SHASHOUA V SHARMA

[2009] EWHC 957 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Cooke, 7 May 2009

Arbitration – Parties agreeing that venue of arbitration should be England – Whether parties agreeing that seat of arbitration should be in England and that the parties should bear their own costs – Anti-suit injunction – Whether English court retained jurisdiction to grant relief – Arbitration Act 1996, sections 3, 44 and 60 – Supreme Court Act 1981, section 37 – New York Convention 1958, article II(3)

The parties entered into a joint venture and shareholder agreement which was governed by Indian law but disputes were to be resolved by arbitration under ICC rules with its venue in London, each party to bear his own costs. The claimant commenced arbitration proceedings. The defendant contested jurisdiction but lost and a costs award was made. A subsequent appeal to the English courts was dismissed for being out of time. The claimant then obtained a charging order over a house in England belonging to the defendant. The defendant applied to the courts of Delhi challenging the costs order and restraining the claimant from enforcing the charging order. The claimant, with the permission of the arbitrators, applied for an anti-suit injunction under both section 37(1) of the Supreme Court Act 1981 and section 44(4) of the Arbitration Act 1996 restraining the defendant from bringing or participating in any proceedings elsewhere which sought to delay the enforcement of the costs award and other orders made by the English court. Cooke J granted the order. (1) The agreement on English venue, coupled with a choice of a transnational arbitration procedure, amounted to a choice of England as the seat under section 3 of the 1996 Act. Such a choice was equivalent to conferring exclusive curial jurisdiction on the English courts, so that the applications to the Indian courts could in principle be restrained. It was irrelevant that the parties had agreed – contrary to section 60 of the 1996 Act – that each party would bear his own costs. (2) The decision of the European Court of Justice in February 2009, in Allianz SpA v West Tankers Inc (The Front Comor) Case C-185/07 did not preclude the grant of an anti-suit injunction in respect of judicial proceedings in a court outside the EU or EFTA. An anti-suit injunction was not inconsistent with article II(3) of the New York Convention. (3) An injunction would be granted on the facts.