CYPRUS: ANTI-SUIT INJUNCTIONS GRANTED BY CYPRUS COURTS FOLLOWING WEST TANKERS
For long the traditional approach of English courts had been to protect the sanctity of agreements between parties in the event a dispute occurred through the method of safeguarding an arbitration agreement against the threat of parallel proceedings launched in a foreign jurisdiction has been for the court to make an order for anti-suit injunctions.Anti-suit injunctions are granted only in personam and therefore cannot interfere with the foreign court’s jurisdiction. Some of the underlying principles is that jurisdiction is exercised “where it is appropriate to avoid injustice”, or where the foreign proceedings are “contrary to equity and good conscience”. The Court will also restrain proceedings which interfere with “the due process of the court” or even whereforeign proceedings are “oppressive or vexatious” [SEE CASE Societe Nationale Industrielle Aerospatiale v.Lee Kui Jak and Another (1987) A.C 871].
Back from 1995, Cyprus Courts have adopted the English Courts approach on the issue relating to the regulation of power of the Courts of the Republic of Cyprus to issue anti suit injunctions. This was further analyzed in the cases of Gastro Shipping Company Ltd- v- Mineaq SQM( Africa)( Proprietary) Ltd & Another (1999) and Gannet Shipping Ltd-v- Naafi& Others(1995) 1 CLR 10.
Recently, Paphos and Limassol District Courts expressed the view that anti-suit injunctions must be issued sparingly and the plaintiff must have a very strong case as in the case of Alexey Suprunov and other v. Natasa Agathokleous and other, Action No. 870/2014 which was alsoconfirmed in the case of Stockman Interhold S.A and Arricano Trading Limited and others, Action No. 219/12.
The year 2009 marked a significant step in the issuing of anti suit injunctions within EU following the cases of Allianz SpA v West Tankers Inc (2009) 1 A.C. 1138 and National Navigation Co v Endesa Generacion SA (2009) EWCA CIV 1397,which significantly narrowed the scope of an English Court to grant an anti-suit injunction against a party located in an EU Member State.The case of West Tankers marked a significant change as the Grand Chamber of the ECJ made a ruling removing the ability of European member states’ courts to grant anti-suit injunctions to restrain foreign proceedings brought in breach of arbitration agreements.
However with regards to anti-suit injunctions outside the EU it seems that the courts are prepared to preserve the use of anti-suit injunctions where possible. In the case of Roger Shasoua, Rodemadan Holdings Limited, Stancroft Trust Limited v Mukesh Sharma (2009) EWHC 957 the court held that English law in relation to proceedings which did not take part in the European Community was not inconsistent with the Regulation or the Convention. This position was also confirmed by a recent High Court decision in Skype Technologies v Joltid Ltd & others (2009) EWHC 2783, where the English Courts issued an anti-suit injunction blocking the continuation of legal proceedings in the United States and the case of Midgulf International Ltd v Groupe Chimique Tunisien [2010] EWCA Civ 66, where the Court of Appeal granted an anti suit injunction restraining Tunisian proceedings brought in apparent breach of an arbitration agreement. In the case of Aes Ust- Kamenogorsk Hydropower Plant LLP-V-Ust-Kamenogorsk Hydropower Plant JSC (2010) EWHC 772 proceedings were outside the scope of the EU, and AES successfully issued proceedings in the English courts for an anti-suit injunction to restrain the proceedings in Kazakhstan.
Therefore, it seems to be the position of the courts as per the case law that anti-suit injunctions may be used in Cyprus only against parties for legal proceedings pending before Courts of non EU Member States.
For further information on this topic please contact Mr. Soteris Pittas (spittas@pittaslegal.com) and
Ms. Nada Starovlah (nstarovlah@pittaslegal.com) at SOTERIS PITTAS & CO LLC,
by telephone (+357 25 028460) or by fax (+357 25 028461)
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