The recent ruling in R v G (anonymised) by the English Commercial Court marks a decisive move towards finding common ground between the English and French courts, rather than in the words of the presiding judge Mr Justice Robin Knowles (Knowles J): "difference or tension or other difficulty or clash". While still open to challenge at the full hearing, this decision has interestingly come to an opposite conclusion to the SQD v QYP application for an anti-suit injunction rejected only a few days prior. The contrast between these two decisions, in combination with the previous case law leading up to them, indicates the English court's efforts to determine their ability to intervene where the seat of the arbitration differs from the governing law of the arbitration agreement.
Perhaps unsurprisingly, a large contributor to this uncertainty is the impact of the UK's departure from the European Union. One expectation regarding the consequences of Brexit was that there would be a surge in the number of anti-suit injunctions granted as a result of anticipated greater judicial independence. Another contributing factor was expected to be the removal of the restrictions on granting an anti-suit injunction against a fellow EU member which had been established by the prominent case of West Tankers in 2009. In this context, both SQD v QYP and R v G have given the English courts the opportunity to consciously redefine their relationship with the European courts, particularly those in France. Yet navigating this is complex. The approach taken by the courts in these cases has essentially been for the judges to compare the English and French legal systems with regard to anti-suit injunctions, thus giving them a view on the intentions of the parties when choosing a particular seat.
Below we (1) commence by briefly outlining the facts of both R v G and SQD v QYP, (2) then we summarise and compare the decisions taken by the presiding judges, (3) before we place these decisions within the broader context of both the English and French legal systems (4) and we finally conclude with a few observations on the significance of these decisions and the practical consequences for parties seeking to enter into arbitration agreements.
The Facts
The confidentiality of both R v G and SQD v QYP means that the identity of the parties and the exact subject matter of the disputes are not in the public domain. However what is known is that both of these cases involve: overseas parties seeking an interim anti-suit injunction based on an arbitration agreement governed by English law and the ICC Rules and seated in Paris. The only distinction drawn between the two by Knowles J in R v G is that, in R v G, the arbitration is yet to begin in full whereas in SQD v QYP it is already underway.
Despite these agreements, in both cases, the defendants initiated litigation proceedings in their own country. This location is confidential in SQD v QYP but in R v G it is public knowledge that it is Russia. Seeking to ensure that the arbitration clause is adhered to, the claimants in both cases have requested an interim anti-suit injunction from the English court restraining the defendant from continuing with the litigation proceedings. In both cases, the application has been brought in the English courts on the basis that, despite the Parisian seat, such injunctive relief is not available in the French courts. In R v G, the claimant also emphasised that the Russian courts would not grant a stay in favour of arbitration.
The decisions differ as to whether the differences between English and French law could prevent an anti-suit injunction
It is not uncommon for arbitration agreements to specify a different governing law to the law of the seat. English law, for example, is a frequent choice worldwide for the governing law on merits while choosing a seat which is arbitration friendly but neutral for both parties (such as Paris as in this case, one of the most common arbitration seats), is often important in demonstrating compromise. However, such cases have not generally been seen in the context of applications for anti-suit injunctions before the English courts.
It is consequently in a relative absence of case law that Knowles J has made his ruling in R v G and the interim nature of the application means that he is somewhat cursory in the justifications for his decision. At a high level, he deemed that all the requisite criteria for granting the injunction were present, including that such a decision would be "just and convenient". In reaching such a decision, Knowles J undoubtedly felt compelled to acknowledge its contrast with the rejection of the application for an interim anti-suit injunction in SQD v QYP less than a week before; such a contrast being all the more highlighted by the similarity of the facts involved.
In R v G, the decision rests on three main foundations: (1) the stance of the French courts; (2) how this applies to enacting the intention of the parties; and (3) the principles set out in the New York Convention. Firstly, Knowles J explicitly acknowledges that his interpretation of French law on anti-suit injunctions is different to Bright J in SQD v QYP. Bright J's primary reason for rejecting the application for the injunction was that French courts have a vehement philosophical objection to anti-suit injunctions, with such injunctions being deliberately excluded from the French judge's available legal toolkit. He therefore held that the parties could not have intended an English court to have the power to grant an anti-suit injunction because they had chosen France as their seat of arbitration in the knowledge that the French court does not grant such injunctions.
Knowles J, however, places less weight on the stance of the French court, holding that it should be an influencing factor but should not be completely determinative so as to "deprive this court of all jurisdiction". He also emphasises "comity" between the English court and French courts, rather than opposition. In this regard, he contends that both jurisdictions have a mutual aim to seek to enact the "bargain" made between the parties in upholding the arbitration agreement. Referencing the New York Convention, Knowles J emphasises that England, France and Russia should not only aim to enforce the agreement but that they have "shared obligations" to do so, while Bright J does not reference the New York Convention. The fact that Russia is the location of the litigation proceedings in R v G is therefore significant to Knowles J and, while he does not expand fully upon this in his ruling, policy considerations regarding the attitude of the Russian courts in recent months may also have been an influencing factor in his decision to grant the injunction.
This injunction has only been granted in R v G as an interim measure and Knowles J's ruling is therefore somewhat light on explanation, which may be developed following a full hearing.
The differing French and English attitude to international arbitration continues to influence decisions
A clear contrast between these two cases is in the different perceptions of French law. It is indeed clearly established that under French law, anti-suit injunctions are not an available interim measure for parties to an arbitration agreement. Instead, the French legal system adopts other mechanisms for the protection of the will of the parties to such an arbitration agreement (such as the negative aspect of the competence-compétence principle, which is considered a material rule of French arbitration law). Nevertheless, French courts have previously held, such as by Cour de Cassation decision back in 2009, that a foreign anti-suit injunction does not violate French international public policy and can be recognized and enforced in France. These different factors might explain the conflicting views taken by Knowles J and Bright J regarding the possibility to issue an anti-suit injunction in the respective cases before them.
The idea of difference between the English and French legal systems in relation to international arbitration has become a recurring theme in case law over the past decade or so. In the case of Kabab-Ji v Kout Food in 2022, when faced with the same question the English and French courts came to opposite decisions regarding the will of the parties. The English court held that by making English law the law of the contract, the parties had essentially selected English law to apply to the arbitration agreement contained within the contract. Contrastingly, the French court held that the arbitration agreement was separate from the remainder of the contract and that there was insufficient evidence that the parties "common will" was for English law to govern the arbitration agreement. Another notable example is the oft-cited example of Dallah v Pakistan where in 2010 / 2011 the English and French courts gave contrasting views on whether Pakistan was a party to the arbitration agreement. In that case, the conflict arose on the application of the facts, rather than differing legal principles.
Whether on fact or principle, this trend towards focusing on the differences between the English and French courts is seen again in SQD v QYP. While Knowles J acknowledges this prior pattern in R v G, his reference to "comity" in the "step" that he proposes to take suggests a conscious shift towards a more unified position between the English and French courts.
Beyond this, the popularity of Paris as a seat of arbitration and the preponderance of English law could result in further cases with these fact patterns entering the courts in the near future. A more detailed judgment in R v G following the full hearing could certainly assist in clarifying the current situation, not least to address the contrast with the SQD v QYP decision. It is worth continuing to monitor the situation, therefore.
In all cases, there will likely remain a certain level of uncertainty arising from these shifts in the stance of the English court in granting anti-suit injunctions. Practically, parties should give thought to the governing law and seat of the arbitration at the point of drafting and negotiating the agreement. Otherwise, there is a risk that parties may find themselves in a position where they are unable to enforce arbitration as the means of dispute resolution and have no means of stopping unwanted litigation proceedings.
