Mobile Telecommunications Company Ltd v HRH Al Saud (t/a Saudi Plastic Factory)

An arbitral award which has not been challenged under section 67 of the Arbitration Act 1996 may establish an issue estoppel concerning the tribunal’s jurisdiction and the matters determined by the award. A broadly drafted arbitration clause ordinarily covers disputes concerning the existence or effect of related agreements. Where foreign proceedings breach the arbitration agreement, the court should grant an anti-suit injunction unless the defendant shows a strong reason to permit them to continue. Final relief may include a mandatory order requiring the foreign proceedings to be withdrawn, particularly where an active step is needed to prevent their continuation.

The claimant sought final summary judgment for an anti-suit injunction restraining proceedings brought by the defendant in Saudi Arabia. The proceedings concerned an alleged investment agreement which corresponded to an alleged oral agreement previously advanced and rejected in an LCIA arbitration seated in London.

The arbitration had resulted in awards determining the tribunal’s jurisdiction and the claimant’s entitlement to substantial sums. The defendant had participated in the arbitration, had not challenged the substantive jurisdiction under section 67 of the Arbitration Act 1996, and had unsuccessfully challenged the award for serious irregularity under section 68. The central issues were whether the Saudi proceedings fell within the arbitration agreement, whether the defendant was estopped from reopening matters determined by the award, and whether final injunctive relief and summary judgment were appropriate.

1. Final relief granted. The defendant had been duly served but did not participate. There was no real prospect of a defence, and final judgment was therefore granted under Part 24 of the Civil Procedure Rules 1998.

2. The defendant’s failure to challenge the tribunal’s substantive jurisdiction under section 67 of the Arbitration Act 1996 meant that the award’s conclusions on jurisdiction and on the alleged second oral agreement operated as issue estoppels under section 73. The defendant could not reopen those matters in the present proceedings.

3. Independently, the arbitration clause covered questions concerning the existence and effect of the alleged oral agreement because they arose out of or in connection with the loan agreement. Applying the principles stated in Fiona Trust v Privalov [2008] 1 Lloyd’s Rep 254, the court held that the defendant’s pursuit of the Saudi proceedings breached the arbitral bargain.

4. An anti-suit injunction was appropriate. The defendant had participated in the arbitration, lost on the substance, failed to honour the resulting award, and sought to relitigate the matter in a foreign forum. The proceedings were vexatious and oppressive. The burden was on the defendant to show a strong or good reason for allowing them to continue, and no such reason existed. The reasoning was consistent with The Angelic Grace [1995] 1 Lloyd’s Rep 87.

5. The injunction properly required the defendant to discontinue, withdraw, or procure the dismissal of the Saudi proceedings. That mandatory provision was appropriate because an active step was necessary to prevent their continuation.

The judgment was a first-instance decision on the claimant’s application for final summary judgment. The court referred to interim injunctions granted by Males J on 1 May 2018 and by Andrew Baker J on 14 May 2018, and to an earlier challenge to the arbitral award under section 68 of the Arbitration Act 1996, which had been dismissed.