Injunction to restrain equitable wrong: undermining the jurisdiction of the English court

There are several kinds of case which illustrate the point that foreign proceedings may be wrongful, and the pursuit of them restrained, when they undermine the jurisdiction of an English court. For example, if the court is exercising jurisdiction in a winding-up or bankruptcy, or the administration of a deceased estate, but proceedings are commenced or continued overseas, by creditors or would-be successors, with a view to obtaining the sole benefit of overseas assets at the expense of the general body of creditors for whose collective benefit the company is being wound up, or for the estate, the court may treat this as a wrongful attempt to subvert or frustrate its jurisdiction, and may issue an injunction to restrain the respondent. In a development which surprised some, the French Supreme Court confirmed that such relief may be granted as a matter of French law. But the particular context of cross-border insolvency may well mean that the law on anti-suit injunctions applies there in a distinctive way, not easily translated to other areas. For another example, injunctions have been ordered to restrain parties who, having submitted to the jurisdiction of the English courts and participated in the judicial process, then undergo an apparent change of heart and seek to bring proceedings before a foreign court which are designed to undermine the English action.^[1] For a third, where parties have made a contractual agreement for the non-exclusive jurisdiction of the English courts which one party wishes to activate, but the other party to the agreement brings proceedings before a foreign court, an injunction may go to restrain those proceedings, even if they are not being continued in breach of contract, if it may be said that their undermining of the agreed jurisdiction is wrongful, particularly where the foreign proceedings include an application for an anti-suit injunction. And an associate of a person who is party to an agreement on choice of court or law, who brings foreign proceedings which are designed to frustrate that agreement, may be held to be acting vexatiously in undermining the agreement for the resolution of disputes in England.’ The same principle applies to a person who seeks to undermine an arbitration agreement by which an associate is bound, and whether the behaviour is regarded as a tort or as vexatious, it is still a wrong and is liable to restraint on that basis. All of these are examples of substantive proceedings overseas, restrained on the ground that their undermining of English jurisdiction is at least vexatious or oppressive.

On the other hand, if there are no proceedings in England, and no contract by which the parties have bound themselves to each other only to litigate in England, there is nothing to undermine when proceedings are brought in the foreign court, and in such circumstances it will be rarer that an injunction will be justified. Indeed, some had gone even further than that: it had been suggested that it was an absolute requirement for the grant of an injunction on the vexatious and oppressive ground that there be proceedings in England. But this is probably going too far. In Turner v Grovit'^ib Lord Hobhouse, in delivering a speech on the decision to refer a preliminary question to the European Court, stated that in the absence of a legal right not to be sued, an applicant needs a ‘sufficient interest’ in obtaining an injunction, and that such an interest will not exist unless he is a party to proceedings actually pending before the English court.^[2] This view is not really reliable, not least because it is not supported by Airbus Industrie GIE v Patel.™ That said, though, it is bound to be more difficult to show that there is anything wrong and restrainable about foreign proceedings when there are no proceedings before the English court, and no contractual obligation to sue only in England. If all that can really be said is that one’s opponent saw which way the wind was blowing and wasted no time in commencing proceedings before his preferred court, there is no criticism to be made, and no wrong to be restrained. One should really praise, rather than blame, those who do not procrastinate. Equity assists the vigilant but not the tardy.

• [1] Glencore International AG v Exter Shipping Ltd [2002] EWCA Civ 528, [2002] 2 All ER (Comm) 1; CNA Insurance Co Ltd v Office Depot International [2005] EWHC 456 (Comm), [2005] Lloyd’s Rep IR 658; Credit Suisse AG v UP Energy Group Ltd [2014] EWHC 2852 (Comm). Cf Star Reefers Pool Inc v JFC Group Co Ltd [2012] EWCA Civ 14, [2012] 1 Lloyd's Rep 376. 2 Sabah Shipyard (Pakistan) Ltd v Islamic Republic of Pakistan [2002] EWCA Civ 1643, [2003] 2 Lloyd’s Rep 571 (wrongful; injunction granted); Deutsche Bank AG v Highland Crusader Offshore Partners LP [2009] EWCA Civ 725, [2010] 1 WLR 1023 (not wrongful; injunction not granted). A far better conclusion would be that the jurisdiction agreement for England became exclusive when it was exercised, and on the basis of Stichting Shell Pensioenfonds v Krys [2014] UKPC 41, [2015] AC 616, the foreign proceedings, until that point unobjectionable, became wrongful and liable to restraint. 3 Horn Lime GmbH v Panamericana Formas e Impresos SA (The Hornbay) [2006] EWHC 373 (Comm), [2006] 2 Lloyd's Rep 44; Credit Suisse AG v UP Energy Group Ltd [2014] EWHC 2852 (Comm). 4 The Kallang [2008] EWHC 2761 (Comm), [2009] 1 Lloyd’s Rep 124 and The Duden [2008] EWHC 2762 (Comm), [2009] 1 Lloyd's Rep 145 treat the acts of the non-party in undermining the arbitration agreement as torts, but on any view they are wrongs and are liable to restraint as wrongs. See also Michael Wilson & Partners Ltd v Emmott [2018] EWCA Civ 51, [2018] 1 Lloyd’s Rep 299. 5 Star Reefers Pool Inc v JFC Group Co Ltd [2012] EWCA Civ 14, [2012] 1 Lloyd’s Rep 376; distinguished in Joint Stock Asset Management Co Ingosstrakh-lnvestments 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.
• [2] [2001] UKHL 65, [2002] 1 WLR 107. 2 At [27]. 3 [1999] 1 AC 119. 4 Star Reefers Pool Inc v J FC Group Co Ltd [2012] EWCA Civ 14, [2012] 1 Lloyd’s Rep 376. 5 [1987] AC 24; Arab Monetary Fund v Hashim (No 6). Financial Times, 23 July 1992. But for an odd contrast, see Singularis v PricewaterhouseCoopers [2014] UKPC 36, [2015] AC 1675, [29]. 6 [2002] CLC 132; ACL Netherlands BVv Lynch [2019] EWHC 249 (Ch).