Ecobank Transnational Incorporated v Tanoh

An applicant seeking an anti-enforcement injunction based on an arbitration agreement must show a high degree of probability that the agreement governs the dispute. Establishing that requirement does not confer an entitlement to relief. The court must assess all relevant discretionary considerations, including delay, wasted expenditure, third-party interests, finality and comity.

Maintaining a jurisdictional objection in foreign proceedings does not excuse delay in seeking English injunctive relief. Detrimental reliance by the respondent is not a precondition to refusal. Anti-enforcement injunctions require particular caution because proceedings have already produced a judgment and enforcement ordinarily falls to the relevant foreign courts. Relief may nevertheless be justified in exceptional circumstances, including fraud or an agreement made after judgment.

Defending the merits while preserving a jurisdictional objection, as required by foreign procedure, need not constitute submission to jurisdiction.

Ecobank Transnational Incorporated, an African banking group's holding company headquartered in Togo, employed Thierry Tanoh as its chief executive officer and group managing director. Their employment agreement provided for English law, London arbitration and, subject to arbitration, exclusive English jurisdiction. After his dismissal, Mr Tanoh obtained a Togolese Labour Court judgment for unfair dismissal. He also obtained an Ivorian judgment against Ecobank and two other defendants concerning a defamatory letter about his performance.

Ecobank challenged jurisdiction in both countries. It defended the Ivorian claim on the merits under procedural requirements which preserved its jurisdictional objection. It sought time to defend the Togolese claim but ultimately relied on its jurisdictional challenge alone. Ecobank commenced arbitration concerning the dismissal in December 2014.

After both foreign judgments had been obtained, Ecobank sought a worldwide injunction restraining their recognition or enforcement. Knowles J discharged an interim injunction and refused relief because Ecobank had delayed: [2015] EWHC 1874 (Comm). Ecobank appealed. The issues concerned the arbitration clause's scope and enforceability, submission to foreign jurisdiction, and the significance of delay and comity when anti-enforcement relief was sought after judgment.

The appeal was dismissed unanimously. Christopher Clarke LJ's reasoning was adopted by Patten LJ and the Chancellor.

1. An applicant for an anti-enforcement injunction had to establish a high degree of probability that an arbitration agreement governed the dispute. The threshold was the same as for an anti-suit injunction. Restraining enforcement interfered indirectly with a foreign court's output, just as restraining proceedings interfered with its process. The possibility that arbitration might subsequently establish that the agreement was inapplicable did not justify a lower threshold ([89]–[91]).

2. The employment agreement, including its arbitration clause, was governed by English law. The dismissal dispute fell within the clause. The constituting Ordinance gave Ecobank's articles priority over inconsistent Togolese laws and made the directors' determination of employment terms effective. The warranty concerning compliance with local law did not qualify the express arbitration or governing-law provisions. Neither possible unenforceability in Togo nor invalidity at the place of contracting established invalidity under the agreement's proper law ([38]–[52]; [70]–[73]).

3. There was also a high probability that the defamation claim against Ecobank fell within the arbitration clause. The allegations concerned Mr Tanoh's performance of his employment functions and were directed towards securing his dismissal. Justification would require examination of that performance. The basis of Ecobank's liability and the presence of defendants outside the arbitration agreement did not sever that connection. Separate adjudication risked duplicated expense and inconsistent conclusions ([74]–[77]).

4. Under section 32 of the Civil Jurisdiction and Judgments Act 1982, recognition was prohibited where its conditions were satisfied and subsection (2) did not apply. Submission was assessed under English law. Ecobank had not submitted, or at least was highly probably not to have submitted, by responding to procedural requirements while maintaining its jurisdictional objections. Its separate criminal complaint did not constitute submission to the court giving the employment judgment ([43]–[69]; [78]–[79]).

5. These conclusions did not compel injunctive relief. An arbitration agreement included a negative right enforceable without commencing arbitration, but injunctions remained discretionary. An applicant had to act with appropriate speed. Pursuing foreign jurisdictional objections did not suspend the significance of delay. Detrimental reliance was relevant but was not a precondition to refusal. The court also considered wasted expenditure, third-party and judicial resources, finality and comity ([122]–[140]).

   Anti-enforcement injunctions required particular caution and were exceptional. Fraud, a post-judgment agreement against enforcement, or inability to discover the proceedings in time could justify relief; these examples were not exhaustive. Such injunctions could prevent foreign courts from determining recognition under their own law and interfere indirectly with domestic execution of their judgments ([107]–[119]; [135]–[136]).

6. The refusal was within the judge's discretion. Ecobank could have sought relief when proceedings began but waited until months after judgment. No sufficient basis for appellate interference was established. The belated contention that the Ivorian publication penalty made enforcement oppressive was not made out ([138]–[143]).

• Court of Appeal (Civil Division): dismissed Ecobank's appeal against refusal of anti-enforcement relief, [2015] EWCA Civ 1309 .
• High Court, Queen's Bench Division (Commercial Court): Knowles J discharged the interim injunction on 3 July 2015 and refused relief because of delay, [2015] EWHC 1874 (Comm) .
• High Court: Simon J granted an interim injunction without notice on 17 April 2015 restraining enforcement of the Togolese and Ivorian judgments. It was continued until Knowles J's decision.