Introduction
Arbitral tribunals, however broad their procedural powers, have no power to restrain a party from commencing or continuing proceedings in a foreign court. Where a party threatens or brings foreign proceedings in breach of its agreement to arbitrate, the tribunal cannot itself enjoin that conduct- the remedy lies exclusively with the court, which may grant an anti-suit injunction and, if that injunction is breached, punish the breach as a contempt of court.
This distinction is of acute practical significance in international arbitration. Anti-suit injunctions restraining a party from pursuing foreign court proceedings brought in breach of an arbitration agreement are among the most powerful tools available to protect the parties’ bargain to arbitrate, but they depend entirely on the court’s contempt jurisdiction for their effectiveness.
This practice note examines the law and procedure governing contempt applications arising from breach of an anti-suit injunction granted in support of arbitration under English law.
The Legal Framework
The Court’s Jurisdiction to Grant Anti-Suit Relief in Support of Arbitration
English courts have long exercised jurisdiction to restrain a party from commencing or continuing foreign court proceedings brought in breach of an arbitration agreement, most commonly under the general injunctive power in section 37 of the Senior Courts Act 1981 and, where an arbitration is on foot, under section 44 of the Arbitration Act 1996 (the court’s power to grant interim relief in support of arbitration, exercisable where the tribunal has no power or is unable to act effectively). Because the tribunal itself has no coercive power over a party’s conduct in a foreign court, the anti-suit injunction and the court’s willingness to enforce it through contempt is the primary mechanism for protecting the parties’ agreement to arbitrate from being undermined by parallel foreign proceedings.
Civil Contempt: CPR Part 81
The procedural rules governing committal for breach of a judgment, order, or undertaking are now consolidated in CPR Part 81, which replaced and simplified the earlier Rules of the Supreme Court and CPR Schedule provisions. Part 81 sets out the requirements for bringing committal proceedings, including the permission requirements (where applicable), the form and content of the application, and the procedural safeguards for the respondent.
It is essential to appreciate that, notwithstanding the “civil” label, contempt proceedings carry quasi-criminal characteristics. The standard of proof is the criminal standard, which is beyond reasonable doubt, and the respondent is entitled to procedural protections akin to those in criminal proceedings, including the right to a fair hearing, disclosure by the applicant, and, in certain circumstances, the privilege against self-incrimination.
The Court’s Inherent Jurisdiction
In addition to the statutory framework, the court retains an inherent jurisdiction to punish contempt. This residual jurisdiction can be relevant where the procedural requirements of Part 81 do not squarely apply, or where the court acts of its own motion (for example, where a contempt is committed in the face of the court). In practice, most contempt applications arising from breach of court orders in the arbitration context are brought under CPR Part 81.
Civil and Criminal Contempt Distinguished
Civil contempt consists in the breach of a court order or undertaking by a party to proceedings. It is remedial in character: its primary purpose is to secure compliance with the order rather than to punish. Criminal contempt, by contrast, encompasses conduct that interferes with the administration of justice more broadly (for example, publications that prejudice a fair trial). Breach of an anti-suit injunction granted in support of arbitration is ordinarily treated as civil contempt, though the same quasi-criminal procedural safeguards apply.
Breach of Anti-Suit Injunctions as a Contempt Trigger
What Constitutes Breach
A party is in contempt of an anti-suit injunction where it commences, continues, or takes any active step in foreign court proceedings falling within the scope of the order, notwithstanding that the proceedings were issued by the party itself, by an affiliate, or through local counsel acting on its instructions. Continuing to participate in foreign proceedings that were already on foot when the injunction was granted, rather than actively discontinuing or seeking a stay of them, is equally capable of constituting a breach. Where the injunction was preceded by an undertaking not to pursue foreign proceedings pending the return date, breach of that undertaking carries the same coercive force as breach of the injunction itself. The international dimension can complicate enforcement, particularly where the contemnor has no assets in England or is not physically present, but the contempt jurisdiction remains available, and courts have made committal orders in such circumstances.
Corporate and Individual Liability
A corporate respondent can be held in contempt of an anti-suit injunction, and sanctions, principally fines and sequestration, can be imposed upon it. Where the breach was caused by, or carried out with the permission or connivance of, an officer or director of that company, the individual may also be personally liable for contempt and subject to committal. This is of particular importance where the corporate respondent has no assets or presence within the jurisdiction: pursuing individual officers or directors, who may be identifiable and amenable to the court’s jurisdiction even where the company is not, can be essential to giving the injunction practical effect.
Cross-Border Enforcement Complications
Breach of an anti-suit injunction typically manifests in a foreign forum, which creates distinctive enforcement challenges. The foreign court seised of the restrained proceedings is under no obligation to recognise or give effect to the English injunction and may in some cases be unaware of its existence. The contemnor may resist the English contempt application by arguing that the foreign proceedings fall outside the scope of the injunction as a matter of construction, for example, by distinguishing between a “dispute” under the contract and “enforcement” of an award already rendered. Practitioners should anticipate such construction arguments when drafting the injunction and should be prepared, in the contempt application itself, to adduce evidence (including foreign law evidence where relevant) addressing how the foreign proceedings interact with the scope of the English order.
Remedies and Sanctions
Committal to Prison
The most severe sanction for contempt of court is committal to prison. The maximum term for a single contempt is two years. In practice, committal is reserved for serious or contumacious breaches, particularly where the respondent has shown deliberate defiance of the court’s authority or where lesser sanctions have failed to secure compliance.
Suspended Committal Orders
The court may suspend a committal order on terms, typically, compliance with the original order within a specified period. Suspended committal is frequently used where the court wishes to give the contemnor a final opportunity to comply before activating the custodial sanction. Breach of the terms of suspension may lead to activation of the committal without a further hearing.
Fines
Fines may be imposed for contempt, whether against individuals or corporate respondents. There is no statutory cap on the level of fine that may be imposed in civil contempt proceedings, and the court has a broad discretion to set the fine at a level proportionate to the seriousness of the breach and the means of the contemnor.
Sequestration of Assets
Sequestration is an equitable remedy by which the court appoints commissioners to take possession of the contemnor’s assets until compliance is achieved. It is typically deployed against corporate respondents or where the contemnor has assets within the jurisdiction but is personally beyond the court’s reach. In the anti-suit injunction context, sequestration can be a particularly effective sanction against a corporate contemnor with assets in England where the individuals responsible for the breach are outside the jurisdiction and not amenable to committal.
Purging Contempt
A contemnor may apply to purge their contempt by demonstrating genuine remorse, full compliance with the order, and a willingness to cooperate. The court retains a discretion to discharge or reduce the sanction where satisfied that the contempt has been purged. In practice, an early application to purge accompanied by evidence of compliance and contrition can result in a suspended order not being activated, or in early release from committal.
Case Study: Breach of an Anti-Suit Injunction in Support of Arbitration
Background
A dispute arose between a buyer and a seller under an international commodity sale contract containing an arbitration clause referring disputes to a trade-association arbitration seated in London, administered under rules providing for a first-tier award subject to a right of appeal to a second-tier appeal board. After the seller commenced the arbitration, the parties negotiated a settlement and the arbitration was stayed; when the settlement later broke down, the seller revived the arbitration. At around the same time, the seller’s US attorneys served a statutory notice threatening separate US civil proceedings against the buyer, notwithstanding that any such dispute fell squarely within the scope of the parties’ arbitration agreement.
The Anti-Suit Injunction and Its Scope
Anticipating an imminent breach of the arbitration agreement, the buyer applied without notice to the English court and obtained interim anti-suit relief, which was later continued by consent (with a penal notice) until the “conclusion of the arbitration.” The order was not personally served; instead, it granted permission for service by alternative means on the seller’s English solicitors, which was duly effected. The order’s restraint was drawn broadly, covering the seller and its directors, officers, servants, and agents, and extending to any proceedings, in any forum other than the agreed arbitration, in respect of any dispute arising out of or in connection with the underlying contract and related settlement documents. Notably, the parties’ agreement to continue the injunction was reached against the backdrop of the buyer’s skeleton argument for the return date, which expressly stated that the relief was sought only until resolution of the arbitration “by final and unappealable award”- language that later proved decisive to a dispute over the order’s construction.
The Breach: Foreign Enforcement Proceedings
The arbitration proceeded to a first-tier award in the seller’s favour. The buyer exercised its contractual right of appeal. Notwithstanding the pending appeal, and notwithstanding that the applicable arbitration rules expressly distinguished between a non-final first-tier award and a final appeal award, the seller commenced (i) attachment proceedings in a civil-law jurisdiction seeking to freeze the buyer’s assets by reference to the first-tier award, and (ii) enforcement proceedings in a US federal court seeking to confirm the same award. The buyer’s solicitors demanded withdrawal of both foreign proceedings on the basis that they breached the anti-suit injunction; the seller’s solicitors resisted, contending that enforcement of an award was legally distinct from “disputes” arising under the contract and therefore fell outside the injunction’s scope. The buyer also sought relief from the arbitral appeal board itself, which considered that it lacked jurisdiction to restrain conduct in foreign courts and left the question to the supervising court.
The Contempt Application
Faced with continuing, unremedied breach, the buyer issued a contempt application under CPR Part 81 against the corporate seller and, in addition, against three individuals believed to be its directors or officers, alleging that they had known of the injunction and had either assisted or permitted the breach, or wilfully failed to take reasonable steps to prevent it. Because the seller declined, through its solicitors, to confirm the identity of its directors, the buyer had to establish the individual respondents’ identities through its own witness evidence rather than through disclosure from the seller. As none of the respondents was present within the jurisdiction, the buyer additionally sought permission to serve the application, and any resulting order, out of the jurisdiction, together with an order dispensing with personal service in favour of service on the respondents’ English solicitors and the seller’s overseas attorneys, supported by evidence that personal service on the corporate respondent had already proved impracticable in related proceedings.
The supporting evidence addressed, in careful detail: the proper construction of “conclusion of the arbitration,” resolved by reference to the parties’ own pre-agreement correspondence and the arbitral rules’ express distinction between provisional and final awards; why the foreign proceedings fell within the broad wording of the injunction notwithstanding the seller’s enforcement/dispute dichotomy argument; foreign law expert evidence addressing whether the foreign court could treat a non-final award as a sufficient enforcement title; and an inference that neither foreign court had been made aware of the English injunction, going to the seriousness of the breach. The relief sought, consistent with the available range of sanctions, included a finding of contempt against each respondent, a fine against the corporate respondent, fines and/or committal to prison against the individual respondents, indemnity costs, and permission to serve and enforce out of the jurisdiction.
Practical Lessons
This case study illustrates several of the practical and strategic themes addressed in this note:
- Precision in drafting the injunction’s temporal scope (here, “conclusion of the arbitration”) can determine the outcome of a subsequent contempt application; ambiguity invites satellite argument over construction rather than compliance.
- Contemporaneous statements made when the order was sought or agreed, such as a skeleton argument, may later become critical evidence of what both parties understood the order to mean.
- Enforcement of an arbitral award abroad is not immune from an anti-suit injunction where the underlying award is not yet final; practitioners should anticipate and foreclose merger or dispute/enforcement dichotomy arguments when drafting the injunction.
- Identifying individual contemnors behind a corporate respondent can be evidentially demanding where the corporate respondent’s solicitors decline to assist, requiring the applicant to build its case through independent witness evidence.
- Cross-border service issues are the norm rather than the exception in this context; applicants should build the evidential case for alternative service and dispensation with personal service into the application from the outset.
- Seeking relief from the tribunal or appeal board in parallel with, or prior to, a court application may be a useful first step, but many arbitral bodies will consider they lack jurisdiction to restrain a party’s conduct in foreign courts, making the supervising court’s contempt jurisdiction the ultimate backstop.
Conclusion
The contempt jurisdiction is an indispensable tool in the armoury of the practitioner enforcing an anti-suit injunction made in support of arbitration. Its quasi-criminal character demands rigorous preparation and strict compliance with procedural requirements. Properly deployed, it provides the coercive force that arbitral tribunals themselves lack and can be decisive in compelling compliance with an anti-suit injunction where a party persists in pursuing foreign proceedings brought in breach of an arbitration agreement.
Given the increasing use of anti-suit injunctions in support of international arbitration, practitioners must be equipped to address both the strategic and procedural complexities of contempt proceedings. Fortior regularly advises clients on arbitration-related court proceedings, including applications for anti-suit injunctions and contempt proceedings arising from their breach, combining arbitration expertise with extensive experience in complex cross-border disputes.
