[2009] EWHC 963 (Comm)  

Midgulf (M) was a trader in sulphur and Groupe Chimiche Tunisien (G) was a company owned by the state of Tunisia. The parties entered into a contract for the sale and purchase of sulphur in June 2008 and a further contract for the same in July 2008. The June 2008 contract contained a London arbitration clause. G complained about the quality of the sulphur provided under both contracts and subsequently terminated the July contract. A dispute arose as to whether the July 2008 contract contained a London arbitration clause.

M subsequently applied to the English courts for the appointment of an arbitrator under the July 2008 contract. G issued proceedings in Tunisia for a declaration that there was no London arbitration agreement between the parties under the July 2008 contract and for damages under both contracts.

M obtained an anti-suit injunction against G's proceedings in Tunisia. G challenged the court's jurisdiction to grant an anti-suit injunction.

It was held by Teare J that if the anti-suit injunction was granted at an interlocutory stage its effect would likely be final, thereby ending the Tunisia proceedings and enabling arbitration proceedings to be completed in London. In order for this to be achieved the applicant (M) was required to establish a high degree of probability that its case against the respondent (G) was made out and therefore, it was entitled to an injunction to restrain G. Teare J found that although M had an arguable case that the July 2008 contract did contain an arbitration clause, it had not established its case to the necessary high degree of probability.

Teare J found that the just and appropriate course of action, on case management grounds, was to order a speedy trial of the issue and to continue the anti-suit injunction only until such time as the issue was determined. This was because of the risk of stalemate if the Tunisian courts, in deciding the declaration and damages actions, declined to determine whether the July 2008 contract contained an arbitration clause on the basis that this was a matter for the arbitral tribunal to decide. The court could then decide whether or not to appoint an arbitrator and to continue the anti-suit injunction indefinitely. In deciding this Teare J held that G had failed to show any good reason why an anti-suit injunction should be refused; that M had not submitted to the jurisdiction of the Tunisian court; and M's delay in seeking an injunction was modest.

Midgulf demonstrates the care taken by the English courts when considering the grant of anti-suit injunctions, an important weapon for insurers and reinsurers. It also shows that courts are willing to be pro-active in managing cases to obtain finality for the parties.