News and insights

Anti-suit Injunctions in a post-Brexit world

Pre-brexit, the United Kingdom (UK) was bound by the Lugano Convention 2007 and the Brussels Recast Regulations, both of which prohibited the English Courts from granting an Anti-suit Injunction (“ASI”) in relation to proceedings in Member States. See the leading authority on the point - Allianz SpA (formerly Riunione Adriatica di Sicurta SpA) v West Tankers Inc (Case C-185/07) [2009] AC 1138 (“West Tankers”).

We look below at two cases following the UK’s exit from the EU on 31 January 2020 to see what approach the Courts are now taking.

QBE Europe SA/NV v Generali Espana de Seguros Y Reaseguros [2022] EWHC 2062 (Comm)

The claimants (QBE Europe and QBE UK, together, QBE) sought an urgent ASI to restrain proceedings brought by the defendant (Generali) against QBE in Spain.

In July 2016, a motor yacht “Angara” was allegedly involved in an incident resulting in damage to an undersea power cable. The owners of the undersea power cable received an indemnity in respect of the loss from their insurers, Generali, who became subrogated to their rights under the insurance policy.

The proceedings brought by Generali in Spain asserted a direct action claim against QBE UK under a Spanish statute, by reference to a liability insurance policy which QBE issued to the owner of the yacht.

In November 2020, QBE Europe took over QBE UK's rights and obligations under the insurance policy. The effect of that transfer, at least as a matter of English law, was that QBE Europe replaced QBE UK as the insurer under the insurance policy.

QBE alleged that the Spanish proceedings had been brought in contravention of a London arbitration agreement contained in the insurance policy, to which Generali's claim was subject, and that Generali should be restrained by an ASI. Generali denied that the claim brought in Spain was one which engaged the London arbitration agreement and claimed that the Spanish statute created a right of direct action independent of the insurance policy. QBE argued that the Spanish statue conferred on Generali a right to enforce the contractual rights in the insurance policy and that they were therefore bound by the law and arbitration agreement in the insurance policy.

The Court granted the ASI application on the following grounds:

1. The claimants had established a very strong case that under Spanish law the defendant had a direct right to enforce a contractual promise of indemnity in the underlying insurance policy.

2. As the defendant's rights in the Spanish proceedings were contractual in nature, the London arbitration clause in the insurance policy applied.

3. The Court was satisfied that it would be just and convenient to grant the order sought and that the defendant had not shown any strong grounds for refusing the ASI.

4. Comity considerations were of little weight under the Angelic Grace principles and that applied equally to a quasi-contractual relationship.

This case is the first decision from the English High Court which confirms that “anti-suit relief” is available to restrain a third party from bringing a direct action claim in an EU Member state in favour of a London arbitration clause.

Ebury Partners Belgium SA/NV v Technical Touch BV [2022] EWHC 2927 (Comm)

The claimant applied for an ASI in respect of proceedings which had been brought by the defendants in Belgium on the basis that they were brought in breach of an exclusive jurisdiction agreement in favour of the English Courts.

The dispute related to whether the claimant’s terms and conditions, which provided for English law and jurisdiction, were agreed when the defendant ticked a box on the claimant’s online application form for foreign exchange currency services agreeing to the claimant’s terms and conditions.

Above the tick box was text which enabled the defendant to download the terms and conditions and below the tick box was a link to a webpage containing a pdf version of the terms and conditions. However, the defendant, on their own evidence, did not read the terms and conditions.

That said, the court was satisfied that the principles governing ASI applications had been satisfied and granted the ASI on the following grounds:

1. The court was satisfied that there was a high degree of probability that there was a jurisdiction agreement governing the dispute in question. In particular:

1. The claimants gave reasonably sufficient notice of their standard conditions by providing the two links.

2. The defendants positively indicated its agreement to all of the relevant terms and conditions by ticking the box.

3. The defendant could have used either link to access the terms and conditions but did not do so.

2. There were no strong grounds for the court declining, whether by stay or otherwise, to exercise its jurisdiction in the light of the parties' contractual agreement.

The Court commented that prior to Brexit, it would not have been possible for anti-suit relief to be granted in such a case. It was common ground, however, that such relief is now potentially available, as shown by the decision in QBE Europe where ASI relief was granted in respect of proceedings in Spain.

Comment

The UK made an application for accession to the Lugano Convention in April 2020. Consent of all the contracting parties (including the EU) has not yet been obtained, therefore the UK is not currently a signatory to the Lugano Convention.

In May 2021, the European Commission published a communication recommending that the EU should not agree to the UK’s accession to the convention and in June 2021, the Commission stated that the EU “was not in a position to give its consent to invite the United Kingdom to accede to the Lugano Convention.”

The final decision on whether the EU will approve the UK’s application is yet to be made. However, the above cases confirm that the UK courts are currently willing to grant an ASI restraining proceedings from being brought in a Member State.

We recommend that the current position on whether the UK has acceded to the Lugano Convention is checked before an ASI application is made, whilst keeping in mind the requirement to act promptly once you have been notified of any foreign proceedings.

The article was prepared by Bethany Hammerton. For a full note on the procedure for making an ASI, see the Quick Guide to Anti-Suit Injunctions https://www.mills-co.com/news-and-insights/quick-guide-anti-suit-injunctions prepared by Bethany.