Hold On To Your Seats! English Court Clarifies Jurisdictional Gateway for ASIs

In Investcom Global Limited v Plc Investments Limited [2024] EWHC 2505 (Comm) (Investcom), the English Commercial Court upheld certain interim anti-suit and anti-enforcement injunctions to prevent breach of an arbitration clause, but discharged others. The court made it clear that it was prepared to intervene in respect of a contract in which a London seat had been designated but not where there was "no good arguable case that the tribunal would find that the seat was London".

This case serves as a reminder of (i) the jurisdictional hurdles faced by parties wishing to rely on anti-suit relief from the English courts, and (ii) the importance of clearly designating a seat of arbitration in your contract.

Factual background

The claimant commenced ICC arbitration in relation to disputes arising under two different contracts. The first contract (SHA) provided for arbitration and stated that the governing law was Liberia which 'shall be applied in any international chamber of commerce outside Liberia'. The second contract (MA) also stated that the law of Liberia was the governing law, but stipulated ICC arbitration seated in London. Some of the defendants were only party to the SHA, and not the MA.

In breach of both the SHA and the MA, the defendants filed civil proceedings in Liberia, seeking, amongst other things, to stay the arbitration under the SHA (the Second Liberian Proceedings) and under the MA (the Third Liberian Proceedings) (the first Liberian Proceedings, which concerned shareholder proceedings, are beyond the scope of this blog). The claimant sought anti-suit and anti-enforcement injunctions in the English courts, which were granted in broad terms that restrained the defendants from taking any steps in Liberia in respect of the proceedings (the Foxton Order).

Subsequently, given the parties' failure to designate a seat of arbitration in the SHA, the ICC Court designated Toronto as the seat for SHA-related disputes. In the light of this designation, the defendants applied to discharge the Foxton Order, arguing that the English courts had no jurisdiction over both the Second and Third Liberian Proceedings.

Relevant legal framework

The English Court's equitable jurisdiction to grant an injunction "in all cases in which it appears to the court to be just and convenient to do so" arises from section 37(1) of the Senior Courts Act 1981 (SCA 1981). However, because the defendants were not in the jurisdiction, the claimant had to satisfy certain jurisdictional gateways under the Civil Procedure Rules (CPR). The relevant jurisdictional gateways relied on by the claimant in this case were either CPR 62.5(1)(c) or CPR 62.5(2A), both of which require that the claims related to an arbitration whose seat was, or would be, England and Wales.  

Decision

The judge (Henshaw J) partially discharged the Foxton Order, upholding the injunctions in relation to the Third Liberian Proceedings relating to the MA but discharging those relating to the Second Liberian Proceedings relating to the SHA.

In relation to the Third Liberian Proceedings, as the MA stipulated for disputes arising from or in connection with it to be settled by ICC arbitration in London, the English courts retained jurisdiction over the matter. The interim relief was upheld as it "continue[d] to serve a proper purpose and should be maintained".  Further, the judge determined that there was good reason to believe that the discharge of the Foxton Order would lead to the refiling of civil proceedings in Liberia. Therefore, the interim relief remained "necessary and justifiable" at least until trial.

In relation to the Second Liberian Proceedings, the court found that once the ICC had fixed Toronto as the seat of the arbitration, the English courts no longer retained supervisory jurisdiction over the matter. Instead, supervisory jurisdiction over the matter fell to the court in Toronto.

The court also rejected arguments put forward by the claimant that the proper seat of the arbitration was London. In particular, the claimant relied on the fact that the defendants had agreed to proceed "in the meantime" on the basis that the seat was London prior to the ICC Court's determination. However, the court held that this did not mean that they had reached a standalone agreement to arbitrate in London. The judge placed emphasis on the wording of the arbitration agreement in the SHA, and in particular the agreement to ICC arbitration. Article 18 of the ICC Rules plainly stated that the seat of the arbitration would be fixed by the ICC Court in the absence of the parties' agreement.

Although the claimant argued that there was a possibility that the tribunal may reach a different conclusion as to whether the seat was Toronto or London, the question for the court was whether the claimant had a "good arguable case that the tribunal will find the arbitration to be seated in London" (see, for example, Brownlie v Four Seasons Holding Inc [2017] UKSC 80). The court's conclusion was that the answer was no.

Comment

This judgment follows closely on the heels of the Supreme Court's decision in UniCredit Bank GmbH v RusChemAlliance LLC (see our blogpost on that case here). However, unlike the Unicredit case, which concerned the jurisdictional gateway relating to the governing law of the arbitration agreement, in this case, the relevant jurisdictional gateway was whether the arbitrations were seated in England and Wales.

The cumulative picture emerging from these two cases is that in order for the English courts to have jurisdiction to grant anti-suit relief, parties need to have either designated the law of England and Wales as the governing law of their arbitration agreement or have chosen an English seat. Where possible, it is advisable that parties consider these issues upfront when drafting their arbitration clauses. In this case, the uncertainty regarding the seat of the SHA proceedings led to a situation whereby the English court's jurisdiction was dependent on the ICC Court's designation of the seat.

The authors would like to thank Kristy Chan for their contribution to this blog post.