Al Sadik v Investcorp Bank B.S.C. and Five Others

• Jurisdiction: Cayman Islands
• Judge: (Kawaley, J.)
• Judgment Date: 13 November 2018
• Court: Grand Court (Cayman Islands)
• Date: 13 November 2018

AL SADIK

and

INVESTCORP BANK B.S.C. and FIVE OTHERS

(Kawaley, J.)

Grand Court, Financial Services Division (Cayman Islands)

Injunctions — anti-suit injunction — injunctions against foreign proceedings — granted on contractual basis to enforce exclusive jurisdiction clause where plaintiff seeks to re-litigate in overseas jurisdiction disputes finally determined against him in Cayman proceedings

Held, granting an anti-suit injunction:

(1) It was common ground that the court’s jurisdiction to grant injunctive relief was ultimately derived from s.11 of the Grand Court Law (2015 Revision) and s.37 of the English Senior Courts Act 1981. It was also common ground that where an applicant had a legal right not to be sued abroad, the court would ordinarily grant an anti-suit injunction unless the party suing in the non-contractual forum could show strong reasons for suing in that forum. In the present case, it was essentially common ground that the SPA contained an exclusive jurisdiction clause, but the plaintiff’s counsel sought to cast doubt on the clarity of its terms. The court was required to construe the clause broadly and assume that the parties to commercial contracts ordinarily preferred to have all disputes relating to a contract resolved in one forum rather than opting for a multiplicity of proceedings to resolve disputes arising out of a single contract (paras. 29–41).

(2) The application for an anti-suit injunction would be granted on a contractual basis by way of enforcement of the exclusive jurisdiction clause in the SPA together with a declaration that the subject matter of the Dubai proceedings was disputes within that clause. Despite the ambiguity in the exclusive jurisdiction clause, the only sensible commercial construction was that it obliged the parties to refer any disputes to which the clause applied to the Grand Court. The court had regard to the presumption that rational businessmen would prefer to have all disputes relating to a contract determined in one forum. In any event, the fall-back propositionthat once an available non-exclusive jurisdiction had been selected it became in practical terms the exclusive jurisdiction was clearly supported by the authorities on which the first defendant relied. Giving the exclusive jurisdiction clause a liberal interpretation, the regulatory and tortious claims asserted against the first defendant by the plaintiff and his wife in the amended claim in the Dubai proceedings fell within the scope of the SPA’s exclusive jurisdiction clause because the main relief sought was the same as that sought in relation to the SPA in the Cayman proceedings and also because the claims asserted were closely connected with the same evidential and legal terrain that was covered in the Cayman proceedings (albeit in relation to pre-contractual claims that were abandoned by the plaintiff during the trial). The court accepted that the Dubai proceedings in their present form did not on their face seek any direct relief in respect of the SPA: the alleged regulatory breach by marketing and promoting investments without the necessary licence and approvals, by itself, had little obvious connection to a share purchase agreement in relation to a Cayman company governed by Cayman law. The commercial reality, however, was that the Dubai proceedings sought to recover the same loss as had been unsuccessfully sought in the present proceedings. The first respondent could not logically be compelled to repay moneys lost under the SPA, which under Cayman law the plaintiff was not entitled to recover, without the validity of the implementation under the SPA being impugned. On any sensible view of the facts, the loss complained of arose out of and was connected to the SPA even if it was also related in a very remote sense to the alleged breaches of Emirati law. It could not be enough to avoid an exclusive jurisdiction clause for a litigant to identify any conceivable non-contractual foreign law claim and then seek to set aside the contract under that foreign governing law having lost in the contractually agreed forum. That was not what rational businessmen would agree. The plaintiff failed to establish strong reasons for this court to decline to enforce the exclusive jurisdiction clause by granting the anti-suit injunction sought. He relied on the fact that Emirati law applied and was different from Cayman law; the factual connection of the claims and the plaintiff/his wife with the UAE; and the fact that the first defendant was established in that region. Those factors might have carried some weight if the jurisdiction clause in the SPA was non-exclusive and the plaintiff’s attempt to recoup his investment loss had not already been finally tried. However, in the context of seeking discretionary relief from an exclusive jurisdiction clause where the relevant dispute had already been unsuccessfully tried in the agreed adjudicative forum at the suit of the plaintiff himself, they were very weak grounds (paras. 48–51; paras. 54–58; paras. 65–66; paras. 71–73).

(3) The court would also have granted an anti-suit injunction on the alternative ground that it was an abuse of the process of this court for the plaintiff to seek to re-litigate abroad an issue which could and should have been advanced in the Cayman proceedings, which he had initiated in this forum but lost. It was common ground that the court could grant ananti-suit injunction to restrain the pursuit of proceedings designed to litigate issues which should have been pursued in previous proceedings on the grounds of abuse of process. The applicant must demonstrate that the pursuit of the foreign proceedings was oppressive and vexatious and/or unconscionable. Whether an abuse of process existed and whether, if an abuse of process was established, injunctive relief should be granted were questions of discretion. When it was sought to restrain proceedings that were pending in a foreign court, regard was to be had to considerations of comity. The guiding public policy objective was the need to achieve finality in litigation. A litigant who had lost in one set of proceedings should not be permitted to re-litigate what was, in substance, the same dispute in subsequent proceedings. For present purposes, the governing legal principle was issue estoppel, a branch of the wider res judicata principle. The critical question in the present case was whether the plaintiff’s Dubai claims should have been raised in the Cayman proceedings. There was a strong analytical overlap between the question of whether the claims asserted by the plaintiff in Dubai fell within the scope of the exclusive jurisdiction clause and whether those claims should have been asserted in the present proceedings. Nevertheless, in theoretical terms at least, there was a distinction between the questions. The court considered that the relevant claims could and should have been asserted in the Cayman proceedings. The question whether the moneys received by the first defendant in relation to the SPA were liable to be repaid in full because the first defendant had acted unlawfully before concluding the SPA belonged to the SPA litigation. It amounted to harassment of the first defendant for the plaintiff to have commenced the Dubai proceedings in terms which blatantly sought to re-litigate the issues dealt with in the Cayman Islands. In the present circumstances, it was appropriate for the court to exercise its discretion to grant injunctive relief. The court declined merely to grant declaratory relief so as to avoid any interference with the Dubai court’s processes. The Dubai proceedings were at an early stage and it would be unjust in all the circumstances to require the first defendant to seek a formal stay from the Dubai court having made out a case for injunctive relief before the present court. The need for restraint was not justified at the request of a Cayman judgment debtor who elected to sue in the Cayman Islands, lost, and was seeking to sue the judgment creditor abroad in respect of substantially the same dispute (para. 74; para. 76; paras. 83–86; para. 93; paras. 96–98).

Cases cited:

(1)BDO Cayman Ltd., In re, 2018 (1) CILR 114; on appeal, sub nom. Argyle Funds SPC Inc. v. BDO Cayman Ltd., 2018 (2) CILR 362, considered.

(2)Breams Trustees Ltd. v. Upstream Downstream Simulation Servs. Ltd., [2004] EWHC 211 (Ch), considered.

(3)British Airways Bd. v. Laker Airways Ltd., [1985] A.C. 58; [1984] 3 W.L.R. 413; [1984] 3 All E.R. 39, referred to.

(4)Deutsche Bank AG v. Highland Crusader Offshore Partners LP, [2009] EWCA Civ 725; [2010] 1 W.L.R. 1023; [2009] 2 All E.R. (Comm) 987, dicta of Toulson, L.J. considered.

(5)Donohue v. Armco Inc., [2001] UKHL 64; [2002] 1 All E.R. 749; [2002] 1 All E.R. (Comm) 97; [2002] 1 Lloyd’s Rep. 425, followed.

(6)Eleftheria (Cargo Owners) v. Eleftheria (Owners) (“The Eleftheria”), [1970] P. 94; [1969] 2 All E.R. 641, dicta of Brandon, J. considered.

(7)Empresa Exportadora de Azucar v. Industria Azucarera Nacional S.A. (“The Playa Larga” and “Marble Islands”), [1983] 2 Lloyd’s Rep. 171, considered.

(8)Fiona Trust & Holding Corp. v. Privalov, [2007] UKHL 40; [2007] 4 All E.R. 951; [2007] Bus. L.R. 1719, applied.

(9)Governor v. Information Commr., 2015 (1) CILR 258, considered.

(10)Hamilton-Smith v. CMS Cameron McKenna LLP, [2016] EWHC 1115 (Ch), dicta of Nugee, J. considered.

(11)Henderson v. Henderson (1843), 67 E.R. 313; 3 Hare 100; [1843–60] All E.R. Rep. 378, applied.

(12)Johnson v. Gore Wood & Co. (No. 1), [2002] 2 A.C. 1; [2001] 2 W.L.R. 72; [2001] 1 All E.R. 481; [2001] C.P.L.R. 49; [2001] BCC 820; [2001] 1 BCLC 313; [2001] P.N.L.R. 18, followed.

(13)Macmillan Inc. v. Bishopsgate Inv. Trust plc (No. 3), [1996] 1 W.L.R. 387; [1996] 1 All E.R. 585; [1996] BCC 453, dicta of Auld, L.J. considered.

(14)Masri v. Consolidated Contractors Intl. (UK) Ltd. (No. 3), [2009] Q.B. 503; [2009] 2 W.L.R. 669; [2008] 2 All E.R. (Comm) 1146; [2008] 2 Lloyd’s...