Seele Middle East FZE v Drake & Scull International SA Co

Under section 44 of the Arbitration Act 1996, the court may grant urgent interim relief to preserve evidence or assets where the arbitral tribunal has no power, or is unable for the time being to act effectively. A negative injunction may be granted where the claimant has a strongly arguable case, damages would be inadequate, and the balance of convenience favours preservation of the claimant’s rights. Commercially sensitive production and installation information may justify protection, particularly where disclosure to competitors could cause irreparable harm. The existing position should ordinarily be preserved while the parties’ substantive rights are determined.

The claimant sought continuation of an interim injunction restraining the defendant from using, removing or disposing of documents held at the claimant’s site office. The documents included internal installation plans, a bespoke installation model, production drawings and layout drawings for façade works under a sub-contract.

The application arose in the context of an ICC arbitration commenced after the contractual relationship deteriorated and the defendant purported to terminate the sub-contract. The principal issue was whether the court had jurisdiction to grant urgent relief under section 44 of the Arbitration Act 1996 and, if so, whether the injunction should continue pending determination of the parties’ rights.

1. Jurisdiction. The application was urgent because it concerned documents said to be the claimant’s property and containing confidential information which the defendant wished to use through a replacement façade sub-contractor. Section 44(2)(e) of the Arbitration Act 1996 therefore applied. Under sections 44(3) and 44(4), the court could make orders necessary to preserve evidence or assets. The documents fell within that scope.
2. Under section 44(5), the court could act only to the extent that the arbitral tribunal, or another body empowered by the parties, had no power or was unable for the time being to act effectively. Although an ICC arbitration had been commenced, no tribunal was yet in a position to act effectively. The jurisdictional conditions were therefore satisfied.
3. Discretionary relief. The claimant had a strongly arguable case that the disputed documents were internal production and installation information falling within preliminary pricing item D, rather than design and engineering information within clause 29 of the sub-contract. It was also strongly arguable that future payment under clause 32 did not constitute payment already made for that item.
4. The information was commercially sensitive. If the defendant were not entitled to use it but disclosed it to competing replacement sub-contractors, damages would not be an adequate remedy. The claimant was given a short opportunity to provide financial information addressing concerns about its undertaking in damages, but that did not justify withholding the injunction meanwhile.
5. The balance of convenience favoured preserving the claimant’s intellectual property rights over the potential delay and cost of a replacement sub-contractor preparing its own designs. The status quo also favoured restraint because the defendant did not presently have access to use the documents.
6. The injunction was continued, subject to matters arising from the claimant’s financial information and the agreed process for handling the documents. The defendant was restrained from using, removing, disposing of or parting with documents in the claimant’s site office, including the amended category (iv) documents.