Conversant Wireless Licensing SARL v Huawei Technologies Co. Ltd & Ors

Where an interim application is compromised save as to costs, the court may determine costs by assessing the likely result had the application proceeded, particularly where the issues have been fully argued and the evidence is complete. It is appropriate to award costs to the party which would clearly have succeeded, subject to any material qualification.

An anti-suit injunction may be granted, or equivalent amendments required, where foreign proceedings contain claims which obstruct or risk undermining pending English proceedings or frustrating the effect of an English judgment. Claims unnecessary to the foreign court’s determination of the issues properly before it may be vexatious in that context.

Conversant applied for an anti-suit injunction concerning proceedings brought by ZTE China in Shenzhen. The Shenzhen proceedings sought, among other things, determinations concerning FRAND licensing and relief directed at Conversant’s English proceedings and licensing conduct.

The substantive application was compromised after ZTE China offered binding undertakings and agreed to amend its complaint. The remaining issue was costs. The court considered what it would have decided had the application been contested to judgment, including whether the targeted claims were vexatious and whether an anti-suit injunction would have been granted.

1. Costs after compromise. Applying Brawley v Marczynski (No 1) [2003] 1 WLR 813, the court could determine costs where the substantive application had been compromised. The present case was an interim application without cross-examination, the issues had been fully argued, substantial costs were at stake, and the likely outcome could be assessed with sufficient confidence.
2. Likely outcome. Conversant would have succeeded. The court would have required ZTE China to remove the objectionable parts of its Shenzhen complaint or, failing that, would have granted an anti-suit injunction in accordance with the principles in Aerospatiale v Lee Kui Jak [1987] AC 871, Airbus v Patel [1999] 1 AC 119, and the summary in Deutsche Bank AG v Highland Crusade Offshore Partners LP [2010] 1 WLR 1023.
3. The targeted claims were vexatious because they sought to obstruct, or could have obstructed, pending English proceedings, or undermined or frustrated the performance of an English judgment. They were unnecessary to the determination of the Chinese FRAND issues.
4. The costs were not reserved pending the appeal from the jurisdiction judgment. Conversant had succeeded in substance, although a 5 per cent deduction was appropriate because the application had been dismissed against ZTE UK. ZTE China was ordered to pay on account 65 per cent of 95 per cent of Conversant’s costs, calculated at £175,370, within 28 days. Enforcement would not be stayed if Conversant gave an undertaking to repay should reconsideration following the jurisdiction appeal make that appropriate; otherwise enforcement would be stayed.

The judgment describes an earlier jurisdiction judgment, [2018] EWHC 808, in the same litigation. Permission to appeal that judgment had been granted and the jurisdiction appeal was pending. This judgment determined the costs consequences of the compromised anti-suit application.