ALTERNATIVE DISPUTE RESOLUTION PROJECT

ANTI SUIT INJUNCTIONS IN ARBITRATION

Submitted by,
Ruben George Ro!,
Ro"" No# $%&,
' Seme(ter, NUALS
CONTENTS
Anti (uit in)untion* me+ning
Anti Suit in)untion in intern+tion+" ommeri+" +rbitr+tion
Prini,"e( under Indi+n L+- .or Gr+nting Anti Suit In)untion
Anti/ (uit in)untion( +g+in(t +rbitr+tion
Anti/ (uit in)untion( in .+0or o. +rbitr+tion
Critii(m on Anti Suit In)untion
Con"u(ion
Re.erene(
ANTI SUIT INJUNCTION* 1EANING
Anti suit injunction refers to an order issued by a court so as to bar proceedings in
another court. If the party contravenes such an order, contempt of the court order can be
issued against that party by the domestic court. Such an injunction can be issued only
against those parties over which the court exercises personal jurisdiction. Such
injunctions are normally issued for the following reasons:
1. o enjoin litigants with records of frivolous litigation from future litigations
concerning a particular matter in !uestion
". o enjoin litigants from attempts to re#litigate an issue that has become res
judicata
$. o enjoin a particular parallel proceeding
%. o enjoin a party from enforcing an award
Anti suit injunctions are resorted to fix a definite forum for settling disputes& differences.
herefore it mainly caters to jurisdictional issues. 'evelopment of anti suit injunctions
trace bac( to the history of the battle for power between the common law and
ecclesiastical courts in )ngland. he injunction was used by common law courts to
restrict the jurisdiction of ecclesiastical court.
ANTI SUIT INJUNCTION IN INTERNATIONAL CO11ERCIAL
ARBITRATION
he primary purpose of anti suit injunctions is to stop same parties from litigating in two
parallel jurisdictions. o stop proceedings parallel to arbitration, a party can go to the
court at the seat of the arbitration and will as( that court to enjoin the other party from
commencing or continuing litigation in a foreign jurisdiction. Anti suit injunctions
normally comes into play when one party to an agreement initiates legal proceedings
against the other in a *ourt even though the arbitration agreement between the parties
have mentioned another seat for arbitration. he other party will then initiate arbitration
proceedings against the first party in the country chosen by both as the seat, thereby
creating parallel proceedings. +arallel proceedings can cause delay, exposure of
confidential informations and conflicting judgments. Anti suit injunctions are meant to
stop this.
,here a contract provides for an arbitration clause, an anti sit injunction can be used in
two ways:
1. to prevent litigation before the courts in other countries. his aids arbitration
proceedings as per the contract between the parties.
". it could be used to stop the arbitration itself and to get the dispute decided by a
court in a country different from that of the arbitral tribunal . In this case, it would
defeat the arbitration. -owever it is unli(ely that court will issue an injunction
against the arbitral proceedings. In case there is a challenge to the jurisdiction of
an arbitral tribunal, courts will not ordinarily entertain the challenge, and leave the
matter to the arbitral tribunal to decide.
Anti suit injunctions can be issued by arbitrators to preserve the jurisdiction of arbitration
tribunal, to safeguard the effectiveness of the award, or even to neutrali.e other anti suit
injunctions.
In the West Tankers case
1
the )*/ held that )nglish *ourt has no power to restrain Italian
proceedings# the Italian *ourt had to decide on its jurisdiction. Anti suit injunction in
1
*ase *#101&23, Allian. SpA 4 5enerali Assicura.ioni 5enerali SpA v ,est an(ers Inc., "226 ,7
$2$3"$, 89eb. 12, "226:
relation to arbitration was held to be incompatible with ;russels <egulation
"
which
spea(s about mutual respect of the jurisdiction of *ourts in member States of the ;russels
<egulation.
In Shashoua v. Mukesh Sharma
3
, it was held that =..therefore there is nothing in the
)uropean *ourt decision in the 9ront *omor 8,est tan(er case:which impacts upon the
law as developed in this country in relation to anti suit injunctions which prevent parties
from pursuing proceedings in the courts of a country which is not a >ember State of the
)uropean *ommunity, whether on the basis of an exclusive jurisdiction clause, or an
agreement to arbitrate or the agreement of the parties to the supervisory powers of this
court by agreeing 7ondon as the seat of the arbitration.?
Again in Ust-Kamenogorsk Hydropower Pant !S" v #$S Ust-Kamenogorsk
Hydropower Pant %%P
%
the Supreme *ourt has confirmed that the )nglish court has
jurisdiction to injunct the continuation or commencement of foreign proceedings brought
in breach of an arbitration agreement, even in the absence of an actual, proposed or
intended arbitration. his power only applies against jurisdictions which fall outside the
;russels <egulation.
PRINCIPLES UNDER INDIAN LA2 3OR GRANTING ANTI SUIT
INJUNCTION
*ourts are generally cautious with granting anti suit injunctions. In the landmar(
judgment of Mod& $nterta&nment 'etwork and #nr. (s W.S.). "r&cket PT$ %td
*
the
-on?ble Supreme *ourt of India explained the scope of =anti#suit injunction? and has laid
down the principles governing granting of anti#suit injunction, which are as under:
# An anti suit injunction can be granted against only those over who the court has
personal jurisdiction.
"
*ouncil <egulation 8)*: @o %%&"221 of "" 'ecember "222 on jurisdiction and the recognition and
enforcement of judgments in civil and commercial matters
$
A"226B ),-* 613 8*omm:
%
A2013] UKSC 35
1
Appeal 8civil: %"" of "22$
# Since issuance of anti suit injunction by one country results in excluding the
jurisdiction of another country which is competent to ta(e up the case, it is
sparingly used (eeping in mind the principle of comity which governs the
relationship between courts of different countries.
# if the injunction is declined the ends of justice will be defeated and injustice will
be perpetuated
Cn applying the principle of forum non conveniens the court must bear in mind that that
the Indian proceedings or foreign proceedings must not be Doppressive and vexatiousE
and would cause ine!uitable hardship and then decide whether to grant anti#suit
injunction or not.
If a clause provides for jurisdiction of courts& tribunal of a particular country, Indian
*ourts normally does not issue anti suit injunctions hampering that *ourt?s jurisdiction.
-owever in exceptional cases *ourt may disregard the choice of the parties regarding
place of jurisdiction.
ANTI/ SUIT INJUNCTIONS AGAINST ARBITRATION
*ourt may issue anti#suit injunction to restrain implementation of arbitral proceedings or
to prevent actions for the enforcement of arbitral awards. Such injunction can be called
as Danti#arbitrationE injunction. *ourts which are less arbitration friendly shows a
paternalistic attitude and (eeps their doors opened to parties who see( to bloc( arbitration
proceedings or awards. he arbitration tribunal?s power to decide on its jurisdiction is
challenged by such action.
In Mod& $nterta&nment 'etwork + #nr vs W.S.)."r&cket Pte. %td the Supreme *ourt
denied the appellants grant of an anti suit injunction enjoinng the respondent from
initiating proceedings in )nglish *ourt pointing that intention of the parties as evidenced
by the jurisdiction clause in the agreement 8which said jurisdiction is with )nglish *ourt:
must be respected.
ANTI/ SUIT INJUNCTIONS IN 3AVOR O3 ARBITRATION
Sometimes a party to arbitration might approach *ourt to frustrate arbitration
proceedings if that party finds it has a wea( stand. o prevent such an action or to bloc(
it, the other party may approach the *ourt where seat of arbitration is located see(ing an
anti suit injunction enjoining the defendant from initiating or continuing with suit for the
purpose of frustrating arbitration proceedings.
CRITICIS1 ON ANTI SUIT INJUNCTION
he practice of issuance of anti suit injunctions is met with protest especially when the
orders aim at enjoining commencement and continuance of legal proceedings in other
nations. It is viewed as a challenge to the power of sovereign to decide on which all cases
can be entertained by it. Another argument against the practice is that it undermines the
principle of Fompeten.# Fompeten., according to which the court entertaining an action
is the judge of its own competence. Since Djurisdiction is something that is declared, not
something that can be ordered,E no domestic court appreciates a foreign court telling it
what to do in regard to a specific lawsuit, especially under a threat of contempt of court.
Supporters of anti suit injunctions argues that the injunctions are directed against
individuals to not to initiate legal proceedings and therefore not interfering with the
power and jurisdiction of other *ourts. -owever such orders indirectly challenge the
power of other *ourts and such an order effectively restricts the jurisdiction of the court
of a foreign sovereign.
In the case of Turner v. )rov&t
,
- the *ourt of /ustice of the )uropean *ommunities
decided that the issuance of an anti suit injunction by the *ourt of a contracting State to
enjoin a party from commencing or continuing legal proceedings at the *ourt of another
*ontracting State is prohibited by the16G0 *onvention on /urisdiction and the
)nforcement of /udgments In *ivil and *ommercial >atters even when the party is
acting in bad faith to frustrate existing proceeding. he *ourt ruled that the *onvention is
G
urner v. 5rovit, *ase *#116&2", Apr. "3, "22%
based on a relationship of mutual trust between the *ontracting States, which does not
allow the jurisdiction of a court to be reviewed by the court of another *ontracting State.
CONCLUSION
hough anti suit injunctions are critici.ed by many as diluting or challenging the power
of a *ourt to decide on its own jurisdiction, it should also be (ept in mind that the same
privilege of the arbitration tribunal 8which was mutually chosen by contracting parties:
must be respected. In a commercial transaction, where the parties enter into agreement
without any compulsion and after analy.ing its pros and cons, it is not fair to have
uncalled *ourt interventions that undermine the authority of arbitration tribunals. In such
cases anti# suit injunctions can act as a handy tool for the smooth operation of arbitration.
RE3ERENCES*
Ri+rdo 4u+(( Du+rte, 5Anti/ (uit In)untion( in t6e Conte7t o.
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Ro6it J+i(-+" +nd Sidd+rt6 Dubey, 5Anti Suit In)untion8, Indi+n Leg+"
U,d+te, Augu(t :;<: 8http:&&www.singhania.net&wp#content&uploads&3#
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8http:&&gradestac(.com&@J/S#'iploma#*ourse#in#)ntrepreneur&7aw#pertaining#
to#anti#suit#injunct&1%6%$#"633#"3G3#study#wtw: