Michael Wilson & Partners Ltd v Emmott

An English court may grant an anti-suit injunction where foreign proceedings undermine a London arbitration governed by English law and are vexatious or oppressive. It may restrain attempts to relitigate claims lost in the arbitration, challenge findings adverse to the party seeking to relitigate, or advance claims consciously omitted from it.

A broadly expressed arbitration clause does not, without express or implied provision, encompass claims assigned from third parties who were not parties to the agreement. An assignment does not make the assignors privies for issue-estoppel purposes. Independent partnership claims not determined in arbitration should remain for the foreign court, including any question whether their pursuit is abusive or unjust.

MWP and Mr Emmott had entered a quasi-partnership agreement containing a London arbitration clause governed by English law. A lengthy arbitration determined their mutual claims. MWP later acquired, by assignments, claims held by former colleagues and Temujin entities, and brought proceedings in New South Wales seeking contribution and relief concerning an alleged Temujin partnership.

O’Farrell J granted an anti-suit injunction restraining MWP from pursuing those proceedings: [2016] EWHC 3010 (Comm). MWP appealed. The central questions were whether the assigned claims fell within either arbitration agreement, whether issue estoppel applied, and whether the New South Wales proceedings were vexatious and oppressive because they undermined the completed arbitration.

Appeal allowed in part. The court substituted a narrower anti-suit injunction.

1. The jurisdiction arose under section 37 of the Senior Courts Act 1981. The decisive question was what the ends of justice required. An injunction affecting foreign proceedings must be exercised cautiously, but an English court will ordinarily enforce an exclusive arbitration bargain where there is a high degree of probability that the arbitration agreement governs the foreign dispute.

2. The broad wording of clause 5.2 did not cover claims that MWP pursued solely as assignee of persons and entities which were neither parties to the MWP Agreement nor bound by its arbitration clause. The assigned claims remained those of the assignors. It was highly unlikely that the parties had intended their quasi-partnership arbitration agreement to determine such third-party claims. Nor could the court be confident that clause 7 of the Co-operation Agreement governed the claims of Mr Nicholls and Mr Slater.

3. Issue estoppel did not arise. The necessary identity of parties or privies was absent. The assignors were not parties to the arbitration, did not obtain their rights through MWP, and did not become MWP’s privies merely because MWP received assignments of their claims.

4. Nevertheless, NSW2 was vexatious and oppressive insofar as MWP sought to recover from Mr Emmott on claims lost in the arbitration, matters contrary to findings adverse to MWP, or fraud and conspiracy claims that MWP could have advanced but had dropped. Those claims would undermine the agreed and completed arbitral process. The alleged Temujin partnership claims were different: they were not determined in the arbitration and were not subject to either arbitration clause. The Australian courts were to decide any abuse, unjustness or unconscionability in pursuing them. It would also be wrong to make MWP’s continuation of those claims conditional on payment of sums awarded in the arbitration.

5. An injunction was preferable to an undertaking, given MWP’s lack of assets or presence in the jurisdiction. The court rejected the complaint that the judge’s reasons were inadequate and refused late permission to challenge her finding concerning MWP’s statement of Mr Emmott’s New South Wales residence.

• Court of Appeal (Civil Division): Allowed MWP’s appeal in part and substituted a limited injunction: [2018] EWCA Civ 51.
• High Court (Queen’s Bench Division, Commercial Court): O’Farrell J granted an anti-suit injunction restraining MWP from pursuing NSW2: [2016] EWHC 3010 (Comm).