Enercon GmbH Wobben Properties GmbH v Enercon (India) Ltd

Permission to serve an arbitration claim out of the jurisdiction is discretionary. Even where the claimant establishes a good arguable case that the arbitration is seated in England, the court may stay proceedings where the same issue is pending before a foreign court and intervention would risk conflicting decisions and injustice. Comity and the avoidance of concurrent proceedings are important considerations.

A freezing injunction requires more than a good arguable case. The claimant must generally provide solid evidence of a real risk of dissipation, and unexplained delay is relevant to that assessment.

The claimants sought relief concerning a proposed arbitration under an intellectual property licence agreement with the defendant. They applied for appointment of a third arbitrator under section 18 of the Arbitration Act 1996, anti-suit relief, and continuation of a freezing injunction.

The defendant challenged the English court’s jurisdiction and contended that the arbitration seat was India. Related proceedings concerning the arbitration and the meaning of the arbitration clause were pending before the Indian courts. The central issues were whether the English proceedings should proceed, whether the English court should determine the seat, and whether the injunctions should continue.

1. Stay and comity. Permission under CPR 62.5 is permissive. The court must consider the risk of concurrent proceedings, conflicting judgments, vexation, oppression, the natural forum and comity. The claimants had actively engaged in the Indian proceedings and those proceedings remained pending. The English proceedings were therefore stayed for a limited period, subject to terms requiring the defendant to seek expedition.
2. Issue estoppel. Even assuming that the Indian District Court’s judgment might otherwise have raised res judicata or issue-estoppel questions, the stay of its order pending the writ proceedings deprived it of the finality and conclusiveness required for reliance upon those doctrines. The court accordingly rejected the claimants’ submission on this issue.
3. Seat of arbitration. The judge stated obiter that the words in clause 18.3 providing that the venue of the arbitration proceedings “shall be London” designated London as the juridical seat. The clause anchored the whole arbitral process, including the making of the award, in London. The reference to the Indian Arbitration and Conciliation Act 1996 did not displace that conclusion. The English court’s supervisory jurisdiction would consequently have been engaged.
4. Injunctions. The anti-suit injunctions were set aside so far as they affected the existing Indian writ proceedings. The freezing injunction was also set aside. A good arguable case was only a prerequisite. There had to be solid evidence of a real risk of dissipation. The reduction in net current assets was consistent with business expansion and did not establish dissipation. The defendant was a substantial, audited and continuing business with banking relationships, and the claimants’ unexplained delay of approximately two and a half years materially weakened the application.

The proceedings were stayed on terms to be settled, and the parties were directed to submit a draft order.