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....