SQD v QYP

An English court’s power to restrain foreign proceedings brought in breach of an arbitration agreement arises under [1981 c. 54] section 37(1), rather than section 44 of the Arbitration Act 1996. Where the arbitration has a foreign seat, the court must exercise particular caution and consider whether granting relief would conflict or clash with the courts or curial law of the seat. The parties’ choice of the foreign seat is highly significant. An English governing-law clause, and the unavailability of an anti-suit injunction in the seat, do not by themselves make England the proper forum.

SQD sought interim anti-suit and anti-enforcement injunctions restraining QYP from pursuing proceedings in its own country. The Agreement was governed by English law and provided for ICC arbitration seated in Paris. QYP commenced foreign court proceedings, asserting that the arbitration agreement was unenforceable because it would lack effective access to justice in Paris. SQD commenced ICC arbitration and applied to the English Commercial Court under section 44 of the Arbitration Act 1996, alternatively section 37(1) of the Senior Courts Act 1981. The central issue was whether the English court should grant interim relief in support of an arbitration seated in France.

1. The application for interim anti-suit and anti-enforcement injunctions was dismissed.

2. Following Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant LLP, the relevant source of power was section 37(1) of the Senior Courts Act 1981. Section 44 of the Arbitration Act 1996 did not apply because the injunction enforced the negative promise not to commence foreign proceedings, rather than supporting arbitral proceedings.

3. The court accepted that the arbitration agreement was probably governed by English law, that QYP’s foreign proceedings breached it, and that SQD had acted promptly. Those matters did not create an automatic entitlement to relief.

4. The foreign seat was a material consideration. The court had to exercise caution and consider the risk of conflict or clash with the courts and curial law of the seat. The court of the seat was ordinarily the natural forum for interim relief, although exceptional circumstances and a sufficient connection with England could justify intervention.

5. France had a fundamental objection to anti-suit injunctions and would not grant or generally enforce the relief sought. The parties had deliberately selected Paris as the seat and French law as the curial law. Granting a coercive English court order could conflict with that choice.

6. ICC Rule 29.7 did not confer jurisdiction on the English court. Nor did the unavailability of an equivalent French remedy make England the proper forum. It was neither just nor convenient to grant the injunctions.