The New Zealand jurisprudence on anti-suit injunctions is developing at pace. Three years ago, the High Court in Lu v Industrial and Commercial Bank of China (NZ) Ltd [2020] NZHC 402 declined an application for an injunction restraining proceedings for the recovery of a debt in China. The case was notable because it appeared to be only the second time a New Zealand court had been asked to grant such an injunction. Since then, the High Court has granted an anti-enforcement injunction in relation to a default judgment from Kentucky, in a case involving allegations of large-scale fraud, and it has also granted an anti-suit injunction to compel compliance with an arbitration agreement. It is this latter decision that I want to focus on here. The decision raises the question whether, like fraud, the existence of a jurisdiction or arbitration agreement really justifies the granting of an anti-suit injunction.
The case
In Maritime Mutual Insurance Association (NZ) Limited v Silica Sandport Inc [2023] NZHC 793, Gault J granted an interim anti-suit injunction to stop Guyana proceedings commenced in breach of an agreement to arbitrate. The applicant was a New Zealand company that had provided marine insurance to Silica Sandport Inc, a company incorporated in Guyana. The insurance cover related to a barge that capsized in international waters north of Trinidad. Silica brought proceedings against MMIA in Guyana, claiming breach of the insurance policies and breach of the (Guyana) Insurance Act 2016. MMIA lodged a protest to jurisdiction, but it also applied to the New Zealand court for an injunction restraining the proceeding on the basis that the parties had agreed to arbitrate any dispute in New Zealand or England.
Gault J granted the order. Referring to Lu, his Honour noted that the legal principles “derive[d] largely from a number of leading United Kingdom decisions” and were “reasonably well-settled” (at [34]). Even though comity was an important consideration when granting an anti-suit injunction, comity played “a smaller role” in cases involving arbitration (or jurisdiction) agreements (at [38]). In such cases, the court would “ordinarily exercise its discretion to restrain the pursuit of proceedings brought in breach of a forum clause unless the defendant can show strong reasons to refuse the relief”. That was because the court was involved “in upholding and enforcing the parties’ contractual bargain” (at [38]). His Honour referred to the following passage from QBE Europe SA/NV v Generali Espana de Seguros Y Reaseguros [2022] EWHC 2062 (Comm) at [10]-[11] by way of further explanation:
… It has been held that respect for comity is not a strong reason for the court not to give effect to a contractual choice of forum clause, and that comity requires that where there is an agreement for a sole forum for the resolution of disputes under a contract, that agreement is respected … By way of parenthesis, in that context, comity is served by applying the same respect to choice of court or arbitration agreements in favour of other jurisdictions and arbitral seats.
… It has been held that the existence of a mandatory provision of foreign law applicable in the foreign court which overrides the contractual choice of jurisdiction is not a strong reason to refuse an [anti-suit injunction].
Applying these principles, Gault J concluded that there were no strong reasons here to refuse an anti-suit injunction.
Comment
Based on English law, Gault J’s reasoning is entirely predictable. However, the question is whether New Zealand courts really ought to be adopting the same approach to anti-suit injunctions as the English courts (see here, and CLNZ at ch 2, Part H). That is because anti-suit injunctions can be difficult to reconcile with an internationalist approach to the conflict of laws. What may appear to the New Zealand court as a blatant attempt to evade a forum clause might be viewed differently by the foreign court, and legitimately so. The foreign court’s perspective should at least be a relevant consideration in the decision whether to grant an injunction.
It can be illuminating to play around with a hypothetical reversal of the facts. What might the New Zealand court do if it was in the position of the foreign court? In other words, what if a New Zealand insured sought to bring proceedings under a policy entered into with an overseas insurer, in an apparent breach of a forum clause? It is conceivable that there are circumstances in which a New Zealand court would refuse to enforce the clause. It is not uncommon for common law jurisdictions to restrict the enforceability of jurisdiction and arbitration agreements in insurance contracts. The fact that common law courts would still feel entitled to interfere with an insured’s access to justice in the foreign court, in the name of upholding the parties’ bargain as to jurisdiction, seems indefensible.
In this context, it is useful to point out that the English position has not been free from criticism. In particular, the argument that the “true role” of comity is to protect the parties’ agreement has been shown to be misguided (Andrew Dickinson “Taming Anti-suit Injunctions” in Andrew Dickinson and Edwin Peel (eds) A Conflict of Laws Companion (OUP, 2021) 77 at 85-6). Rather, “comity requires the English court to accept that ‘different judges operating under different legal systems with different legal policies may legitimately arrive at different answers’” (at 85). I would add to this that different judges operating under different legal systems but with similar legal policies may still arrive at different answers, simply because of differing connecting factors to the particular case. New Zealand courts should think twice before following the English lead and granting injunctions in such circumstances as a matter of course.
