Channel Tunnel Group Ltd and Another v Balfour Beatty Construction Ltd and Others

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Keith of Kinkel,Lord Goff of Chieveley,Lord Jauncey of Tullichettle,Lord Browne-Wilkinson,Lord Mustill
Judgment Date21 January 1993
Judgment citation (vLex)[1993] UKHL J0121-3
Date21 January 1993

[1993] UKHL J0121-3

House of Lords

Lord Keith of Kinkel

Lord Goff of Chieveley

Lord Jauncey of Tullichettle

Lord Browne-Wilkinson

Lord Mustill

Channel Tunnel Group Limited and Others
(Appellants)
and
Balfour Beatty Construction Limited and Others
(Respondents)
Lord Keith of Kinkel

My Lords,

1

For the reasons given in the speech to be delivered by my noble and learned friend Lord Mustill, which I have had the opportunity of considering in draft and with which I agree, I would dismiss this appeal. I would add that I also agree with the observations contained in the speech of my noble and learned friend Lord Browne-Wilkinson.

Lord Goff of Chieveley

My Lords,

2

For the reasons given by my noble and learned friend Lord Mustill, I too would dismiss the appeals. I also wish to express my agreement with the point raised by my noble and learned friend Lord Browne-Wilkinson. Like him, I am concerned that the jurisdiction to grant an injunction, which is unfettered in the statute, should be rigidly confined to exclusive categories by judicial decision.

Lord Jauncey of Tullichettle

My Lords,

3

I have the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Mustill. I agree with him, and for the reasons which he gives, I, too, would dismiss the appeal.

Lord Browne-Wilkinson

My Lords,

4

I have read and agree with the speech of my noble and learned friend Lord Mustill. For the reasons which he gives I too would dismiss the appeal.

5

I add a few words of my own on the submission that the decision of this House in "Siskina" (Owners of Cargo lately laden on Board) v. Distos Compania Naviera S.A. [1979] A.C. 210 would preclude the grant of any injunction under section 37(1) of the Supreme Court Act, 1981, even if such injunction were otherwise appropriate. If correct, that submission would have the effect of severely curtailing the powers of the English courts to act in aid, not only of foreign arbitrations, but also of foreign courts. Given the international character of much contemporary litigation and the need to promote mutual assistance between the courts of the various jurisdictions which such litigation straddles, it would be a serious matter if the English courts were unable to grant interlocutory relief in cases where the substantive trial and the ultimate decision of the case might ultimately take place in a court outside England.

6

Section 37(1) of the Supreme Court Act, 1981, provides:

"The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases where it appears to the court to be just and convenient to do so."

7

Despite the breadth of these words, in the Siskina this House laid down certain limits on the powers which it confers. In that case, the plaintiffs were seeking leave to serve the defendants out of the jurisdiction. The only ground on which the plaintiffs could rely under order 11 was the then sub-rule (i) viz. that the writ claimed an injunction against the defendants dealing with their assets within the jurisdiction. Since the contract in question contained a foreign exclusive jurisdiction clause, the only injunction capable of being granted by the English courts in the ordinary course of events would have been an interlocutory injunction. In that context, Lord Diplock said, (at p. 256C-E):

"The words used in sub-rule (i) are terms of legal art. The sub-rule speaks of 'the action' in which a particular kind of relief, 'an injunction' is sought. This pre-supposes the existence of a cause of action on which to found "the action". A right to obtain an interlocutory injunction is not a cause of action. It cannot stand on its own. It is dependent upon there being a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened by him, of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the court. The right to obtain an interlocutory injunction is merely ancillary and incidental to the pre-existing cause of action."

8

This passage, read in isolation, suggests that there are only two limits on the general power conferred by section 37 viz.

(1) that the court must have personal jurisdiction over the defendants in the sense that they can be duly served either personally or under order 11 (other than sub-rule (i)); and

(2) that the plaintiffs have a cause of action under English law.

9

However it was submitted for the respondents that two other passages in Lord Diplock's speech impose a third requirement, viz.

(3) that the interlocutory injunction must be ancillary to a claim for substantive relief to be granted in this country by an order of the English court.

10

It was said that this third limit is to be found in two other passages in Lord Diplock's speech, at pages 254E and 256H:

"[Section 37], speaking as it does of interlocutory orders, presupposes the existence of an action, actual or potential, claiming substantive relief which the High Court has jurisdiction to grant and to which the interlocutory orders referred to are but ancillary.

To come within [sub-rule (i)] the injunction sought in the action must be part of the substantive relief to which the plaintiff's cause of action entitles him; and the thing that it is sought to restrain the foreign defendant from doing in England must amount to an invasion of some legal or equitable right belonging to the plaintiff in this country and enforceable here by a final judgment for an injunction."

11

On the basis of that alleged third requirement, the respondents contended that since the contract in the present case contains a foreign arbitration clause which the Arbitration Act, 1975, requires the action to be stayed, the court has no power to grant an interlocutory injunction. Although the respondents have been validly served (i.e. there is jurisdiction in the court) and there is an alleged invasion of the appellants' contractual rights (i.e. there is a cause of action in English law), since the final relief (if any) will be granted by the arbitrators and not by the English court, the English court, it is said, has no power to grant the interlocutory injunction.

12

In my judgment that submission is not well founded. I can see nothing in the language employed by Lord Diplock (or in later cases in this House commenting on the Siskina) which suggest that a court has to be satisfied, at the time it grants interlocutory relief, that the final order, if any, will be made by an English court. The two passages I have quoted refer to the substantive relief being relief which the English court has "jurisdiction to grant" and to rights "enforceable here": see also, at p. 256F "some legal or equitable right which it has jurisdiction to enforce by final judgment". These are words which indicate that the relevant question is whether the English court has power to grant the substantive relief not whether it will in fact do so. Indeed, in many cases it will be impossible, at the time interlocutory relief is sought, to say whether or not the substantive proceedings and the grant of the final relief will or will not take place before the English court. My noble and learned friend Lord Mustill has demonstrated in his speech that in the context of arbitration proceedings whether it is the court or the arbitrators which make such final determination will depend upon whether the defendant applies for a stay. The same is true of ordinary litigation based on a contract having an exclusive jurisdiction clause: the defendant may not choose to assert his contractual right to have the matter tried elsewhere. Even more uncertain are cases where there is a real doubt whether the English court or some foreign court is the forum conveniens for the litigation: is the English court not to grant interlocutory relief against a defendant duly served and based on a good cause of action just because the English proceedings may subsequently be stayed on the grounds of forum non conveniens?

13

I therefore reach the conclusion that the Siskina does not impose the third limit on the power to grant interlocutory injunctions which the respondents contend for. Even applying the test laid down by the Siskina the court has power to grant interlocutory relief based on a cause of action recognised by English law against a defendant duly served where such relief is ancillary to a final order whether to be granted by the English court or by some other court or arbitral body.

14

Finally I should make it clear that I have merely been considering the effect of the decision in the Siskina on the assumption that it correctly states the law. The tests it laid down in absolute terms have already received one substantial modification: see Castanho v. Brown and Root (U.K.) Ltd. [1981] A.C. 557; British Airways v. Laker Airways [1985] A.C. 58. Moreover, in South Carolina Insurance Co. v. Assurantie Maatschappij "de Zeven Provincien" N.V. [1987] A.C. 24, Lord Goff of Chieveley (with whom Lord Mackay of Clashfern agreed) reserved the question whether the law as laid down by the Siskina (as subsequently modified) was correct in restricting the power to grant injunctions to certain exclusive categories. With respect, I share the same doubts as are there expressed and reserve the question for consideration when it arises.

Lord Mustill

My Lords,

15

Since this is a long judgment I will state at the outset my answers to the questions posed in argument, before developing the reasons.

16

1. Should the action brought by the appellants against the respondents be stayed?

17

I consider that the action can and should be stayed pursuant to the inherent jurisdiction of the court to inhibit proceedings brought in breach of an agreed method of resolving disputes. I thus arrive at the same conclusion as the Court of Appeal, but by a different route. It...

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