Anti-Suit Injunctions Live To See Another Day (At Least Outside The EU)

A party to London arbitration proceedings recently sought to

outflank the jurisdiction of the English court, the supervisory

court of the arbitration, by pursuing court proceedings in Delhi.

The English Commercial Court has however blocked this attempt in

its decision in Shashoua & Others v Sharma,1 by

granting an anti-suit injunction which prevents the party from

pursuing the matter in India. In doing so the English court has

confirmed that it still has the power to grant anti-suit

injunctions in relation to proceedings outside the EU

notwithstanding the recent decision of the European Court of

Justice (ECJ) in West Tankers2.

Anti-Suit Injunction (ASI)

An ASI is a court order restraining a party from bringing or

continuing foreign court proceedings in breach of an exclusive

jurisdiction clause or arbitration agreement. ASIs are not issued

against the foreign court in question, only against the parties

bringing proceedings there. ASIs are largely a common law

phenomenon and their availability is perceived as a reason for

choosing arbitration in London rather than in competing civil law

jurisdictions. ASIs can be highly effective where the offending

party has assets within England that would be vulnerable to

contempt proceedings.

Brief Summary of Facts

Mr Shashoua and Mr Sharma entered into a Shareholders'

Agreement to set up a joint venture company in India. The

Shareholders' Agreement was governed by the laws of India and

contained an arbitration clause providing for arbitration in London

in accordance with the rules of the International Chamber of

Commerce (ICC). Following unsuccessful applications to the English

High Court (being the court of the seat of the arbitration), Mr

Sharma applied to the Delhi High Court (inter alia) to have an

interim costs award made against him in the arbitration set

aside.

The Claimants obtained an interim anti-suit injunction to

restrain Mr Sharma from pursuing the proceedings in the Indian

courts, on the basis that the supervisory court of the arbitration

was the English court. Mr Sharma challenged the Claimants'

application for continuance of the interim injunction, contending

that further to the decision of the ECJ in the West Tankers case,

it was not open to the English courts to grant anti-suit

injunctions to prevent proceedings being brought in the courts of

India.

Judgment

Mr Justice Cooke rejected the argument that the ECJ's

decision in West Tankers had changed the landscape of anti-suit

injunctions...