The Law Debenture Trust Corporation Plc v Concord Trust & Ors

An anti-suit injunction may be granted where foreign proceedings are vexatious or oppressive, breach a contractual allocation of enforcement rights, or interfere with the due process of the English court. The jurisdiction must be exercised cautiously, having regard to comity, the natural forum, and injustice to both parties.

A contractual provision confining enforcement of bond rights to a trustee is interpreted purposively. It may preclude an individual bondholder from pursuing a tort claim which, in substance, seeks compensation for loss suffered in the bondholder capacity or by the bondholders as a class. Proceedings which are bound to fail or constitute a collateral attack on an English judgment may properly be restrained.

The claimant trustee administered €510 million bonds issued by Elektrim Finance BV and guaranteed by Elektrim SA. Following the non-payment of the bonds, the trustee presented bankruptcy proceedings in Poland. After Elektrim paid €525 million, the petition was withdrawn and the trustee retained the money for the bondholders.

Vivendi Holdings 1 Corp, having acquired bonds from Everest Capital Ltd, commenced proceedings in Miami against the trustee and Elektrim. The trustee and Elektrim applied to continue anti-suit injunctions restraining those proceedings. The issues were whether the Miami claims were vexatious or oppressive, constituted a collateral attack on an English judgment, or were barred by the trust deed and bond conditions.

1. Anti-suit jurisdiction. The court adopted the principles summarised in Royal Bank of Canada v Rabobank [2004] 1 Lloyd’s Rep 471. The jurisdiction exists where justice requires, including where foreign proceedings are vexatious or oppressive, breach a contractual right concerning forum or enforcement, or interfere with the English court’s process. Concurrent proceedings alone are insufficient. The court must consider the natural forum, injustice to both parties, and comity.
2. Claim against the trustee. England was plainly the natural forum. The allegations of non-disclosure, breach of duty, acceptance of tainted money, inadequate investigation and delay disclosed no arguable cause of action. The claim was also bound to fail on causation and loss. It amounted to a collateral attack on the earlier English judgment that the money was not tainted, and raised matters which could and should have been advanced in the Part 8 proceedings. The claim was therefore vexatious.
3. Claim against Elektrim. Clauses 10.2 of the trust deed and condition 13 of the bond conditions were not confined to specific performance or contractual claims. Read in their commercial context, they required bondholders to pursue enforcement of the bond rights through the trustee, subject to the contractual exception where the trustee had become bound to act and failed to do so.
4. The Miami fraud claim was, in substance, an attempt to recover the value of the contingent payment allegedly lost in the bondholder capacity and by the bondholders as a class. It therefore sought to enforce the trust deed and bond conditions and fell within the contractual prohibition, regardless of its tortious pleading. The claim was also bound to fail because Everest had seen the relevant arbitration award and could not plausibly show reliance or causation.
5. Both anti-suit injunctions were continued until trial or further order.