Commerzbank AG v RusChemAlliance LLC
[2023] EWHC 2510 (Comm)
RSM Production Corporation v Gaz du Cameroun SA
15 November 2023
[2023] EWHC 2820 (Comm)
High Court
Two companies had a disagreement, and agreed to settle it through arbitration in England. One company, GdC, sued the other in Cameroon anyway. The English court stopped GdC's Cameroonian lawsuit because they broke their agreement to arbitrate in England. The court also ordered GdC to drop the lawsuit in Cameroon.
Key Facts
- •RSM Production Corporation (RSM) and Gaz du Cameroun SA (GdC) are parties to a Joint Operating Agreement (JOA), a Participation Agreement (PA), and a Settlement Agreement (SA).
- •GdC initiated legal proceedings in Cameroon, provisionally attaching US$18 million of RSM's funds.
- •The SA contains an arbitration agreement with an English seat (London) under the UNCITRAL Arbitration Rules.
- •RSM sought and obtained an anti-suit injunction (ASI) to restrain GdC from continuing the Cameroonian proceedings.
- •GdC resisted the continuation of the ASI on four grounds: the dispute isn't governed by the English arbitration agreement; there was no breach of the arbitration agreement as interim relief was sought; the English court lacks jurisdiction; and there was a failure to make a fair presentation at the without-notice hearing.
- •GdC's claim in Cameroon was based on Article 7.5 of the JOA, alleging RSM owes US$48,855,450 for well LA-108 remediation costs.
Legal Principles
Jurisdiction to grant an anti-suit injunction stems from s. 37 Senior Courts Act 1981. The court requires a high degree of probability that an arbitration agreement governs the dispute.
s. 37 Senior Courts Act 1981
An English court will not ordinarily grant relief based on breach of an arbitration agreement to restrain a party from seeking interim relief (like freezing orders) to obtain security for a claim in the agreed forum.
Aquavita International SA v Indagro SA [2023] 1 Lloyd’s Rep 61 at [18]-[20]
Commencing substantive proceedings in another court solely to obtain interim relief like arrest or freezing orders is not ordinarily a breach of an arbitration agreement.
SRS Middle East FZE v Chemie Tech DMCC [2020] EWHC 2904 (Comm) at [43]
Courts consider clauses providing that parties 'may' submit a dispute to arbitration.
Aiteo Eastern E&P Co Ltd v Shell Western Supply [2022] EWHC 2912 (Comm) at [17]-[18]
Outcomes
The anti-suit injunction was continued.
The court found to a high degree of probability that the arbitration agreement in the SA was binding on GdC and applied to its Cameroonian claim. The Cameroonian proceedings were not solely for interim relief; GdC did not commence arbitration despite opportunities to do so. The English court had jurisdiction over GdC. There was no failure of full and frank disclosure by RSM.
A mandatory order requiring discontinuance of the substantive Cameroonian proceedings was made.
This was deemed appropriate to give effect to the contractual position and protect against the risk of an adverse judgment in Cameroon.
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