Case Report:

Star Reefers v JFC Group [2012] EWCA Civ 14

Anti-suit injunctions

Steven Gee QC and Peter Stevenson acted on behalf of JFC Group in this Court of Appeal decision concerning the granting of anti-suit relief.

Star Reefers had been granted anti-suit relief in respect of proceedings in Russia brought by JFC to decide that JFC had no liability under an alleged contract of guarantee signed by JFC, guaranteeing a charterparty governed by English Law and containing a London arbitration clause. The relief had been granted on the grounds that JFC had acted unconscionably in bringing proceedings in Russia when under English conflicts rules the guarantee was governed by English law and applying that Law there was no arguable defence.

The Court of Appeal observed that this was a matter of discretion for an experienced judge of the commercial court, and held, reversing the judge, that there was nothing unconscionable in the conduct of JFC to justify granting the injunction. The guarantee contained no jurisdiction or arbitration clause, JFC had not submitted to the jurisdiction in England in the proceedings brought to enforce the guarantee and so there was no contractual basis for the injunction. Even if JFC had a weak case under Russian Law for contesting whether there was a valid guarantee it had a legitimate juridical advantage in Russia where the court would be likely to apply Russian Law as the putative law governing the guarantee.

The position contrasts with what is needed to justify permission to serve out of the jurisdiction. There the fact that a foreign court may not apply English Law to a putative contract governed by English Law applying English conflicts rules is a factor in favour of granting permission. In the anti-suit arena the question is whether the applicant can demonstrate unconscionable or vexatious behaviour. The question requires a different approach because otherwise courts would be injuncting proceedings before other courts based on their own conflict of law rules and the risk that the foreign court might apply a different conflicts rule and produce a different governing law. The Court of Appeal observed that "..there is..something of a touch of egoistical paternalism in an English court .." granting such anti-suit relief.

> See also coverage in Lloyd's List www.lloydslist.com/ll/sector/finance/article389931.ece

> For a copy of the judgment, please email sarah.longden@stonechambers.com.