proceed in Texas. But if a litigant brings proceedings in a foreign court with a view to stealing a march on his opponent, it is not natural to see this as oppressive. It is simply sensible litigation strategy, deserving of respect.^[3]

There is some authority for the view that if a claimant has commenced proceedings in the forum, it may be oppressive and/or vexatious for the defendant to institute proceedings in a foreign court which will duplicate or otherwise frustrate the first set of proceedings. If this were to be applied as a general rule it would put a premium on winning the race to commence proceedings first; and as this is too crude a basis for the decision whether to order an injunction, the relative timing of proceedings should be material but not decisive. In the end, the questions are whether the behaviour of the party to be restrained can be shown to be objectively wrongful even though it is in accordance with the law of the (foreign) court in which it is taking place, and whether, if it is, the case is one in which the English court ought to take upon itself the decision whether the respondent should be allowed to continue with it.

It follows that, when an injunction is sought on this basis, the analysis is holistic. If England is the natural forum, the applicant has satisfied one, but only one, of the criteria on which the grant of an injunction depends; by doing only this he has not shown an equitable wrong. One effect of the decision in Airbus Industrie GIE v Pate! is that the parties may be free to rush to judgment in their preferred forum. Cases which have identified oppression tend to be fact-specific. But to take one example, in Midland Bank Pic v Laker Airways Ltd,™ an injunction was ordered on the ground of oppression when an English bank, which had a mere presence, but had done none of the acts complained of, in the United States, was to be subjected to the unbearable burden and harassment of American anti-trust proceedings. The result is that a finding of oppression is quite distinct from any question whether England is the most appropriate forum. It requires proof of wrongful behaviour; and more than that it is difficult to usefully say. And, of course, it bears repetition that if the parties have agreed that the foreign proceedings may be brought, even if there are proceedings in England, the idea that it may be wrongful to bring them is almost unarguable: the maxim that volenti non fit injuria will be a good guide when looking for a wrong.^[4]

• [1] See [1997] LMCLQ 90, where the issue is examined. The suggestion that the court incorporate a concern for choice of law was not adopted by the House of Lords in Airbus Industrie GIE v Patel [1999] 1 AC 119; and did not feature at all in Turner v Grovit [2000] QB 345, [2002] 1 WLR 107. 2 [1987] AC 871. 3 The fact that the claim brought in the foreign proceedings could not be brought in an English court (British Airways Pic v Laker Airways Ltd) should be irrelevant. There is still an available forum in England in which proceedings could be brought; that the respondent would lose on the merits or the law if he brought them there is in principle irrelevant. It is therefore wrong to see Laker Airways as a special case in which there was only one available forum. See below, para. 28.22. 4 At 896. 5 [1999] 1 AC 119. 6 But the respondents had elected to ignore it, on the presumed ground that they had no fear of being found to be in contempt in India, and knew perfectly well that the order of the Indian court could not be
• [2] At 138. 2 See below, para. 28.18. 3 Or, at any rate, clearly more appropriate than the forum in which the foreign litigation is pending. 4 But advantages accruing only in an inappropriate forum may well be disregarded: this aspect of Amchent Products Inc v British Columbia (Workers’ Compensation Board) [1993] 1 SCR 897, 933, is likely to be applicable in the context of a slightly different English test. For the distinctive Canadian approach, see below, para. 28.24. 5 Peruvian Guano Co v Bockwoldt (1883) 23 Ch D 225. It is lack of success in the foreign forum, rather than the impossibility of subsequent enforcement in England, which is presumably relevant. See also Shell International Petroleum Co Ltd v Coral Oil Co Ltd [1999] 2 Lloyd's Rep 606. But for the view that the case must be really extreme, truly hopeless, before the English court is entitled to restrain it on this ground, see Vital Bahrein EC v Nasdec General Trading LLC [2013] EWHC 3359 (Comm) (obiter, as England was in any event not the natural forum for resolution of the question). 6 But if there are assets in two countries, neither of which freely allows the enforcement of judgments from the other, the claimant may be forced to sue in both jurisdictions. 7 If there was an unspoken assumption that proceedings would be brought in England, but they were then instituted in another court, this may be regarded as unsatisfactory, but in the absence of detrimental reliance it may not be oppressive: Insurance Co of the State of Pennsylvania v Equitas Insurance Ltd [2013] EWHC 3713 (Comm), [2014] Lloyd’s Rep IR 195. 8 It is possible that the Privy Council would, notwithstanding the general reluctance to make comparisons between systems, have been willing to see some aspects of Texan procedure - jury trial, strict liability, punitive damages and the distortions of the contingency fee system - as pointers towards oppression: at 899. There is tension between this part of the decision and The Abidin Dover [1984] AC 398. And in the light of Lubbe v Cape Pic [2000] 1 WLR 1545, if the respondent sues in a court in which the applicant cannot possibly afford to defend himself, this may point to oppression.
• [3] Star Reefers Pool Inc v J EC Group Co Ltd [2012] EWCA Civ 14, [2012] 1 Lloyd’s Rep 376; Golden Endurance Shipping SA v RM A Watanya SA [2014] EWHC 3917 (Comm), [2015] 1 Lloyd’s Rep 266. This approach was not taken in Joint Stock Asset Management Co Ingosstrakh-Investments v BNP Paribas SA [2012] EWCA Civ 644, [2012] 1 Lloyd’s Rep 649, in which pre-emptive proceedings were found to have been brought with a view to undermining an English arbitration. For the proposition that proceedings which were properly brought before a foreign court became liable to restraint once proceedings had been commenced in the forum court, see Stichting Shell Pensioenfonds v Krys [2014] UKPC 41, [2015] AC 616 (where the foreign proceedings, though not originally objectionable, became liable to restraint once the company was being wound up in its home jurisdiction). It is possible that the decision is confined to the particular context of insolvency proceedings, and is motivated by the public interest which requires the court to ensure that the interests of the general body of creditors are protected. 2 Henry v Henry (1996) 185 CLR 571, CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345. But cf Administración Nacional de Combustibles Alcohol v Portland v Ridgley Shipping Inc [1996] 1 Lloyd’s Rep 570. 3 Sabah Shipyard (Pakistan) Ltd v Islamic Republic of Pakistan [2002] EWCA Civ 1643, [2003] 2 Lloyd’s Rep 571. Likewise if the respondent has (or should have) submitted to the jurisdiction but then goes to a foreign court to institute proceedings there; and it will be even more oppressive or vexatious if he seeks relief overseas which will impede the English court in ruling on its jurisdiction: General Star International Indemnity Ltd v Stirling Cooke Brown Reinsurance Brokers Ltd [2003] EWHC 3 (Comm), [2003] ILPr 314; Tonicstar Ltd v American Home Insurance Co [2004] EWHC 1234 (Comm), [2005] Lloyd’s Rep IR 32; Goshawk Dedicated Ltd v ROP Inc [2006] EWHC 1730 (Comm), [2006] Lloyd’s Rep IR 711; CNA Insurance Co Ltd v Office Depot International [2005] EWHC 456 (Comm), [2005] Lloyd’s Rep IR 658. 4 Aerospatiale at 895 in particular. 5 [1986] QB 689. The case was one in which the claim advanced in the United States under federal legislation could not be successfully brought in England.
• [4] 2 Likewise, the same principles allow an English court, when England is the seat of an arbitration, to grant an anti-suit injunction to prevent a party from taking steps overseas which are calculated to undermine an English arbitration: Michael Wilson & Partners Ltd v Emmott [2018] EWCA Civ 51, [2018] 1 Lloyd's Rep 299 (proceedings brought overseas to run an argument raised but dismissed in arbitral proceedings). See also The Al Khattiya [2018] EWHC 389 (Admlty), [2018] 2 Lloyd’s Rep 243; Hai Jiang 1401 Pte Ltd v Singapore Technologies Marine Ltd [2020] SGHC 20. 3 Weinstock v Sarnat [2005] NSWLR 744 (administration of deceased estates: injunction granted); cf Al-Bassam v Al-Bassam [2004] EWCA Civ 857 (where the court was markedly more reluctant to grant the injunction and preferred to give directions for trial of a preliminary issue). For injunctions to restrain proceedings designed to hamper the administration and sale of a company as a going concern, see Hanns Offshore AHT Taurus GmbH & Co KG v Bloom [2009] EWCA Civ 632, [2010] Ch 187. 4 Stichting Shell Pensioenfonds v Krys [2014] UKPC 41, [2015] AC 616 (foreign proceedings, though not originally objectionable, became liable to restraint once the company was being wound up in its home jurisdiction). 5 Aerospatiale at 892-893; see also South Carolina Insurance Co v Assurantie Maatschappij 'de Zeven Provincieri [1987] AC 24, and Bank of Tokyo v Karoon (noted) [1987] AC 45. But in Barclays Bank Pic v Homan [1993] BCLC 680, an application in the context of the insolvency of an English company, the application to restrain proceedings in the United States proceeded under the rubric of oppression or vexation, not the protection of the jurisdiction. The principle was extended to the case of a company in administration, granting relief on the ground of unconscionable behaviour by the respondent, who had set a trap for the company by quietly obtaining ex parte attachment orders in New York and then attaching funds transferred by the company to pay post-administration suppliers, in such a way as to hinder the administration and sale of the company by the administrators as a going concern: Harms Offshore AHT Taurus GmbH & Co KG v Bloom [2009] EWCA Civ 632, [2010] Ch 187 (but cf to opposite effect, Kemsley v Barclays Bank Pic [2013] EWHC 1274 (Ch), where there was no undermining of the English bankruptcy). See also Carlyle Capital Corp Ltd v Conway [2013] 2 Lloyd’s Rep 179 (Guernsey CA); UBS AG New York v Fairfield Sentry (in liq) [2019] UKPC 20 (BVI) (proceedings in New York did not adversely affect BVI scheme). 6 Banque Worms v Brachot [2003] Rev Crit DIP 816 (note Muir-Watt); also noted by the same commentator at [2003] CLJ 573. However, it is not clear whether this is properly to be seen as an anti-suit injunction, as distinct from some form of asset preservation order, though the difference in nomenclature