Court: Privy Council (from the Court of Appeal of the Cayman Islands)
Subject: Did the Cayman Islands Court of Appeal err in holding that: (1) it was not bound to apply the rule in Henry v Geoprosco [1976] 1 QB 726; and (2) the Respondent has not submitted to the jurisdiction of the Pakistan courts?
Judges: Lord Sales, Lord Hamblen, Lord Leggatt, Lord Burrows, Dame Janice Pereira
Summary
The Privy Council upheld an anti-suit injunction restraining the Appellants from continuing proceedings in Pakistan. The central issue in the appeal was when will a party be held to have submitted to the jurisdiction of a foreign court.
The Board held that, as a matter of Cayman law, a party does not submit to a foreign court’s jurisdiction by taking steps that do no more than challenge that court’s jurisdiction. The Board declined to follow the English Court of Appeal decision in Henry v Geoprosco, which has since been reversed by statute, as representing Cayman law, rather aligning Cayman with the modern approach in Rubin v Eurofinance.
Further details
The dispute concerns shareholders in KES Power Ltd, a Cayman company which in turn controls K Electric Limited (KEL), a utility company in Pakistan of national importance. The shareholders’ agreement (SHA) governed by English law contained an exclusive jurisdiction clause in favour of the courts of England and Wales or the Grand Court in the Cayman Islands. After disputes about director appointments to KEL’s board, the Appellants obtained an ex parte interim injunction in Pakistan.
The Respondent applied in Pakistan to: (i) stay the proceedings in favour of arbitration; and (ii) recall or modify the injunction to allow nominations to the board of KEL. The Respondent also applied for an anti-suit injunction in the Cayman Islands to restrain the Appellants continuing proceedings in Pakistan. The Grand Court granted, and the Court of Appeal affirmed, the anti suit injunction.
On appeal to the Privy Council, the Appellants argued that the Respondent had submitted to Pakistan’s jurisdiction relying on Geoprosco. The Board held that Cayman law governs the issue of whether there has been a submission to the foreign jurisdiction. The Board adopted the approach in Rubin; submission to a jurisdiction will usually require a step that is not consistent with, or relevant to, a challenge to the foreign court's jurisdiction or obtaining a stay. It accepted the findings of the judge that no steps were taken in the Pakistan proceedings which went beyond a challenge to jurisdiction. The application to recall or modify the injunction was to be seen as seeking relief that would flow as a consequence of a successful challenge to the jurisdiction, rather than as a claim for substantive relief. As both courts held below, there was no submission to the jurisdiction of the Pakistan court.
