A Brief Guide to Anti-Suit Injunctions and Related Relief

By Mikhail Vishnyakov, Rosie Wild, Julia Ogievetsky, Sam Macintosh and Iason Pafitis

There has been a surge in anti-suit injunctions granted by the English Court. This article explains this remedy and provides a brief outline of the key considerations in this regard.

If you would like to discuss this in more detail, please do not hesitate to reach out; we have extensive and recent expertise in applying for and challenging anti-suit relief.

Understanding ASIs

An ASI is a court order restricting a party from initiating or continuing legal proceedings in a jurisdiction or forum outside of that in which the proceedings should be conducted (typically, because there is a jurisdiction or arbitration clause).

Indeed, the English Courts take a strong stance in upholding these injunctions to maintain the integrity of jurisdictional agreements, provided that:

• the jurisdiction agreement between the parties is binding; and
• the substantive disputes in question fall within the remit of that jurisdiction clause.

ASI orders are typically accompanied by a prominent “Penal Notice”, on the front page notifying the recipients that breaching the ASI can result in asset seizure, financial penalties, or imprisonment for individuals (including those who assist in breaching the injunction, e.g. as a director of a respondent company).

Related relief

The applicant may also seek relief that would make the ASI more effective. This is particularly important if the proceedings sought to be restrained are ongoing and are or may be brought in courts with powers to: (a) continue the proceedings (and issue a judgment) even if the claimant seeks to withdraw the proceedings (as required by the ASI), and/or (b) grant their own ASIs. Such related relief includes:

• Anti-Enforcement Injunctions (AEIs): AEIs prohibit a party from enforcing a judgment obtained in foreign proceedings that violates an arbitration agreement or jurisdiction clause. In cases where the judgment has already been obtained, it may be that the AEI is the only relief that can be sought and, in any event, it is often prudent to seek an AEI along with an ASI.
• Anti-Anti-Suit Injunctions (AASIs): AASIs are designed to counteract foreign anti-suit injunctions that may undermine a party’s contractual rights. While an ASI acts as a defensive measure, shielding parties from unwanted litigation, an AASI serves as an offensive tool, preventing opponents from initiating or continuing parallel proceedings through an ASI application.

Potential defences to an ASI

When an ASI application is before the Court (and it is clear that a claim falling within the scope of the agreement between the parties is made in proceedings in a forum other than that which the parties have agreed), the burden then shifts to the respondent attempting to pursue litigation in that alternative forum to present “strong reasons” for their conduct. These reasons may include:

• Voluntary Submission to Jurisdiction: If the applicant has previously engaged with the proceedings in the foreign jurisdiction, this may complicate its case for an ASI: indeed, deemed submission to the foreign jurisdiction risks rendering any ASI application redundant (as discussed further below), as the English Courts will likely deem that an ASI will not be appropriate if submission has already occurred.
• Improper Conduct: Evidence of conduct such as dishonesty or excessive delay can weigh against the grant of an ASI.  In assessing whether there has been ‘delay’ in bringing an ASI application the Courts will have regard to how far the ‘offending’ foreign proceedings have progressed.

A swift assessment of the availability of the ASI should therefore be made, to ensure that the applicant does not impede the prospects of obtaining the ASI by, for example, participating in the foreign proceedings.

ASIs post-Brexit

Notably, post-Brexit, the English Courts have the power to grant ASIs against litigants in any jurisdiction, including those within the EU.

ASIs in support of foreign-seated arbitrations

As things stand, English Courts are able to issue ASIs to prevent breaches of arbitration agreements, even when the arbitration is seated outside of England & Wales, provided that the arbitration agreement is governed by English law (which may be the case even if there is no express provision as to the governing law of the arbitration agreement).

However, the proposed Arbitration Bill presently before Parliament is likely to change this, as the amended Arbitration Act is highly likely to specify that in the absence of an express choice of law for the arbitration agreement, the law of the seat will govern the arbitration agreement.

This amendment is likely to be implemented very soon indeed. Accordingly, now may be the last opportunity for obtaining ASIs from the English Court restraining proceedings brought (or which may be brought) in breach of non-English seated arbitrations (provided that the governing law of the arbitration agreement is – by express choice or by implication – English law).

Surge in ASIs

The recent surge in ASIs is partly explained by Russian parties bringing proceedings in Russia, relying on provisions of Russian law to disapply the arbitration or jurisdiction clause to which they have previously agreed.

Practical considerations for ASIs

Applications for ASIs may require extensive factual and expert evidence. Additionally, ASI applications may need to be made without notifying the respondent, which, under English procedural law, requires the applicant to provide ‘full and frank’ disclosure, raising arguments that are harmful for its application (and which would have been made had the respondent been present). The first hearing (the interim hearing) is then likely to be followed by a second (return date) hearing, of which the respondent will be notified, and where the ASI may be made final. Typically, where applicants are successful they will be granted their costs of the application, with such costs likely to be awarded on the indemnity basis.

Comment

ASIs, AASIs, and AEIs are key tools for preserving the parties’ chosen dispute resolution clauses. The ASI legal landscape is evolving, presenting both challenges and opportunities. A timely application for an ASI may significantly improve a party’s position in the broader dispute.