Crown Copyright ©
Lord Justice Lawrence Collins :
I Introduction
1.This appeal involves the question whether the English court has
jurisdiction following judgment to grant an anti-suit injunction against
foreign judgment debtors (one of whom has a domicile in a Brussels I
Regulation State) restraining them from pursuing proceedings abroad
seeking to re-litigate matters which have been decided by the English
court.
2.The background to the present appeal is set out in Masri v Consolidated
Contractors International Co SAL [2008] EWCA Civ 303 (April 4, 2008),
and I repeat here what is necessary for this appeal. Mr Masri succeeded
in an action in the Commercial Court in London in proving that he had
a 10% interest in the judgment debtors' own 10% interest in an oil
concession for the exploitation of an oil field in the Yemen. He obtained
judgment in the sum of about US$55 million against the appellants,
Consolidated Contractors International Company SAL ("CCIC") and
Consolidated Contractors (Oil & Gas) Company SAL ("CCOG"), but they
have not paid any part of the judgment debt, and have made it clear that
they will resist payment.
3.CCOG is incorporated in Lebanon, and its claim to have a domicile in
Greece for the purposes of the Brussels I Regulation was rejected in
the April 4, 2008 judgment. CCIC is also a Lebanese company, but it is
common ground that it also has a domicile in Greece. CCOG and CCIC are
part of a substantial group (the CCC group) based in the Lebanon. The
group was founded, with others, by Mr Said Khoury. Other members of
the group include Consolidated Contractors Group SAL (Holding Company)
("CC Holding"), another Lebanese company, and Consolidated Contractors
International (UK) Limited ("CCUK"), an English company.
4.Mr Masri originally brought two actions in England against members of
the CCC group. Ultimately the defendants were (1) CCUK; (2) Mr Khoury;
(3) CC Holding; (4) CCIC; and (5) CCOG. After jurisdictional challenges,
CCOG and CCIC submitted to the jurisdiction of the English court by
appearing and defending the case on the merits. In July 2006 Gloster J
held that CCIC and CCOG were liable to Mr Masri. The judge dismissed
Mr Masri's claims against Mr Khoury personally and against CCUK and CC
Holding. In March 2007 she gave judgment on quantum.
5.In April 2007 CCOG and CCIC brought an action in the Yemen for a
declaration that they were not liable to Mr Masri. By application notice
in the existing proceedings issued on May 14, 2007, Mr Masri applied for
an order that the judgment debtors be prohibited from commencing or
pursuing proceedings in the courts of any other jurisdiction, including in
particular the courts of Yemen, relating to matters already determined
in these proceedings, and that they be ordered to discontinue the
proceedings brought in the Yemen. The ground was that the proceedings
commenced in the Yemen by the judgment debtors were vexatious and
oppressive, and were an attempt to re-litigate issues determined in the
English court and/or to evade the judgment of the English court, and that
it was in the interest of justice to grant an order.
6.On May 25, 2007, following an inter partes hearing, HH Judge Mackie
QC ordered that the judgment debtors were not to commence or
continue proceedings against Mr Masri relating to the 1992 agreement
(under which Mr Masri had acquired his rights) or the parties' rights
and obligations thereunder in any courts other than the English courts
or EU courts, including in particular the proceedings in the Yemen. The
judgment debtors were required by June 4, 2007 to discontinue the
Yemeni proceedings.
7.The Yemeni proceedings were discontinued following the grant of the
injunction. Sir Henry Brooke, acting as a judge of the Court of Appeal,
gave permission to appeal from Judge Mackie QC's order on condition that
the judgment debtors complied with all costs orders to date (which they
did). Although the Yemeni proceedings have been discontinued this appeal
has proceeded on the basis that it is not academic since the judgment
debtors may wish to bring further proceedings there or elsewhere. They
have also brought proceedings in Greece and the Lebanon for declarations
that the English judgment is not enforceable, but these proceedings have
not been the subject of applications for anti-suit injunctions.
II The judgment and the arguments
8.The essence of Judge Mackie QC's decision was that jurisdiction to grant
the injunctions was established because the application was designed
to protect the underlying action. No additional jurisdictional hurdle
was required. Commencing proceedings for the collateral purpose of
creating a ground of objection to enforcement was not legitimate where
the proceedings are duplicative and could not possibly succeed except
by contradicting the English judgment. What the judgment debtors
were doing was seeking to have decided instead in Yemen something
which they were obliged to have decided in England. The judge rejected
the judgment debtors' evidence that the real object of their action in
the Yemen was to protect their rights under the Production Sharing
Agreement in case the effect of the English judgment was to effect
a forbidden assignment of their rights. The injunction was worldwide
because the defendants would not say what their intentions were as
regards seeking to bring proceedings in other countries. He refused
to insert a proviso permitting the judgment debtors to come back to
the court should they wish to reformulate their Yemeni proceedings in
order to safeguard their rights under the Production Sharing Agreement.
His reason was that he did not believe that the point on the Production
Sharing Agreement was a legitimate reason for bringing the proceedings
and he did not wish to dignify it further by agreeing to such a proviso.
9.The appeal was most elaborately, and attractively, argued by Mr
Alexander Layton QC for the judgment debtors and by Mr Simon Salzedo
for Mr Masri.
A The judgment debtor's arguments
Personal jurisdiction
10.The court may only grant an anti-suit injunction against a person
who is outside the jurisdiction if it has in personam jurisdiction to do so.
The better view is that a claim for a non-contractual anti-suit injunction
is a claim to enforce a substantive equitable right not to be vexed
by litigation abroad. But whether or not a non-contractual anti-suit
injunction enforces a substantive equitable right, a claim for an anti-suit
injunction is a separate claim based on a separate cause of action, and
is a different cause of action from the underlying claim with which the
action is concerned. Consequently from the point of view of international
jurisdiction (both under the Brussels I Regulation and under CPR 6.20),
the anti-suit injunction should be regarded as a separate substantive
claim over which jurisdiction must be separately established. This is not
affected by the fact that a claim for an anti-suit injunction may be made
by an application notice in existing proceedings. Both under the Brussels
I Regulation and under CPR 6.20 amendments which add a new cause
of action are precluded unless jurisdiction over them can be separately
established.
11.By virtue of Article 2 of the Brussels I Regulation CCIC must be
sued in Greece, the country of its domicile, unless some other basis
of jurisdiction is established: cf Case C-159/02 Turner v Grovit [2004]
ECR I-3565. There is no jurisdictional basis under the Regulation for
the anti-suit injunction. Although Case C-391/95 Van Uden v Deco Line
[1998] ECR I-7091, at [19]-[22] and Case C-99/96 Mietz v Intership
Yachting Sneek BV [1999] ECR I-2277, at [40]-[41] establish that the
court with jurisdiction over the underlying claim has a form of "parasitic"
or "ancillary" jurisdiction to grant provisional or protective measures, an
interim anti-suit injunction would not be treated as a merely ancillary
matter, nor as provisional or protective.
12.There is no jurisdiction over CCOG because the anti-suit injunction
must be treated as a separate claim for a separate cause of action (even
if made by application notice), and it does not fall within any available
head of CPR 6.20. If (contrary to CCOG's principal submission) the anti-
suit injunction is not based on an underlying substantive equitable cause
of action, CPR 6.20 does not apply to it at all, as CPR 6.20 can only allow
the court to permit service out of the jurisdiction of claims for substantive
relief.
Submission
13.CCIC's submission to the court's jurisdiction in respect of the breach of
contract claim does not found jurisdiction in respect of any fresh anti-suit
claim under Article 24 of the Brussels I Regulation. CCIC's submission was
a submission only to the court's jurisdiction to try the breach of contract
claims against it as formulated in the Amended Consolidated Claim Form,
and not any new and subsequent substantive claims for an anti-suit
injunction.
14.The court should not extend its ancillary jurisdiction, where it is now
known that the court obtained jurisdiction on a false basis. Jurisdiction
was obtained against CCIC under Article 6(1) on the basis that CCUK
was the anchor defendant, and against CCOG under CPR 6.20(3)
(as a necessary or proper party to a claim against CCUK). But it was
subsequently decided by the Commercial Court that CCUK was not a party
to the 1992 Agreement under which Mr Masri's rights arose. Although
CCIC submitted to the jurisdiction of the court to try the claims (after
the dismissal of CCUK's application for summary judgment and the later
joinder of CCIC together with CCUK in the same action on January 13,
2006) CCIC had no real choice if it was not to have default judgment
entered against it.
15.CCOG's submission to the jurisdiction of the court for the purposes of
the trial of the breach of contract action does not give jurisdiction for the
purposes of the anti-suit injunction. Its submission was "to try the claim"
only (see, by analogy, CPR Part 11), and occurred by reference only to
the existing claims formulated in the Amended Claim Form of January
19, 2006. CCOG's submission was no more than the usual submission
that occurs in any case where a defendant, who has disputed and lost
a jurisdictional challenge, contests the claim on the merits because it
does not wish default judgment to be entered. That submission cannot
comprise a submission to the court's jurisdiction to advance a wholly new
substantive claim for an anti-suit injunction after judgment: Glencore
International AG v Exter Shipping Ltd [2002] EWCA Civ 528, [2002] 2 All
ER (Comm) 1, at [50].
Conditions for the grant of an anti-suit injunction
16.International comity dictates a need for judicial deference in the
international context, and an injunction to restrain foreign proceedings
is only to be granted in exceptional cases. It is contrary to principle for
an injunction to be granted solely on the ground that it is sought to
restrain the re-litigation elsewhere of a matter which has already been
decided in England. It is a matter for the courts of the relevant country
to decide what the effect of the English judgment on liability should be:
The Western Regent [2005] EWCA Civ 985, [2005] 2 Lloyd's Rep 359, at
[50], [66]. It is not sufficient that the foreign litigation ignores, or seeks
to obtain a result contrary to, the judgment of the English court: ED & F
Man (Sugar) Ltd v Haryanto (No. 2) [1991] 1 Lloyd's Rep 429, 437-438.
It is a matter for the courts before which enforcement may be sought to
determine, under their own law of enforcement, whether enforcement
should be granted: Mamidoil-Jetoil Greek Petroleum Co SA v Okta Crude
Refinery AD [2003] 1 Lloyd's Rep 1, at [201]-[208]. Steps which are
otherwise legitimate under Yemeni law relating to the enforcement
of judgments, including steps to prevent enforcement, should not, in
principle, be restrained, at least in the absence of evidence that (a) Mr
Masri is the subject of oppression, and (b) the case is exceptional.
Discretion
17.The judge failed to take into account that the jurisdiction is to be
exercised exceptionally and in accordance with principles of comity. Nor
did he take into account the fact that an anti-suit injunction is at least
an indirect interference with the exercise of jurisdiction by the relevant
foreign court, and that particular restraint is therefore necessary. He failed
to take into account the fact that jurisdiction had been obtained wrongly,
on the basis of an assertion that CCUK was liable.
Terms of the injunction
18.There was no basis for extending it to any country outside Yemen. In
any event, it should also have excluded the non-EU contracting states to
the Lugano Convention. A provision for liberty to apply should have been
included.
B Mr Masri's arguments
19.Where the English court has international jurisdiction over the
substance of the proceedings, it also has international jurisdiction to
grant ancillary orders in those proceedings on both a pre- and post-
judgment basis (Masri v Consolidated Contractors International Co SAL
[2008] EWCA Civ 303) and that principle applies to the grant of an anti-
suit injunction where the party enjoined commences proceedings in an
alternative forum. In such a case the anti-suit injunction is not based on
any underlying cause of action, other than the substantive cause of action
behind the English proceedings, and it does not generally involve separate
proceedings over which jurisdiction has to be separately established. It
is not a pre-condition of an application, based upon the protection of the
court's own proceedings and its jurisdiction to prevent unconscionable or
vexatious behaviour between litigants who are before it in substantive
proceedings, that there be a substantive legal or equitable right: South
Carolina Insurance v Assurantie Maatschappij "De Zeven Provincien" NV
[1987] AC 24, 40; ED & F Mann (Sugar)Ltd v Haryanto (No. 2) [1991] 1
Lloyd's Rep 429, 439; Dicey, Morris & Collins, Conflict of Laws (14th ed.
2006) ("Dicey"), para 12-069.
CCIC
20.International jurisdiction over the main proceedings against parties
domiciled in a Brussels I Regulation State carries with it jurisdiction to
grant any ancillary orders in those proceedings: Case C-391/95 Van
Uden v Deco-Line [1998] ECR I-7091 and Case C-99/96 Mietz v Intership
Yachting Sneek BV [1999] ECR I-2277, as applied in Masri v Consolidated
Contractors International Co SAL [2008] EWCA Civ 303, at [97]. The
ancillary order need not be strictly provisional or temporary. If contrary
to that submission, it is a necessary requirement that the injunction be
an interim or provisional measure, then the condition is satisfied in the
present case. An anti-suit injunction in an alternative forum case is always
subject to an implicit liberty to apply and to discharge if the foreign
proceedings contemplated cease to be oppressive: Eras EIL Actions
[1995] 1 Lloyd's Rep 64.
21.The English court did not assume jurisdiction on a false basis. The
claim against CCUK was arguable at the time that jurisdiction was
determined. CCUK failed in an application for summary judgment. The
connection between the various claims is not falsified because one or
more of the claims is ultimately dismissed.
CCOG
22.CCOG had been served under CPR 6.5(5) with the application notice
for the anti-suit injunction in England, by service upon its English
solicitors retained for the purposes of the English proceedings. There was
therefore no question of Mr Masri having to satisfy the test for permission
to serve out under CPR 6.20. In any event, CCOG's submission was a
general one.
Conditions for exercise
23.An overlap of issues between English litigation and a foreign claim
is something which raises prima facie a case of vexatious conduct. The
fact that the judgment debtors are seeking to re-litigate in a foreign
jurisdiction matters which are already res judicata by reason of an
English judgment can be a sufficient ground for the grant of an anti-suit
injunction.
Discretion
24.There was no error of principle. The judgment debtors' own initial
explanation for the Yemeni proceedings (given through counsel) was
that their purpose was to assist them in resisting enforcement of the
judgment. The additional further purpose (to avoid assignment problems
under the Production Sharing Agreement) was rejected by the judge and
has not been revived on the appeal.
Scope of injunction
25.Mr Masri accepts that Contracting States to the Lugano Convention,
as well as Brussels I Regulation States, should be excluded from the
scope of the injunction. But the injunction should not be limited to the
Yemen, because the judgment debtors have shown that they intend to
take all possible steps in the world to resist compliance with the English
judgment.
III Discussion and conclusions
26.For reasons on which I will expand, in my judgment the English court
has power over persons properly subject to its in personam jurisdiction
to make ancillary orders in protection of its jurisdiction and its processes,
including the integrity of its judgments. That power is of course a
discretionary one, to be exercised in accordance with the requirements of
international comity.
In personam jurisdiction
27.The starting point is that an anti-suit injunction binds only the party
enjoined, in personam, and is effective only in so far as that party is
amenable to the jurisdiction of the English courts so that the order can
be enforced against him: Société Nationale Industrielle Aérospatiale v
Lee Kui Jak [1987] A.C. 871, 892, per Lord Goff of Chieveley; Turner v
Grovit [2001] UKHL 65, [2002] 1 W.L.R. 107, at [23], per Lord Hobhouse;
Donohue v Armco Inc [2001] UKHL 64, [2002] 1 Lloyd's Rep. 425, at
[19], per Lord Bingham.
28.Thus in Turner v Grovit [2001] UKHL 65, [2002] 1 WLR 107, at [22]-
[23] Lord Hobhouse confirmed:
"The power … is one which had historical origins in the English legal
system and the relationships which once existed between various different
courts and the limited remedies which they were variously able to grant.
It had however been recognisably established by 1834 (Lord Portarlington
v Soulby (1834) 3 My & K 104, 108) and described as being grounded
not upon 'any pretension to the exercise of judicial… rights abroad' but
upon the fact that the party being restrained is subject to the in personam
jurisdiction of the English court. …
… When an English court makes a restraining order, it is making an
order which is addressed only to a party which is before it. The order is
not directed against the foreign court: Lord Goff of Chieveley, Société
Nationale Industrielle Aérospatiale v Lee Kui Jak [1987] A.C. 871, 892.
The order binds only that party, in personam, and is effective only in so
far as that party is amenable to the jurisdiction of the English courts so
that the order can be enforced against him: 'an injunction will only be
issued restraining a party who is amenable to the jurisdiction of the court,
against whom an injunction will be an effective remedy.' "
29.Does the English court have in personam jurisdiction over the
judgment debtors to grant the anti-suit injunction?
30.The best view, the judgment debtors say, is that a claim for a non-
contractual anti-suit injunction is a claim to enforce a substantive
equitable right not to be vexed by litigation abroad. The essence of the
judgment debtors' argument is that a claim for an anti-suit injunction
is a separate claim based on a separate cause of action, which must in
turn be based on a substantive legal or equitable right and for which
an independent basis of jurisdiction must be found under the Brussels I
Regulation or CPR 6.20. They go on to argue that there is no basis under
the Brussels I Regulation or CPR 6.20 for the assertion of jurisdiction in
this case, and, in particular, the judgment debtors' submission on the
merits of the case does not give the court jurisdiction to make the order,
and the order was not a provisional or protective measure so as to give
jurisdiction over CCIC in the absence of the English court's jurisdiction
over the substance of the case.
31.In my judgment the answer to these points is, first, the type of anti-
suit injunction granted in these proceedings is not one which is founded
in English law on a cause of action separate from the claims in the main
proceedings which gave rise to the judgment debt. Second, the claim for
an anti-suit injunction did not involve CCIC being "sued" for the purposes
of the Brussels I Regulation, nor did it involve "a claim" for the purposes
of the heads of jurisdiction in CPR 6.20. Third, the judgment debtors'
submission to the jurisdiction gave the English court power to make any
incidental orders in the litigation, irrespective of whether (in the case of
CCIC) the order was a provisional or protective measure.
Nature of anti-suit injunction
32.Is the claim for an anti-suit injunction a new claim which must satisfy
its own jurisdictional criteria? The judgment debtors argue that an
application for an anti-suit injunction, including an interim injunction, has
a substantive effect and must be supported by a substantive cause of
action.
33.The development of the anti-suit injunction began in the early 19th
century, but the question whether a claim for an anti-suit injunction was a
claim separate from the claim in the action only arose in the aftermath of
Lord Diplock's speech in The Siskina [1979] AC 210.
The influence of The Siskina
34.In The Siskina cargo-owners had a substantial claim against the
owners of the Siskina for failing to carry goods to Saudi Arabia. The
English court had no jurisdiction over the substantive claim, which might
be determined in Genoa (under an exclusive jurisdiction clause in the
bills of lading) or by counterclaim in Cyprus (where the shipowners had
arrested the cargo). The Siskina was owned by a one-ship Panamanian
company, and had become a total loss. The insurance moneys were
payable by London underwriters. The question was whether the English
court could authorise service abroad under the then RSC Ord 11, r 1(1)
(l) ("injunction … ordering the defendant to .. refrain from doing anything
within the jurisdiction ..") of a claim for a Mareva injunction restraining
disposal of the insurance proceeds. By a majority the Court of Appeal
held that the court had jurisdiction to grant the injunction: [1979] AC at
224. The House of Lords reversed the decision of the Court of Appeal in a
decision which Lord Denning described as the most disappointing reversal
in his career: The Due Process of Law (1980), at 141. The actual decision
has been reversed by statute (Civil Jurisdiction and Judgments Act 1982,
section 25(1)), but it remains an influential, and controversial, decision,
and has had considerable effect on the development of the law of anti-suit
injunctions.
35.Lord Diplock, in a speech with which all the other members concurred,
said ([1979] AC at 256):
"… A right to obtain an interlocutory injunction is not a cause of action. It
cannot stand on its own. It is dependent upon there being a pre-existing
cause of action against the defendant arising out of an invasion, actual
or threatened by him, of a legal or equitable right of the plaintiff for the
enforcement of which the defendant is amenable to the jurisdiction of the
court. The right to obtain an interlocutory injunction is merely ancillary
and incidental to the pre-existing cause of action. It is granted to preserve
the status quo pending the ascertainment by the court of the rights of
the parties and the grant to the plaintiff of the relief to which his cause of
action entitles him, which may or may not include a final injunction.
Since the transfer to the Supreme Court of Judicature of all the
jurisdiction previously exercised by the court of chancery and the courts
of common law, the power of the High Court to grant interlocutory
injunctions has been regulated by statute. That the High Court has
no power to grant an interlocutory injunction except in protection or
assertion of some legal or equitable right which it has jurisdiction to
enforce by final judgment, was first laid down in the classic judgment of
Cotton L.J. in North London Railway Co. v. Great Northern Railway Co.
(1883) 11 Q.B.D. 30, 39-40, which has been consistently followed ever
since."
36.That general principle has been re-affirmed several times by the
House of Lords and the Privy Council: Bremer Vulkan Schiffbau und
Maschinenfabrik v South India Shipping Corporation Ltd. [1981] AC
909, 979-980, 992, 994-995; British Airways Board v Laker Airways Ltd
[1985] AC 58http://www.bailii.org/cgi-bin/redirect.cgi?path=/uk/cases/
UKHL/1984/7.htmlhttp://www.bailii.org/cgi-bin/redirect.cgi?path=/uk/
cases/UKHL/1984/7.htmlhttp://www.bailii.org/cgi-bin/redirect.cgi?path=/
uk/cases/UKHL/1984/7.html, 80-81; Channel Tunnel Group Ltd v Balfour
Beatty Construction Ltd [1993] AC 334, 341, 360-361; Mercedes Benz AG
v Leiduck [1996] AC 284, 298 (PC).
37.But doubts have been expressed in the House of Lords about the
width of the principle. In South Carolina Insurance Co. v Assurantie
Maatschappij "De Zeven Provincien" NV [1987] AC Lord Goff of Chieveley
(with whom Lord Mackay of Clashfern agreed) said (at 44):
"I am reluctant to accept the proposition that the power of the court
to grant injunctions is restricted to certain exclusive categories. That
power is unfettered by statute; and it is impossible for us now to foresee
every circumstance in which it may be thought right to make the remedy
available."
38.In Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993]
AC 334 Lord Browne-Wilkinson (with whom Lord Keith of Kinkel and Lord
Goff of Chieveley agreed) shared those doubts and reserved the question
for consideration when it arose, and in Mercedes Benz AG v Leiduck
[1996] AC 284 (PC) Lord Nicholls said in his dissenting opinion (at 308)
that these were
"highly persuasive voices that the jurisdiction to grant an injunction,
unfettered by statute, should not be rigidly confined to exclusive
categories by judicial decision. The court may grant an injunction against
a party properly before it where this is required to avoid injustice, just
as the statute provides and just as the Court of Chancery did before
1875. The court habitually grants injunctions in respect of certain types of
conduct. But that does not mean that the situations in which injunctions
may be granted are now set in stone for all time. The grant of Mareva
injunctions itself gives the lie to this. As circumstances in the world
change, so must the situations in which the courts may properly exercise
their jurisdiction to grant injunctions. The exercise of the jurisdiction must
be principled, but the criterion is injustice. Injustice is to be viewed and
decided in the light of today's conditions and standards, not those of
yester-year."
The Siskina and anti-suit injunctions
39.Prior to the Judicature Acts, the anti-suit injunction generally required
the applicant to establish either that there was "vexatious harassment"
or that the respondent was proceeding abroad in a manner which was
contrary to equity and good conscience: Carron Iron Co v Maclaren
(1855) 5 HLC 415, at 436-437, per Lord Cranworth LC; Kerr, Injunctions
in Equity (1867), at p 134. After the Judicature Acts, from McHenry v
Lewis (1883) LR 22 Ch D 387 and Hyman v Helm (1883) 24 Ch D 531,
and especially in what became (until the explosion in the use of the anti-
suit injunction from the 1980s) the leading case, Cohen v Rothfield [1919]
1 KB 410, the essential basis for the injunction was the vexatious or
oppressive conduct of the respondent. That was the test even in cases in
which the applicant relied on a contract not to sue in the foreign court,
as in The Tropaioforos (No 2) [1962] 1 Lloyd's Rep 410, at 418, and
Settlement Corp v Hochschild [1966] Ch 10, at 15, 19.
40.Soon after The Siskina the question arose as to how Lord Diplock's
categorisation applied to anti-suit injunctions. In Castanho v Brown &
Root (UK) Ltd [1981] AC 557, Lord Scarman said (at 573) in a speech
with which all the other members (including Lord Diplock) concurred:
"The considerable case law to which your Lordships have been referred
does not, in terms, express any limitation upon the sort of cases in which
it may be appropriate to exercise the jurisdiction. Counsel for the plaintiff
however, submitted that it is to be found to have been exercised only in
two classes of case: (1) 'lis alibi pendens,' where the object is to prevent
harassment: he cited as examples The Christiansborg (1885) 10 P.D. 141,
with especial reference to the judgment of Baggallay L.J. at pp. 152-153,
The Hagen [1908] P. 189, 2002 and The Janera [1928] P 55: and (2)
where there is a right justiciable in England, which the court seeks to
protect."
and, after referring to The Siskina, Lord Scarman said:
"No doubt, in practice, most cases fall within one or other of these two
classes. But the width and flexibility of equity are not to be undermined
by categorisation. Caution in the exercise of the jurisdiction is certainly
needed: but the way in which the judges have expressed themselves from
1821 onwards amply supports the view for which the defendants contend
that the injunction can be granted against a party properly before the
court, where it is appropriate to avoid injustice."
41.The actual decision in Castanho v Brown & Root (UK) Ltd, that an anti-
suit injunction may be granted on the ground that England is the forum
conveniens, is no longer good law, and has been replaced by a return to
the formula that the foreign proceedings must be vexatious or oppressive:
Société Nationale Industrielle Aérospatiale v Lee Kui Jak [1987] A.C.
871; Airbus Industrie v Patel [1999] 1 A.C. 119. But there is no reason to
doubt that what Lord Scarman said on the nature of the injunctive power
still represents the law. The effect of that part of his speech is that where
the party is before the court an anti-suit injunction is not a separate claim
requiring its own basis of jurisdiction.
42.In British Airways Board v Laker Airways Ltd [1985] A.C. 58 Lord
Diplock agreed with that part of Lord Scarman's speech. He referred to
the relevant passages in his speech in The Siskina and said (at 81):
"This, being said in the context of an application for a Mareva injunction,
omitted to mention the type of case that is of comparatively rare
occurrence in the English courts in which the plaintiff seeks against
a person amenable to the jurisdiction of the English High Court an
injunction to restrain the defendant from bringing suit against him
in a foreign court upon the ground that the plaintiff is entitled under
English law to a legal or equitable right not to be sued in that foreign
court by that person upon the cause of action that is the subject of such
proceedings. A right not to be sued upon a particular cause of action
in a particular foreign court by the person against whom the injunction
is sought may be contractual in origin. A common example of this is
an exclusive jurisdiction clause in a contract. Furthermore, if under
English law a defence would be available to the injunction-seeker, that
defence may be given anticipatory effect as a right not to be sued that
is enforceable by injunction in an action for a declaration of non-liability.
Of such defences it is not difficult to point to a number of examples most
of them equitable in historical origin, such as estoppel in pais (which was
also a defence at common law), promissory estoppel, election, waiver,
standing by, laches, blowing hot and cold - to all of which the generic
description of conduct that is 'unconscionable' in the eye of English law
may be given. I would accordingly agree, as I did in Castanho's case
[1981] A.C. 557, with the qualification to the statement of principle in the
stark terms in which I expressed it in the Siskina case [1979] A.C. 210,
256 that was added by Lord Scarman in Castanho's case …"
43.Lord Scarman said (at 95), in relation to "single forum" cases,
i.e. cases where there is no remedy in the English court in respect of
the cause of action which, if the facts be proved, is recognised and
enforceable by the foreign court,
"… the power of the English court to grant the injunction exists, if
the bringing of the suit in the foreign court is in the circumstances so
unconscionable that in accordance with our principles of a 'wide and
flexible' equity it can be seen to be an infringement of an equitable right
of the applicant. The right is an entitlement to be protected from a foreign
suit the bringing of which by the defendant to the application is in the
circumstances unconscionable and so unjust. This equitable right not to
be sued abroad arises only if the inequity is such that the English court
must intervene to prevent injustice. Cases will, therefore, be few: but the
jurisdiction exists and must be sustained …"
44.The effect of these speeches is that what is being said is that in
jurisdiction agreement cases and single forum cases the person seeking
an anti-suit injunction is asserting a right not to be sued abroad.
This involves fitting anti-suit injunctions (at any rate in single forum
cases) into the mould of The Siskina by the use of a right based on
unconscionable conduct.
Alternative forum cases
45.Since Lord Diplock's speech in British Airways Board v Laker Airways
Ltd, the vexation/oppression test has often been subsumed within the
category of unconscionability. Thus in South Carolina Insurance Co. v
Assurantie Maatschappij "de Zeven Provincien" N.V. [1987] A.C. 24 Lord
Brandon said (at 41):
"It is difficult, and would probably be unwise, to seek to define the
expression 'unconscionable conduct' in anything like an exhaustive
manner. In my opinion, however, it includes, at any rate, conduct which
is oppressive or vexatious or which interferes with the due process of the
court."
46.But it does not follow that even in alternative forum cases it is
necessary for the applicant to establish a separate right not to be sued,
in the sense of a cause of action based on a legal or equitable right not to
be sued. Hobhouse LJ pointed out in The Jay Bola [1997] 2 Lloyd's Rep
279, 286, that the right to apply for an injunction was not a "cause of
action" of the same character as the right to sue for damages for breach
of contract or for tort. It was an application for "an equitable remedy to
protect the plaintiff against the consequences of unconscionable conduct."
47.The distinction was made by Lord Brandon in South Carolina, in a
speech with which all other members concurred (at 39-41):
"… The first basic principle is that the power of the High Court to grant
injunctions is a statutory power conferred on it by section 37(1) of the
Supreme Court Act 1981, which provides that 'the High Court may by
order (whether interlocutory or final) grant an injunction in all cases in
which it appears to the court to be just and convenient to do so.' … The
second basic principle is that, although the terms of section 37(1) of the
Act of 1981 and its predecessors are very wide, the power conferred
by them has been circumscribed by judicial authority dating back many
years. … The effect of these authorities [The Siskina, Castanho v Brown
& Root (UK) Ltd, and British Airways Board v Laker Airways Ltd], so far
as material to the present case, can be summarised by saying that the
power of the High Court to grant injunctions is, subject to two exceptions
to which I shall refer shortly, limited to two situations. Situation (1) is
when one party to an action can show that the other party has either
invaded, or threatens to invade, a legal or equitable right of the former
for the enforcement of which the latter is amenable to the jurisdiction
of the court. Situation (2) is where one party to an action has behaved,
or threatens to behave, in a manner which is unconscionable. The third
basic principle is that, among the forms of injunction which the High Court
has power to grant, is an injunction granted to one party to an action
to restrain the other party to it from beginning, or if he has begun from
continuing, proceedings against the former in a foreign court. …
The latter form of injunction may be granted in such circumstances as to
constitute an exception to the second basic principle stated above. This
may occur where one party has brought proceedings against another
party in a foreign court which is not the forum conveniens for the trial of
the dispute between them, as that expression was defined and applied
in MacShannon v Rockware Glass Ltd [1978] AC 795. In such a case the
party who has brought the proceedings in the foreign court may not, by
doing so, have invaded any legal or equitable right of the other party, nor
acted in an unconscionable manner. The court nevertheless has power to
restrain him from continuing his foreign proceedings on the ground that
there is another forum in which it is more appropriate, in the interests of
justice, that the dispute between the parties should be tried. …
The power of the court to grant Mareva injunctions may also, before it
was statutorily recognised, have been a further exception to the second
basic principle stated above. …"
48.What Lord Brandon said there about forum conveniens is no longer
good law, but what he said applies to alternative forum cases, where the
applicant complains of unconscionable conduct or vexation/harassment.
The effect of what he says about what he describes as "situation (2)",
namely unconscionability, and what he says about forum conveniens
(which must now be transposed to vexation/oppression), is that in such
cases there is no need for the applicant to establish a threatened invasion
of a legal or equitable right, or a separate cause of action. See also Airbus
Industrie v Patel [1999] 1 AC 119, 134, per Lord Goff of Chieveley, who
describes both alternative forum and single forum cases without reference
to legal or equitable rights.
49.ED & F Man (Sugar) Ltd v Haryanto (No 2) [1991] 1 Lloyd's Rep.
429 is consistent with Lord Brandon's approach. Neill LJ and Mann LJ
accepted that where the applicant for an anti-suit injunction relied on
unconscionable conduct on the part of the respondent, the applicant did
not have to identify a legal or equitable right not to be sued. Neill LJ said
(at 437):
"For my part I find it difficult to identify any legal or equitable rights of
Man, apart from their rights under the arbitration clause, which were
infringed by Mr. Haryanto when he brought his proceedings in Indonesia,
or would be infringed by enforcement proceedings in other jurisdictions.
It is sufficient, however, to consider the matter, as did the Judge, on the
basis of unconscionability."
50.Mann LJ said (at 439), after referring to Lord Brandon's speech in
South Carolina said:
"In my judgment the learned Judge was correct in dismissing legal and
equitable rights from his consideration. I turn to behaviour, actual or
threatened, in a manner which is unconscionable in English law. .."
51.In Mercedes Benz AG v Leiduck [1996] AC 284 (PC) Lord Nicholls said
in his dissenting opinion (at 310):
"For instance, a writ may properly be issued containing nothing
materially more than a claim for an injunction to restrain a defendant
from continuing proceedings abroad on the ground that this would be
unconscionable: see British Airways Board v Laker Airways Ltd. [1985]
A.C. 58, 81, 95; [1984] Q.B. 142, 147. In such a case, the underlying
right, if sought to be identified, can only be defined along the lines
that a party has a right not to be sued abroad when that would be
unconscionable. This formulation exemplifies the circular nature of the
discussion."
52.Some judges have spoken in terms of a right not be sued abroad, even
in alternative forum cases. There can be no objection to the expression
"right not to be sued" if the word "right" is used in the same sense as
it is in, for example, "right to obtain disclosure". The right not to be
sued may involve a correlative duty, but it does not necessarily require
a separate claim or cause of action any more than the right to obtain
disclosure inter partes. In my judgment, on analysis those judges who
have spoken, in alternative forum cases, of a right not to be sued, have
not been indicating that there need be a separate cause of action, legal or
equitable, but have simply been using the word "right" in the sense of the
thing which gives rise to a remedy.
53.Thus in Turner v Grovit [2001] UKHL 65, [2002] 1 WLR 107, a case
involving vexatious and oppressive litigation by Mr Grovit against Mr
Turner in Spain, Lord Hobhouse said (at [25]):
" … Under English law, a person has no right not to be sued in a particular
forum, domestic or foreign, unless there is some specific factor which
gives him that right. A contractual arbitration or exclusive jurisdiction
clause will provide such a ground for seeking to invoke the right to
enforce the clause. The applicant does not have to show that the
contractual forum is more appropriate than any other; the parties'
contractual agreement does that for him. Similarly, where as in the
present case there has been clearly unconscionable conduct on the part
of the party sought to be restrained, this conduct is a sufficiently strong
element to support the affected party's application for an order to restrain
such conduct. …"
54.Other judges may have gone further in requiring a legal or equitable
right in all such cases. Thus in Glencore International AG v Exter Shipping
Ltd [2002] EWCA Civ 528, [2002] 2 All ER (Comm) 1, at [42], which was
another alternative forum case, Rix LJ said (obiter): "… the threatened
conduct must be 'unconscionable'. It is only such conduct which founds
the right, legal or equitable … for the protection of which an injunction can
be granted." See also OT Africa Line Ltd v Magic Sportswear Corp [2005]
EWCA Civ 710, at [63], per Rix LJ; Youell v Kara Mara Shipping Co Ltd
[2000] 2 Lloyd's Rep. 102, at [43], per Aikens J.
55.In some cases it will be necessary to establish a separate claim. For
example, where the underlying dispute has nothing to do with England,
the only basis of jurisdiction of the English court may, for example, be
an English jurisdiction agreement governed by English law. In such a
case an independent head of jurisdiction based on a separate cause of
action against the foreign respondent may have to established under the
Brussels I Regulation or CPR 6.20: e.g. Amoco (UK) Exploration v British
American Offshore [1999] 2 Lloyd's Rep 772; Youell v Kara Mara Shipping
Co Ltd [2000] 2 Lloyd's Rep. 102. So also where the parties have agreed
an exclusive English jurisdiction clause, it has been held, for the purposes
of the lis alibi pendens provisions of the Brussels Convention, that a
claim for an anti-suit injunction is a different cause of action from the
underlying claim with which the action is concerned: Toepfer International
GmbH v Molino Boschi Srl [1996] 1 Lloyd's Rep 510, where Mance J said
(at 513) that the claim for the anti-suit injunction (where the foreign
proceedings were in breach of an English arbitration agreement) did not,
for the purposes of what is now Article 27 of the Brussels I Regulation,
involve the same of cause of action as the substantive proceedings in
Italy.
56.Single forum cases (which, as I have said, are cases where there is
no remedy in the English court in respect of the cause of action being
maintained abroad) may raise more difficult problems. In neither British
Airways Board v Laker Airways Ltd nor in Midland Bank plc v Laker
Airways Ltd [1986] QB 689 (a rare decision in which an injunction was
granted in a single forum case) did a question of personal jurisdiction
arise. Although Laker Airways was a Jersey company, the defendants
included its English liquidators. I accept the submission for Mr Masri that
it would be a highly unusual case in which the English court would grant
an anti-suit injunction in a single forum case against a non-English party,
and (I would add) an even rarer case in which it would have jurisdiction to
do so.
57.Where a claim for an anti-suit injunction is made on the basis of an
exclusive English jurisdiction clause, or where it is made in a single forum
case, the claim for the final injunction may be made in the claim form, as
it was in British Airways Board v Laker Airways Ltd [1985] A.C. 58, where
the writs by British Airways and British Caledonian sought declarations of
non-liability and injunctions to restrain the US anti-trust actions: [1984]
QB 142, at 147; and in Donohue v Armco Inc [2001] UKHL 64, [2002]
1 Lloyd's Rep. 425, where Donohue's action in England was for an anti-
suit injunction and for damages against Armco for breach of the exclusive
jurisdiction clause; but there was no other substantive remedy sought,
such as a declaration on non-liability: see [1999] 2 Lloyd's Rep 649, at
655.
58.In alternative forum cases the application for an anti-suit injunction
will normally be made (as it was in this case) by way of an application in
existing proceedings: Eras EIL Actions [1995] 1 Lloyd's Rep 64; Glencore
International AG v Exter Shipping Ltd [2002] EWCA Civ 528, [2002] 2 All
ER (Comm) 1, at [59], per Rix LJ; Gee, Commercial Injunctions (5th ed.
2004), para 14.031. As long ago as 1867 it was said that if the court is in
full possession of the cause, or a decree has been made, an injunction will
be granted on motion in the suit, but if the court is not in possession of
the matter, an action must be brought: Kerr, Injunctions in Equity (1867),
at 160.
59.That does not in itself determine whether the court has jurisdiction
because CPR 6.20 applies to applications and application notices as it
applies to claims and claim forms: CPR 6.18. But this cannot mean that
a separate head of jurisdiction must be identified for every application
notice in existing proceedings. As a matter of English law, once the court
has jurisdiction over the substance of the case, it has jurisdiction to make
ancillary orders, including anti-suit injunctions to protect the integrity of
its process.
Ancillary orders and CCIC
60.The effect of the judgment of this court in Masri v Consolidated
Contractors International Co SAL [2008] EWCA Civ 303 (April 4, 2008)
is that the English court seised of the substance of a dispute has the
power to grant ancillary orders in that dispute, both prior to judgment and
after judgment, and irrespective of whether the defendant or judgment
debtor is domiciled in a Brussels I Regulation State: at [92]-[107], and
addendum.
61.It is also the effect of the April 4, 2008 judgment that such ancillary
orders are not limited to "protective or provisional measures" within the
meaning of Article 31 of the Brussels I Regulation (formerly Article 24 of
the Brussels Convention). In the course of my judgment I said (at [96]-
[97]) that in Case C-391/95 Van Uden Maritime BV v Firma Deco-Line
[1998] ECR I-7091:
"The European Court distinguished between cases in which the court
which made the order had jurisdiction over the substance of the case
under the Brussels Convention, and those in which it did not. Where
the national court had jurisdiction over the substance of the case, the
European Court held (paras 19, 21 and 22) that that court also had
jurisdiction to order provisional or protective measures, without that
jurisdiction being subject to any further conditions, such as that the order
must be capable of enforcement in the State where the order is made.
The same point is made in [Case C-99/96 Mietz v Intership Yachting
Sneek BV [1999] ECR I-2277] at paras [40]-[41].
It follows that even if CCOG were domiciled in Greece, the English court
as the court having jurisdiction to hear the substance of the case would
have power to order provisional or protective measures. The effect of
these decisions is that the court with jurisdiction over the substance of
the case has jurisdiction to grant any ancillary order. There is no reason to
doubt that that includes orders both pre-judgment and post-judgment …."
62.That decision concerned a receivership order, a freezing injunction,
and an order for an affidavit of assets. In my judgment, even where
the defendant is domiciled in a Brussels I Regulation State, whether
the English court, as the court with jurisdiction over the substance of
the case, has power to grant an ancillary order does not depend upon
whether the injunction is a provisional or purely interim measure for the
purposes of Article 31.
63.Both Case C-391/95 Van Uden Maritime BV v Firma Deco-Line 1998]
ECR I-7091 and Case C-99/96 Mietz v Intership Yachting Sneek BV
[1999] ECR I-2277 concerned orders for interim payments made by the
Netherlands court in favour of Dutch plaintiffs against German defendants
in proceedings for "an immediate measure on grounds of urgency" (kort
geding procedure under Art 289(1) of the Dutch Code of Civil Procedure).
In Van Uden there were arbitral proceedings pending in the Netherlands
between the parties, but the Dutch court would (but for the arbitration
agreement) have had jurisdiction over the substance of the case under
Article 5(1) of the Brussels Convention. In Mietz the German defendant
resisted enforcement of the order in Germany on the grounds that (a) the
German court lacked jurisdiction over the substance of the case; and (b)
the order was not a provisional or protective measure for the purposes of
Article 24 of the Brussels Convention.
64.In each case the European Court was being asked whether the Dutch
court had jurisdiction to make the order for interim payment. In each
case the European Court ruled on the conditions which had to be fulfilled
before a court which did not have jurisdiction over the substance of the
case could grant measures which qualified as provisional or protective
measures under Article 24. In each case the European Court also ruled
that the court with jurisdiction over the substance of the case could grant
provisional or protective measures, without any additional conditions such
as those applied under Article 24. But it is plain from the context in which
the questions were referred that the Court was not being asked to rule
upon, and that it did not rule upon, whether the court with jurisdiction
over the substance of the case may make orders which are not provisional
or protective measures.
65.To take an elementary example, it cannot be doubted that the court
with jurisdiction over the substance may make an order for the production
of documents as part of the ordinary process of discovery or disclosure.
Such an order would not be a provisional or protective measure, but it is
obvious that the court has jurisdiction to make it.
66.No permanent injunction has been sought in this case. In any event, it
seems to me that an interim anti-suit injunction qualifies as a protective
measure. In Case C-261/90 Reichert v Dresdner Bank AG [1992] ECR
I-2149, at [34]-[35], the European Court described (in the context of
Article 24 of the Brussels Convention) provisional and protective measures
as measures which "were intended to preserve a factual or legal situation
so as to safeguard rights…" The anti-suit injunction in this case was
designed to protect the underlying rights of Mr Masri, and the judgment
which he had obtained, and also to protect the integrity of the English
proceedings to which the judgment debtors had submitted. Although
there was no express liberty to apply it was not a final injunction, and
therefore there was and remains an implied liberty to apply in relation to
it: Eras EIL Actions [1995] 1 Lloyd's Rep 64, at 74.
67.Nor do I consider that there is anything in Case C-159/02 Turner v
Grovit [2004] ECR I-3565 which justifies the submission that the only
court which may restrain a domiciliary of a Brussels I Regulation State
from litigating abroad should be the court of its domicile. That ruling was
concerned only with the propriety of enjoining proceedings in a Regulation
State.
Jurisdiction and submission
68.The procedural background is complex, and for present purposes (and
at the risk of over-simplification) it is only necessary to point out that the
English court assumed jurisdiction over the judgment debtors primarily
because they were co-defendants with CCUK. The applicable head of
jurisdiction for CCIC was, because it had a domicile in Greece, Article
6(1) of the Brussels I Regulation as a co-defendant to an action against
a UK domiciliary, and the applicable head of jurisdiction for CCOG was
CPR 6.20(3) as a necessary or proper party to an action brought against
CCUK. There was also an issue as to whether the English court also had
jurisdiction over CCIC under Article 5(1).
69.The submission by CCOG and CCIC to the jurisdiction followed the
addition of all defendants into the same claim form by amendment on
January 13, 2006. Until then CCOG and CCIC had challenged (without
success) the jurisdiction of the court. CCIC's primary ground was that it
could not be joined in the second action simply by virtue of CCUK being a
party to the first action. CCOG's main point was that England was not the
forum conveniens. After the Court of Appeal dismissed the jurisdictional
objections (Consolidated Contractors International Co SAL v Masri [2005]
EWCA Civ 1436, [2006] 1 WLR 830) the House of Lords gave permission
to appeal.
70.But in January 2006 CCIC was joined in the same action as CCUK,
and the claim form in that action was amended on January 19, 2006,
without prejudice to CCIC's accrued time bar defences in respect of claims
that had become time barred before January 13, 2006. The appeal to the
House of Lords remains pending but CCIC and CCOG submitted to the
jurisdiction, and contested the proceedings on the merits. A finding that
the contract provision in Article 5(1) also provided an independent basis
of jurisdiction over CCIC was determined by Cresswell J in favour of Mr
Masri and is still pending in the House of Lords.
71.What is the effect of that submission? Relying on Glencore
International AG v Exter Shipping Ltd [2002] EWCA Civ 528, [2002] 2
All ER (Comm) 1 and Donohue v Armco Inc [2001] UKHL 64, [2002] 1
Lloyd's Rep 425, the judgment debtors say that the submission was one
limited to the claims then made, and did not extend to the claim for an
anti-suit injunction.
72.In Glencore International AG v Exter Shipping Ltd, ante, the applicant
was a company which had used an oil storage facility off Fujairah at which
it was discovered that the stocks of oil fell far short of the amount claimed
by those who used the facility. The applicant company (and many others)
commenced proceedings in England claiming title to the remaining stock
and to stock delivered to third parties. The respondents were four foreign
shipowners who had claimed or counterclaimed against the applicant in
the English proceedings, but who also commenced proceedings in New
York against the applicant for an indemnity shortly before judgment was
given in one of the English actions. The applicant sought, by way of an
application notice, an anti-suit injunction on the basis that the New York
proceedings were vexatious.
73.The shipowners argued that the English court had no jurisdiction
to grant the anti-suit injunctions because they had submitted to the
jurisdiction only for limited purposes and in respect of limited parties. It
was held that the court had jurisdiction to grant the anti-suit injunction
because (1) the respondents to the application had submitted to the
jurisdiction, by making substantive claims or counterclaims in the actions;
and (2) the applicant was a party to the litigation in which they had
submitted, and the shipowners had participated in full in the litigation:
at [52]-[53]. Rix LJ (at [45]) drew a distinction between the case of
a foreign party who invokes the jurisdiction of the English court by
claiming here, and the case of a foreign party who is brought to this
jurisdiction by answering a claim under CPR 6.20. In the first case the
foreign claimant submits himself to the jurisdiction without reservation,
and is subject, so far as territorial jurisdiction is concerned, to all the
incidents of litigation in this country. But in the second case the defendant
can limit his submission to the jurisdiction and prima facie is regarded as
doing so on a claim by claim basis. He went on (at [50]), in a passage
relied by the judgment debtors on this appeal:
"The case of the foreign defendant who has not invoked the jurisdiction
of these courts, however, is different. In such a case, in the absence of a
general submission to the jurisdiction (see … The Kapetan Markos [1986]
1 Lloyd's Rep 211 at 228-229) the general rule is that permission has to
be obtained within the four corners of the English long-arm statute for
each separate claim made against him: see Holland v Leslie [1894] 2 QB
346 and Waterhouse v Reid [1938] 1 All ER 235, [1938] 1 KB 743."
74.In my judgment the decision in Glencore International AG v Exter
Shipping Ltd is entirely orthodox and does not assist the judgment
debtors. A defendant who submits to the jurisdiction is subject to
the incidents of litigation. I accept that both under CPR 6.20 (and its
predecessor RSC Order 11, r. 1) and under the Brussels I Regulation, it
is not permissible to add by way of amendment additional claims unless
the jurisdictional requirements are fulfilled for those claims (including,
in the case of CPR 6.20, the obtaining of permission to serve out of the
jurisdiction): Dicey, para 11-154; Parker v Schuller (1901) 17 TLR 299;
News International v Borgognon (unreported, March 5, 1988); Société
Commerciale de Reassurance v Eras International Ltd. [1992] 1 Lloyd's
Rep 570, 612-613; The Jay Bola [1997] 2 Lloyd's Rep 279, 290; Glencore
International AG v Exter Shipping Ltd [2002] EWCA Civ 528, [2002] 2 All
ER (Comm) 1, at [50]; Donohue v Armco Inc. [2001] UKHL 64, [2002] 1
Lloyd's Rep 425, at [21].
75.Nor does The Kapetan Markos [1986] 1 Lloyd's Rep 211 assist. It
does not decide more than that where a person outside the jurisdiction
unconditionally acknowledges service there is a submission to the
jurisdiction in respect of all claims comprised in the claim form.
76.The judgment debtors' argument based on the Glencore International
AG v Exter Shipping Ltd fails because (a) there has been a general
submission to the jurisdiction in respect of the claims which were the
subject of Gloster J's judgments and (b) the claim for an anti-suit
injunction is not a new claim requiring amendment of the claim form
so as to add a new cause of action. The fact that jurisdiction over the
judgment debtors was obtained primarily (as CCOG and CCIC say) or in
part (as Mr Masri says) by virtue of CCUK's involvement as a party, and
the fact that CCUK was ultimately held not to be liable, affect neither the
original assertion of jurisdiction nor the scope of the judgment debtors'
submission.
77.Nor do I consider that Donohue v Armco Inc [2001] UKHL 64, [2002] 1
Lloyd's Rep 425 assists the judgment debtors. Armco Inc had commenced
proceedings in New York alleging fraud against Mr Donohue and several
other companies and individuals. Mr Donohue claimed that the New York
proceedings were in breach of an exclusive English jurisdiction clause.
The basis of jurisdiction for Mr Donohue's claim was the contract head
of jurisdiction under RSC Order 11, rule 1(1) (see [2002] 1 Lloyd's Rep
at [17]). Other alleged conspirators who were being sued in New York
applied to be joined as co-plaintiffs to the English proceedings so that
they too could seek anti-suit injunctions.
78.Lord Bingham (at [18]) recognised that an exclusive jurisdiction
agreement gave a cause of action entitling a party to the agreement
to seek an anti-suit injunction. But those who were not parties to the
exclusive jurisdiction agreement could not be joined to the English
proceedings as additional plaintiffs, not only because England was not
the natural forum and the New York proceedings were not vexatious or
oppressive, but also because the court had no personal jurisdiction over
Armco in proceedings by the proposed additional plaintiffs. They could not
have obtained permission to serve out of the jurisdiction in independent
proceedings, and the amenability of Armco and its associated companies
to the jurisdiction of the English court by virtue of their contractual
relationship with Mr Donohue did not enable them to take advantage
of that relationship to effect service on the solicitors nominated by the
Armco companies. The court would not allow them to use Mr Donohue's
action as a vehicle to enter the proceedings when they could have shown
no possible ground for doing so in their own right.
79.This decision does not assist on the question of submission in the
present case. Armco was subject to the jurisdiction of the English court
in relation to the proceedings by Mr Donohue and (potentially) the other
parties to the jurisdiction agreement, but whatever the scope of its
submission to those proceedings, it would not have been a submission to
claims by other parties.
Comity and the conditions for the exercise of the discretion
80.The judgment debtors say that it is contrary to principle for an
injunction to be granted solely on the ground that it is sought to restrain
the re-litigation elsewhere of a matter which has already been decided
in England. This is because it is a matter for the courts of the relevant
country to decide, if need be by reference to their own choice of law rules
and any applicable international treaty, what the effect of the English
judgment on liability should be (The Western Regent [2005] EWCA Civ
985, [2005] 2 Lloyd's Rep 359, [50], [66]) and it is not sufficient that
the foreign litigation ignores, or seeks to obtain a result contrary to, the
judgment of the English court: ED & F Man (Sugar) Ltd v Haryanto (No. 2)
[1991] 1 Lloyd's Rep 429, at 437-438.
81.This argument is an appeal to considerations of international comity. In
modern times the courts have often emphasised the importance of comity
in the exercise of the discretion to grant anti-suit injunctions. Although
the injunction is directed to the parties it involves an indirect interference
with the foreign court, and caution is required before the injunction is
granted: see, among many others, Cohen v Rothfield [1919] 1 KB 410,
413, per Scrutton LJ; Société Nationale Industrielle Aérospatiale v Lee
Kui Jak [1987] A.C. 871, 892, per Lord Goff of Chieveley. The litigation
in Phillip Alexander Securities and Futures Ltd v. Bamberger [1996] CLC
1757 and in British Airways Board v Laker Airways Ltd [1985] A.C. 58
showed how foreign courts may object to the imposition of an anti-suit
injunction by the English court. Comity may be decisive where the English
court is asked to grant an anti-suit injunction when the case has no
relevant connection with England, since to grant an injunction in such a
case may be a breach of international law: Airbus Industrie v Patel [1999]
1 A.C. 119.
82.I do not accept the judgment debtors' argument that there is a
principle (whether it is expressed as a condition for the exercise of the
jurisdiction, or as an aspect of comity, or as an element in the exercise
of the discretion) that the English court will not restrain re-litigation
abroad of a claim which has already been the subject of an English
judgment adverse to the person seeking to re-litigate abroad. It has
been established since at least 1837 that the fact that the respondent
is seeking to re-litigate in a foreign jurisdiction matters which are
already res judicata between himself and the applicant by reason of an
English judgment can be a sufficient ground for the grant of an anti-suit
injunction.
Protection of the jurisdiction
83.In Bank of Tokyo v Karoon [1987] AC 45n, at 63, Robert Goff LJ
referred to the public interest in the finality of litigation, and said that
there were authorities in England and the United States in which courts
had granted injunctions restraining persons properly amenable to their
jurisdiction from relitigating matters which had already been the subject
of a judgment of the court of the forum. He referred to Booth v Leycester
(1837) 1 Keen 579 where the plaintiff had failed in a suit before the
Court of Chancery in England. He appealed against that judgment. In the
meantime, he also instituted proceedings before the Court of Chancery
in Ireland raising the same contentions. The defendant applied for an
injunction to restrain the Irish proceedings. Lord Langdale MR said (at
580):
"As it appears that these suits were instituted for the same matter in
all respects, and there has been an adjudication upon that matter, from
which there may, indeed, be an appeal, but which, for the present, must
be considered as final, I think I should not be performing my duty, if
I permitted the Plaintiff to go on with the proceedings in Ireland. The
injunction prayed by this petition must, therefore, be granted."
84.It is noteworthy that, citing (among other cases, Booth v Leycester),
Kerr on Injunctions from the first edition (as Injunctions in Equity, 1867)
to the last (6th ed. 1925) treated the existence of an English judgment as
the primary situation in which injunctions to restrain proceedings abroad
would be granted, and dealt with others cases with the introductory words
(1st ed. at 156; 6th ed. at 599):
"Even though no decree has been obtained in this country, yet if a suit
instituted abroad does not appear so well calculated to answer the ends
of justice as the suit here, the Court will restrain the foreign action,
imposing, however, terms which it considers reasonable for protecting the
party whom it enjoins."
85.Counsel for the judgment debtors have subjected the other cases
cited in Kerr to an elaborate analysis designed to show that they are
distinguishable from this case, particularly because in most of the cases
the plaintiff in England was also the plaintiff abroad, and the plaintiff was
seeking not to re-litigate the issues pending in England, but was seeking
a concurrent remedy abroad. I will not extend this already long judgment
by analysing these decisions, because the law on anti-suit injunctions has
moved on a great deal since the last edition of Kerr and I doubt whether
it is profitable to do more than note that the protection of the jurisdiction
of the English court and its judgments by injunction has a long lineage.
In my judgment there is no reason to doubt that in appropriate cases
the English court may enjoin a foreign defendant against whom there is
an English judgment (in proceedings to which the foreign defendant has
submitted) from seeking to re-litigate the same issues abroad.
86.In Bank of Tokyo Ltd. v Karoon [1987] A.C. 45n, at 58, Robert Goff
LJ referred to Judge Wilkey's statement in Laker Airways Ltd v Sabena,
Belgian World Airlines, 731 F 2d 909, at 926-927 (DC Cir 1984) that anti-
suit injunctions were most often necessary (a) to protect the jurisdiction
of the enjoining court, or (b) to prevent the litigant's evasion of the
important public policies of the forum, and concluded (at 60):
"…without attempting to cut down the breadth of the jurisdiction, the
golden thread running through the rare cases where an injunction has
been granted appears to have been the protection of the jurisdiction;
an injunction has been granted where it was considered necessary and
proper for the protection of the exercise of the jurisdiction of the English
court. …"
87.Also in South Carolina Lord Goff said ([1987] AC 24, at 45): "… I
am at present inclined to the opinion that an injunction has generally
been granted in such circumstances for the purpose of protecting the
English jurisdiction ..." It would seem that he was not able to persuade
his colleagues of the primacy of the protection of English proceedings,
since in Société Nationale Industrielle Aérospatiale v Lee Kui Jak [1987]
A.C. 871 Lord Goff said at (at 893): "…one of their Lordships has been
inclined to think that such an idea generally underlies the jurisdiction to
grant injunctions restraining the pursuit of foreign proceedings …"
88.But Lord Goff is certainly not the only member of the House of Lords
who has emphasised the importance of protection of the jurisdiction.
In South Carolina Lord Brandon gave (at 41), as an example of
unconscionable conduct, conduct "which interferes with the due process
of the court." In Turner v Grovit [2001] UKHL 65, [2002] 1 W.L.R. 107, at
[28] Lord Hobhouse said:
"… It is recognised that to make an order against a person who is a party
to proceedings before a foreign court may be treated as an interference
(albeit indirect) in the foreign proceedings. Thus English law requires the
applicant to show a clear need to protect existing English proceedings.
The protection of English proceedings is, understandably, regarded as a
legitimate subject matter for an English court. It is not the concern of any
other court."
89.I do not consider that the two judgments of this court relied on by the
judgment debtors compel a conclusion that the English court should not
enjoin conduct abroad which is designed to prevent compliance with an
English judgment.
90.The first case is ED & F Man (Sugar) Ltd v Haryanto (No. 2) [1991] 1
Lloyd's Rep 429. The underlying dispute concerned agreements for the
sale of sugar by Man to Haryanto. Disputes were referred to arbitration.
There were three actions between the parties in the English court. In
one of them Haryanto's claim that he was not bound by the disputed
contracts was dismissed. Subsequently there was a settlement agreement
under which Haryanto agreed to pay Man US$9 million. Haryanto then
commenced an action in Indonesia claiming annulment of the disputed
contracts, and Man began an action in Indonesia seeking enforcement
of the acknowledgment of debt. The Indonesian court decided that
the disputed contracts were illegal as were the obligations of Haryanto
under the settlement agreement. Man then sought a declaration in the
English court that the settlement agreement, the acknowledgment of debt
and additional security given by Haryanto were valid and binding, and
sought an injunction restraining Mr Haryanto from taking any steps in
proceedings in Indonesia or elsewhere to prevent Man's pursuit of its won
proceedings. There were further proceedings by Mr Haryanto in Indonesia,
and related proceedings in New Mexico by Man.
91.It was held that the Indonesian judgments would not be recognised
in England as they were inconsistent with the previous decision of the
English court, but the injunction to prevent reliance on the Indonesian
judgments in Indonesia or other countries was refused. Neill LJ said (at
437-438):
"... In my view it would be wrong for this Court to grant an injunction
which is designed to take effect inside Indonesia and which would
interfere or purport to interfere with the judgment of a court of competent
jurisdiction inside that country.
...
One can see the force of the argument that Man, having obtained
declarations in England, should be entitled to ancillary relief to give teeth
to the declarations and to reduce the risk of a multiplicity of proceedings.
In the end, however, I have come to the conclusion that it would not be
right on the facts of this case to grant any injunction which would have an
extraterritorial effect on proceedings abroad."
92.In refusing to interfere with the exercise of discretion by the judge,
Mann LJ said (at 440) that the considerations which required caution
were "respect for decisions of foreign Courts properly given within
their jurisdictions and of not constraining albeit indirectly, the ability of
foreign Courts to apply their local law in regard to the recognition and
enforcement of judgments".
93.It is important to note that in this case the Indonesian judgments
had been given, and it is plainly a very serious matter for the English
court to grant an injunction to restrain enforcement in a foreign country
of a judgment of a court of that country. The decision in that case was
reached as a matter of discretion, not jurisdiction. In Mamidoil-Jetoil
Greek Petroleum Co SA v Okta Crude Refinery AD [2003] 1 Lloyd's Rep
1 the courts of the Former Yugoslav Republic of Macedonia had granted
an interlocutory injunction restraining the defendants from paying any
damages to the claimant in the English proceedings. Aikens J applied
ED & F Man (Sugar) Ltd v Haryanto (No. 2) and refused as matter of
discretion to grant an injunction restraining the defendants from relying
on any judgment or order in Macedonia which prevented them from
paying any damages adjudged due from them by the English court:
[201]-[208]. Aikens J considered that an injunction would be contrary
to comity. It was for the foreign court to decide whether to recognise
the English judgment, and an injunction would put the officers of the
defendants in an impossible position since there was already an injunction
in Macedonia preventing the defendant from paying any damages. That
too was a decision on discretion, and there too the foreign court had
made orders which the English court was being asked, in effect, to defy.
94.These decisions show that it will be a rare case in which an injunction
will be granted by the English court to prevent reliance abroad on, or
compliance with, a foreign judgment, or an injunction which will indirectly
have that effect. But there is no general principle that even in such a
case no injunction will be granted. In Ellerman Lines, Ltd v Read [1928]
2 KB 144 (a case to which this court was not referred in argument) the
Court of Appeal specifically rejected an argument that, while the English
court could grant an injunction restraining the institution or continuance
of proceedings in a foreign court, there was no power, after the foreign
court had given judgment, to grant an injunction restraining the person
who had obtained it from reaping its fruits: at 152 (Scrutton LJ), 155
(Atkin LJ), and 158 (Eve J). No doubt the power will only be exercised
in exceptional circumstances, as they were in that case, where the party
enjoined was a British subject who had obtained the judgment by fraud.
95.But the present case is not a case where the foreign court has given a
judgment with which an English injunction will be inconsistent. It is simply
a case in which the judgment debtors are seeking to re-litigate abroad the
merits of a case which, after a long trial, they have lost in England. In my
judgment it is a classic case of vexation and oppression, and of conduct
which is designed to interfere with the process of the English court in
litigation to which the judgment debtors submitted.
96.The second decision of this court on which the judgment debtors
rely is The Western Regent [2005] EWCA Civ 985, [2005] 2 Lloyd's Rep
359. That was a case involving a collision between the claimant's vessel
and the defendant's North Sea oil installation. The claimant brought
limitation proceedings in England under the Convention for the Limitation
of Liability for Maritime Claims 1976. The defendant brought an action
for damages in Texas, and contested the jurisdiction of the English court.
The Commercial Court made a limitation decree, but declined to grant
an injunction restraining the Texas proceedings. The latter decision was
affirmed by the Court of Appeal on the ground that it was for the Texas
court to determine what effect to give to the limitation decree. Clarke
LJ (at [51]) reached that conclusion partly because of the nature of a
limitation decree, and because the United States approached limitation
differently. Rix LJ said (at [66]) that it was for other nations to decide on
the international effect of an English declaration or decree under the 1976
Convention. This decision does not lay down any general principle outside
the unusual context of limitation decrees.
Scope of the injunction
97.As I have said, the judgment debtors have three objections to the
form of the injunction. The first is that it should not have extended
to the few remaining Lugano Convention States. That is right, and is
accepted by Mr Masri. The second objection is that it did not contain a
liberty to apply. The judgment debtors say that the judge refused an
express liberty to apply. I do not consider that that is a fair reading
of his judgment. All he did was refuse to insert a proviso permitting
the judgment debtors to come back to the court should they wish to
reformulate their Yemeni proceedings in order to safeguard their rights
under the Production Sharing Agreement. His refusal was based on his
rejection of their evidence on motive. I am satisfied that the order was
subject to the normal implied liberty to apply.
98.The judgment debtors say that the injunction should be limited to
Yemen, on the basis that there is no sufficient evidence of an intention
to take proceedings in any other countries to re-litigate the matters
decided by the English court. Mr. Masri referred to the finding of Gloster
J in her judgment of December 20, 2007, at [82], that since the time
of the judgment on liability, the actions of the judgment debtors had
demonstrated in a patently obvious fashion that they proposed to take
advantage of any opportunity open to them to resist enforcement of the
judgments of the English courts, to evade their responsibility to pay Mr.
Masri what is due to him, as found by the English courts, and to put every
obstacle in his way to prevent him from enforcing judgment against them.
At the hearing before Judge Mackie QC, the judgment debtors declined to
say whether they intended to sue Mr Masri elsewhere. I see no reason to
interfere with the judge's exercise of discretion in those circumstances.
Overall conclusions
99.Where a party is properly before a court, an anti-suit injunction is
not a separate claim requiring its own basis of jurisdiction. In alternative
forum cases, such as the present, it is not necessary for the applicant
to rely on a cause of action establishing a separate right not to be sued.
The right to apply for an injunction is not of itself the cause of action
but is ancillary and incidental to the existing proceedings. The judgment
debtors' submission to the English jurisdiction in those proceedings is a
sufficient basis for the imposition of the anti-suit injunction, and the claim
for the injunction does not require any amendment, and does not require
any separate basis of jurisdiction either under the Brussels I Regulation or
under CPR 6.20. Nor in the case of an injunction directed at a domiciliary
of a Brussels I Regulation State is it necessary that the injunction be a
protective or provisional measure, but if that were necessary, then the
anti-suit injunction was such a measure.
100.The discretion was properly exercised in this case, consistently with
the dictates of comity. It is consistent with principle for an English court to
restrain re-litigation abroad of a claim which has already been subject of
an English judgment. There is long-established authority that protection
of the jurisdiction of the English court, its process and its judgments by
injunction is a legitimate ground for the grant of an anti-suit injunction.
101.I would therefore vary the order to exclude the Lugano Convention
States, and dismiss the appeal.
Lord Justice Longmore:
102.I agree.
Sir Anthony Clarke MR:
103.I also agree.