Singapore Court of Appeal: Grant of An Anti-Enforcement Injunction Against Foreign Court Judgment

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In Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd [2019] SGCA 10, the Singapore Court of Appeal refused to upheld the anti-enforcement injunction (i.e. an injunction to restrain reliance on a foreign judgment) granted by the Singapore High Court. The Court of Appeal inter alia held that anti-enforcement injunctions would not be granted except in exceptional circumstances, since such injunctions offend comity and equity and interfere with the foreign court by abrogating their prerogative to decide whether to enforce the foreign judgment. The Court also observed that it is no excuse that an applicant was contesting the foreign judgment on jurisdictional grounds, as granting an anti-suit or anti-enforcement injunction would be giving the applicant a second bite of the cherry. Further, the exceptional circumstance in which such injunction can be granted includes cases where a judgment has been procured by fraud or cases where the applicant had no knowledge that the judgment was being sought until after the judgment was rendered. Read the case analysis of the decision of the High Court at Singapore High Court: Power to grant an anti-suit injunction over a foreign defendant post arbitral award, parties negative obligation not to sue in another forum, Article 5 of Model Law does not limit the court’s power to grant such injunctions

Detailed case analysis given below:

Factual Matrix

Dispute culminated from repudiation of a management agreement entered into between Sun and Hilton which led to two arbitral awards in favour of Hilton in a Singapore seated ICC arbitration. At first, Hilton tried enforcing the Awards in Maldives (First Enforcement) but was unsuccessful due to confusion as to the proper court in the Maldives vested with jurisdiction to hear enforcement matters.

Prior to this, Sun instituted a civil suit in Maldives (Maldivian Suit) against Hilton effectively re-litigating the same issues which were already decided in the arbitration. Hilton challenged the jurisdiction of the Maldivian Courts by contesting the Maldivian Suit but ultimately, the Maldivian Court decided in favour of Sun (March Judgment). This decision was appealed by Hilton in Maldives.

Meanwhile, Hilton recommenced enforcement proceedings in the Maldivian Civil Court (Second Enforcement) but it was denied on account of March judgment in Sun’s favour. Thereafter, Hilton applied for anti-suit injunction in Singapore. The Singapore High Court granted an anti-enforcement injunction to prevent Sun from relying on the judgment in the Maldivian Suit declaring that Sun is permanently restrained from taking any steps in reliance on the March Judgment by the courts in Maldives, or any decision upholding the March Judgment (Anti-Enforcement Injunction). The decision of High Court was assailed before the Court of Appeal in the present case.

Parties Contentions

Sun contended

  • that Maldivian Suit should not be treated as part of Sun’s effort to resist enforcement;
  • that the appeal should be allowed because Hilton had not acted promptly, and it had continued to participate in the Maldivian Suit;
  • that the injunction as granted by High Court would interfere with the appeal process in Maldives;
  • that the declaration granted by the Singapore High Court interferes with the recognition or enforcement process in the Maldives and run counter to the Maldivian judgments;
  • that there is no real controversy for the court to resolve in Singapore because the only real controversy is in the Maldives.

Hilton contended

  • that the Maldivian Suit should not be treated as part of Sun’s efforts to resist enforcement;
  • that even though an anti-suit injunction was granted by the Singapore High Court, that was not a bar to anti-enforcement relief;
  • that the March Judgment was an “aberration” that took the parties by surprise;
  • that Sun had procured March Judgment by misleading the Maldivian court;
  • that the declaration given by the Singapore High Court is appropriate given that Sun had breached the arbitration agreements;
  • that the declaration does not affect the enforcement proceedings in the Maldives.

Judgement

The Singapore Court of Appeal held

  • that the Maldivian Suit should not be treated as part of Sun’s efforts to resist enforcement because
    • the claims brought and the relief sought by Sun in the Maldivian Suit were similar to those in the Arbitration;
    • that Sun could have resisted the enforcement in the enforcement proceedings instead of commencing a separate civil action in the Maldivian court;
    • that Sun had not adopted the position that it was merely seeking the non-recognition and non-enforcement of the Awards before the Maldivian courts.
  • that comity considerations are relevant in cases where anti-suit relief is sought for a breach of an arbitration or exclusive jurisdiction clause particularly when there is delay in bringing an application for anti-suit relief;
  • when there has been extensive delay, the foreign court would have expended vast amounts of judicial time and costs, and respect for the operations of foreign legal systems entails caution in exercising the jurisdiction to enjoin a party from relying on the foreign court’s decision
  • this consideration is amplified when an anti-enforcement injunction is sought after the issuance of a court judgment and such injunctions should generally be refused; not least for want of sufficient promptitude. Further, two additional considerations come into the picture:
    • first, such an injunction would preclude other foreign courts from considering whether the judgment in question should be recognised and enforced; and
    • secondly, it would be an indirect interference with the execution of the judgment in the jurisdiction where the judgment was given and where the judgment can be expected to be obeyed
  • that anti-enforcement injunctions can be granted in exceptional circumstances which warrants the injunction which are
    • where a judgment has been procured by fraud;
    • cases where the applicant had no knowledge that the judgment was being sought until after the judgment was rendered.
  • that the March judgment was not an “aberration” that took the parties by surprise because:
    • while there is no rule prohibiting Hilton from participating in the Maldivian Suit, Hilton could and should have simultaneously sought injunctive relief from the Singapore court, and its failure to do so allowed the Maldivian proceedings to reach an advanced stage;
    • Hilton had ample opportunity to seek assistance from the Singapore courts to stop the Maldivian Suit in its tracks but it appeared to be quite content to wait until there were two Maldivian judgments against it and a pending appeal. By then, it was far too late. The “surprise” that Hilton described was therefore an afterthought;
    • that it was not an issue for the Singapore courts to decide whether the Maldivian Suit was not properly conducted rather it is a matter to be dealt with in the Maldivian Appeal.
    • that the additional requirement to show exceptional circumstances to warrant anti-enforcement relief is rooted in principles of equity and the notion of unconscionability. In Court’s view, it is open to an applicant to simply point to some “aberration”, “surprise” or unexpected outcome and expect that the seat court would exercise its jurisdiction to grant an anti-enforcement injunction. The nature of the relief requires that such jurisdiction be exercised very sparingly.
  • that declaration serves to uphold the integrity of the arbitration agreements and the Awards rendered on the basis of these agreements

My Comments

The view taken by the Singapore Court of Appeal is in line with the English authorities on the subject which inter alia states that an applicant seeking an anti-suit or anti enforcement injunction should apply promptly and before the foreign proceedings are too far advanced (see The Angelic Grace [1995] 1 Lloyd’s Rep 87 (CA) at 96 per Millett LJ; and The Skier Star [2008] 1 Lloyd’s Rep 652 at [37] per Teare J)

Further, the Court also dealt with the role of “comity” in determining the approach of the court to an application for an anti-enforcement injunction. The Court relied on the notion of  “reverse of comity” as propounded by Leggatt LJ in The Angelic Grace who described graphically the “reverse of comity” were the English court “to adopt the attitude that if [a foreign court] declines jurisdiction, that would meet with the approval of the English court, whereas if [the foreign court] assumed jurisdiction, the English court would then consider whether at that stage to intervene by injunction”. The longer the delay and the more advanced the foreign court proceedings become, the stronger the considerations of comity would be as against granting anti-enforcement injunction.

The decision further clarifies anti-enforcement injunctions will be granted sparingly only in exceptional circumstances since it interferes with foreign court proceedings which might have spent its judicial time and cost.

Thus parties should take immediate steps against multiple and parallel proceedings in foreign courts, in breach of an exclusive jurisdiction or arbitration agreement especially when such party is seeking anti-enforcement injunction.

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