We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
01 February 2018
An anti-anti-suit injunction is a relatively rare form of anti-suit injunctive relief granted by a particular court in order to stop a party from pursuing an application for an anti-suit injunction in another court.
The Guernsey Court of Appeal case Carlyle Capital Corporation (in liquidation) (CCC) v Conway, decided on April 27 2012, sets out the Guernsey position on anti-anti suit injunctions. In this case, the Court of Appeal stated that the basis of the principles governing the granting of an anti-anti-suit injunction were the same as those applied in respect of anti-suit injunctions, and emphasised that while caution is required in granting an anti-suit injunction, "particular caution" should be applied in granting an anti-anti-suit injunction. The reason for particular caution is that the effect of an anti-anti-suit injunction may be to prevent a party from approaching the court that the parties have agreed will have exclusive jurisdiction over a dispute (or an aspect of a dispute) to complain that they are being sued elsewhere in breach of contract.
Here, the liquidators were successful in obtaining an anti-anti-suit injunction restraining the eighth, ninth and 10th defendants from seeking anti-suit relief in relation to Guernsey proceedings in the Delaware Chancery Court.
To put this case into context, the liquidators brought common law and statutory claims against the former directors and managers of CCC alleging, among other things, that the defendants had breached their contractual and fiduciary obligations in relation to the management of CCC. In July 2010 the liquidators issued proceedings in Guernsey, Delaware, Washington DC and New York State and subsequently withdrew their claims in Delaware. From December 2010 the proceedings concerned the issues as to the appropriate forum to hear these claims. Some of the liquidators' non-statutory claims arose from alleged breaches of an investment management agreement (IMA) between CCC and the eighth defendant. As the IMA contained an exclusive jurisdiction clause in favour of Delaware, the defendants issued an application for an anti-suit injunction in Delaware to prevent the liquidators from pursuing their claims anywhere other than Delaware. The anti-suit injunction was pursued on an inter partes basis.
In tandem with this, the defendants challenged the jurisdiction of the Guernsey court to determine the claims. At first instance, the defendants were successful on the basis that the Delaware court was the most appropriate forum for determination of the proceedings. The plaintiffs appealed to the Guernsey Court of Appeal.
In October 2011 the liquidators obtained an ex parte anti-anti-suit injunction in Guernsey against the defendants. This prevented the defendants from pursuing their anti-suit injunction in Delaware. The defendants were unsuccessful in their application to have that injunction set aside, and so appealed to the Court of Appeal.
In March 2012 the Guernsey Court of Appeal allowed the liquidators' appeal against the jurisdictional findings against them – permitting, in effect, that all their claims should be heard in Guernsey.
In the parallel Court of Appeal proceedings challenging the anti-anti suit injunction, the liquidators argued that the defendants were seeking to subvert the effect of the Court of Appeal's March 2012 judgment by seeking in Delaware that which they had already failed to obtain in Guernsey.
In dismissing the appeal and upholding the anti-anti-suit injunction, the Court of Appeal set out the objectives and rationales underpinning the policy, which included the following (as set out by Lord Goff in Société Nationale Industrielle Aerospatatiale v Lee Kui Jak ( 1 AC 871)):
In dismissing the appeal, the Court of Appeal held that "there is a strong public policy in Guernsey against multiplicity of litigation and the fragmentation of proceedings that can and should be determined in a single action". The rationale behind that policy was the saving of costs and the avoidance of delay, uncertainty, inconsistent decisions and potential injustice. The Court of Appeal went on to say that the fundamental principle of the interests of justice were best served:
"by the submission of the whole of the dispute to a single tribunal which is best fitted to give comprehensive judgment on all matters in issue in accordance with its own law which governs the vast majority of the claims."
In March 2012 the Court of Appeal had already found that the Guernsey court was the only one in which all of the liquidators' causes of action could be pursued.
The Court of Appeal further held that exclusive jurisdiction clauses could be overridden in appropriate circumstances – for example, to:
The Court of Appeal considered that some of the liquidators' statutory claims were justiciable only in Guernsey and were inextricably linked to their non-statutory claims governed by Guernsey law for breach of fiduciary duty and gross negligence against each of the defendants.
Therefore, the Court of Appeal held that the interests of justice were best served by the submission of the whole dispute to the Guernsey court for determination.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.