Author: Syedur Rahman
7 July 2021
2 min read
Syedur Rahman of Rahman Ravelli considers a case that emphasises courts’ powers to remedy breaches of contract.
In the recent case of UAU v HVB  EWHC 1548 (Comm), the court explored what happens when foreign proceedings are brought in breach of an arbitration agreement arranged in London.
In this case, the English Commercial Court granted final prohibitory and mandatory anti-suit injunctions in order to restrain the commencement of court proceedings in Equatorial Guinea, as well as declarations that the defendant had breached its contractual obligation to arbitrate.
There are several remedies available via the English courts when court proceedings are started in breach of an arbitration agreement.
Under section 37 of the Senior Courts Act 1981 (SCA 1981), the UK courts have powers to grant an anti-suit injunction in circumstances where it is just and convenient to do so. An anti-suit injunction is an order which orders a party not to commence or not to take any further steps to pursue proceedings in another jurisdiction.
In order to make a successful application for an anti-suit injunction, an applicant will need to satisfy the following:
The English courts have a discretionary power to grant declaratory relief – this being, a declaration from the court as to a state of affairs. A benefit of declaratory relief is that it can assist in preventing further argument and in enabling settlement.
The dispute concerned an agreement between UAU (the claimant) and HVB (the defendant) relating to the parties' involvement in an oil and gas field offshore from Equatorial Guinea. The agreement contained a clause requiring arbitration to take place in London, under the London Court of International Arbitration (LCIA) rules, in the case of a dispute.
In November 2020, a dispute arose between the parties and the defendant brought proceedings in Equatorial Guinea for damages and other interim relief, following an alleged breach of contract.
Following unsuccessful appeals on jurisdiction to the courts in Equatorial Guinea, the claimant made the following applications to the English court against the defendant, pursuant to section 37 of the SCA 1981:
In the case, the court considered the following issues:
On consideration of these issues, the judge granted the declaratory and injunctive relief sought by the claimant.
This is a case that demonstrates the wide powers the courts possess when it comes to remedying breaches of contract and, in particular, arbitration agreements. This case is noteworthy in the field of arbitration as the judgment recognises the respondent’s obligation to arbitration through the declaratory relief granted, potentially forming the basis of a damages claim in ensuing arbitration.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.