Dana Gas PJSC v Dana Gas Sukuk Ltd & Ors

A stay in favour of foreign proceedings should be refused where the foreign-law issues are closely intertwined with English-law issues, particularly where English jurisdiction clauses and the parties’ procedural conduct favour determination in England. A claimant which has chosen to pursue substantive relief in England cannot later insist that necessary foreign-law issues be determined elsewhere. An anti-suit injunction is appropriate where parallel proceedings would require defendants to contest substantially the same claim in two jurisdictions. A contractual no-set-off clause will ordinarily be enforced, and an injunction restraining enforcement requires exceptional circumstances.

Dana Gas PJSC brought proceedings in England concerning the validity and enforceability of agreements connected with a mudarabah transaction. It also pursued related proceedings in Sharjah concerning UAE law, including the alleged invalidity of the Mudarabah Agreement and a proposed reconciliation claim. Dana Gas sought to vary earlier directions so that the UAE-law issues could be litigated in the UAE and applied for a continuation of an injunction restraining enforcement of the Purchase Undertaking.

The defendants opposed a stay. BlackRock sought an anti-suit injunction. The court also considered whether the existing injunction should continue pending an appeal and the determination of the reconciliation claim.

1. Stay application dismissed. The court refused to stay any part of the English proceedings. The issues of UAE law could not sensibly be separated from English-law issues concerning the Purchase Undertaking, the Declaration of Trust, liability limitations, indemnities and allocation arrangements. The English-law and UAE-law issues therefore required determination within a coherent procedural framework.
2. The exclusive English jurisdiction clause in the Purchase Undertaking was a very strong factor in favour of resolving the connected claims in England. The position was reinforced because the Trustee and Delegate had not submitted to the Sharjah court, and the Delegate was not a party to the Mudarabah Agreement. The non-exclusive UAE jurisdiction clause did not outweigh those considerations.
3. Dana Gas had itself commenced and pursued substantive English proceedings, inviting the English court to grant relief which depended on propositions of UAE law. It could not both seek judgment in England and reserve necessary UAE-law issues for decision elsewhere. The subsequent procedural developments did not constitute a material change justifying departure from the earlier direction. Dana Gas’s failure to comply with earlier orders and its responsibility for the failed trial were also relevant considerations.
4. Anti-suit injunction granted. Once England was found to be the appropriate forum, permitting Dana Gas to pursue the same or substantially overlapping claim in the UAE would be vexatious and oppressive. The decision in Deutschebank AG v Highland Crusader Partners LLP [2010] 1 WLR 1023 was distinguishable because the claims there had materially less connection with England and involved less overlap.
5. Continuation injunction refused in its existing form. The Purchase Undertaking’s no-set-off clause entitled the Trustee on its face to enforce immediately despite Dana Gas’s prospective reconciliation claim. Although the court retained a residual discretion to restrain enforcement, The “Fedora” [1986] 2 Lloyd's Rep 441 showed that exceptional circumstances were required. Those circumstances had not been established. The Trustee was nevertheless restrained from distributing enforcement proceeds to certificateholders pending final determination or further order.
6. The court declared the other three agreements valid and enforceable, granted the anti-suit injunction subject to its precise terms, confined costs to the standard basis, and refused permission to appeal on the matters identified.

The judgment was a first-instance decision. It records earlier directions by His Honour Judge Waksman QC for an expedited Commercial Court trial, but no lower-court judgment was under appeal.