Introduction
Anti-suit injunctions are orders, usually made by courts in the seat of arbitration, restraining a party from commencing or continuing court proceedings in breach of an agreement to arbitrate. In P v C[1], the claimant (P) sought anti-suit injunctions from the High Court of Lagos State against the defendant (C) who had commenced multiple court actions against P despite the existence of an arbitration agreement between the parties.
Facts
P and C entered a Transportation Agreement (the “Agreement”) which contained an arbitration clause that required all disputes to be resolved by arbitration under the International Chamber of Commerce (ICC) Arbitration Rules. The clause also designated “Lagos, Nigeria” as the seat of arbitration.
When a dispute arose, C commenced a suit at the High Court of Imo State seeking to recover monies allegedly owed to it by P under the Transportation Agreement. C also obtained ex parte injunctions freezing the bank accounts of P. When P became aware of C’s lawsuit, it commenced arbitration proceedings against C and filed an application at the High Court of Imo State requesting a stay of the proceedings in favour of arbitration.
C participated in the arbitration proceedings and in fact signed a Terms of Reference which, amongst other things, affirmed that the seat of arbitration was “Lagos, Nigeria” and designated the Lagos State Arbitration Law 2009 as the law to govern the arbitration agreement and proceedings.
While the suit at the High Court of Imo State was pending, C commenced three more suits at various High Courts in Nigeria in respect of the same dispute. This led P to seek anti-suit injunctions from the High Court of Lagos State, being the court of the seat of arbitration.
Issues Before the Court
The High Court of Lagos State considered whether it had the power to grant anti-suit injunctions against C and if it was appropriate to do so in the circumstances of the case.
P argued that by virtue of Section 21(1) of the Lagos State Arbitration Law 2009, the court had the power to grant anti-suit injunctions against C. The provision states that “the Court shall have the power to issue interim measures for the purposes of and in relation to arbitration proceedings as it has for the purpose of and in relation to proceedings in the Courts…” Section 21(3)(b) of the same law defines interim measures to include an order compelling a party to an arbitration agreement to “take action that would prevent, or refrain from taking action that is likely to cause current or imminent harm or prejudice to the subject matter of the dispute or the arbitral process…”.
Decision
The court was of the view that it had the power to grant the anti-suit injunctions sought by P and was convinced that the balance of convenience was in P’s favour. The Court held that C was bound by the arbitration agreement and clarified that P’s suit was not a call or invitation to the court to make orders binding courts of coordinate jurisdiction, but a call on the court to restrain C from taking steps outside of the arbitration proceedings that would amount to further abuse of the process of the court by C.
The court specifically condemned the actions of C and its counsel, finding that the counsel misused his knowledge of the law and legal procedure to stultify the administration of justice.
Orders Made by the Court
The court granted an order restraining C from commencing, prosecuting, continuing, taking any steps in, enforcing, appealing, or otherwise participating in proceedings against P in any court or tribunal, wherever situated, other than the arbitration under the ICC Rules in respect of any dispute arising out of or in connection with the Transportation Agreement. The court went on to award costs of N2, 000, 000 against C and N2, 000, 000 against C’s counsel personally for aiding the abuse of the process of the court by C.
Conclusion
This case demonstrates the pro-arbitration stance of most Nigerian courts (especially the courts in Lagos State) and shows that where Nigeria is chosen as the seat of arbitration, the courts will not hesitate to rein in a recalcitrant party and its counsel who use the machinery of the courts to frustrate arbitration agreements.
*TNP represented P in the anti-suit proceedings.
[1] Suit No. LD/17896GCM/2024.
