Aqaba Container Terminal (Pvt) Co. v Soletanche Bachy France SAS

A dispute seeking to invalidate a contract falls within a broad arbitration clause covering disputes of any kind arising in connection with that contract, even where the underlying constitutional challenge is not arbitrable. The court may therefore restrain a party from pursuing contract-invalidity relief in foreign proceedings where that relief is reserved to arbitration. An anti-suit injunction enforcing an exclusive arbitration agreement is granted unless there are strong reasons not to do so, subject to the court’s statutory discretion to act justly. The fact that an injunction may prevent a party from reaching a foreign constitutional court is not, without more, a strong reason where that consequence results from the party’s own agreement to arbitrate.

The claimant, a Jordanian company, and the defendant, a French construction company, entered into a construction contract containing a staged dispute-resolution procedure culminating in international arbitration seated in London. An arbitral tribunal later held that the claimant had validly terminated the contract and awarded damages and costs.

The defendant subsequently commenced proceedings in Jordan challenging the constitutionality of legislation connected with the claimant’s establishment and seeking, consequentially, to invalidate the construction contract. The claimant sought a permanent anti-suit injunction, while accepting that a constitutional challenge to the legislation itself was outside the arbitration agreement and non-arbitrable. The central issue was whether the defendant’s claim to invalidate the construction contract was nevertheless within the arbitration agreement and whether an injunction should be granted.

1. Outcome. The court granted a permanent anti-suit injunction restraining the defendant from pursuing in Jordan the invalidity or invalidation of the construction contract, and requiring appropriate steps to withdraw or bring that claim to an end. The court reserved further argument on damages and costs.
2. Scope of the arbitration agreement. The phrase covering a dispute of any kind arising between the parties in connection with the construction contract was sufficiently broad to include a claim that the contract was invalid. The constitutional challenge to Article 17 of the Aqaba Special Economic Zone Law No 32 of 2000 was not arbitrable and fell outside the agreement. That did not remove from the arbitral tribunal the separate question whether invalidity of Article 17, the Development Contract or the Joint Development Agreement had consequences for the validity of the construction contract.
3. Character of the Jordanian claim. The defendant’s request to the Jordanian court went beyond a constitutional challenge. It also asked that court to determine whether the construction contract was a nullity under Jordanian law. That was a dispute between the contracting parties connected with the construction contract and was both arbitrable and within the arbitration agreement.
4. Discretion. An anti-suit injunction enforcing an exclusive arbitration agreement is ordinarily granted unless strong reasons exist not to grant it. No such reason existed. The possible loss of a route to a Jordanian constitutional court resulted from the defendant’s agreement not to bring a civil claim invalidating the contract, rather than from the injunction itself. The court retained a discretion under section 37 of the Senior Courts Act 1981, but the just course was to grant relief. The defendant’s prior reliance on the validity of the arbitration agreement and construction contract in its own damages claim reinforced that conclusion.

Not stated in the judgment.