European Court of Justice Turner v Grovit and Harada - Essay Example

European Court of Justice Turner v Grovit and Harada Ltd Discuss Table of Contents Introduction 2 Discussion 3 Arguments in Favour 5 Arguments Against 7 Conclusion 12 References 13 18 18 Introduction In this modern age, where limits in terms of geographic boundaries and socio-cultural differences have been almost abolished, it is very likely that the conflicts that were limited within the national legal framework have high chances to spread its effects to all over the world. The parties involved in the cross border disputes can take the assistance of international arbitration as the method of resolving their conflicts under the legal formalities. Under the legalities of international arbitration, anti-suit injunction is one of the basic and the common legal frameworks, which is applicable in the international level. Anti-suit injunction is defined as “an order of the court requiring the injunction defendant not to commence or to cease to pursue, or not to advance particular claims within, or to take steps to terminate or suspend court or arbitration proceedings in a foreign country”1. The definition of anti-suit injunction claims that under this legal framework, none of the defendants or plaintiffs can take the assistance to obtain undue advantages of a foreign legislation apart from the country wherein the dispute took place. It is usually observed in case of cross border disputes that the litigants perceive that they can take the advantage by shifting the proceedings in their home country, with the expectation to obtain a favourable judgement to the case ruling2. In order to disregard this belief of the litigants, anti-suit injunction has been introduced3. Arguably, anti-suit injunctions are often regarded as interference to the disputes in foreign courts. Addressing this particular issue, the discussion henceforth will evaluate whether the considerable of anti-suit injunction as an act of interference by a foreign court is justifiable. Illustrative examples will also be sought from various cases, including the landmark case of Turner v Grovit (C-159/02) [2005] 1 AC 101 in order to strengthen the rationalisation of the arguments in this essay. Discussion The case of Turner v Grovit, decided in April 2004, is considered one of the landmark cases in the European Court of Justice (ECJ), which apparent denotes the legislative implications of anti-suit injunctions to the principle of lis alibi pendens. This case became the basis for the explanation of anti-suit injunction as Turner, the plaintiff, was granted with anti-suit injunction, as a measure to restrict the application of the rule given in correspondence to the re-appeal of the defendant (i.e. Harald Ltd.) in the Spanish court4. The case began when Turner sued a case against his employer in Employment Tribunal claiming that he was urged to involve in the illegal conduct of the company, which led towards his unfair dismissal. After the proceedings in the London Court, it was decided that the companies must award Turner with a certain amount of compensation for his damages. Meanwhile, in July 1998, Changepoint and Harada had sued a case against Turner in the Spanish capital court claiming damages against the inconveniences caused due to the unprofessional conduct of Turner, who was stated to have violated organisational policies of resignation to the company. On 18th December 1998, he had asked for the assistance of London High Court requesting for an injunction restraining the proceedings of the Spanish court. On 22nd December of that year, London High court decided to grant the request of Turner through the issue of anti-suit injunction5. With regards to this case, it can be affirmed that anti-suit injunction in ECJ is applied as a remedial measure for individuals to restrain from the commencing the proceedings in another jurisdiction and hence, igniting conflicts between two national legislative frameworks. Arguably, different legislative frameworks are quite likely to rule a single case from different perspectives and deliver conflicting judgements. It is to avoid such conflicts in the national and foreign legislative frameworks that anti-suit injunction is practiced. The ECJ likewise asserts that anti-suit injunction can be granted by the courts in Europe to prohibit the litigant to continue with the proceedings of the court of other country or with the court of another member state, which is incompatible with Brussels I Regulation6. The Brussel Regulation, also termed as lis alibi pendens, is applied by both the municipal law and international law to discourse the problem of conflicting decisions. Article 27-30 of lis alibi pendens deal with the problems of conflicting decisions in the foreign courts along with the courts of other member states. Specifically, Article 28 deals with the avoidance of risks arising from conflicting decisions given by the foreign courts, which might be considered as illegal or inapplicable in the national court. Thus, with regards to this regulation, the ECJ can grant anti-suit injunction to the individuals applying for it7. Arguments in Favour From the study of the case of Turner v Grovit, it can be argued that as per the meaning of anti-suit injunction, the injunction request granted by the London High Court can be termed as a practice of interference upon the decision ruled by the Spanish court. The case of Turner v Grovit was formed on the basis of certain legal frameworks wherein the Spanish Court and London High Court were involved. In this case, the interference of the foreign country could be observed apparently. In the first instance of the sued case against the employers of Harada Limited, it was observed that Turner had made an immoral allegation on his employer stating that he was urged to conduct illegal activities within the company, which made him to resign from the job. According to the prior judgments given in the case of Erich Gasser GmbH v Misat Srl, it was observed that ECJ could not grant the approval of anti-suit injunction unless the contracting country first decides or gives its judgment to the case, even in case of breach of a clause8. It was also signified that the English Court must restrain from all these types of cases and be departed from giving judgements in the similar case, which if disregarded or violated can treat the practice of anti-suit injunction as an interference9. With regards to this statement given by ECJ, it can be stated that the London High Court had interfered in the proceedings of the Spanish Court by approving the injunction to Turner. Furthermore, as can be observed from the case of Societe Nationale Industrille Aerospatiale v Lee Kui Jak, if proceedings have already been commenced in the court of other country or under any other jurisdiction, it is advisable not to apply for an anti-suit injunction case in the courts of the UK10. Hence, if the case of Turner is to be measured based on this particular ground, it can be argued that the anti-suit injunction act was an act of interference to the foreign country as the proceedings had already been started in Spain after the case was ruled and concluded in the London High Court. Hence, it can be criticised as an unethical practice, as it had granted for the approval of anti-suit injunction upon the Spanish Court. According to the report of European Court of Justice, it was observed that a plaintiff could take the assistance of the contracting court, which also acts as interference to the decisions made by the foreign courts11. Saarland University also asserted that anti-suit injunction could act as interference when operating against the proceedings of the foreign courts12. Arguably, although motivated with the intention of preventing unworthy use of legislating gaps in the international context, the provision at times may fail to offer complete protection to the parties from being a victim of unjust decisions as per the legislation of one national court. Contextually, Hartley stated that anti-suit injunction acts as interference due to the reason that it tries to prevent the risk of conflicting decisions and prevent the plaintiff from the risk of multiple proceedings, reflecting home biases to the decision rules by the national court13. This further justifies the issue of anti-suit injunction as interference to the disputes of the foreign courts, as the contradiction of judgments take place. Arguments Against In the above section, it was discussed that in the case of Turner v Grovit, anti-suit injunction has acted as an interference with a dispute in the foreign courts. However, critics have also argued on few of the points on the basis of which it can be proved that the injunction does not act as interference to the foreign courts’ ruling on a similar case already concluded in a national court. At the foremost, the view that anti-suit injunction acts as an interference can be contradicted based on the fact that many reasons considered by the London High Court when granting the application of Turner regarding anti-suit injunction were legally justifiable. Notably, the supporters of international anti-suit injunctions in the UK contradict the notion based on the ground that the order of the court is not directed to the foreign courts, but to the defendant as per the legislation of the enjoining court. In the similar context, the other reason based on which, viewing anti-suit injunction as an interference can be contradicted is that the case filed by Mr. Grovit on behalf of Harada Ltd in the Spanish Court was of no significance as the decision was already ruled by the London High Court emphasising the same conflict. As the case was already lodged by Turner in the ECJ and the decision of damages were awarded, there was no valid reason for filing the case again in Spanish Court, which signifies the involvement of the foreign court in this case (i.e. the Spanish Court) as unworthy and hence, justifies the legitimacy of practicing anti-suit injunction14. Similarly, the European Court states that it can grant anti-suit injunction to the plaintiff under two criteria. One of these criteria signifies that if the European court observes that the allegation forwarded by the foreign courts is oppressive and the plaintiff is a domicile of the UK, an injunction under the arbitration law can be forwarded. In testing whether the filed case is oppressive, the European Court will analyse all the evidences including the justice to both the parties and the details of the proceedings conducted by the foreign courts15. The English Court will also involve in testing the applicable law and the evidences for interfering in the disputes of the foreign courts16. This preliminary criterion was completely adhered by Turner and ECJ, which justifies that the application of the anti-suit injunction was not interference in this case. For instance, a similar criterion was mentioned in the case of Allianz SpA v West Tankers Inc wherein the European Court had interfered in the disputes of foreign court decisions as the plaintiff had urged for the legal assistance from the European Court17. Similarly, in case of Turner v Grovit, it can be termed that Turner was liable for seeking the assistance of the European Court. He had been able to prove himself as per the first criterion of the English Court. Hence, based on these understandings it can be argued that the case filed by Grovit in Spanish Court was oppressive and had no legal acceptance due to the reason that Turner had been charged with the damage compensation by the English Court in the earlier phase. As per the rule of the Court of Appeal in the UK, the decision of the European Court cannot be challenged by any other foreign court18. With regards to this law, it can be stated that the grant for anti-suit injunction by the London High Court cannot be deemed as interference. According to Fisher, it has been stated that anti-suit injunction is a remedial tool to detain the proceedings with the foreign courts19. This statement itself proves that anti-suit injunction cannot be completely termed as interference, rather it can be treated as a device or a tool for protecting the interests of the plaintiff, justifying the first criterion of the European Court to approve anti-suit injunction. Correspondingly, the second criterion of ECJ states that a strong jurisdiction will be enforced by the European Court if there is a potential risk of parallel proceedings in two different countries20. In the similar context, it can be stated that the London High Court had followed these rules and legislations and supported Turner by granting his request for the issue of anti-suit injunction. It is due to the reason that Turner had the potential risk of parallel proceedings in the ECJ as well as the Spanish Court. All these criteria were followed by the English Court in support of Turner, which cannot be termed as an interference with disputes to the foreign courts21. From the above discussion of the arguments against interference of anti-suit injunction, it can be affirmed that the London High Court had granted the issue of injunction according to the English legislation. Turner and the UK government had used the anti-suit injunction against the proceedings of the Spanish Court on the basis of three grounds. Firstly, the issue of anti-suit injunction was based on the ground that an injunction does not act as interference on the jurisdiction of the foreign courts; rather it is framed to prohibit an individual who complains of the proceedings in a foreign legislation against the bad faith. The second ground considered in this regard asserted that an anti-suit injunction is recognised as a bureaucratic tool of the national law in the UK and thus, the Convention does not create any type of conflicts in its operation. The third ground considered in this context noted that the major bases of anti-suit injunction is that it serves the English citizens to minimise the risk of conflicting judgment and prevent from the situation of multiple proceedings in different countries, with the motive to restrict individuals from taking undue advantages of legislative differences prevailing in the international contexts22. Similar bases of judgment in the approval of anti-suit injunction were observed in case of Philip Alexander Securities v Bamberger where anti-suit injunction was issued by the court23. On the basis of the above discussion, it can be termed that in case of Turner v Grovit, the anti-suit injunction did not act as interference in the foreign courts, rather it assisted Turner under the framework of ECJ to face further charges of compensating his former employer. Conclusion From the above discussion and analysis of the case of Turner v Grovit, it can be concluded that anti-suit injunction was granted by London High Court on the basis of various determinants, which disregards viewing such practices as interference. In the first instance, it was termed as interference due to the reason that anti-suit injunction requires the contracting country (i.e. London) to give its judgment first. In case of Turner, the London High Court had already awarded Turner with compensation for damages against unprofessional behaviour while resigning. On the other hand, London High Court’s approval for anti-suit injunction cannot be termed as interference due to the legal frameworks of the ECJ. ECJ states that an anti-suit injunction can be granted in case if the individual complains of bad faith. Anti-suit injunction is also recognised to be the bureaucratic tool of preventing multiple proceedings along with minimising the risk of conflicting judgments. Hence, anti-suit injunction had played the role of a major tool for protecting the plaintiff from the wrong judgments and multiple proceedings in case of Turner v Grovit, rather than acting as interference. References Ali Arif, Katherine Nesbitt and Jane Wessel, ‘Anti suit Injunction in support of International Arbitration in the United States and the United Kingdom’ (2008) 1 International A.L.R http://www.crowell.com/documents/Anti-Suit-Injunctions-in-Support-of-International-Arbitration-in-United-States-and-United-Kingdom.pdf 06 March 6, 2014. Baker & McKenzie, The Baker & McKenzie International Arbitration Yearbook 2009 (Wolters Kluwer Russia, 2010). Clarkson Christopher M. 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White & Case LLP, ‘European Court of Justice Finds Anti-Suit Injunctions Unavailable in Support of Arbitration Proceedings in Europe’ (2009) International Disputes Quarterly http://www.whitecase.com/idq/summer_2009_ca2/#.UxmcPj-Sxe8 06 March, 2014. Wolff Spencer, ‘Tanking Arbitration or Breaking the system to fix it? A sink or Swim Approach to Unifying European Judicial Systems: The ECJ in Gasser, Turner & Tankers’ (2009) The Columbia Journal of European Law Online http://www.cjel.net/wp-content/uploads/2009/06/wolff.pdf 06 March 6, 2014. Worthington Sarah, Commercial Law and Commercial Practice (Hart Publishing, 2003). Read More