Law Report: Court will only bar 'oppressive' foreign suits: Arab Monetary Fund v Hashim and Others. Chancery Division (Mr Justice Hoffmann). 14 July 1992

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An anti-suit injunction, restraining proceedings in a foreign jurisdiction, should only be granted by an English court if the prosecution of the foreign proceedings appeared to be 'vexatious or oppressive' in the strict sense that injustice was likely to result unless the English court granted an injunction rather than leaving the matter to the foreign court.

Mr Justice Hoffmann declined to grant an application by the plaintiff, the Arab Monetary Fund, for an interlocutory injunction to restrain the respondents, Dr Jawad Mahmoud Hashim, his wife, Salwa al Rufaiee, and his son Jafar Jawad Hashim (the first, second and tenth defendants), from prosecuting an action against Salah al Hafidh in California.

In an English action begun by writ in 1988, the AMF claims that Dr Hashim, who was its director- general from 1977 to 1982, defrauded the AMF of more than dollars 50m during that period, and that the other 15 defendants knowlingly assisted him or knowingly received some of the money.

Among the obstacles the action has faced was a challenge to the AMF's capacity to bring legal proceedings in this country, but its right to sue was finally upheld by the House of Lords (The Independent, 27 February 1991).

Mr al Hafidh is an accountant who became the AMF's chief internal auditor in 1983. He gave evidence about irregularities in the accounts in support of earlier interlocutory proceedings by the AMF. In 1989, he resigned from the AMF and emigrated to California, where he practises as an accountant.

In 1991, the three respondents began proceedings against him in the Los Angeles County Superior Court, claiming, in essence, that Mr al Hafidh conspired with the AMF and its accountants, Ernst & Whinney, to ruin Mr Hashim and his family by various lawsuits. It was this action which the AMF sought to restrain by injunction until after the conclusion of the English trial.

Charles Flint (Freshfields) for the AMF; Hugo Page (Landau & Scanlan) for the respondents.

MR JUSTICE HOFFMANN said there was no doubt the court had jurisdiction to grant the injunction. The order was not directed to the Californian court but operated in personam against the respondents, as persons subject to the jurisdiction of the court.

It was nevertheless well established in England, as it was in the United States, that an anti-suit injunction should only be granted in very narrowly restricted circumstances.

Generally speaking, the foreign judge was in the best position to decide whether it was just and equitable that proceedings in his or her court should be stayed or allowed to proceed.

An anti-suit injunction would be granted only if the prosecution of the foreign proceedings appeared to be 'vexatious or oppressive', a phrase which had been given a very restrictive interpretation in previous anti-suit injunction cases.

It was not sufficient that the action should be vexatious or oppressive in the ordinary domestic sense in which such actions might be summarily struck out under the rules of court. That was a decision for the court in which the proceedings were pending. There had to be some good reason why the decision to stay proceedings had to be made here rather than there.

It might be because there was a conflict of national policy between England and the foreign tribunal, for example in relation to bankruptcy or anti-trust actions, and an injunction might be needed to protect the jurisdiction of the forum or to prevent a litigant from evading its important public policies.

On the other hand, when the question was simply one of justice between the litigants, uninfluenced by differences of national policy, the normal assumption was that the English court had no superiority over a foreign tribunal in knowing what justice required.

There were cases, such as an attempt to relitigate abroad a question already decided at home, in which it was so plain and obvious that the foreign proceedings were vexatious and oppressive that even requiring a party to apply for a stay or dismissal in the foreign court would be unjust.

And although this was a matter of some delicacy, there might be cases in which, although there was no overt clash of national policy, the realities of litigation before the foreign tribunal might be such as to satisfy the court that justice could be achieved only by enjoining the foreign suit.

The circumstances in which an anti-suit injunction might be granted could not be exhaustively categorised.

But one way or another, the court must be satisfied that the foreign proceedings were vexatious or oppressive in a sense which was likely to result in injustice unless the court granted an injunction rather than leaving the matter to the foreign court.

Here, the AMF said the Californian action against Mr al Hafidh interfered with the jurisdiction of the English court by intimidating a potential witness, and that, pending trial here, the court should grant an injunction to prevent such interference.

The question was whether the injunction was necessary in order to enable justice to be done here or to safeguard the general jurisdiction of this court. In his Lordship's judgment it was not.

Mr al Hafidh was not a witness of primary fact, and the AMF had not originally intended to call him as a witness. There was nothing to suggest that Dr Hashim had begun the Californian action to dissuade Mr al Hafidh from giving evidence in England. The object seemed rather to have been to examine Mr al Hafidh on discovery or at trial, which might be an abuse of the process of the Los Angeles court but did not constitute an interference with proceedings in England.

Motion dismissed.

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