Court of Appeal considers the role of comity and delay in the context of anti-enforcement injunctions

Will Holder

In Ecobank Transnational Incorporated v Tanoh, the Court of Appeal was asked to consider the Commercial Court’s decision to refuse an anti-enforcement injunction against two foreign judgments.

Practical implications

This case provides a useful reminder of the factors that will be relevant to the court’s discretion when considering anti-enforcement injunctions. Applicants should be aware of the need to apply promptly and should consider obtaining an anti-suit injunction before a judgment is reached in the foreign proceedings. Further, given that the threshold requirement in anti-suit injunctions applies equally to anti-enforcement injunctions, applicants should consider making both applications simultaneously.

Factual Background

Ecobank is a major African bank.  It employed Mr Tanoh in Togo as Chief Executive Officer and Group Managing Director pursuant to an Executive Employment Agreement (the “EEA”). Article 26 of the EEA provided for disputes to be conducted in London under the UNCITRAL Arbitration Rules.

On 11 March 2014, Ecobank terminated Mr Tanoh’s employment. Following this, Mr Tanoh commenced two sets of proceedings against Ecobank.

  1. On 4 April 2014, Mr Tanoh commenced proceedings before the Labour Court of Lomé in Togo (the “Togolese proceedings”). He claimed that the termination of his employment breached the Togo Labour Code and was unfair. On 3 February 2015, the Togo Labour Court held that Article 26 of the EEA did not prevent Mr Tanoh from making a claim in that court. Ecobank sought an extension of time for submissions on the merits, but ultimately did not advance any case. The court ordered Ecobank to pay $11,547,572 in damages to Mr Tanoh.
  2. On 12 May 2014, Mr Tanoh began proceedings before the Abidjan Commercial Court in the Côte D’Ivoire (the “Ivorian proceedings”). The claim arose after a director of Ecobank, Dr Matjila, wrote a scathing article about Mr Tanoh that was leaked to the Financial Times and Bloomberg. Mr Tanoh’s claim against Ecobank was based on the tort of inaction arising from its failure to disapprove the defamatory statements. The Abidjan court rejected Ecobank’s submissions that the courts of the Côte D’Ivoire lacked jurisdiction and gave judgment for damages in favour of Mr Tanoh. A stay of execution pending appeal was refused.

In neither case did Ecobank seek an anti-suit injunction from the English courts preventing the issue or continuation of the foreign proceedings in breach of the arbitration clause in the EEA. Ecobank commenced arbitration against Mr Tanoh in December 2014 and its claims dealt with the matters in the Togolese proceedings. However, the defamation dispute in the Ivorian proceedings was not included.

Ecobank applied to the English High Court for an interim injunction restraining enforcement of the two judgments. This claim was rejected by Knowles J at the first instance.  Ecobank appealed.

Court of Appeal decision

In dismissing the appeal, Christopher Clarke LJ highlighted the need for applicants to act promptly and noted that the test for granting anti-enforcement relief is no lower than that for an anti-suit injunction (a high degree of probability that there was an arbitration agreement governing the dispute).

Christopher Clarke LJ noted that it was rare for the English courts to grant anti-enforcement injunctions and observed that no authority had been cited where an anti-enforcement injunction had been granted because the proceedings sought to be restrained were commenced in breach of an exclusive jurisdiction or arbitration clause. Given the requirement to act promptly, an applicant who does not apply for an injunction until after judgment is given in the foreign proceedings is not likely to succeed. However, the Court of Appeal held that an applicant may succeed if: (1) the respondent has acted fraudulently; or (2) the applicant could not have sought relief before the judgment was given, either because the relevant agreement was reached post judgment or because he had no means of knowing that the judgment was being sought until it was served on him.

With regards to delay and comity, it was held that delay by the applicant is not wholly irrelevant. This is because injunctions are equitable remedies, and therefore the courts will consider the extent to which the respondent has incurred expense prior to any application being made, the interests of third parties, including, in particular, the foreign court, and the effect of making such an order in relation to what has happened before it was made. With this in mind, Christopher Clarke LJ concluded that there was no good reason for Ecobank to have delayed seeking anti-suit relief in England. Further, the respondent did not have to show: (1) that he believed that no application for an injunction would be made; or (2) that if he had realised that an application would or might be made, he would have abandoned the foreign proceedings. Whilst such reliance is relevant, it is not determinative. The relevance of delay is wider and it should be avoided for reasons including the avoidance of prejudice, detriment, and waste of resources; the need for finality; and considerations of comity.

Christopher Clarke LJ held that injunctive relief may be sought from before any foreign proceedings have begun to after judgment. It was also noted that even if a foreign court has ruled in favour of its own jurisdiction, that is not per se a bar to an anti-suit injunction (AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2011] EWCA Civ 647). However, as each stage is reached, more will have been wasted by the abandonment of proceedings which compliance with an anti-suit injunction would bring about. Therefore, the longer an action continues without any attempt to restrain it, the less likely a court is to grant an injunction and considerations of comity have greater force.

Ecobank Transnational Incorporated v Tanoh [2015] EWCA Civ 1309

Post By Will Holder (4 Posts)

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