Cupreus SARLv Whiteshell Group Ltd

An anti-suit injunction may enforce an arbitration agreement where foreign proceedings seek to enforce security for a disputed debt covered by that agreement. The court must construe the arbitration clause as a whole and in the context of the contractual network, including contemplated security documents. A dispute between the contracting parties about whether a secured sum is due remains within the arbitration agreement, even if the foreign proceedings also involve non-parties who granted security over land. The court may restrain the foreign proceedings under section 37 of the Senior Courts Act 1981. The claimant does not lose that protection merely because neither party has yet commenced arbitration. Costs may be ordered on the indemnity basis where litigation conduct materially departs from the norm.

Cupreus sought continuation of an interim anti-suit injunction restraining Whiteshell from pursuing Moroccan proceedings to enforce mortgages securing obligations under a copper supply agreement. The agreement contained an English governing-law clause and an arbitration agreement providing for London arbitration of disputes relating to or arising from the agreement. Whiteshell argued that the mortgages concerned Moroccan land, involved third-party mortgagors, and fell outside the arbitration agreement. It also alleged material non-disclosure and argued that Cupreus had lost any right to arbitrate by failing to commence arbitration. The central issue was whether enforcement of the mortgages, where the underlying debt was disputed between the contracting parties, was within the arbitration agreement.

Application granted; discharge application dismissed. The injunction restraining Whiteshell from taking further steps in the Moroccan proceedings was continued.

1. The arbitration agreement had to be construed as part of the network of agreements comprising the supply agreement and the contemplated mortgages. The mortgages were intended to secure Cupreus’s obligations under the supply agreement, principally payment obligations.
2. The arbitration agreement applied to disputes between Cupreus and Whiteshell concerning whether sums were due and whether Whiteshell was entitled to enforce the mortgages. It did not apply to claims against the third-party mortgagors as such, but the presence of those parties did not remove the contractual dispute between Cupreus and Whiteshell from arbitration.
3. Enforcement of the mortgages without first resolving the disputed underlying debt through arbitration was within the scope of the negative promise enforced by an anti-suit injunction. The injunction was therefore properly granted on a contractual basis under section 37 of the Senior Courts Act 1981. It was unnecessary to decide the alternative vexatious-and-oppressive jurisdiction, although the judge considered the Moroccan enforcement proceedings obviously vexatious in the circumstances.
4. Cupreus had not lost its right to arbitrate by failing to commence arbitration. Whiteshell, which claimed the debt, was at least equally able to commence arbitration.
5. The allegations of material non-disclosure and unfair presentation failed. The criminal proceedings in Morocco had been disclosed sufficiently and were immaterial to the issue being decided.
6. Whiteshell was ordered to pay the costs. The judge regarded its late change of position and attempt to reopen the injunction as conduct outside the norm, supporting indemnity costs for the relevant period. The balance of the costs was summarily assessed, with specified items allowed in full and the remaining balance reduced to 75 per cent.