Raiffeisen International Bank Ag v Scully Royalty Ltd and Seven Others
| Jurisdiction | Cayman Islands |
| Judge | (Parker, J.) |
| Judgment Date | 28 October 2020 |
| Court | Grand Court (Cayman Islands) |
(Parker, J.)
Injunctions — anti-suit injunctions — injunction against foreign proceed-ings — applicant granted interim anti-suit injunction to require principal defendant to Cayman proceedings to withdraw from proceedings in Malta concerning subset of issues in Cayman proceedings — Cayman Islands proper forum for trial of all claims — multiple proceedings in different jurisdictions not in interests of justice
Held, granting the injunction:
(1) The power to grant an anti-suit injunction arose under the Grand Court Law (2015 Revision), s.11(1) and s.37 of the Senior Courts Act 1981 (England) (by cross-reference). The grant of relief was discretionary. The court could restrain a defendant over whom it had personal jurisdiction from instituting or continuing proceedings in a foreign court when it was necessary in the interests of justice to do so. The remedy bound therespondent to the proceedings in personam. The general principles as to the exercise of the discretion were as followed:
(a) As the remedy could not avoid being seen as an indirect interference with the process of a foreign court, regard must be had to the principles of international judicial comity. The court should therefore exercise the jurisdiction with caution.
(b) The discretion was broad and general. All material facts and circumstances were taken into account. The principles were not the same as those applied when granting a stay of proceedings on the ground of forum non conveniens. Although the question whether the action was oppressive and/or vexatious was material in determining whether the interests of justice required the restraint, the court had also to consider the injustice to the party being restrained.
(c) There needed to be some conduct identified (variously described in the authorities as unconscionable, vexatious or oppressive) which gave rise to the right to the grant of the remedy. This would include conduct which interfered with the due process of the court.
(d) The injunction must be necessary to protect the applicant’s legitimate interest in the relevant proceedings. The fact that the court had found that the Cayman proceedings were the natural forum for this litigation was a necessary but not sufficient condition. It could be a factor in finding that the parallel proceedings were oppressive.
(e) The risk of inconsistent judgments and the undesirable consequences of concurrent actions in respect of the same subject matter in two different jurisdictions was also not in itself sufficient to show an anti-suit injunction should be granted but it was a factor to be taken into account.
(f) Similarly, the mere inconvenience of parallel proceedings was insufficient of itself, unless it amounted to real injustice.
(g) It was not inherently vexatious or oppressive to bring a claim to which the foreign court would apply a different substantive law than would be applied in the Cayman Islands even where this would give a significant advantage to the claimant abroad.
(h) Whilst there was nothing inherently improper about a litigant tactically preferring a foreign court, where there was no adequate explan-ation for why competing foreign proceedings had been brought, the court might be willing to infer that the foreign proceedings were motivated by a deliberate strategy of harassment and vexation and not for proper purposes.
(i) The court would not grant an anti-suit injunction where it would serve no purpose or where it would be futile to do so.
(j) The court needed to determine which party had the better case on the material available at an interim stage (paras. 48–49).
(2) The court was satisfied that it was in the interests of justice to grant the injunction against D1 and that RBI needed such protection. The court recognized that judges of different legal systems could legitimately arrive at different answers and it was not for this court to predict how the Maltese court would determine jurisdiction in this matter or to interfere with its processes without good reason. However, the court was satisfied that it wasright, in the interests of justice, to intervene to prevent further participation at this relatively early stage by D1 in the Maltese proceedings. The court had already determined that the Cayman Islands were the proper forum for the trial of all claims, including claims in relation to the merchant bank transaction. It would not be in the interests of justice for there to be multiple proceedings in different jurisdictions, particularly in light of RBI’s unlawful means conspiracy case which was an overarching claim and would involve the analysis of extensive evidence. D1, a Cayman company, was a critical player in relation to that claim and had participated extensively in the Cayman proceedings and advanced a substantial counterclaim. There had been substantial pleadings filed and the parties had already incurred considerable costs in furtherance of the Cayman proceedings. There were clearly costs and timing disadvantages to RBI of having to litigate in two jurisdictions over the same subject matter, which were not balanced out by any potential prejudice to D1 if the court granted an anti-suit injunction. The court was entitled to look for an explanation for D1’s motivation and conduct in relation to its case in Malta. The court drew the inference that the Maltese proceedings had been brought by D1 in bad faith to harass and vex RBI. The court was not persuaded that D1 had a good claim in Malta, or that it genuinely sought relief in Malta, or that it would suffer any real prejudice if restrained from proceeding in Malta. D1 had participated extensively in the Cayman proceedings, it was a central party and should not be permitted to gain any illegitimate advantage by bringing flawed proceedings in Malta. The court accepted RBI’s submissions on the potential for issue estoppels and conflicting decisions should D1 continue with its claim in Malta, which could lead to great uncertainty and significantly complicate the enforcement of any Cayman judgment in other jurisdictions. RBI had shown a real risk of injustice in the meantime, including material inconvenience and potentially irrecoverable costs. No legitimate deprivation of advantage had been shown by D1 if restrained from proceeding in Malta (paras. 62–80).
(1)Al Sadik v. Investcorp Bank BSC, 2018 (2) CILR 464, referred to.
(2)Contadora Enterprises S.A. v. Chile Holdings (Cayman) Ltd., 1999 CILR 194, referred to.
(3)Donohue v. Armco Inc., [2001] UKHL 64; [2002] 1 All E.R. 749; [2002] 1 All E.R. (Comm) 97; [2002] CLC 440; [2002] 1 Lloyd’s Rep. 425, referred to.
(4)ED&F Man Capital Markets Ltd. v. Straits (Singapore) PTE Ltd. [2019] EWCA Civ 2073, referred to.
(5)Glencore Intl. A.G. v. Exter Shipping Ltd., [2002] EWCA Civ 528; [2002] CLC 1090; [2002] 2 All E.R. (Comm) 1, considered.
(6)Magellan Spirit ApS v. Vitol SA, “Magellan Spirit”, [2016] EWHC 454 (Comm); [2017] 1 All E.R. (Comm) 241; [2016] Lloyd’s Rep. 1; [2016] 1 CLC 480, referred to.
(7)Maxwell Communications Corp. plc (No. 2), Re, sub nom. Barclays Bank plc v. Homan, [1992] BCC 757; [1993] BCLC 680, referred to.
(8)Origami Partners III LP v. Pursuit Capital Partners (Cayman) Ltd., 2012 (2) CILR 191, referred to.
(9)Société Nationale Industrielle Aerospatiale v. Lee Kui Jak, [1987] A.C. 871; [1987] 3 W.L.R. 59; [1987] 3 All E.R. 510; (1987), 84 L.S.G. 2048, referred to.
(10)Star Reefers Pool Inc. v. JFC Group Co. Ltd., [2012] EWCA Civ 14; [2012] 2 All E.R. (Comm) 225; [2012] 1 CLC 294; [2012] 1 Lloyd’s Rep. 376, referred to.
(11)Turner v. Grovit, [2002] UKHL 65; [2002] 1 W.L.R. 107; [2002] CLC 463; [2002] I.C.R. 94; [2002] IRLR 358; [2002] I.L.Pr. 28, referred to.
Grand Court Law (2015 Revision), s.11(1):
“11. (1) The Court shall be a superior court of record and, in addition to any jurisdiction heretofore exercised by the Court or conferred by this or any other law for the time being in force in the Islands, shall possess and exercise, subject to this and any other law, the like jurisdiction within the Islands which is vested in or capable of being exercised in England by
(a)Her Majesty’s High Court of Justice; and
(b)the Divisional Courts of that Court,
as constituted by the Senior Courts Act, 1981, and any Act of the Parliament of the United Kingdom amending or replacing that Act.”
The plaintiff sought an interim anti-suit injunction.
The plaintiff (RBI) was an Austrian bank. It claimed that the second defendant (D2), which was the guarantor of RBI under an Austrian law guarantee, was asset stripped by the first defendant (D1) and other subsidiaries of D1 for the purpose of putting those assets beyond the reach of RBI to avoid enforcement of a claim against them. RBI sought to reverse the transfers pursuant to claims under the Fraudulent Dispositions Law (1996 Revision) and the tort of unlawful means conspiracy. The transfers included the transfer from D2 to D1 of the shares of D3, a Maltese company which held the shares of a merchant banking business.
Some nine months after RBI commenced proceedings in the Cayman Islands, proceedings were commenced in Malta by D3 and D1 (and Merkanti Bank Ltd. (“M Bank”)) against RBI and D2. The Maltese proceedings concerned the transfer of D3 by D2 to D1. The...
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