Shashoua & Ors v Sharma

An express agreement that arbitration is to take place in a specified country will ordinarily designate that country as the juridical seat, particularly where the arbitration is conducted under supranational rules and no alternative seat is identified. The seat carries the curial law and supervisory jurisdiction of the courts of that country. An anti-suit injunction may restrain proceedings in a non-Member State which seek to challenge the validity of an award or interfere with enforcement, subject to the limited right to resist recognition or enforcement under the New York Convention. The Front Comor decision does not alter that position in relation to proceedings between England and India.

The claimants sought a continuing anti-suit injunction under section 37(1) of the Supreme Court Act 1981 and section 44(4) of the Arbitration Act 1996. The injunction was intended to restrain the defendant from pursuing proceedings in India challenging an interim costs award, English enforcement orders and the appointment of an arbitrator.

The parties’ shareholders agreement was governed by Indian law and required arbitration under the ICC Rules. It provided that the venue of arbitration was London, United Kingdom. The defendant argued that this designated only a venue, leaving India as the juridical seat and curial law. He also relied on the decision in Front Comor, alleged submission by the claimants to the jurisdiction of the Delhi High Court, delay and non-disclosure. The central issues were the seat of the arbitration, the effect of Front Comor, and whether an injunction should be granted.

1. Seat of arbitration. The provision that the arbitration venue was London, United Kingdom, read with the ICC Rules and the absence of any alternative seat, designated London as the juridical seat. Alternatively, London was the seat determined under section 3 of the Arbitration Act 1996. The parties had therefore selected English law as the curial law and the English courts as the supervisory courts. The governing law of the shareholders agreement, the use of the ICC Rules, the interim application in India and the costs clause did not displace that conclusion.
2. Effect of the seat. Agreement on the seat was analogous to an exclusive jurisdiction clause. Challenges to interim or final awards were consequently to be brought only in the courts of the seat. The defendant’s attempts to set aside the Costs Award in India, and to interfere there with enforcement of an English charging order, sought to bypass the agreed supervisory jurisdiction.
3. Front Comor. The European Court’s reasoning concerned the uniform jurisdictional regime and mutual confidence required between Member States under Regulation 44/2001. It did not apply between England and India. The principle stated in C v D remained good law.
4. Scope of injunction. The court could restrain challenges to the validity of the Costs Award and future awards outside England and Wales. It could not prevent the defendant from resisting recognition or enforcement in another country on the limited grounds permitted by Article V of the New York Convention. Any proposed application relying on those grounds was subject to liberty to apply.
5. Discretion and unresolved issues. The case was prima facie an appropriate, indeed paradigm, case for relief. However, disputed questions concerning the claimants’ alleged submission to the Delhi High Court, non-disclosure and delay required oral evidence and a further hearing. The interim injunction was continued pending directions. No final costs order was made.