Court of Appeal confirms jurisdiction to restrain foreign arbitration even where England is not the natural forum for the dispute

The Court of Appeal has partly upheld the injunction granted by the Commercial Court restraining the pursuit of arbitration proceedings seated in Lebanon: Sabbagh v Khoury and others [2019] EWCA Civ 1219.

In doing so, it confirmed the power of English courts to restrain a foreign arbitration on grounds that the foreign arbitration is oppressive and vexatious and provided helpful guidance on the exceptional circumstances in which English courts may exercise this power. In particular:

• English courts have the power to grant such an anti-arbitration injunction where it is just and convenient to do so.
• Where it is clear that the dispute is within the scope of the arbitration agreement, no injunction should be granted.
• Where it is clear that the dispute is outside the scope of the arbitration agreement, either because it is common ground between the parties or because of a previous determination, the court may grant an anti-arbitration injunction but only if the circumstances of the case require it (eg when the proceedings are considered oppressive and vexatious).
• It is not a precondition to the grant of such an injunction that England be the “natural forum” for the underlying dispute.
• Save in the case of exclusive jurisdiction agreements, the grant of an anti-arbitration injunction remains an exceptional step.

For further information, please see this post on our Arbitration Notes blog.