English Court grants interim injunction notwithstanding jurisdictional challenge

In Abrey v Abrey [2024] EWHC 2689 (Ch), the English court granted an interim injunction, notwithstanding a pending application under section 9 of the Arbitration Act 1996 to stay the underlying court proceedings in favour of arbitration. The judge concluded that the outcome of the stay application would not affect the Court's power to grant the injunction sought, given that - in the circumstances of the claim – that power would exist under s44 of the Act if the dispute was subject to London-seated arbitration, and/or pursuant to CPR rule 3, or the inherent jurisdiction of the Court if not.

Background

A disagreement emerged within the Abrey family's farming partnership, involving three brothers and their sons. In April 2024, legal action was started against one brother and his son, Thomas Abrey, to end the partnership. This case was moved to arbitration by consent, per their Partnership Agreement. In September 2024, Thomas Abrey was removed as a company director, limiting his management role. In response, he brought a new claim against the other partners (excluding his father) and sought an interim order to prevent them from interfering with his alleged management rights. The defendants applied to stay the claim in favour of arbitration as per section 9 of the Act and argued that the court lacked jurisdiction in those circumstances to grant an interim injunction.

The court needed to decide (i) whether it had jurisdiction to grant the injunction and (ii) whether the injunction should be granted.

The jurisdictional question

The claimant argued that even if the claim were subject to arbitration, the court retained its power to grant an interim injunction in case of urgency under section 44(3) of the Act. The defendants argued that the claimant could not rely on section 44 of the Act because he did not accept that the claim was subject to the arbitration. They also argued that the case was not one of urgency.

The judge held that whether the claim was to be determined in arbitration or the courts, this would not (given the terms of the arbitration agreement in the Partnership Agreement) affect the court's power to grant an injunction. The court concluded that the requirements of urgency were satisfied here and granted the order sought.

The court concluded that due to the arbitral tribunal's limited power to issue temporary injunctions, if Thomas Abrey needed an enforceable and immediate temporary injunction, he had to seek it from the court.

Decision on the injunction

The Court applied the three-stage approach to interim relief laid down in American Cyanamid v Ethicom [1975] AC 396, observing that the claimant would feel increasingly vulnerable regarding the defendants without an injunction, making it "harder and not easier for a final settlement to be reached or an arbitration to proceed." Thus, it was held that "the position needed to be 'frozen' so that rather than pushing for advantage on the ground, the two sides could concentrate on resolving the dispute."

Comment

This case demonstrates that the English court is willing to grant urgent interim relief, even where the parties are disputing the court's substantive jurisdiction to hear the matter.  Crucially, the question of whether the claim was to be determined in arbitration did not change the nature of the court's power, whether it was exercised under the Act or under its inherent jurisdiction.

The authors would like to thank Anupriya Dhonchak for her contribution to this post.