Unilever v ABC Intl

• Jurisdiction: Cayman Islands
• Judge: (Smellie, C.J.)
• Judgment Date: 13 October 2008
• Court: Grand Court (Cayman Islands)
• Date: 13 October 2008

Grand Court

(Smellie, C.J.)

UNILEVER PLC and SIX OTHERS

and

ABC INTERNATIONAL

MOLSON COORS BREWING COMPANY and NINE OTHERS

and

ABC INTERNATIONAL

Ms. S.-J. Hurrion and Ms. L. Connolly for the plaintiffs;

H. Robinson and P. Hayden for the defendant.

Cases cited:

(1) Alpine Bulk Transport Co. Inc. v. Saudi Eagle Shipping Co. Inc. (The ‘Saudi Eagle’), [1986] 2 Lloyd”s Rep. 221, referred to.

(2) British Airways Board v. Laker Airways Ltd., [1985] A.C. 58; [1984] 3 W.L.R. 413; [1984] 3 All E.R. 39; (1984), 128 Sol. Jo. 531, referred to.

(3) Evans v. Bartlam, [1937] 2 A.C. 473; [1937] 2 All E.R. 646, referred to.

Civil Procedure-judgments and orders-summary judgment-challenge by defendant-restraining defendant from compelling plaintiff to join in foreign proceedings upheld as part of summary judgment unless defendant shows real prospect of success-merits of defendant”s application to be considered, even if clearly delaying tactic and would prejudice plaintiff if granted

Civil Procedure-judgments and orders-summary judgment-summary judgment may contain injunction restraining defendant from pursuing foreign proceedings-immaterial that injunction interferes with jurisdiction of foreign court and to be used sparingly

Injunctions-summary injunctions-restraint of foreign proceedings-injunction restraining party from pursuing foreign proceedings is interference with jurisdiction of foreign court to be granted only sparingly-interference not ground for challenging grant of injunction in summary judgment

The defendant applied for an order setting aside the summary judgment obtained by the plaintiffs in ongoing litigation between them.

The defendant (‘ABCI’), a company incorporated in the Cayman Islands, had previously made several attempts (in which it had failed to comply with various orders and rules of the court) to enter into arbitration with the plaintiffs, a well-known international group of companies. ABCI relied on an arbitration clause in an agreement made between it and a related but separate entity (‘Diversey Ltd.’) in 1988, which replaced an earlier agreement of 1983. ABCI claimed that Saudi law governed the agreements, as illustrated by specific provisions of the 1983 agreement and correspondence between the parties before the 1988 agreement was signed, and maintained that, as Saudi law recognized the doctrine of ‘group enterprise theory,’ it could compel the plaintiffs to arbitrate, through their connection with Diversey Ltd. The plaintiffs, disputing that the agreements had been governed by Saudi law, and, in any case, that the

agreement was still operative, claimed to be unconnected to Diversey Ltd. and therefore applied to the court for an injunction restraining ABCI from seeking to join them in the foreign arbitration. ABCI, however, failed to appear at the hearing and the court therefore made summary injunctive orders in favour of the plaintiffs. The decision of the Grand Court is reported at 2008 CILR 87.

ABCI submitted, in an application to set aside that judgment, that (a) contrary to the summary judgment in the plaintiffs” favour, Saudi law, not English law, was the governing law of the agreement (as illustrated by the correspondence between the parties before it was signed, to that effect), and therefore, as group enterprise theory was a valid doctrine of Saudi law, it could compel the plaintiffs to arbitrate; (b) since it could demonstrate that it had a real prospect of proving that to be the case, the summary judgment had to be set aside; and (c) the court should not have restrained it from pursuing the foreign proceedings, as such an injunction interfered with the jurisdiction of the foreign court, and the power to do so should be exercised sparingly.

The plaintiffs submitted in reply that (a) ABCI”s history of conduct (its failure to appear; its failure to comply with various orders and rules of the court; and its inexplicable decision, eventually, after an inordinate length of time, to apply for the summary judgment to be set aside, rather than simply taking the most obvious course of action and appealing against it) indicated delaying tactics; (b) in view of that, to allow its...