Contractual Anti-suit Injunctions and Delay – One to Watch?

As we reported in the March 2016 edition of the Hong Kong Lawyer (“Anti-suit Injunctions and Delay”), in Re Sea Powerful II [2016] 1 HKLRD 1032 the first instance court refused to grant an injunction to restrain a party from continuing with court proceedings commenced in mainland China in breach of an arbitration clause favouring Hong Kong. That refusal was based on the plaintiff ship owner’s delay of approximately one year in seeking anti-suit injunctive relief, during which time the plaintiff appears to have adopted a strategy of “wait and see” with respect to the progress of the Mainland proceedings and the limitation period provided for in the arbitration clause had expired.

On a recent appeal, the plaintiff challenged the court’s decision on the basis that delay and comity considerations were not grounds to refuse an application for the grant of an injunction to enforce a contractually agreed arbitration clause (as opposed to, for example, the grant of an anti-suit injunction in the context of a forum non conveniens case). This argument did not succeed in the Court of Appeal, which declined to find that the lower court had exercised its discretion erroneously*.

The outcome of the appeal primarily turns on the Court of Appeal’s approach to the lower court’s exercise of a discretion. However, the case raises an interesting issue; namely, delay as a standalone objection to the grant of an anti-suit injunction in the context of a contractually agreed jurisdiction clause, in circumstances where the plaintiff in the Mainland action (the holder of a bill of lading) could have protected its rights by making a claim within the limitation period provided for in the arbitration clause.

It will be interesting to see whether the plaintiff’s lawyers (and their leading marine counsel) are instructed to seek permission to appeal to the CFA and, if so, whether they can prepare grounds for an appeal that raise an issue of great general or public importance. The issue is interesting; particularly, in this context, the difference between contractual anti-suit injunctions and forum non conveniens anti-suit injunctions. However, while a final appeal may be of considerable interest that (presumably) needs to be balanced against the fact that ultimately the outcome in the case turned on the exercise of a judge’s discretion.

* CACV 36/2016, [2016] HKEC 1150.


Senior Consultant, RPC