Emmott v Michael Wilson & Partners

An anti-suit injunction will ordinarily be granted where foreign proceedings breach an arbitration agreement, subject to the court’s discretion and considerations of justice and comity. A claimant must establish a high degree of probability that the arbitration agreement governs the dispute. Broad arbitration clauses are construed by reference to the parties’ commercial purpose and presumptively cover disputes arising from their relationship. Final findings in arbitration may give rise to issue estoppel, even where later claims arise from different causes of action. Proceedings seeking to reopen matters finally determined may constitute an abuse of process. The court may also restrain assigned claims where the claims, properly characterised, arise from obligations governed by the arbitration agreement.

The claimant sought continuation of an interim anti-suit injunction restraining the defendant from pursuing proceedings in New South Wales. The defendant’s proceedings sought contribution and an account concerning business said to have been diverted from the defendant through a related business arrangement. The claims were based on assignments obtained from other parties involved in earlier New South Wales proceedings.

The underlying contractual and fiduciary allegations had already been litigated between the claimant and defendant in London arbitration proceedings. The claimant argued that the New South Wales claims fell within the arbitration agreements, were barred by issue estoppel, and constituted an abuse of process. The defendant disputed the scope of the arbitration agreements and relied on the assigned nature of the claims.

1. The court continued the anti-suit injunction. Under section 37 of the Senior Courts Act 1981, the court had jurisdiction where the defendant threatened invasion of an enforceable legal right or had acted unconscionably. The claimant had to show a high degree of probability that an arbitration agreement governed the relevant disputes.

2. The arbitration clause in the MWP Agreement was broad. Applying the commercial-purpose approach in Premium Nafta Products Limited v Fili Shipping Company Limited [2007] UKHL 40, disputes arising from or connected with the parties’ business relationship, including claims concerning diverted business and benefits, fell within the clause. The claims were made by the defendant against the claimant in its own name, notwithstanding the assignments. Alternatively, claims relating to Messrs Slater and Nicholls fell within the arbitration clause in the Co-operation Agreement.

3. The court ordinarily grants an anti-suit injunction for proceedings brought in breach of an arbitration agreement unless strong reasons exist not to do so. The discretion had to take account of justice, comity, the foreign court’s connection with the dispute, and the risk of parallel proceedings. The decisive factor was that the parties had already obtained final and binding determinations under their agreed dispute-resolution procedure.

4. The claims in the New South Wales proceedings were different causes of action from the arbitration claims, so cause of action estoppel did not arise. However, the claimant’s contractual and fiduciary breaches, and the diversion and concealment of business benefits, were necessary common issues decided finally in the arbitration. Issue estoppel therefore applied.

5. The proceedings were also an abuse of process. They constituted a collateral attack on the arbitration award and sought further compensation and disclosure concerning the same wrongdoing and damage. The defendant’s misrepresentation of the claimant’s address was an additional discretionary factor. The claimant had not materially misled the court about the arbitral tribunal’s treatment of his alleged Temujin partnership.

6. Permission was granted for service out of the jurisdiction under CPR 62.5 and for service by email under CPR 6.15. The application was not dependent on section 44 of the Arbitration Act 1996; an arbitration claim may be served out where the remedy or question concerns an arbitration agreement or award.