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As a business owner, you can experience times when relationships with other companies are not going well. When business relationships go wrong, it may be because you and the other party disagree on something, leading to a commercial dispute. One way to resolve a commercial dispute is by using arbitration proceedings with an arbitral tribunal. However, when you take this path, you may need to request an anti-suit injunction from an English court. This article will explain what anti-suit injunctions are for commercial disputes.
This guide outlines how to resolve commercial disputes.
What is International Commercial Arbitration?
Commercial arbitration is a form of alternative dispute resolution (ADR) that you may choose to resolve a dispute. Other types of ADR include, for example, mediation and negotiation. Arbitration, however, is a more formal type of ADR and follows rules and procedures. International commercial arbitration is explored when the other party to the arbitration is in a different state or territory from you. Therefore, it is relevant for cross-border commercial disputes. When you carry out arbitration, you usually have an arbitration agreement with the other party or an arbitration clause in your existing contract.
Arbitration is when you refer the dispute to an arbitrator or panel of arbitrators, known as an arbitral panel. The role of the arbitral panel is to listen to both parties’ evidence regarding the dispute and then make a legally binding decision to resolve it.
What Are Anti-Suit Injunctions in Commercial Arbitration?
An anti-suit injunction is an order preventing the other party from initiating legal proceedings. In cross-border disputes, you might apply to a court for an anti-suit injunction if the other side is threatening to take your business to court. This could take place such as the Supreme Court and possibly the High Court.
Broadly, an injunction is a legal tool by a court to order a person or business to do or stop doing something, such as:
- discontinuing court proceedings;
- preventing them from going forward with specific claims as part of their litigation; and
- take action to terminate or suspend the litigation.
It may be necessary to apply for an anti-suit injunction where the other party to the international commercial arbitration is in a different state or territory. As such, instead of carrying out arbitration, commercial litigation is utilised to resolve the commercial dispute in their national court. If this happens, you can try to prevent the continuation of court proceedings through an application for an anti-suit injunction.
What is an Anti-Suit Injunction?
An anti-suit injunction is an injunction that a national court may be able to issue. An injunction is a civil tool ordering a party to do or to stop doing something such as:
- discontinuing court proceedings;
- preventing them from going forward with specific claims as part of their litigation; and
- take action to terminate or suspend the litigation.
As a result of an anti-suit injunction, the other party will be ordered to participate in commercial arbitration and comply with the arbitration agreement. If the other party does not abide by the anti-suit injunction, they could be in contempt of court.
Anti-suit injunctions are usually available in common law states and territories. For example, England is a common law country, so requesting one from a national English law court is likely possible. This essentially means that the selected common law country will have exclusive jurisdiction on the matter. Although the other party could appeal against the court’s decision, it is unlikely to succeed.
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Key Takeaways
If you are part of a dispute with a party in another jurisdiction, you may choose to use international commercial arbitration to resolve the dispute. However, when you agree with the other party that you will use arbitration to resolve the agreement, you may encounter problems where the other party decides against arbitration and instead pursues litigation. In this case, you may request an anti-suit injunction which may order the other party to suspend litigation proceedings. If you need help understanding anti-suit injunctions, our experienced disputes and litigation solicitors can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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