Take your seats: navigating jurisdiction clauses in arbitration agreements
In the significant recent case of Investcom Global Limited v PLC Investments Limited [2024] EWHC 2505 (Comm), the English High Court partially discharged anti-suit and anti-enforcement injunctions, while upholding others. This case provides an important precedent in the context of the availability of anti-suit relief from the English courts in relation to arbitration agreements.
Background
Investcom (a subsidiary of the MTN Group) entered into a Shareholders' Agreement (“SHA”) and a Management Agreement (“MA”) with PLC Investments Ltd and its shareholders. The agreements governed the parties’ joint telecoms venture, MTN Liberia. Disputes arose over management and shareholding control within MTN Liberia, prompting PLC Investments to initiate two sets of civil proceedings in Liberia (in the English High Court case listed respectively as the Second Liberian Proceedings and the Third Liberian Proceedings). These proceedings breached the arbitration clauses contained in the agreements – the SHA dictated that any international chamber of commerce would hear a dispute, while the MA specified the ICC in London as the designated arbitration seat.
In response, Investcom sought anti-suit and anti-enforcement injunctions in the English High Court, which were subsequently granted. However, the ICC later designated Toronto as the seat of arbitration for the parties’ disputes relating to the SHA. In light of this, PLC Investments disputed the English courts’ jurisdiction to maintain the injunctions across both sets of proceedings.
Decision
PLC Investments’ application to discharge the injunctions was heard in the English High Court, where it was decided to discharge the injunctions concerning the SHA in the Second Liberian Proceedings, but uphold the injunctions concerning the MA in the Third Liberian Proceedings.
Second Liberian Proceedings
The High Court discharged the injunctions relating to the SHA in these proceedings primarily because the ICC had shifted the arbitration seat from London to Toronto, as the ICC was entitled under the ICC Rules to determine the seat of arbitration absent any express choice by the parties.
As a result of the arbitration being seated in another country, the Court found that the English courts lacked the legal grounds on which to intervene, maintaining that the injunctions would have overstepped the Court’s jurisdiction.
The Court dismissed Investcom’s argument that the ‘substantive’ parties to the arbitration had agreed via correspondence that the arbitral seat should be London, on the basis that other parties named as respondents to the arbitration had not provided their agreement. Therefore, the Court found that the arbitration agreement contained within the SHA clause was determinative. As the arbitration agreement incorporated the ICC Rules, the seat had been decided by the ICC under the relevant provision in the Rules.
Third Liberian Proceedings
Despite PLC Investments having by this stage discontinued this third set of Liberian court proceedings, the English High Court decided to maintain the injunctions in relation to the MA. The Court’s decision was influenced by the fact that the Liberian proceedings had been discontinued “without prejudice” and “with reservation of the right to re-file”, meaning that PLC Investments were free to restart similar claims at any time.
The High Court found that in this case there was good reason to believe that discharging the injunctions relating to these proceedings would lead to PLC Investments re-filing the same or similar proceedings in court in Liberia, which would circumvent the agreed arbitration process.
Comment
This judgment highlights once again the English courts’ willingness to protect arbitration agreements from abuse where the English courts are deemed to have supervisory jurisdiction, as shown by the High Court’s treatment of the Third Liberian Proceedings, where the Court was keen to prevent PLC Investments evading arbitration.
The decision also serves as a reminder to those negotiating contracts to carefully consider the wording of the arbitration clause. It continues to be important to ensure that an express choice of arbitral seat has been made, having considered all relevant implications, including the powers of the courts which will have supervisory jurisdiction.
In this case, the SHA’s inconclusive drafting resulted in Toronto becoming the designated arbitration seat – a result none of the parties had wanted. The decision not to select a specific arbitral seat also led to the injunctions relating to this agreement being discharged, potentially limiting the relief available in relation to the breach of the arbitration agreement.
Arbitration clauses are increasingly being employed in multiparty contracts and the facts in this case illustrate what can go wrong where there are different signatories to different documents in a suite of contracts. In this case, despite the key parties agreeing that the arbitration seat should be London, the absence of other signatories led to the ICC having the power to make the decision in respect of the SHA. Where there are multiple contracts involved in a transaction with differing signatories, parties should consider either bespoke drafting or entering into an umbrella agreement to ensure all parties are bound by the same arbitration agreement.