Ecobank Transnational v Tanoh [2015] EWCA Civ 1309

This case provides a helpful review of the law on anti-enforcement injunctions. It also emphasizes the dangers of delay in applying for injunctive relief in a jurisdictional context.

The facts: Mr Tanoh was employed by Ecobank under an Executive Employment Agreement (EEA), providing for London arbitration under UNCITRAL Rules.   After the termination of his employment, Mr Tanoh commenced proceedings against Ecobank before a Labour Tribunal in the Togolese Republic in April 2014 for unfair dismissal, and before Adidjan Commercial Court in Cote D’Ivoire in May 2014 for defamation. Ecobank challenged jurisdiction in each set of proceedings, but was unsuccessful. Ecobank also lost on the substance in both cases, and began appeals.

Ecobank did not seek an anti-suit injunction in the English courts, based on breach of the arbitration argument, to try to stop either the Togolese or the Ivorian proceedings.

In December 2014, Ecobank commenced arbitration against Mr Tanoh under the arbitration agreement, for matters overlapping with the Togolese proceedings. The arbitration reference, however, did not cover the defamation issues from the Ivorian proceedings.

Ecobank sought a worldwide anti-enforcement injunction from the English courts in respect of the Togolese and Ivorian judgments. This was granted on an interim basis, in a without notice application.

Procedural History: At the return date, the Court declined to continue the interim injunction and refused Ecobank’s application. The primary ground for the refusal was the delay by Ecobank in seeking injunctive relief, and in commencing arbitration proceedings.  The decision of Mr Justice Knowles in the Commercial Court was appealed to the Court of Appeal.   The Court of Appeal upheld the Commercial Court decision (though disagreeing on certain points) and dismissed the appeal.

The Decision: The Court of Appeal emphasized that an applicant needed to act promptly and seek injunctive relief at an early stage. An applicant should not wait to see what the foreign court would do before seeking relief in the English courts. The Court of Appeal confirmed that this principle applied to both anti-suit and anti-enforcement injunctions.

The Court of Appeal stated that there are various stages at which injunctive relief could be sought in a jurisdictional context: a) before any foreign proceedings have begun; (b) once they have begun; (c) within a relatively short time afterwards; (d) when the pleadings are complete; (e) thereafter but before the trial starts; (f) in the course of the trial; (g) after judgment.   At each stage, there will be greater waste of time and resources (both of the parties and of the foreign courts) should the proceedings have to be abandoned due to an anti-suit injunction. Considerations of comity have greater force the longer an action has been allowed to run on without any attempt to restrain it.

Delay was considered relevant even in the absence of prejudice to the other party. The Court stressed that prejudice to third parties and to the foreign court, which would suffer waste of resources and impact on its own timetabling, must also be considered.

The Court considered it unsurprising that there were few English cases where a party had been granted an anti-enforcement injunction. If an applicant for anti-suit relief needs to act promptly, an applicant who only applies for relief in the form of an anti-enforcement injunction after the foreign court has given judgment, is unlikely to be successful. The exceptions include scenarios such as fraud by the respondent, unconscionability, the applicant being unaware of the judgment until it is served on him, or scenarios where agreements are reached between parties after the judgment is rendered.

The Court considered the issue of anti-enforcement injunctions in the context of breach of arbitration clauses.   No English case law was put before the Court where an anti-enforcement injunction was granted solely on the basis that there had been a breach of an arbitration or exclusive jurisdiction agreement. Prior case law had already considered that anti-enforcement injunctions would not be needed to restrain enforcement in England, in any event, as the English courts could reach a decision as to whether to recognize or enforce a judgment within the context of s32 Civil Jurisdiction and Judgments Act 1982 (see below for its full text). Therefore, an anti-enforcement injunction would be sought for extra-territorial use. In this context, the English courts would take a cautious approach.

Section 32 of the Civil Jurisdiction and Judgments Act 1982, “Overseas judgments given in proceedings brought in breach of agreement for settlement of disputes” provides as follows:.

(1) Subject to the following provisions of this section, a judgment given by a court of an overseas country in any proceedings shall not be recognised or enforced in the United Kingdom if—

(a) the bringing of those proceedings in that court was contrary to an agreement under which the dispute in question was to be settled otherwise than by proceedings in the courts of that country; and

(b) those proceedings were not brought in that court by, or with the agreement of, the person against whom the judgment was given; and

(c) that person did not counterclaim in the proceedings or otherwise submit to the jurisdiction of that court.

(2) Subsection (1) does not apply where the agreement referred to in paragraph (a) of that subsection was illegal, void or unenforceable or was incapable of being performed for reasons not attributable to the fault of the party bringing the proceedings in which the judgment was given.

(3) In determining whether a judgment given by a court of an overseas country should be recognised or enforced in the United Kingdom, a court in the United Kingdom shall not be bound by any decision of the overseas court relating to any of the matters mentioned in subsection (1) or (2).