Thursday, 28 June 2012

Law Report, interim injunction where there are parallel foreign proceedings

E.R.G Resources LLC v Nabors Global Holdings II Limited [2012] SC (Bda) 23 Com (5 April 2012)

The Plaintiff had been granted an ex parte interim injunction restraining the Defendant from disposing of certain shares pending the outcome of the action. The Defendant applied to set aside the injunction and the action dismissed on the grounds that the parties had agreed that Texas would be the exclusive jurisdiction; that the Plaintiff could not maintain actions in two jurisdictions on the same matter; and that it was an inappropriate case for an interim injunction as the Texas courts would be very unlikely to order similar interim relief.

It was held by Kawaley CJ that interim injunctive relief may be granted in support of foreign causes of action where the court has jurisdiction over the defendant [23]. The applicant is implicitly requesting the local court to assist the foreign court by making an order the foreign court is unable to make because the property affected is subject to the territorial jurisdiction of the local court. Whether or not the foreign court itself would be minded to grant interlocutory relief if it could thus becomes an important factor to take into account in determining where the balance of convenience lies and in deciding how the discretion to grant injunctive relief should be exercised [15].

The central question to be asked is whether it is consistent with modern notions of judicial cooperation and respect for foreign courts to grant the interim relief sought in support of a claim being pursued before a foreign court. This will usually likely require an assessment of :
(a) whether an application has been made to the foreign court so its position on interim relief can be ascertained;
(b) if an application has been refused by the foreign court whether it was refused on merits grounds or merely because it lacked the jurisdiction to grant such relief; and
(c) in general terms whether the grant of interim relief by the ‘ancillary’ court would be justified with a view to assisting the foreign court in its adjudication of the substantive dispute. [22]

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