Franek Jan Sodzawiczny v Gerald Martin Smith

An anti-arbitration injunction may protect a legal or equitable right, or restrain arbitration that is vexatious and oppressive. Where an English-seated arbitration is used in substance to challenge an award outside the procedures and time limits of the Arbitration Act 1996, the court may restrain it. The court examines the substance and effect of the proposed claims, not merely their form. Claims which fall outside the arbitration agreement, or which an arbitral tribunal plainly lacks jurisdiction to determine, may also be restrained.

Mr Sodzawiczny sought an anti-arbitration injunction to restrain an LCIA arbitration commenced by Dr Smith and Dr Cochrane. The arbitration sought, among other relief, to set aside or undermine three earlier awards and related enforcement proceedings. Dr Smith also applied under section 9 of the Arbitration Act 1996 to stay enforcement of two awards and the injunction application.

The court considered whether the proposed claims were matters to be referred to arbitration and whether the arbitration was in substance an impermissible challenge to English-seated awards.

1. Enforcement of awards made enforceable as judgments under section 66 of the Arbitration Act 1996 was not an arbitral matter. The court alone had jurisdiction over enforcement. The anti-arbitration injunction application was likewise not a matter to be referred to arbitration.
2. The court followed FamilyMart China Holding Co Ltd v Ting Chuan (Cayman Islands) Holding Co Ltd [2023] UKPC 33 and Republic of Mozambique v Privinvest Shipbuilding SAL (Holding) [2023] UKSC 32. Identification of an arbitral matter requires attention to substance, context, foreseeable defences, legal relevance and discrete determination.
3. An English seat entails submission to the supervisory jurisdiction of the English courts and use of the statutory challenge procedures in sections 67 to 70. The Smith arbitration was in substance a non-compliant challenge to the three awards. Its ancillary claims were outside the tribunal’s jurisdiction, already dealt with, privileged or inconsequential.
4. The same conclusion applied to Dr Cochrane. She was not a party to the arbitrations producing the awards and could be in no better position to challenge them. The court also accepted the unchallenged Jersey-law evidence that relevant pre-bankruptcy claims had vested in the Viscount.
5. The anti-arbitration injunction was granted against both defendants in respect of the entirety of the proposed LCIA arbitration. The court did not determine the substantive allegations concerning Mr Sodzawiczny’s historical conduct.