UK P&I Club NV v República Bolivariana De Venezuela

The Court of Appeal refused the Clubs' appeal against the Commercial Court's refusal to grant a permanent anti-suit injunction against Venezuela. Central legal principles were (i) the compatibility of section 13(2)(a) of the State Immunity Act 1978 with Article 6(1) ECHR, (ii) whether anti-suit injunctions fall within a court's adjudicative jurisdiction governed by the restrictive doctrine of state immunity or its enforcement jurisdiction, and (iii) proportionality under Article 6 and the scope for reading-down under section 3 of the Human Rights Act 1998.

The court held that (a) there is no established rule of customary international law treating injunctions or anti-suit injunctions as part of the adjudicative jurisdiction such that the restrictive doctrine applied; (b) injunctions, including anti-suit injunctions, are properly characterised as coercive measures connected to enforcement and thus fall within the subject matter of section 13(2)(a); (c) in the absence of a binding international rule, section 13(2)(a) falls within the range of possible rules consistent with current international practice and therefore can justify an interference with Article 6(1) provided it pursues a legitimate aim and is proportionate; and (d) on proportionality the restriction was justified by legitimate domestic policy considerations (comity, international sensitivity and alternative remedies such as arbitration and damages) and did not impair the essence of the Clubs' Article 6 rights. The court also held that it would be inappropriate to read down section 13(2)(a) under section 3 HRA to create the carve-outs proposed by the Clubs.

Background and parties

The appellants (the Clubs) are insurers of the cruise liner RCGS Resolute. Venezuela commenced claims in Venezuela and Dutch Curaçao arising out of a collision in March 2020 in which a Venezuelan navy vessel sank. The Clubs relied on a London arbitration clause and sought anti-suit injunctions restraining Venezuela from pursuing its foreign proceedings; Venezuela relied on state immunity.

Procedural history

• HH Judge Pelling granted a without-notice anti-suit injunction in March 2021 ([2021] EWHC 595 (Comm)).
• Sir Ross Cranston in the Commercial Court decided preliminary issues, found that Venezuela lacked immunity from suit under the commercial exception (section 3(1)(a) SIA) and that Venezuela had agreed to arbitration, but refused to make the interim injunction final because of section 13(2)(a) SIA and Article 6 concerns ([2022] EWHC 1655 (Comm)).
• The Clubs obtained a leap-frog certificate; the Supreme Court refused permission to appeal. The Clubs appealed to the Court of Appeal.

Issues framed

1. Whether an interference with Article 6(1) could be justified if section 13(2)(a) fell within the range of possible domestic rules consistent with international practice.
2. Whether anti-suit injunctions are part of the court's adjudicative jurisdiction (so that the restrictive doctrine of state immunity applies) or part of its enforcement jurisdiction (so that section 13(2)(a) is engaged).
3. Whether the interference with Article 6 was proportionate and whether it impaired the essence of the Clubs' Article 6 right.
4. Whether, if incompatible with Article 6, section 13(2)(a) should be read down under section 3 HRA.

Court's reasoning

The master of the rolls reviewed Strasbourg and domestic authority, including Benkharbouche and Fogarty, and concluded that where there is no established rule of customary international law the relevant test is whether the domestic rule lies within the range of rules consistent with current international standards. He held there is no widespread, representative and consistent state practice treating injunctions as part of adjudicative jurisdiction: states differ in approach and some jurisdictions refuse coercive orders against states while others allow them with qualifications. Anti-suit injunctions are coercive, tied to enforcement, and the UK is not an outlier in conferring immunity against such remedies by statute. On proportionality the court accepted the judge's reasons: comity, international sensitivity, the impracticality of enforcing coercive sanctions against a state, and the availability of other remedies (arbitral declarations, compensation) together justified section 13(2)(a) and did not impair the essence of the Article 6 right. Finally, the court held that reading down the provision to create the Clubs' proposed carve-outs would undermine the statutory scheme and was not a permissible exercise under section 3 HRA.

Appeal dismissed. The court held that section 13(2)(a) of the State Immunity Act 1978 is compatible with Article 6(1) ECHR because (i) in the absence of an established rule of customary international law treating injunctions as part of the adjudicative jurisdiction, a domestic rule within the range of possible rules consistent with current international practice may justify an interference with Article 6; (ii) anti-suit injunctions are coercive measures connected to enforcement and thus fall within section 13(2)(a); (iii) the restriction is justified and proportionate for legitimate domestic policy reasons (comity, international sensitivity and alternative remedies); and (iv) the provision should not be read down under section 3 HRA to create the carve-outs sought by the Clubs.

Appeal from the Commercial Court (Sir Ross Cranston sitting as deputy judge) [2022] EWHC 1655 (Comm); HH Judge Pelling had earlier granted a without-notice anti-suit injunction ([2021] EWHC 595 (Comm)). The Clubs obtained a leap-frog certificate but the Supreme Court refused permission to appeal (refusal dated 28 October 2022). The appeal to the Court of Appeal was heard and dismissed on 20 December 2023.