Dreymoor Fertilisers Overseas PTE Ltd v Eurochem Trading GmbH & Anor

An English court may restrain use of a foreign evidence-gathering procedure where, in the particular circumstances, its use would be unconscionable interference with English litigation or arbitration. There is no general prohibition on obtaining evidence abroad, including by deposition under section 1782 of the United States Code. The assessment is fact-sensitive and must respect international comity.

A party to an arbitration has no general right to prepare its case free from the demands of other proceedings. Where foreign proceedings have a legitimate purpose, the foreign court has ordered production after full argument, and the timing difficulty results substantially from the applicant’s own resistance or delay, an injunction is unlikely to be justified.

The claimant participated in London arbitrations with the first defendant concerning allegations that payments made in connection with fertiliser contracts were bribes. Related proceedings were pending in the British Virgin Islands and Cyprus.

The defendants obtained an order from a United States District Court under section 1782 of the United States Code requiring the claimant’s former director and employee, Mr Chauhan, to produce documents and give deposition evidence for use in the BVI and Cyprus proceedings. The claimant sought to continue an interim injunction restraining enforcement, arguing that enforcement would interfere with preparation for the London arbitrations and would be unconscionable.

The central issues were whether the relief was final or interim, whether the power arose under section 37 of the Senior Courts Act 1981 or section 44 of the Arbitration Act 1996, and whether enforcement was unconscionable or breached an implied contractual right to have the dispute resolved only through arbitration.

1. Application dismissed. The injunction was discharged and the arbitration claim form was dismissed.
2. The relief sought was essentially final, although time-limited. It would finally determine the asserted right to prevent enforcement during the arbitrations. Section 44 of the Arbitration Act 1996 therefore could not provide the primary basis for a final injunction.
3. The relevant power arose under section 37 of the Senior Courts Act 1981. That provision permits final or interim relief where it is just and convenient, including in support of legal or equitable rights or to restrain unconscionable conduct. Section 44 considerations could inform the discretion, but were not jurisdictional requirements under section 37.
4. Use of section 1782 could, in an appropriate case, be unconscionable interference with English proceedings. The question required an overall evaluation of all the circumstances. There was no blanket prohibition on foreign evidence-gathering or pre-trial depositions.
5. The circumstances pointed decisively against relief. The United States order was directed to evidence for the BVI and Cyprus proceedings, had been reconsidered and affirmed after full participation by Mr Chauhan, and the English court had no legitimate interest in policing evidence obtained for those foreign proceedings. Comity was therefore important. The timing problem was also substantially self-created by Dreymoor’s prolonged resistance to the United States proceedings and its late application in England. The BVI proceedings involved additional parties, the material sought extended beyond the Indian contracts, and the arbitrators retained control over the use of the material in the arbitrations.
6. Enforcement did not breach any contractual right implicit in the arbitration agreements. The disputes concerning the Indian contracts would still be determined by arbitration, and a party has no right to prepare without the distractions or obligations arising from other proceedings. The equitable claim failed for the same reasons.