Anti-suit injunctions are interim measures issued by a court or an arbitral tribunal that require a party who has initiated, or intends to initiate, proceedings before a forum other than the one agreed by the parties to refrain from commencing such proceedings or to discontinue proceedings that have already been initiated.[i]
Originating in fifteenth-century England, anti-suit injunctions constitute a remedy frequently encountered within the common law system.[ii] Under English law, it is accepted that English courts may, where there is a sufficient legal interest or where the circumstances so require, restrain a party subject to their jurisdiction from commencing or continuing proceedings before a foreign court.[iii]
While, under the influence of Anglo-Saxon legal systems, anti-suit injunctions have also emerged in international arbitration as a powerful procedural tool aimed at preventing parallel proceedings and directing the parties to litigate in a designated forum, their applicability remains highly controversial. This is primarily because such a remedy is foreign to many legal systems, in particular those of continental European origin.
1) Legal Basis of the Arbitral Tribunal’s Power
The arbitral tribunal’s power to grant anti-suit injunctions is primarily grounded in provisions that confer upon arbitrators the authority to adopt certain measures in order to ensure the efficiency of the proceedings.
In this context, arbitration rules such as Article 26 of the UNCITRAL Arbitration Rules, Article 25 of the LCIA Arbitration Rules, Article 28 of the ICC Arbitration Rules, and Article 37 of the ISTAC Arbitration Rules empower arbitral tribunals to grant interim or provisional measures. Although these rules do not expressly refer to anti-suit injunctions, the authority to order parties to take or refrain from taking certain actions on the basis of such interim powers constitutes the legal foundation for granting anti-suit injunctions.
This power essentially derives from the arbitral tribunal’s duty to preserve the integrity and efficiency of the arbitral proceedings. Accordingly, where one party initiates proceedings before state courts while the arbitration is ongoing, the arbitral tribunal may, in order to prevent disruption of the arbitral process, issue an order directing that party to stay or withdraw the parallel proceedings.
2) Conditions for Granting an Anti-Suit Injunction
Anti-suit injunctions occupy a distinct position among interim measures. This is because such measures, in essence, involve a decision that interferes with proceedings conducted before a third forum vested with adjudicatory authority. Given that anti-suit injunctions differ in nature from other types of interim measures, this distinction is also reflected in the conditions governing their admissibility.
The standard requirements sought for interim measures, namely a prima facie case, urgency, and irreparable harm, are generally not applied in a strict or identical manner in the context of anti-suit injunctions. Instead, due to the specific nature of this type of measure, a different analytical framework is required. In this respect, the principal conditions considered include the existence of a breach of the arbitration agreement, the negative impact of parallel proceedings on the ongoing arbitral proceedings, and the fact that such proceedings are initiated in a vexatious or oppressive manner.
2.1. Breach of the Arbitration Agreement
The primary basis for requests for anti-suit injunctions in the context of arbitral proceedings lies in a party’s recourse to state courts despite the existence of a valid arbitration agreement. In this respect, it is first necessary to establish both the existence of the arbitration agreement and that the parallel proceedings constitute a breach of that agreement. At the stage where the request for interim relief is made, the arbitral tribunal should, at a minimum, assess whether there is a prima facie valid arbitration agreement.
For a breach of the arbitration agreement to be established, the arbitration agreement must be prima facie valid, the parties must be identical, there must be a connection between the claims, and the claims must be based on the same legal grounds.
Where these criteria are cumulatively satisfied, the arbitral tribunal may find that a breach has occurred. This is because the tribunal’s authority derives from the will of the parties, and any intervention in proceedings before state courts is justified only where there is a breach of the arbitration agreement, which constitutes the basis of that authority.
2.2. Aggravation of the Arbitral Proceedings
The second fundamental condition for granting an anti-suit injunction is that the proceedings before state courts seriously and adversely affect the arbitral process, by rendering it more difficult, causing delay, or threatening the enforcement of the award.
Parallel proceedings before state courts concerning the same subject matter as the arbitration pose a significant risk to the arbitral process, particularly due to the possibility of conflicting decisions. If a state court renders a judgment on the same dispute before the arbitral tribunal has issued its award, this may impede the enforcement of the subsequent arbitral award and may even render the arbitration devoid of purpose. In such a scenario, the enforceability of the arbitral award becomes uncertain due to the existence of a prior final judgment. Accordingly, in the face of the risk of conflicting decisions or res judicata effects, interim relief may be sought in order to safeguard the procedural integrity of the arbitration.
2.3. The Proceedings to Be Restrained Must Be Vexatious or Oppressive
Another condition taken into account in granting an anti-suit injunction is that the parallel proceedings are of a vexatious or oppressive nature. However, a mere breach of the arbitration agreement does not, in itself, suffice to establish that the proceedings have been initiated with the purpose of causing harassment or harm.
In this context, by way of example, in Telenor Mobile Communications AS v. Storm LLC [iv], multiple parallel proceedings initiated in Ukraine were found to be vexatious and oppressive on the grounds that they were aimed at obstructing the arbitral process, and the request for an anti-suit injunction was accordingly granted.
3) Form of the Anti-Suit Injunction Request
The form in which anti-suit injunctions are granted may vary depending on factors such as the forum in which the measure is ordered and the stage of the proceedings at which it is issued. However, considering the interim nature of anti-suit injunctions, it can be said that, particularly in international arbitration, this remedy typically takes the form of a procedural order issued by the arbitral tribunal.[v]
4) Non-Compliance with an Anti-Suit Injunction
In practice, parties generally comply voluntarily with anti-suit injunctions issued by arbitral tribunals. Indeed, it may be said that the direct effect of such measures largely depends on the willingness of the party concerned to comply with them of its own accord.
Since arbitral decisions do not possess direct coercive enforceability in the same manner as court judgments, the sanctions available to arbitral tribunals in the event of non-compliance are limited. In practice, arbitrators have developed various forms of indirect sanctions to address conduct that is in breach of anti-suit injunction.
The first of these relates to the allocation of costs. Where a party breaches the arbitration agreement by initiating parallel proceedings, and such conduct is considered by the arbitral tribunal to have been undertaken in bad faith, the tribunal may order that party to bear the costs of the arbitration. Even if the breaching party ultimately succeeds on the merits, it may still be ordered to bear costs as a consequence of such procedural misconduct.[vi]
Another form of sanction concerns the award of damages. Concrete losses incurred by the opposing party as a result of parallel proceedings initiated in breach of an anti-suit injunction, such as legal fees, court costs, or security deposits, may be claimed within the arbitration.
In addition, some arbitral tribunals resort to the imposition of daily monetary penalties known as astreinte.[vii] Under such measures, a party is required to pay a specified amount for each day of non-compliance. Although this practice is primarily associated with French arbitration law, it has also been employed in certain ICC arbitral awards.
Finally, claims for punitive damages, which are more common in Anglo-Saxon legal systems, may occasionally arise. However, since such claims are not recognised in continental European jurisdictions such as Türkiye and Germany, they carry the risk of creating obstacles at the stage of recognition and enforcement of the arbitral award.[viii]
Conclusion
In international arbitration, the submission of a dispute to state courts despite the existence of a valid arbitration agreement between the parties constitutes one of the principal challenges undermining the efficiency and functionality of arbitration. Anti-suit injunctions, which are employed to prevent such breaches of jurisdiction and obstructive conduct, have increasingly gained prominence in contemporary arbitral practice as an effective form of interim relief aimed at ensuring procedural loyalty between the parties.
Although anti-suit injunctions are not regarded as directly enforceable in many legal systems, non-compliance with such orders may give rise to various forms of indirect sanctions. Arbitral tribunals may, in particular, resort to mechanisms such as adverse cost allocation against the breaching party and awarding compensation for the direct damages incurred.
[i] Gölcüklü, İlyas, Milletlerarası Tahkimde Dava Açma Yasakları, On İki Levha Yayınları, 1st ed., Istanbul, 2018, pp. 5-6.
[ii] Hartley, Trevor C., Comity and the Use of Antisuit Injunctions in International Litigation, Vol. 35, No. 3 (Summer, 1987), pp. 489 et seq.
[iii] Acar, Serdar, “Son Gelişmeler Işığında “Anti-Suit Injunction”, in Prof. Dr. Hüseyin Ülgen’e Armağan, Vol. II, Vedat Kitapçılık, Istanbul, 2007, pp. 1609–1654.
[iv] Gölcüklü, op. cit., pp. 50–51.
[v] Gaillard, Emmanuel, “Anti-suit Injunctions Issued by Arbitrators”, International Arbitration 2006: Back to Basics (Ed. Albert Jan Van Den Berg) p. 266; Gölcüklü, op. cit., p. 27.
[vi] ICC Dispute Resolution Bulletin 2015 Vol. 2, p. 14
[vii] ICC Case No. 7895.
[viii] Gölcüklü, op. cit., pp. 241–242.