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Thursday, March 12, 2009

Anti-suit Injunctions and Duplicative Foreign Proceedings

Lots has been written about globalization and transnational litigation.  One of the results of the increased number of transnational/cross-border actions -- that has not been written about so extensively -- is the larger number of parallel proceedings that potentially exist (i.e., duplicative, concurrent actions pending in different countries at the same time).  In the U.S., the issue has not been carefully examined, and, with some exceptions, little has been written on the topic by legal scholars. I posted on this topic during my last guest stint at Prawfs Blawg, and I thought I would do so again.  Although the issue is only just starting to get attention in the U.S., outside the U.S. the issue of parallel proceedings is a hot topic.

Last month, two significant decisions were handed down that relate to the problem of parallel proceedings.  The first was from the European Court of Justice in the West Tankers case.  The ECJ issued a decision that anti-suit injunctions may not be brought to restrain court proceedings in another EU member state, even if the proceedings are brought allegedly in breach of an arbitration agreement (summary of decision here).  An anti suit injunction is a court order that attempts to prevent an opposing party from continuing a proceeding in another jurisdiction. If the opposing party contravenes the order, the court may find the party guilty of contempt. The use of anti suit injunctions are highly controversial, and once used quite commonly in the U.S. The underlying rationale of the ECJ's decision is that each European state must respect the procedures of the courts of other member states.  This is big decision that has sparked lots of controversy.  The Conflict of Laws blog held a wonderful online symposium on the case that's well worth taking a look at.

The second decision (also handed down last month) was from the Supreme Court of Canada in the Teck Cominco v. Lloyd 's Underwriters case. In that case, the issue was whether a British Columbia court should decline jurisdiction and stay its proceedings pending resolution of a parallel and previously filed U.S. action (pending in federal district court in Washington State).  The court's decision held that the trial court correctly refused to stay the Canadian action, and in doing so approved using the doctrine of forum non conveniens to determine whether a stay would be appropriate.  Unlike in the U.S., the Canadian doctrine of forum non conveniens now seems to be used to determine not whether the forum is appropriate, but whether the forum is the most appropriate forum.  The Court seemed little bothered by the costs and waste associated with the duplicative proceedings. The Canadian Business Law Journal (from the U. of Toronto) has dedicated a special issue to the case, which should be in print soon.  Contributors include Joost Blom, Janet Walker, Vaughan Black, and John Swan -- all leading Canadian conflicts scholars.

Both cases have important implications for forum shopping and transnational litigation in general.  To date, the U.S. Supreme Court has yet to grapple with the issue directly. One suspects it can only be a matter of time: currently, U.S. courts apply at least three different approaches when addressing the issue of parallel foreign proceedings.  Unfortunately, the three approaches are doctrinally confused and inconsistent.  Part of the problem is that all three approaches are derived from domestic law theories, without any serious consideration as to whether domestic translate well into the the transnational or international context. The issue of how to handle duplicative foreign proceedings is important because battling on two fronts can be incredibly costly and wasteful. As transnational litigation becomes more common, having the same lawsuit pending in two countries may become not only more common but also part of a defense strategy.

If you're interested in more on this topic, I've written a short article on the topic titled Duplicative Foreign Proceedings (a draft is posted on SSRN).  It's still a draft, so comments would be welcome.  I am embarassed to say I don't have a theme song for it (didn't realize that was the new trend in the law).  I better talk to Jay....

Posted by Austen Parrish on March 12, 2009 at 06:22 PM in Civil Procedure | Permalink


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There's some more blogging on West Tankers here and, most importantly, on the Conflict of Laws Blog here.

Posted by: Martinned | Mar 13, 2009 12:38:17 PM

Adding to Martin George's comment, I'd just like to clear up that in West Tankers the ECJ was very much of the opinion that the Italian court should not entertain the case. However, it also felt that no foreign court should try to force the Italians to come to that conclusion. Essentially they considered it a matter of comity.

Posted by: Martinned | Mar 13, 2009 12:35:27 PM

Many thanks for the kind words re our West Tankers online symposium at Conflict of Laws .net. No doubt the ECJ's decision in West Tankers looks a little odd to any lawyer raised in the common law tradition.

In any event, I will read your draft paper with interest.

Posted by: Martin George | Mar 13, 2009 7:53:01 AM

Yes, TS Productions is an interesting case. Australian forum non conveniens analysis appear substantially more similar to the U.S. approach (asking if the current forum is clearly inappropriate before dismissing). In contrast, Canadian and the U.K. forum non conveniens analysis appears to have moved to ask whether the other forum is "more appropriate." The inclination to search for the most appropriate forum in Canada and the U.K. -- while often characterized as similar -- seems to be fundamentally different and lead to very different results. It's also striking how quickly the Australian court was willing to enter the injunction.

As an aside, Oxford University Press has a great book that surveys the approaches in 17 countries to how courts decline jurisdiction (J.J. Fawcett, Declining Jurisdiction in Private International Law (1995)). It's unfortunate that with recent developments it's becoming a little dates.

Posted by: AP | Mar 12, 2009 11:51:35 PM

There have been a couple of recent Australian cases on this issue as well. See for example TS Productions LLC v Drew Pictures Pty Ltd [2008] FCAFC 194

Posted by: Anon | Mar 12, 2009 10:48:07 PM

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