UK Court Refuses Anti-Suit Injunction Against Non-Party

In Evison Holdings Limited v International Company Finvision Holdings & Anor [2019] EWHC 3057 (Comm), the English High Court considered an application for the continuance of an anti-suit injunction against a non-party to an arbitration agreement. The application was based on the non-party having pursued proceedings in Russia which raised the same or overlapping issues to those which were the subject of the arbitration.

Evison argued:

  • that Finvision and OEB had colluded to bring the OEB Russian Proceedings in order to impede the Arbitrations (relying upon BNP Paribas v Open Joint Stock Company Russian Machines [2011] EWHC 308 (Comm) and Mace (Russia) Ltd v Retansel Enterprises Ltd [2016] EWHC 1209 (Comm));
  • That the OEB Russian Proceedings would require Evison to engage with the same issues in dispute in two jurisdictions;
  • Given that the OEB Russian Proceedings were due to conclude before the Arbitrations, they may give rise to issue estoppels binding upon the Arbitrations;
  • The OEB Russian Proceedings may lead to Evison being seized of its shares in OEB.

In response, OEB, not being a party to the Framework Agreement containing the arbitration agreement, argued that it was simply pursuing its own corporate claims for wrongs done to it by Evison in Russia, the natural and only forum where they could be pursued, with Finvision denying any collusion with OEB, submitting evidence demonstrating that it had required OEB to discontinue the OEB Russian Proceedings. Finvision also offered to undertake to the Court not to rely upon any issue estoppel arising from the OEB Russian Proceedings

The Court noted that it would not hesitate to exercise its jurisdiction under s.37 of the Senior Courts Act 1981 to prevent a party to an arbitration agreement from breaching that agreement by commencing proceedings in a non-contractual forum. But, in this case, while there was a presumption that OEB colluded with Finvision due to the control which Finvision exercised over OEB, the judge distinguished the cases relief upon by Evision, noting that:

the OEB claims were its own corporate claims which only it could bring and only in Russia. The judge noted that it would be a remarkable step for the Court to restrain a foreign public company from pursuing its own legitimate claims, concluding that it wouldbe inappropriate to injunct OEB from pursuing its claims and therefore ordered that the interim anti-suit injunction be discharged.

See the following reviews of the case

“This decision confirms that, whist the Court will often not hesitate (subject to well-known EU law restrictions) to exercise its jurisdiction under section 37 of the Senior Courts Act 1981 to prevent a party to an English seated arbitration agreement from breaching that agreement by commencing proceedings in a non contractual forum, the Court will be hesitant to restrain nonparties to the arbitration agreement for pursuing proceedings which raise the same or overlapping issues to those which are or might be subject to arbitration. In order to successfully obtain an injunction in such circumstances, the applicant will require strong evidence that the proceedings involve collusion with a party to the arbitration and represent a vexatious and unconscionable attempt to impede it. In that way the Court will seek to distinguish cases where the non-party is simply pursuing its own legitimate claims.”

“The English court will not generally hesitate to prevent a party to an arbitration agreement from commencing proceedings in a non-contractual forum in breach of that arbitration agreement. However, whether the court will grant an anti-suit injunction against a non-party to an arbitration agreement will always depend on the evidence before it. The party pursuing the injunction should not merely rely on common control between the other party to the arbitration agreement and the party that commenced proceedings in a non-contractual forum as evidence of collusion. It must stand ready to present evidence demonstrating that the foreign court proceedings were initiated to impede the arbitration. This case helpfully reminds us that not all proceedings initiated by non-parties to an arbitration agreement raising connected or overlapping issues will necessarily be found by an English court to be vexatious or unconscionable. If the non-party commenced proceedings in a forum which is a proper and natural forum to advance its claims, there may be no cause for intervention by the English court.”

About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Hong Kong Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

View

Leave a Reply

Your email address will not be published. Required fields are marked *