The English Commercial Court has recently granted an anti-suit injunction based on an arbitration clause in an insurance policy (QBE Europe and another v Generali Espaňa de Seguros Y Reaseguros [2022] EQHC 2062 (Comm)). The interesting points in this case were that (i) the anti-suit injunction was directed against a party which was not pursuing a claim under the policy but instead was pursuing a claim under a statute, and (ii) the party applying for the anti-suit injunction (and relying on the London arbitration clause in the policy) denied it was a party to the policy. The Commercial Court concluded that the circumstances nonetheless warranted an anti-suit injunction.
This shows the flexibility of the courts’ approach to anti-suit injunctions. This was also another example of an anti-suit injunction issued by the English courts in relation to a dispute in the courts of an EU country (Spain), something which had not been possible while the UK was a member of the EU.
Facts
In July 2016, the undersea power cable linking Mallorca and Menorca was damaged. It was alleged that the superyacht “Angara” had caused the damage. Red Eléctrica de Espaňa, the owner of the cable, made an insurance claim and its insurers (Generali) paid it €7.7 million. Generali then sought to recover this from the Angara’s insurers. QBE UK had been the insurer of the yacht in 2016, but in 2020 there had been a reorganisation of QBE’s business which meant that QBE Europe had taken over the insurance.
In February 2022, Generali started a court claim against QBE UK in Madrid. It relied on the insurance policy and claimed against QBE UK as the insurer of the yacht. However, it also said that its claim was a tortious claim under the Maritime Navigation Act in Spain, and not a contractual claim under the policy, which meant that the arbitration clause in the policy did not apply. In response, QBE UK, along with QBE Europe, applied to the English courts for an anti-suit injunction to restrain Generali from pursuing the claim against QBE UK in Spain, and to prevent it from starting similar court proceedings against QBE Europe.
“Quasi-contractual” and “non-contractual” anti-suit injunctions
Most anti-suit injunctions are made by a party that says both it and the respondent are parties to the arbitration agreement (or the court jurisdiction agreement) in a contract, and that the respondent has started or is going to start court proceedings arising out of that contract, in breach of the arbitration agreement.
However, sometimes the right that the respondent is seeking to assert in those court proceedings is only derived from a contract, rather than being found within it, meaning that the arbitration agreement is not directly connected to that right but is merely ancillary to it. In those circumstances the right that is sued upon can be described as being “conditioned” by the arbitration agreement. For example, as in this case, a victim of a tort might be permitted under a statute to proceed directly against the provider of liability insurance to the wrongdoer. The judge in the QBE Europe case noted that an anti-suit injunction granted in such circumstances can be described as “quasi-contractual” and explained on a “benefit and burden” basis: the respondent cannot enjoy the benefit of the derived right without also complying with the associated obligation to pursue the right only in the contractual forum.
There can also be “non-contractual” anti-suit injunctions. For example, an injunction might be granted where there is a claim under a contract which does not have an agreed forum for disputes, or where the claim being asserted is under a statute without any reference to a contract at all (it is more difficult to apply for an anti-suit injunction in these situations). Another variation is where a claim is being made under a contract which contains an agreed forum for disputes, but the party applying for the anti-suit injunction denies that it is a party to that contract.
The anti-suit injunction against Generali
To decide whether it was appropriate to grant an anti-suit injunction here, the judge had first to decide whether the application could be classified as “quasi-contractual”. This involved examining the claim in Spain, and assessing whether, under English conflicts of law rules, that claim was seeking to enforce a contractual obligation derived from the contract of insurance (meaning that the arbitration agreement was ancillary to it), or whether it advanced an independent right of recovery under the relevant statute.
After reviewing the Statement of Claim from the Madrid proceedings and considering the expert evidence on Spanish law that had been presented by the parties, the judge concluded that Generali’s claim was, in substance, a claim to enforce the insurance policy. The relevant provisions under the Maritime Navigation Act gave to a party that has suffered a loss the right to enforce an insurer’s contractual obligation to indemnify. The Act arguably denied to the insurer some of the defences that it could raise under the policy, but not so much as to change the view that the obligation being enforced is essentially a contractual right. This meant that Generali’s claim was conditioned by the London arbitration agreement in the policy, and an anti-suit injunction on “quasi-contractual” grounds was appropriate.
The judge also concluded that QBE UK could be granted the anti-suit injunction, even though it denied being a party to the policy, because Generali was claiming against it under that policy. A “non-contractual” anti-suit injunction was therefore also appropriate. In addition, QBE Europe (which did not deny being a party to the policy) could be granted the injunction, even though Generali was not claiming against it, because there was a real risk that Generali would seek to join QBE Europe to the Spanish court proceedings in the future.
Comment
In modern commerce, many complexities can arise. Contractual and statutory rights might overlap. Parties to a contract might change. Sometimes when considering whether to issue an anti-suit injunction, a court must grapple with these complexities and work out what is, in substance, the true situation. And if the court concludes that, in fact, foreign court proceedings are being brought in breach of an English arbitration or litigation clause, it may issue an anti-suit injunction to compel the parties to comply with that clause.
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