Turner v. Grovit and Others

This appeal concerned the power of English courts to grant in personam restraining orders (commonly called anti-suit injunctions) to prevent parties from commencing or continuing foreign proceedings where those proceedings are launched in bad faith to frustrate or obstruct litigation properly before English courts. The court considered the interaction between that domestic equitable jurisdiction (exercised under s.37(1) of the Supreme Court Act 1981) and the 1968 Brussels Convention (in particular Articles 17, 21, 26 and 27(3)).

The House of Lords agreed with the Court of Appeal that English law permits a restraining order where: (i) the applicant is a party to existing proceedings in England, (ii) the defendants have, in bad faith, commenced or threaten proceedings abroad for the purpose of frustrating those English proceedings, and (iii) it is necessary to protect the applicant's legitimate interest in those English proceedings. The order is directed in personam against the defendant and does not purport to bind or decide the jurisdiction of the foreign court. The court held that that exercise of English law is not inherently inconsistent with the Brussels Convention, though a question of interpretation of the Convention was referred to the European Court of Justice under the 1971 Protocol.

This case arose from competing proceedings: (i) an unfair and wrongful dismissal claim brought by Mr Gregory Paul Turner against Harada Ltd before the Employment Tribunal in London, and (ii) later civil proceedings commenced in Madrid by Changepoint SA (and Harada) claiming substantial damages for alleged breaches of a service agreement. Mr Turner, a British-qualified solicitor employed by members of the Chequepoint group, had relocated (briefly) to Madrid but was domiciled and continued to have his contractual employment tied to English law. The Employment Tribunal found it had jurisdiction and ultimately gave judgment for Mr Turner; Harada's appeal to the Employment Appeal Tribunal was dismissed.

Changepoint's Madrid proceedings were served on Mr Turner in London. Mr Turner applied in England for injunctive relief to restrain the defendants from continuing the Spanish proceedings. A temporary injunction was granted ex parte, but the deputy judge later declined to continue it. On appeal the Court of Appeal held that the Spanish proceedings were launched in bad faith to harass Mr Turner and to interfere with his English proceedings, described the Spanish action as a sham and orchestrated by the group's controlling mind, Mr Grovit, and granted restraining orders.

The defendants appealed to the House of Lords raising three main issues: (i) whether the domestic power to grant restraining orders continues to exist in view of the United Kingdom's accession to and incorporation of the Brussels Convention; (ii) whether making a restraining order on the ground of abuse of process is inconsistent with the Convention; and (iii) whether making such an order to give effect to Article 21 of the Convention would be inconsistent with the Convention. The House of Lords reviewed the domestic equitable basis for such in personam relief, reiterated the orthodox limits (importance of comity, the need for a legitimate interest in existing English proceedings and that the order must not be directed at the foreign court), and concluded that the domestic law permitting restraint in cases of bad faith is not in principle inconsistent with the Convention.

The House of Lords therefore would dismiss the defendants' appeal on the law but, because the Convention point was dispositive of the international law aspect, referred a formulated question of interpretation to the European Court of Justice under Article 3(1) of the 1971 Protocol so that an authoritative ruling could be obtained on whether the Convention permits national courts to grant such restraining orders where defendants act in bad faith to frustrate proceedings in another Contracting State.

• Nature of claim: application for an in personam injunction to restrain defendants from prosecuting foreign proceedings brought in Spain;
• Issues framed: (i) existence and scope of the domestic power to grant restraining orders; (ii) consistency of that power with the Brussels Convention; (iii) whether, and in what circumstances, English courts may restrain foreign proceedings on the ground of abuse of process or bad faith;
• Court's reasoning: the remedy is personal and fault-based; it protects existing English proceedings where necessary; it does not decide foreign jurisdiction; it must be exercised with caution in recognition of comity; and it is not, in principle, incompatible with the Convention, but an interpretative question was referred to the ECJ.

Appeal dismissed. The House of Lords agreed with the Court of Appeal that English courts have power to grant in personam restraining orders to protect existing English proceedings where defendants have acted in bad faith to frustrate them, and that such orders are directed at the party and not the foreign court. The Lords considered that this domestic power is not inherently inconsistent with the 1968 Brussels Convention, but, because the point of EU law interpretation was material, they referred a specific question on the Convention's interpretation to the European Court of Justice under the 1971 Protocol.

Employment Tribunal (judgment 10 September 1998) — appeal to Employment Appeal Tribunal dismissed (after 14 October 1998); proceedings in Madrid commenced 21 October 1998; interlocutory injunction granted ex parte 22 December 1998; deputy judge (Chancery Division) declined to renew injunction 24 February 1999; Court of Appeal allowed appeal and granted restraining orders (reported [2000] 1 QB 345); Madrid action discontinued (desistimiento) 28 June 1999; appeal to House of Lords allowed hearing and judgment [2001] UKHL 65 with a reference to the ECJ under the 1971 Protocol.