The return of the anti-suit injunction post-Brexit?

Posted on 19 Dec 2016 by Brick Court

Oliver Jones

The decision of the united Kingdom to leave the European Union has given rise, in the context of the rules regulating civil jurisdiction and enforcement in the EU, to questions as to how this may impact on the availability of the anti-suit injunction, an injunction issued by the courts of this jurisdiction to prevent a person from bringing proceedings in any other jurisdiction.

For many of us the anti-suit injunction featured heavily in our legal education as a prime example of the remedial power and flexibility of English law. However they have been a somewhat rare occurrence in recent legal practice because of the regime now embodied in the recast Brussels Regulation (Regulation (EU) No. 1215/2012), and its predecessor, the Brussels Regulation No. 44/2001.

Brexit is likely to lead to the UK’s departure – in some form – from that regime. As a consequence, this has at least given rise in some quarters to the perception that the anti-suit injunction may be in line for a return to prominence.

Common Law

The anti-suit injunction is to some degree a juridical weapon built on judicial mistrust. At common law, it was available where a party to a contract with an exclusive English jurisdiction clause sued, or threatened to sue, elsewhere, in breach of the jurisdiction clause. It was also available in a more amorphous category of case, where the conduct of the person was considered vexatious or oppressive in some way in the eyes of English law and thus constituted an equitable wrong. Because the foreign court could not be trusted to uphold the jurisdiction agreement, or prevent this oppressive conduct (or did not have the necessary powers), the English court had to step in and injunct the person from doing so itself. This was always styled, however, not as an interference with the jurisdiction of the foreign court, but simply with a personal restriction on a person over whom the English court had in personam jurisdiction.

ECJ rejects this approach in the context of legislation

The anti-suit injunction fell foul, however, of the European regime. This was a regime, it was said, founded upon a theory of mutual trust that represented the antithesis of the underlying rationale of the anti-suit injunction. That was established by the ECJ in Turner v Grovit (a case on the predecessor to the Recast Regulation and the Brussels Regulation, the Brussels Convention). This has rankled with some academics and practitioners because it was built on a premise that some do not believe in: namely, that all EU courts were created equal. It was felt that some EU courts did not give sufficient respect to exclusive jurisdiction clauses in favour of, in particular, the English courts.

Those concerns were only exacerbated with the ECJ’s decision in Allianz SpA v West Tankers Inc. That, in turn, put an end to the use of anti-suit injunctions to uphold arbitration agreements in the context of the Brussels regime, on essentially the same reasoning as in Turner (despite the fact that Article 1(1)(d) of the Brussels Regulation states that “the Regulation shall not apply to arbitration”).

Changes in the Recast Regulation

Those tasked with negotiating amendments to the Brussels Regulation, which when agreed became the Recast Regulation, sought to address some these problems in two ways. First, a provision was introduced that enabled a court chosen by the parties in an exclusive jurisdiction clause to continue to hear a claim despite a foreign court being first seised (reversing the ECJ’s decision in Erich Gasser GmbH v MISAT Srl). So it could not prevent those foreign proceedings happening, as it once could, but it could at least hear a competing case of its own. The second was to insert an additional recital – recital (12) – addressing the arbitration exception, that has given some hope that the anti-suit injunction might, at least to some degree, be back in an arbitration context (see AG Wathelet’s decision in Re Gazprom and the ECJ’s subsequent judgment).

What will become of the anti-suit injunction post-Brexit?

If we revert back to the common law, then the anti-suit injunction would return in the EU context. In this scenario, however, all of the reciprocity on which the Brussels regime is based will be lost. This might be good for aficionados and fans of the anti-suit, but is probably bad for any commercial lawyer who casts her gaze a little wider to look at the over-arching recognition and enforcement context. The return of the anti-suit injunction is unlikely to outweigh – as a benefit – the negatives that will follow from such an outcome.

The best outcome in relation to the underlying concerns that motivated the anti-suit injunction in the first place – in particular a lack of respect for exclusive jurisdiction clauses – would appear to be the UK re-signing up to the Recast Regulation, or the Lugano Convention.

This would not bring with it the complete remedial freedom and flexibility afforded by the common law, being the jurisdiction in which the anti-suit injunction was forged. Anti-suit injunctions would remain unavailable. The reality may be, however, as it may be in so many other areas of Brexit negotiations, that we are not able to pick out the plums and leave the duff behind. The price for reciprocity with other EU courts may be deference to them in relation to anti-suit injunctions, as in others respects.