In the recent case of Transfield Shipping Inc v Chiping Xinfa Huayu Alumina Co Ltd, the English Court rejected an application for an anti-suit injunction by the Applicant, a Panamanian company, to restrain the Respondent, a Chinese company, from pursuing legal proceedings in a Chinese court, allegedly in breach of an arbitration agreement.
The Respondent originally initiated court proceedings in China to resolve its disputes over a charterparty contract. The Applicant challenged the Chinese court's jurisdiction on the basis that there was a valid arbitration agreement between the parties which provided for arbitration in London. The jurisdictional challenge was rejected by the Chinese court which decided that there was no valid arbitration agreement because the Applicant could not prove that its terms and conditions had been accepted by the Respondent. The Applicant's appeal to a higher Chinese court also failed.
Thereafter, the Applicant applied for an anti-suit injunction in the English court. By this time, the Chinese court had already set the hearing date for the substantial hearing.
The English court rejected the application, holding that "the appropriate test is whether or not the applicant has shown…a high degree of probability that there was such an agreement [to arbitrate]. It is one thing to enforce a clear agreement to arbitrate or one which on an interlocutory basis can be seen to be highly likely to be established. It is another to restrain a party from litigating in a foreign country where the position is less clear than that." This is because "[t]he effect of any such order is likely to be final in the sense that if granted until after an arbitration hearing, it will preclude the enjoined party from contending that there was no such an agreement otherwise than before the arbitral tribunal and, if the tribunal rules that there was such an agreement, from disputing its existence."
The English court also noted that "[i]t is well established that, if an application is to be made for an anti-suit injunction, it should be made promptly before the foreign proceedings are too far advanced".
It can be seen from this judgment that if a party applies to the English court for an anti-suit injunction to stop the other party from taking a dispute to court in violation of an arbitration agreement, such application must be made promptly. Further, a degree of deference will be shown to foreign courts with the English court requiring a "high degree of probability" of the existence of an arbitration agreement before an anti-suit injunction will be issued.