English Commercial Court Refuses To Issue Anti-Suit Injunction For Paris Arbitration In The Case Of SQD V QYP

• Published date: 11 September 2023
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Herbert Smith Freehills
• Author: Mr Charlie Morgan, Emily Fox and Elizabeth Kantor

In SQD v QYP [2023] EWHC 2145 (Comm), the English Commercial Court refused to issue an anti-suit injunction (ASI) and anti-enforcement injunction to stop proceedings commenced by a claimant in its home country in breach of an arbitration agreement. The court reasoned that such an injunction would be inconsistent with the French courts' approach to ASIs and the parties' choice of Paris as the seat of arbitration.

Background

The dispute arose between two companies, SQD and QYP, under an agreement concerning an overseas project. QYP sought to terminate the agreement and collect payment from SQD, who argued they were prohibited from making the requested payment. Although the agreement contained an arbitration clause referring disputes to ICC arbitration seated in Paris, QYP brought proceedings in its home country (not specified in the judgment).

QYP argued that the arbitration agreement was unenforceable due to a lack of access to justice and representation. QYP maintained it could only defend its rights in its "own country", contrary to the dispute resolution clause. Consequently, SQD applied to the Commercial Court in London under s44 of the English Arbitration Act (Act) and alternatively under s37(1) of the Senior Courts Act 1981 (SCA) for an ASI and also an anti-enforcement injunction to halt the foreign proceedings.

Decision

Judge Bright J noted that the proceedings were likely a breach of the arbitration agreement, and that generally the English courts would exercise their powers in support of arbitration where they have jurisdiction, to ensure arbitration agreements are honoured. However, he questioned the appropriateness of granting an injunction in this case, given that the parties had not chosen England as the seat of the arbitration.

The judge was unpersuaded by QYP's claim that it would not have access to justice in a Paris-seated arbitration. He commented that QYP could instruct local lawyers, obtain necessary licences, and conduct the hearing remotely (all of which has led to speculation that QYP might be a Russian entity).

In denying the requested relief, the judge highlighted:

1. While the agreement was subject to English law, and the English courts have an interest in securing the performance of contracts that are subject to English law, the English courts will not act in every case where the relevant agreement is subject to English law The court had to exercise discretion with respect for the parties' choice of a foreign seat and the...