http://www.bailii.org/ew/cases/EWHC/Comm/2016/454.html

The claimant applied for an anti-suit injunction to restrain the defendant from pursuing proceedings in Nigeria, on the basis that it had agreed to refer disputes to the English courts. The relevant agreement was entered into by a Bermudian company which was part of the same group to which the defendant belonged. It was argued that the Bermudian company had entered into the agreement as the agent of the defendant. Although nothing in the agreement itself suggested an agency agreement, the claimant alleged that the defendant was an undisclosed principal.

The undisclosed principal doctrine is well established and provides that a principal who was at the time of contracting undisclosed can sue or be sued on the contract of his agent. The Privy Council has held that, in entering the contract, the agent must intend to act on the principal's behalf (see Siu Yin Kwan v Eastern Insurance[1994]).

Of issue in this case was whether that test of intention is subjective (given that the representative of the Bermudian company gave evidence that he intended to sign on behalf of his company as principal and not agent). Leggatt J held that it was not subjective and that it would give rise to "wholly unacceptable uncertainty" if the doctrine could be invoked even though the supposed agent had not communicated his private intention to the supposed principal: "The question whether an undisclosed agency relationship was created must depend in principle, as I see it, not on the state of mind of the supposed agent at the time of contracting, but on whether the supposed agent had communicated to the supposed principal an intention to contract on its behalf".

The judge concluded, on the evidence, that the doctrine did not apply here.

He also considered whether the application for an anti-suit injunction would have failed anyway because of the claimant's delay in bringing the application. He held that it would have. Although the claimant could not be criticised for not taking action before being served with the Nigerian proceedings (where no meaningful pre-action correspondence had taken place), prompt action was required once served. A decision to contest jurisdiction in Nigeria did not justify delaying an application to the English courts for an anti-suit injunction. Furthermore, "the fact that the delay in applying for an injunction was the result of a deliberate tactical decision to first wait and see if more information might emerge which would bolster the claimant's case is no reason to discount the delay or belittle its significance". In addition, steps had been taken and costs incurred by the claimant in the Nigerian proceedings eg it had filed a defence on the merits, such that it would not be inappropriate for the English courts to intervene.

COMMENT: This case continues a trend of recent caselaw to refuse anti-suit injunctions where there has been delay. For example, in the recent case of Essar Shipping v Bank of China (see Weekly Update 42/15), an injunction was refused because of the applicant's delay even though there had been no detrimental reliance on the delay.