SQD v QYP 2023 EWHC 2145 Comm - 21 August 2023
Country
Year
2023
Summary
This judgment concerns the application of the Claimant ("SQD") for an interim anti-suit injunction ("ASI") and anti-enforcement injunction ("AEI") against the Defendant ("QYP").
SQD was represented by leading counsel. I am very grateful to him and to the team working with him for the care taken in relation to this application and the fairness with which the matter was explained to me. This was all the more important because the application was made without notice to QYP.
Background
The application arises out of an agreement provided by SQD to QYP ("the Agreement") in relation to a project overseas. The Agreement had a choice of law that expressly provided that English law applied. It also had a clause expressly providing for ICC arbitration in Paris.
Work on the project was suspended. QYP purported to terminate the contract governing the project. It then called for payment under the Agreement. SQD replied stating that it was legally prohibited from making the payment.
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It is generally right for the courts of England and Wales to support arbitration in this jurisdiction. It is not the job of the courts of England and Wales to support arbitration in France by granting ASIs, given the fundamentally inconsistent approach in France on whether such support is appropriate or desirable. Indeed, it seems that the support of this court would be unwelcome.
In reaching this conclusion, I note that Lord Mustill appears to have held similar views: see Channel Tunnel at p. 368E-G.
The point that has made me pause longest is that based on Spiliada - i.e., that it would be a virtue, not an insult, for this court to step in where the French courts cannot. The best way of developing that point (I think) would be that, while it is true that the parties have chosen French law as the curial law/law of the seat, they have also chosen to adopt the ICC Rules - which (as I understand it) permit the arbitrators to grant conservatory and interim measures, including ASIs. The French courts cannot grant ASIs, but the arbitrators can (including an emergency arbitrator). Accordingly, even if French law objects to ASIs, the parties do not. All SQD is seeking is an interim ASI to maintain the status quo until the ICC arbitrators can take over and grant their own ASI.
This approach assimilates an ASI granted by this court to one granted by the arbitrators, on the basis that the injunction I am asked to me is an anticipatory and temporary version of the relief that will in due course be given by the arbitrators.
I consider this a false equivalence. There are real differences between orders granted by courts and those made by arbitrators - which is why parties are often astute to ask for relief from the court, where they can find a way to justify this. Above all: court orders are backed by the coercive powers of the state; arbitrators' orders are not.
This is exemplified by the draft order presented to me by SQD. Prominent on its front page is a penal notice, which threatens the recipient with being held in contempt of court and being fined or having assets seized. The ultimate penalty is imprisonment. This is exactly what the French system regards as unacceptable. The fact that the parties have agreed to the arbitrators being able to make orders for interim measures does not mean that they have implicitly accepted the availability of a court order such as that presented to me in draft.
Ultimately, therefore, I therefore am unmoved by this point and by SQD's other arguments. SQD's application is dismissed.