Absence Of A Bilateral Or Multilateral Treaty For Enforcement Of Judgments Between UK And Lebanon Leads To English Court Issuing Anti-Suit Injunction In Favour Of Arbitration

In the case of Perkins Engines Company Limited v Mohammed Samih Hussein Ghaddar & Ghaddar Machinery Co. S.A.L [2018] EWHC 1500 (Comm) the English Court was asked to issue an anti-suit injunction against court proceedings brought in Lebanon. The relevant dispute resolution clause between the parties provided for English court jurisdiction to the extent that “reciprocal enforcement procedures” exist between the United Kingdom and Lebanon, failing which, disputes were to be submitted to arbitration. The Court found that the ordinary and natural meaning of the words required the existence of a multilateral/ bilateral treaty facilitating reciprocal enforcement of judgments in the United Kingdom and Lebanon. Since no such treaty existed, an anti-suit injunction should be granted against the Respondents in respect of proceedings they had brought in Lebanon.

Background

The UK Claimant and Lebanon-based Respondents entered into an Agreement for the distribution of gas and diesel engines in Lebanon. The Agreement contained a dispute resolution agreement which stated:

"This Agreement shall be deemed to be an agreement made in England and shall be read and construed and take effect in all respects in accordance with the Laws of England and the Parties hereby submit to the jurisdiction of the English Courts.

To the extent there is no reciprocal enforcement procedures between the United Kingdom and the country in which the Distributor is located, the Parties agree to submit any dispute arising between them that cannot amicably be settled to arbitration. The arbitration shall be held in London, England ..."

The Claimant alleged that the Respondents had made sales into Syria in breach of the Agreement and therefore sought to terminate it. The Respondents commenced proceedings against the Claimant in Lebanon under a Lebanese law that entitles a commercial representative to damages where their principal has unlawfully terminated the representation agreement. Meanwhile, the Claimant sent a Notice of Arbitration to the Respondents purporting to refer the dispute to arbitration in England. The Respondents did not take part in the arbitration.

The Claimant sought an anti-suit injunction in respect of the Lebanese proceedings, alleging that it was commenced in breach of the arbitration agreement between the parties.

The Decision

The focus of the anti-suit application was on the meaning of the wordsto the extent there is no reciprocal enforcement procedures...