The Commercial Court’s decisions in AB International (HK) Holdings Plc Ltd & Anor v AB Clearing Corporation Ltd & Ors [2015] EWHC 2196 (Comm) (“AB International”) and Southport Success S.A. and Tsingshan Holding Group Co Ltd [2015] EWHC 1974 (Comm) (“Southport Success”) clarify (i) the power of courts to grant urgent interim relief under section 44 of the Arbitration Act 1996 (the “Act”); and (ii) the applicability of section 44 of the Act in relation to the Court’s power to decide on an anti-suit injunction application.

AB International

In AB International, the Claimants made an urgent application for interim relief under section 44(3) of the Act to seek disclosure of information from the Defendants. It was argued by the Claimant that disclosure was required in order to preserve the business of a joint venture which was arguably not receiving the profits that it ought to have been receiving from the Defendants’ companies.

Section 44(3) of the Act provides that:

"If the case is one of urgency, the court may, on the application of a party or proposed party to the arbitral proceedings, make such orders as it thinks necessary for the purpose of preserving evidence or assets”.

In its judgment, the Court refused to grant such a disclosure under section 44 of the Act because:

(i) The Claimants had failed to “establish that there was any real urgency, nor any necessity for the order” sought by the Claimants.  In addition, “once the arbitrators are appointed and are in a position to act they can, if appropriate, order the disclosure the claimants seeks”. Consequently, it was held that “it would be an interference by the court in the arbitration process where there seems to be no reason why the arbitrators will not be able to act effectively”.

(ii) Given that the Claimants were not “relying on the arbitration to produce an award of the trading profits which will fund the JVC [Joint Venture Company] business”,  it was unclear to the Court the purpose of the Claimants’ argument that “disclosure in the arbitration is necessary to preserve the JVC business”.

In the circumstances, the Court held that “the application for disclosure had strayed far from the concepts of urgency and necessity and was founded upon pure speculation”.

Southport Success

In Southport Success, the Defendants submitted “that the court must at least have regard to the requirements of s44 when considering granting an anti-suit injunction under s37 [of the Senior Courts Act 1981], even if it was not strictly bound to apply the criterion set out in s44”.

The Defendants had in mind section 44(2)(e) of the Act which provides that the Court has, for the purposes of arbitral proceedings, the same power of making orders about matters listed in that section which include:

(e) the granting of an interim injunction or the appointment of a receiver.”

The Court rejected the Defendants’ submission and in its reasoning relied on the Supreme Court’s decision in Ust -Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant LLP [2013] UKSC 35 (“AES”).

Applying the decision in AES, the Commercial Court reminded the parties that section 37 of the Senior Courts Act 1981 was the basis for the Court’s jurisdiction to grant anti-suit injunctions where foreign proceedings have been brought in breach of an arbitration agreement. Further, the Court’s power to grant an anti-suit injunction under section 37 of the Senior Courts Act 1981 was not dependent on whether the arbitration proceedings had already been commenced and/or whether the parties intend to commence any such arbitral proceedings. 

In the circumstances, the Court held that its powers to grant an anti-suit injunction stemmed from section 37 of the Senior Courts Act 1981 and that it was not obliged to consider the requirements of section 44 of the Act when considering granting an anti-suit injunction.

Comment

These cases serve as a useful reminder of the following:

  1. An application for interim relief in the High Court, pursuant to section 44 of the Act, where there are associated arbitral proceedings, requires the parties to (i) establish real urgency for such an order; (ii) provide reasons for necessity for such an order; and (iii) establish that such an order cannot be granted by an arbitral tribunal (whether already appointed or not).
  2. Further, the English Courts have the power to grant anti-suit injunctions under section 37 of the Senior Courts Act 1981 in support of an arbitration agreement irrespective of whether or not arbitration has been commenced or is in contemplation.
  3. Finally, the court has clarified that the requirements set out in section 44 of the Act have no bearing on the Court’s jurisdiction and/or decision to grant or refuse an anti-suit injunction.