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Multiplicity of proceedings no reason to withhold anti-suit injunction
Multiplicity of proceedings no reason to withhold anti-suit injunction
13 November 2019
Series
Blogs
13 November 2019
In A and another v B and another [2019] EWHC 2478 (Comm), the English High Court granted a continuation of an anti-suit injunction to restrain the defendants from pursuing court proceedings in Israel against the claimants. Mr Justice Jacobs found that, notwithstanding the possibility of a multiplicity of proceedings, there was no strong reason not to enforce the parties' arbitration agreement.
Background
The parties had concluded an arbitration agreement with seat in London (under LCIA rules) as part of an agreement to settle an earlier dispute between them.
Despite this, the defendants had commenced proceedings in Israel against a number of parties – including the claimants. These proceedings had been issued in late 2018 but were served on the claimants in March 2019. The claimants had, in that month, also obtained an anti-suit injunction against those proceedings and this case concerned the court’s decision at the return date as to whether to continue that injunction. Since the granting of the injunction, whilst the Israeli proceedings had not far advanced, arbitration proceedings had been commenced in England by the claimants and were likely to continue.
The decision
The court continued the injunction that had been granted in March 2019. The judge noted that, in accordance with previous authorities, the basic principle was that the court would enforce and feel no diffidence in granting an injunction to enforce the parties’ arbitration agreement. There was an exception to this, however, where there was “strong reasons” not to. The judge, however, found that this did not apply here. In reaching his decision, the judge considered three points put forward on behalf of the defendants to resist the application.
First, the defendants pleaded delay by the claimants in seeking the present relief in March 2019. The judge disagreed, noting that he found no material delay on the facts, but more importantly the relevant question was whether or not the Israeli proceedings could be described as having been far advanced. The judge did not consider this to be the case.
Second, the defendants pleaded that the Israeli court was seised with proceedings and that the court was yet to rule or determine future progress. The judge did not consider this to be a strong reason not to continue the injunction. The judge said that the position was for the English court, applying its principles developed in the case law, to decide whether anti-suit relief was appropriate in a particular case. On the facts of this case, there was a clear arbitration agreement that bound the parties, and there was no submission to suggest that the claims were outside the scope of the arbitration agreement.
Finally, the defendants argued that allowing the Israeli proceedings to continue would be far more appropriate and efficient as it would promote one set of proceedings before which all defendants to a number of “related transactions” were party. They pointed pleaded the risk of multiplicity of proceedings if an injunction were to be granted. The judge considered this point to be of no substance. This risk existed in any event as the arbitration would go ahead in accordance with an arbitration agreement and, in such circumstances, the English court had no jurisdiction to stop it. The possibility of multiplicity of proceedings was simply the natural consequence of the agreement that had been reached between the parties.
Comment
This case shows that the English court is ready, in accordance with established case law, (albeit within the well-known restrictions established by EU Law – which were not relevant in this case) to grant an injunction where a valid and binding arbitration agreement with seat in England exists. Moreover, it’s dismissal of concerns that the injunction may fragment the wider picture of the proceedings further illustrates the importance that the court will generally place on the parties’ choice.
Stephen Lacey would like to thank Madeline Chan for her assistance in preparing this article.