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This article was originally published in Practical Law Arbitration. Reproduced with permission. This article is co-written by Reed Smith Pte Ltd and Resource law LLC who together form the Reed Smith Resource Law Alliance in Singapore. Reed Smith LLP is licensed to operate as a foreign law practice in Singapore under the name and style, Reed Smith Pte Ltd (hereafter collectively, “Reed Smith”). Where advice on Singapore law is required, we will refer the matter to and work with Reed Smith’s Formal Law Alliance partner in Singapore, Resource Law LLC, where necessary.

In Sun Travels & Tour Pvt Ltd v Hilton International manage (Maldives) Pvt Ltd [2019] SGCA 10, the Singapore Court of Appeal refused to order an anti-enforcement injunction in favour of two arbitration awards, where a foreign court had issued a judgment relating to the same dispute and in favour of the other party. The Court of Appeal also considered the different approach to be taken between anti-suit injunctions and anti-enforcement injunctions.

Authors: Kohe Hasan Justine Barthe-Dejean

* Kohe Hasan is a Partner in Reed Smith's Singapore office and a Director of Resource Law LLC. Justine Barthe-Dejean is an Associate in Reed Smith's Singapore office.

Speedread:

The Singapore Court of Appeal has refused to order an anti-enforcement injunction restraining a party from enforcing, in a foreign jurisdiction, a judgment issued by a court of that jurisdiction.

The respondent (Hilton) attempted to enforce two arbitration awards in the Maldives. The appellant (Sun), against whom the awards were made, commenced Maldivian court proceedings that essentially re-litigated the dispute to which the awards related. In parallel to its efforts to enforce the awards, Hilton participated in those Maldivian court proceedings, not just challenging the court’s jurisdiction but also responding on merits. The Maldivian court eventually issued a judgment in favour of Sun.

Pending its appeal of the Maldivian court judgment, Hilton sought an anti-suit injunction in Singapore, being the seat of the arbitrations. In first instance, the High Court noted that the Maldivian proceedings were already too far advanced to warrant an anti-suit injunction and awarded Hilton an anti-enforcement injunction instead. This would prevent Sun from acting on the Maldivian court judgment in the Maldives.

Sun appealed from the High Court decision. The Court of Appeal carried out a thorough review of the authorities and a careful analysis of the principles commanding its discretion to order an injunction in these circumstances. In particular, it compared the requirements for granting an anti-suit injunction with those for granting an anti-enforcement injunction, and the principles of comity and equity, which underpinned them both.

The Court of Appeal agreed that the Maldivian court proceedings were brought in breach of the arbitration agreements, and were both vexatious and oppressive. However, the Court of Appeal found that Hilton's delay in seeking an anti-suit injunction was particularly detrimental to its case. An anti-enforcement injunction seriously impinges on the comity between courts of different jurisdictions. There has to be exceptional circumstances, in equity, to justify granting one.

This decision is a stark reminder that parties must take a pro-active stance when faced with multiple and parallel proceedings in foreign courts, in breach of an exclusive jurisdiction or arbitration agreement. A "wait and see" approach will not be viewed sympathetically in Singapore, as the seat of an arbitration. (Sun Travels & Tour Pvt Ltd v Hilton International manage (Maldives) Pvt Ltd [2019] SGCA 10 (12 February 2019).)