Star Reefers Pool Inc v JFC Group Co Ltd

Where no exclusive English jurisdiction or arbitration agreement exists, an anti-suit injunction requires an evaluative finding that the foreign proceedings are unconscionable, ordinarily because they are vexatious or oppressive. England must also be the natural forum, but that condition alone is insufficient.

An arguable juridical advantage under the law applied by a foreign court does not become unconscionable merely because an English judge considers the claim weak. Particular caution is required where the foreign claimant sued first in its domicile, did not agree or submit to English jurisdiction, and can pursue an arguable claim only abroad. Comity remains an important restraint at the discretionary stage. Parallel proceedings are undesirable but are not inherently vexatious or oppressive.

JFC, a Russian company, issued Russian proceedings seeking declarations that two guarantees relied upon by Star Reefers were ineffective under Russian law. JFC commenced those proceedings before Star Reefers brought its English claim and did not submit to the English proceedings.

Teare J continued an anti-suit injunction restraining the Russian proceedings. He regarded their purpose as frustrating resolution of the dispute in England and considered JFC’s Russian-law case apparently weak. England was accepted to be the natural forum, and the guarantees were treated in the English proceedings as governed by English law.

JFC appealed. The central question was whether its Russian proceedings were vexatious or oppressive and, if so, whether considerations of comity nevertheless made an injunction inappropriate.

1. The appeal was allowed and the anti-suit injunction set aside. Rix LJ delivered the judgment, with which Sullivan and Lewison LJJ agreed.

2. A finding that foreign proceedings are vexatious or oppressive is an evaluative judgment and a condition precedent to relief, rather than an exercise of discretion. Once that condition is established, the court separately decides whether an injunction should be granted. An appellate court may therefore review the prior evaluative finding, while giving proper respect to the assessment of an experienced Commercial Court judge.

3. In the absence of an exclusive English jurisdiction or arbitration agreement, England must be the natural forum and the respondent’s conduct must be unconscionable. The injunction must also be necessary to protect a legitimate interest in English proceedings. The natural-forum requirement is necessary but insufficient.

4. JFC’s Russian proceedings were not unconscionable. When they began, no valid English proceedings existed against JFC. JFC had neither promised to litigate or arbitrate in England nor submitted to the English court. Its Russian proceedings could not impede the unopposed progress of the English claim merely because enforcement in Russia might later prove contentious.

5. The absence of advance warning, an earlier express denial of the guarantees, or prompt service did not establish unconscionability. JFC was entitled to seek in its own domicile the juridical advantage of Russian substantive law. Its expert supported an arguable case under that law. Although the case appeared weak to English eyes, it was neither demonstrably hopeless nor doomed to failure. Weakness may contribute to an assessment of unconscionability, but only a plainly hopeless foreign claim can ordinarily carry substantial weight by itself.

6. Comity supplied an additional reason to refuse relief. The judge had not considered it. An injunction was unnecessary to protect the English proceedings and was not in the interests of justice. Competing proceedings arising from different systems of private international law cannot invariably be confined to a single forum.

7. Although immaterial to the disposition, the application and injunction order were capable of service in Russia as documents in the proceedings and as measures protecting the court’s jurisdiction and processes.

1. Court of Appeal (Civil Division): The appeal was allowed unanimously and Teare J’s anti-suit injunction was set aside: [2012] EWCA Civ 14.
2. Commercial Court: Teare J continued the anti-suit injunction on 23 November 2010 after finding JFC’s Russian proceedings vexatious and oppressive. No neutral citation for that judgment is stated.
3. High Court: Christopher Clarke J had initially granted the anti-suit injunction without notice on 15 October 2010. Subsequent jurisdiction and summary-judgment decisions formed part of the same litigation but were not the judgment under appeal.