In the recent judgment, AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2011] EWCA Civ 647, the Court of Appeal held that an anti-suit injunction can be granted to restrain foreign proceedings brought in breach of an English arbitration agreement, even in the absence of an actual, proposed or intended arbitration.

The dispute arose out of a concession agreement to produce hydroelectric energy between the state of Kazakhstan government (D) and a US company (C). The agreement specified London arbitration for the resolution of any disputes. D commenced proceedings in Kazakhstan, where the Supreme Court held that the arbitration agreement was non-compliant with public policy and therefore void. C subsequently issued a claim in the English Commercial Court, seeking an anti-suit injunction under section 44 of the Arbitration Act 1996 (AA) and/or section 37 of the Senior Courts Act 1981 (SCA). D challenged the court's jurisdiction to grant the injunction.

Section 44 of the AA empowers the court to grant interim injunctive relief for the purpose of preserving evidence or assets in cases of urgency and where there is no arbitral tribunal in existence. The raison d'être of the provision, and of this part of the AA, is to support the arbitration process once it is afoot. Similarly, section 37 of the SCA allows the court to grant an interim or final anti-suit injunction where foreign court proceedings have been brought in breach of an arbitration agreement.

At first instance, Mr Justice Burton dismissed D's challenge to the court's jurisdiction. He held that the court could not intervene under section 44 of the AA, because there was no actual or intended arbitration, but that the court still had jurisdiction under section 37 of the SCA. This was the case in spite of section 1(c) of the AA which provided that "the Court should not intervene except as provided by this part".

The Court of Appeal upheld the decision below and found that the AA did not exclusively govern the question of whether the court had jurisdiction to grant injunctive relief. Lord Justice Rix, delivering the leading judgment, considered that where there was an arbitration in prospect or in motion and so section 44 of the AA applied, it would be wrong in principle to circumnavigate the limitations of section 44. However, where there was no arbitration in prospect there was no bar to the court's jurisdiction under the SCA. The court held that the words "should not intervene" in section 1(c) of the AA related to an intervention in an arbitration rather than an intervention in litigation which threatened the conduct of arbitration proceedings or the efficacy of an arbitration agreement. The court also found that C had successfully established a jurisdictional gateway for service out of the jurisdiction under CPR 62.51(1)(c) which was not, as D had contended, limited to claims under the AA and that the English court was not bound to recognise or enforce the decision of the Kazakhstan court (which was plainly wrong). In addition, the court found that C had not submitted to the jurisdiction of the Kazakhtsan court by arguing the merits in circumstances where the court had refused to decline jurisdiction and where C had little other practical options.

This decision provides welcome clarification of the relationship between section 44 AA and section 37 SCA as well as of the circumstances in which an anti-suit injunction may be obtained.