ANTI-SUIT INJUNCTIONS IN AUSTRALIA.

• Jurisdiction: Australia
• Author: Douglas, Michael
• Date: 01 August 2017

CONTENTS I Introduction II Jurisdiction to Award Anti-Suit Injunctions A Equitable Jurisdiction 1 Anti-Suit Injunctions in Aid of Legal Rights 2 Anti-Suit Injunctions Restraining Oppressive or Vexatious Foreign Proceedings 3 Why Equity Matters B Inherent Jurisdiction 1 Does Every Court Possess 'Inherent Jurisdiction'? 2 Anti-Suit Injunctions in the Absence of Equity 3 Protective Anti-Suit Injunctions C Comparing the Inherent Jurisdiction to the Equitable Jurisdiction III The Value of The Remedy A Damages as an Alternative Remedy 1 Damages as an Alternative to an Anti-Suit Injunction in Aid of Legal Rights 2 Damages in Equity? Dissecting the Equitable Jurisdiction 3 Damages in Lieu of an Anti-Suit Injunction in Exercise of Inherent Jurisdiction? 4 When Damages Would be a Suitable Alternative, or Addition, to an Anti-Suit Injunction B The Merits of Discretion 1 The Injunction Is a Discretionary Remedy 2 The Place of Comity in the Exercise of Discretion 3 The Value of the 'Ends of Justice' Principle C The Future Ideal: Comity in Transnational Commercial Litigation IV Conclusion I INTRODUCTION

The anti-suit injunction is a remedy that suits the current mood of global politics. The rise of support for isolationist policies in developed nations, sensationally reflected in the Brexit vote, challenges efforts towards greater international engagement and cooperation. In relation to private law, those efforts have produced a trend towards legal harmonisation. (1) In private international law, the normative justification for international engagement has a counterpart in 'comity'. Comity is an elusive concept which touches on ideas of international politeness or civility. (2) It has been described as 'the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation. (3)

For reasons of comity, the anti-suit injunction is not awarded lightly. (4) It is one of the 'more aggressive' remedies at a court's disposal, (5) operating to restrain a person amenable to the court's jurisdiction from commencing or continuing proceedings in a foreign jurisdiction. (6) The remedy is relevant to the 'three-dimensional chess' of transnational litigation, (7) where parties 'litigate in order to determine where they shall litigate'. (8) It might be seen as a counterpart to the stay of proceedings on forum non conveniens grounds, which involves distinct but related principles and can also resolve a dispute as to where rights should be litigated. (9)

Although the anti-suit injunction operates in personam, it would be a mistake to overlook the tension between the remedy and the ends of comity. (10) On a functionalist view, the anti-suit injunction is effectively an encroachment upon the exercise of jurisdiction by foreign courts. (11) To stress this point may offend those who emphasise the equitable origins of the remedy, but it goes some way to explain why anti-suit injunctions are generally not awarded in the European Community, (12) and are generally not directed across the Tasman (13) or within the Federation. (14) Anti-suit injunctions are inconsistent with the stronger species of comity which is of the essence of a free economic zone and which is antithetical to nationalistic isolationism.

In light of these themes, it is worth considering: what is the future of the anti-suit injunction? This article considers that question in relation to Australian courts. (15) The future of the remedy is tied to the jurisdiction of our courts, and the evolving exercise of that jurisdiction. This article examines that jurisdiction, and argues that courts have broad powers to award the remedy, which recent experience suggests they are willing to utilise. It is argued that anti-suit injunctions are an important feature of our legal tradition: restraining individuals pursuing foreign proceedings is not necessarily a parochial or provincial move; rather, it is a legitimate means by which the forum can do justice in the case before it. (16)

II JURISDICTION TO AWARD ANTI-SUIT INJUNCTIONS

A court's jurisdiction is its authority to decide. (17) In many, if not most cases before Australian courts, the authority of the court will not be in issue. Cases with a foreign element are different. Authority to decide is a central issue in private international law. (18) In light of the extraordinary nature of the anti-suit injunction, and the extra-territorial impact that it can have, the question of the authority to award the remedy is an important one.

In CSR, the High Court majority identified two distinct jurisdictional bases for the award of an anti-suit injunction. (19) First, the remedy is available in equity to restrain unconscionable conduct or the unconscientious exercise of legal rights. Second, anti-suit injunctions are available in exercise of a court's inherent jurisdiction, when the administration of justice demands, to protect the court's processes.

A Equitable Jurisdiction

The anti-suit injunction was originally a creature of equity: (20) Chancery's common injunction restrained litigants from obtaining relief before common law courts contrary to equity. (21) The common injunction would operate in personam, binding the party pursuing proceedings at common law rather than binding the common law court itself. (22) In Airbus Industrie GIE v Patel, Lord Goff explained that, in the course of the 19th century, injunctions were employed to restrain the pursuit of proceedings outside of the United Kingdom. (23) That trend continues today: equity will intercede in matters relating to property or acts located overseas, including the commencement or continuation of foreign proceedings, in appropriate circumstances. (24)

The equitable jurisdiction to restrain the pursuit of foreign litigation is an illustration of the broader theme of equitable intervention to avoid unconscionability. (25) There are two ways in which equity can intervene to grant an anti-suit injunction to avoid unconscionability. (26) Firstly, an equitable anti-suit injunction can aid legal rights, and secondly, an equitable anti-suit injunction can protect the administration of justice by restraining proceedings that are 'vexatious [or] oppressive' in the relevant sense. (27) This bifurcation is not a neat one; as will be seen, an anti-suit injunction might protect legal rights (like an exclusive jurisdiction agreement) while also preventing pursuit of foreign proceedings that are vexatious or oppressive. (28) The power to award anti-suit injunctions in equity is not limited by such divisions, but only by 'the dictates of equity and good conscience'. (29)

1 Anti-Suit Injunctions in Aid of Legal Rights

Anti-suit injunctions are available in equity's auxiliary jurisdiction to restrain 'unconscionable or otherwise improper exercise of legal rights' (30) For example, in CSR, the legal rights that were relied on by the parties who sought an anti-suit injunction derived from a purported agreement not to sue. (31) More recently, in Rectron Australia BV v Lu, an anti-suit injunction was granted by the Supreme Court of New South Wales to restrain a breach of contract. (32) The contract in question was a deed of release made in the settlement of an earlier set of proceedings. Contrary to the terms of the deed, the defendant continued proceedings in Taiwan. A mandatory injunction was awarded to discontinue the Taiwanese proceedings in exercise of the Court's discretion 'to restrain a breach of an implied negative stipulation.' (33)

In the context of cross-border commercial activity, a jurisdiction agreement is an important source of common law rights that might justify an award of an anti-suit injunction in equity. In Ace Insurance, the plaintiff sought an anti-suit injunction in respect of proceedings that had been brought in California despite the existence of the jurisdiction clause and an express choice of Australian law. In those circumstances, the invocation of Californian jurisdiction was 'unconscionable' and the injunction was granted. (34)

Another notable example is Akai Pty Ltd v People's Insurance Co Ltd, (35) where the English Commercial Court considered an application for an anti-suit injunction after the High Court of Australia delivered its important judgment (36) on the impact of forum policy on choice of law and choice of jurisdiction. The High Court had construed the Insurance Contracts Act 1984 (Cth) and held that Australian proceedings should not be stayed despite an exclusive choice of English jurisdiction to the contrary. (37) The Commercial Court subsequently granted an injunction to restrain the continuation of the Australian proceedings, giving effect to the original bargain. (38) It is notable that the Court recognised the importance of comity, but held that comity did not require it to give effect to Australian law and policy. (39)

If proceedings are brought in contravention of an arbitration agreement, the court should stay the proceedings to give effect to the bargain. (40) Alternatively, a party to an arbitration agreement can apply for an anti-suit injunction to restrain contravention of that agreement by pursuit of some other proceedings. (41) An injunction to give effect to an arbitration agreement would be available in exercise of equity's auxiliary jurisdiction. In The Angelic Grace, Millet LJ held that the principles applicable to an application for an anti-suit injunction to uphold an arbitration agreement are the same as those that govern anti-suit injunctions to uphold exclusive jurisdiction clauses. (42) In the wake of the West Tankers litigation, (43) those principles probably no longer apply in Europe, (44) but they still apply in Australia. (45) Thus, in Alkimos Shipping Co v Hind Lever Chemicals Corporation Ltd, Allsop J considered that an antisuit injunction would be justifiable provided that the relevant arbitration clause formed part of the contract. (46)

Anti-suit injunctions that enforce...