G v R [2023] EWHC 2365 (Comm)
On 22 September 2023, Sir Nigel Teare heard an application for an anti-suit injunction to restrain proceedings in Russia, which were alleged to be in breach of an arbitration agreement with its seat in France. On 24 August 2023, Knowles J granted an interim injunction at an ex parte hearing.
Whilst anti-suit injunctions are habitually granted in relation to English-seated arbitrations, the English Court has never previously decided, at an inter partes hearing, whether it has jurisdiction to grant such an injunction in relation to an arbitration with a foreign seat.
The claimant argued that because the French court (i.e. the courts of the seat of arbitration) would not grant an anti-suit injunction, it was necessary and appropriate for the English Court to intervene and grant an injunction.
The case also represented the first time that a lower court has had to apply the Supreme Court’s guidance in Enka v Chub [2020] UKSC 4 as to the determination of the governing law of an arbitration agreement, and in particular the tension which arises where the governing law in the main contract provides for one law, but the seat of the arbitration is in another country.
Sir Nigel Teare (sitting as a Judge of the High Court) held that the English court did not have jurisdiction to grant the injunction sought. In summary:
- The arbitration agreement did not contain any express choice of law, and it was therefore necessary to apply the approach set out in Enka v Chubb at [170(iv) to (vi)].
- The main contract contained an English law governing law clause, and that would generally mean that the parties intended to apply English law to the arbitration agreement. However, the expert evidence showed that the law of the seat (French law) would apply French law to the arbitration agreement, and this negated the inference that the parties intended to apply the governing law of the main contract to the arbitration agreement. The parties had instead intended to apply French law to the arbitration agreement.
- Since the arbitration agreement was not governed by English law, there was no jurisdictional gateway on which the claimant could rely (under Practice Direction 6B).
- England was also not the proper place for the claim (as required by CPR 6.37(3)). The courts of the seat of the arbitration (France) were the natural forum to hear claims concerning a breach of the arbitration agreement. Even if English law had applied to the arbitration agreement (which it did not), this would not be a cogent factor in support of English jurisdiction in circumstances where there was not likely to be any significant dispute on English law.
- Applying the test set out by the Supreme Court in Vedanta Resources v Lungowe [2020] AC 1045, the fact that the French Courts do not grant anti-suit injunctions did not mean that the claimant was unable to obtain substantial justice in France. The non-availability of a particular remedy is not sufficient to establish that a claimant cannot obtain justice in a foreign forum.
- Arguments based on developments in Russia, and the suggestion that it may have departed from its obligations under the New York Convention, did not assist in showing that substantial justice cannot be done in France.
This is an important decision on the law governing arbitration agreements, and the limits of the English Courts’ jurisdiction to intervene in foreign-seated arbitrations.
Alex Gunning KC and Alexander Brown appeared for the defendant in successfully resisting an anti-suit injunction, instructed by Enyo Law. A copy of the judgment is below.
View Judgment