Emmott v Michael Wilson & Partners [2016] EWHC 3010 (Comm)

Case No CL-2016-000116[2016] EWHC 3010 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 24/11/2016
Before
MRS JUSTICE O'FARRELL
Between
JOHN FORSTER EMMOTTClaimantMICHAEL WILSON & PARTNERSDefendant
Mr Philip Shepherd QC (instructed by Kerman & Co) for ClaimantMr Charles Samek QC & Mr Dan McCourt Fritz (instructed on a direct access basis) for DefendantHearing Hearing dates: 15th, 16th, 17th November 2016
JudgmentMrs Justice O’Farrell:Introduction
[1]In these proceedings the claimant seeks an anti-suit injunction against the defendant to restrain it from taking any further steps in ongoing proceedings in New South Wales and from commencing or pursuing any other substantive claims against the claimant on the ground that such proceedings are in breach of arbitration agreement(s) to which the claimant is a party.[2]On 2 March 2016 Mr Justice Burton granted interim anti-suit relief in respect of the New South Wales proceedings on a ‘without notice’ application, at which the defendant appeared and was represented, having been given informal notice of the application. This is the return date for the application. Background The Agreements

Background

[3]Mr Michael Wilson is an English qualified corporate transaction lawyer, who controls the defendant company, Michael Wilson & Partners Ltd (“MWP”), incorporated in the British Virgin Islands (“BVI”) with an established legal practice in Kazakhstan. The claimant, Mr Emmott, is an Australian and English qualified solicitor.[4]The underlying dispute between the parties arises out of an agreement dated 7 December 2001 made between Mr Emmott and MWP (“the MWP Agreement”). Pursuant to the MWP Agreement the parties agreed to operate as a “quasi partnership” and share contacts and information, Mr Emmott became a director of MWP, and the shares in MWP were to be divided between Mr Emmott (33%) and Mr Wilson (through a vehicle used by Mr Wilson, WFA-Windsor Fine Arts Establishment - 67%).[5]On 20 December 2005 Mr Emmott entered into an agreement with two other MWP employees, Robert Nicholls and David Slater (Australian lawyers), and Mr Arman Shaikenov, a Kazak lawyer (“the Co-operation Agreement”). The Co-operation Agreement provided for the establishment of a consultancy owned and operated by Temujin International Ltd (“TIL”), acting as trustee under a trading trust, and an associated service company, Temujin Services Ltd (“TSL”), both of which were incorporated in the BVI.[6]In December 2005 Mr Slater left MWP to work at Temujin and Mr Nicholls joined him in March 2006.[7]In July 2006, Mr Wilson and Mr Emmott parted company on acrimonious terms. Mr Emmott and MWP each purported to accept repudiatory breach on the part of the other in respect of the MWP Agreement and Mr Emmott left to work at Temujin.

The Arbitration

[8]The MWP Agreement contains an arbitration clause providing for arbitration in London under the law of England and Wales. On 14 August 2006 MWP gave notice of arbitration to Mr Emmott, seeking relief for breach of contractual and fiduciary obligations, including an account of profits and equitable compensation. Mr Emmott counterclaimed for sums due under the MWP Agreement.[9]By early 2007 the tribunal was constituted, consisting of Mr Christopher Berry (Chairman), Lord Millett and Ms Valerie Davies. An award on liability was issued on 19 February 2010 (subject to clarification on 6 April 2010): i) Mr Emmott was found liable to account to MWP for fees received from Richards Butler. ii) Mr Emmott was found liable to account to MWP for fees, commission and other sums as a result of breaches of his contractual and fiduciary obligations in respect of the Maersk and Kangamuit Seafoods projects. iii) Mr Emmott was found not liable to account to MWP for any fees, commission and other benefits derived from the Chilisai, Urals Gold, Roxi, Project X, Eragon and ADA, Benkala Copper and Ablai projects. iv) MWP was found liable to Mr Emmott for the value of shares in MWP under the MWP Agreement.[10]An award on quantum was issued on 5 September 2014 (subject to clarification on 30 October 2014), in which the tribunal awarded sums to both parties, giving rise to net sums due to Mr Emmott of £3,209,613 and $841,213 plus interest.[11]There were a number of unsuccessful challenges by MWP to the liability and quantum awards. In June 2015 Burton J ordered that the quantum award should be enforced as a judgment.[12]In December 2014 winding up proceedings were commenced by Mr Emmott against MWP in the BVI in respect of the unpaid quantum award. A further hearing on the petition has been fixed for 28 November 2016.

The First NSW Proceedings

[13]In October 2006 MWP commenced proceedings against Mr Slater and Mr Nicholls in New South Wales (“the First NSW Proceedings”), seeking an account of profits and damages for breach of their contractual and fiduciary obligations to MWP, and for conspiring with Mr Emmott to divert clients and business opportunities from MWP to TIL in breach his contractual and fiduciary duties to MWP. Subsequently TIL, TSL and others were added as defendants.[14]The pleaded allegations against the defendants largely mirrored the allegations against Mr Emmott in the arbitration, although the personal claims against Mr Emmott differed from the personal claims against the defendants. The clients and business opportunities said to be diverted from MWP to the Temujin entities were the same in the arbitration and the First NSW Proceedings.[15]In 2009 Judgment was given against the defendants by Einstein J in the Supreme Court of New South Wales. Following appeals to the Court of Appeal in New South Wales and the High Court of Australia, issues including causation and quantum were remitted to the Court of Appeal. On 28 November 2012 the Court of Appeal adjusted the quantum of the judgment against the defendants to US$ 676,335 and €378,160 plus interest: Chilisai (lost fees) US$ 284,218 Chilisai (Success fee) US$ 140,000 Urals Gold / Maminskoye US$ 98, 363 Roxi, AiM Admission € 351,205 Project X € 26,955 Eragon and ADA, Roxi, AiM re-admission US$ 15,000 Benkala Copper US$ 53,280 Project Ablai US$ 28,764 Maersk / KKMOC / Lancaster Group US$ 16,960 Kangamuit Seafoods / Grolansk Invest US$ 39,750

The Assignments

[16]On 16 October 2015 the liquidator of TIL assigned to MWP any claim or cause of action arising by joint and several liability under the Civil liability Contribution Act 1978 against Mr Emmott in connection with the Temujin business. The assignment was subject to the sanction of the BVI courts and provided for termination if sanction had not been obtained within 6 months. Sanction has not been obtained but there is a fresh deed of assignment dated 30 August 2016, assigning to MWP any claim to seek equitable contribution from Mr Emmott in respect of TIL’s liabilities to pay equitable compensation to MWP arising out of the First NSW Proceedings.[17]A similar assignment has been made by the liquidator of TSL in favour of MWP.[18]On 19 October 2015 the trustees in bankruptcy of Mr Nicholls assigned to MWP all choses in action, claims, rights and liabilities connected with or incidental to the Temujin business and the First NSW Proceedings.[19]On 11 March 2016 a similar assignment was made by the trustees in bankruptcy of Mr Slater in favour of MWP.[20]Each of the deeds of assignment is stated to be subject to the laws of New South Wales.[21]The validity of the assignments is challenged by Mr Emmott, as stated in oral submissions by Mr Shepherd QC.[22]On their face, the assignments would appear to transfer to MWP the rights that it now seeks to assert against Mr Emmott. There may be issues as to authenticity of the assignments, whether the assignments have been, or will be, sanctioned, the scope of the rights assigned, and whether any issues of merger, maintenance or legality arise. However, those are matters that would be for the courts in New South Wales to determine, applying their domestic law and conflicts rules. They would be relevant to any substantive defence in the Second NSW Proceedings but do not fall to be determined on this application for anti-suit relief.

The Second NSW Proceedings

[23]On 2 February 2016 MWP commenced legal proceedings against Mr Emmott in the Supreme Court of New South Wales, seeking:(a) an order for contribution in respect of the liability of Mr Nicholls, Mr Slater, TIL and TSL under the First NSW Proceedings; and(b) an account of the fees, commissions, shares and other benefits of the Temujin business.

The Issues

[24]MWP’s position is that, whilst at MWP, Mr Emmott diverted clients, business and opportunities from MWP and failed to disclose or account for the benefits derived from his breaches of contractual and fiduciary duty. Having obtained assignments from the Temujin parties, MWP is entitled to pursue their claims against Mr Emmott. Mr Emmott’s position is that those matters were (or could have been) determined on a final basis in arbitration in London and that the current proceedings are an invalid attempt to avoid enforcement of the arbitration award.[25]The key issues for the court to determine are: i) whether any or all of the claims in the Second NSW proceedings are in breach of the arbitration agreement(s) in the MWP Agreement and/or the Co-operation Agreement; ii) if so, whether it is in the interests of justice for the court to exercise its discretion in continuing the anti-suit injunction; iii) whether the anti-suit injunction should be discharged and no further relief granted on the grounds of Mr Emmott’s failure to provide full and frank disclosure and/or misleading statements to the court on the interim application; iv) whether the court should grant permission for Mr Emmott to serve MWP out of the jurisdiction by an alternative method, namely, email.[26]Mr Emmott also made an application for Mr Wilson and MWP to file a further disclosure affidavit in respect of a freezing order made on 5 December 2014.[27]I adjourned the application in respect of the freezing order on the grounds that no formal application had been issued and MWP did not have adequate notice of the application. A penal notice is attached to the freezing order and it would not be fair to consider amending such an order without giving MWP a proper opportunity to respond to the application, including submissions and any evidence on which it wished to rely. Threshold Test

Threshold

[28]Section 37 of the Senior Courts Act 1981 provides:
“The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so.”
[29]The court’s power under section 37 may be exercised(a) where one party can show that the other party has invaded, or threatens to invade, a legal or equitable right of the former for the enforcement of which the latter is amenable to the jurisdiction of the court, and(b) where one party to any action has behaved, or threatens to behave, in a manner which is unconscionable: Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant LLP [2013] UKSC 35 per Lord Mance Para.20.[30]An applicant for an anti-suit injunction in the circumstances of this case must show a high degree of probability that there is an arbitration agreement that governs the dispute in question: Ecobank Transnational Inc v Tanoh [2015] EWCA Civ 1309 per Clarke LJ Para.89.[31]Clause 5.2 of the MWP Agreement provides:
“This Agreement shall be governed by and interpreted in accordance with the laws of England and Wales and all and any disputes shall be referred to and subject to arbitration in London ...”
[32]Mr Emmott’s case is that the causes of action sued on in the Second NSW Proceedings are all encompassed by the widely expressed arbitration agreement that provides for all disputes to be referred to arbitration in London.[33]MWP’s case is that the claims sued on in the Second NSW Proceedings are the assigned claims from Messrs Slater and Nicholls, TIL and TSL. Its right to make the claims derives from the assignments. The assignors are not parties to the MWP Agreement and the assigned claims do not fall within the scope of clause 5.2.[34]The approach to the construction of arbitration agreements was considered by Lord Hoffmann in the Fiona Trust case: Premium Nafta Products Limited v Fili Shipping Company Limited [2007] UKHL 40:
“[5] … Arbitration is consensual. It depends upon the intention of the parties as expressed in their agreement. Only the agreement can tell you what kind of disputes they intended to submit to arbitration. But the meaning which parties intended to express by the words which they used will be affected by the commercial background and the reader's understanding of the purpose for which the agreement was made. Businessmen in particular are assumed to have entered into agreements to achieve some rational commercial purpose and an understanding of this purpose will influence the way in which one interprets their language. [6] In approaching the question of construction, it is therefore necessary to inquire into the purpose of the arbitration clause. As to this, I think there can be no doubt. The parties have entered into a relationship, an agreement or what is alleged to be an agreement or what appears on its face to be an agreement, which may give rise to disputes. They want those disputes decided by a tribunal which they have chosen, commonly on the grounds of such matters as its neutrality, expertise and privacy, the availability of legal services at the seat of the arbitration and the unobtrusive efficiency of its supervisory law. Particularly in the case of international contracts, they want a quick and efficient adjudication and do not want to take the risks of delay and, in too many cases, partiality, in proceedings before a national jurisdiction. [7] If one accepts that this is the purpose of an arbitration clause, its construction must be influenced by whether the parties, as rational businessmen, were likely to have intended that only some of the questions arising out of their relationship were to be submitted to arbitration and others were to be decided by national courts. Could they have intended that the question of whether the contract was repudiated should be decided by arbitration but the question of whether it was induced by misrepresentation should be decided by a court? If, as appears to be generally accepted, there is no rational basis upon which businessmen would be likely to wish to have questions of the validity or enforceability of the contract decided by one tribunal and questions about its performance decided by another, one would need to find very clear language before deciding that they must have had such an intention. [8] A proper approach to construction therefore requires the court to give effect, so far as the language used by the parties will permit, to the commercial purpose of the arbitration clause. But the same policy of giving effect to the commercial purpose also drives the approach of the courts (and the legislature) to the second question raised in this appeal, namely, whether there is any conceptual reason why parties who have agreed to submit the question of the validity of the contract to arbitration should not be allowed to do so… [13] In my opinion the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator’s jurisdiction.”

Claims made in the Second NSW Proceedings

[35]The Second NSW Proceedings are brought by MWP against Mr Emmott.[36]The nature of the relief claimed in the Second NSW Proceedings is: i) contribution based on Mr Emmott’s joint and several liability with Messrs Nicholls and Slater, TIL and TSL for the sums due to MWP as a result of the First NSW Proceedings; and ii) an account of all benefits obtained by Mr Emmott from the Temujin partnership or other arrangement; to which relief MWP is entitled by virtue of the assignments (Section A of the Commercial List Statement).[37]The grounds on which MWP established liability in the First NSW Proceedings were that the assignors assisted and conspired with Mr Emmott to divert projects, business opportunities and clients from MWP to TIL, TSL and other entities used for holding benefits from the Temujin business (“the Temujin Entities”) (paras.26 & 27 of the Commercial List Statement in the Second NSW Proceedings).[38]The grounds on which Mr Emmott is said to be jointly and severally liable for the same damage are: i) Mr Emmott owed contractual and fiduciary duties to MWP arising under the MWP Agreement (paras.28-30). ii) Messrs Slater, Nicholls and Emmott formed a partnership or other arrangement that involved diverting projects, business opportunities and clients from MWP to the Temujin Entities and concealing the benefits of those activities (para.31). iii) By reason of that conduct, Messrs Slater, Nicholls and Emmott were in breach of their contractual and fiduciary duties to MWP (paras.34-39).[39]The Temujin Projects identified in the Second NSW Proceedings as the source of the shares and other benefits from the diverted business are: Chilisai, Urals Gold, Benkala Copper, Ablai, Pinegrove/Roxi Petroleum, Project X, Eragon and ADA, Kangamuit and Maersk (para.31(e)). These are the same projects in respect of which equitable compensation was awarded in the First NSW Proceedings (para.43). They are also the same projects in respect of which claims were awarded or dismissed in the arbitration (paras.4.101-4.189 in the liability award).[40]The damage for which Mr Emmott is said to be jointly and severally liable with Messrs. Slater and Nicholls, TIL and TSL is the judgment sum in the First NSW Proceedings, together with interest and costs (para.65).[41]The claim for an account is in respect of the following projects: i) The Pinegrove/Roxi Petroleum Projects (paras.49-50); ii) The Urals Gold and Benkala Copper Projects (paras.51-59); iii) The Uzbek Phosphour Project, stated to be a follow-on project from the Chilisai Phosphour Project (paras.60-62 & 31(e)).[42]The shares and other benefits in respect of which disclosure and an account are claimed are said to derive from the business diverted from MWP through the Temujin partnership or other arrangement as pleaded in paragraph 31 of the Commercial List Statement (paras.49, 53, 56, 60, 61).[43]Shares and benefits obtained by the Temujin Entities from those projects were the basis of sums awarded against the assignors in the First NSW Proceedings but were rejected as the basis for any relief against Mr Emmott in the arbitration.

Whether claims within arbitration agreement(s)

[44]The claims for contribution and an account in the Second NSW Proceedings fall within the ambit of the arbitration agreement in the MWP Agreement: i) The MWP Agreement governed the “quasi partnership” relationship between MWP and Mr Emmott. It included provision for clients, contacts and business to be shared, as well as provision for sharing profits in the business. ii) The arbitration agreement at clause 5.2 is in wide terms and it is likely that the parties intended that any dispute arising out of or connected with their “partnership arrangement” at MWP, particularly any disputes concerning the fruits of the business, should be decided in arbitration. iii) There is nothing in the language of the MWP Agreement that indicates that the parties contemplated any other form of dispute resolution for any particular disputes that might arise from their arrangement. iv) The claims for contribution and an account are claims made by MWP against Mr Emmott, both parties to the MWP Agreement. v) MWP’s argument is that the claims are brought by MWP as assignee and the assignors are not parties to the MWP Agreement. As a result, they are not bound by the arbitration agreement. However, the effect of the assignments (if valid) is that they transfer the rights of the assignors to MWP (subject to equities). As a result, MWP is entitled to bring the claims in its own name and does not have to join the assignors. Therefore, the claims for contribution and an account against Mr Emmott are made by MWP to enforce its own rights. vi) MWP’s further argument is that the assigned claims do not arise under the MWP Agreement and therefore do not fall within the scope of clause 5.2. It is correct that MWP’s right to make the claims is a right that is derived from the assignments concerning the partnership or other arrangement between Mr Emmott and the Temujin Entities. However, the arbitration clause is sufficiently wide to include disputes that arise out of or in connection with the MWP Agreement. vii) The claims for contribution are based on allegations of breaches of Mr Emmott’s contractual and fiduciary duties to MWP arising under the MWP Agreement. Disputes as to those breaches and their consequences fall directly within the terms of the arbitration clause. Indeed, the same breaches were the subject of the arbitration proceedings between MWP and Mr Emmott. viii) The claim for an account is in respect of the business that was diverted from MWP through the Temujin partnership or other arrangement. The same projects were relied on as clients and business that were diverted from MWP in the arbitration. Those disputes are directly connected with the MWP Agreement and fall within the scope of clause 5.2.[45]Therefore, I am satisfied to a high degree of probability that there is an arbitration agreement that governs the disputes in question.[46]If I am wrong about the ambit of the arbitration clause in the MWP Agreement and the claims should be considered as the claims of the assignors, the claims in respect of Messrs Slater and Nicholls (but not TIL or TSL) would fall within the arbitration clause in the Co-operation Agreement. It is not inconsistent for Mr Shepherd QC to argue that the claims fall within one of two separate arbitration agreements. Both agreements are referred to and relied on in the Second NSW Proceedings. It is a matter of construction of the agreements against the proper characterisation of the claims that determines whether the claims fall within either or both agreements. i) Clause 7 of the Co-operation Agreement provides: “This Agreement shall be governed by, and construed in all respects, in accordance with the substantive laws of England and Wales in force from time to time, save only for any conflicts of laws, rules or principles. Any and all differences, discrepancies, divergences or dispute arising out of or in connection with this Agreement, including any question regarding its validity, breach, or termination (a “Dispute”) shall be resolved and finally settled in the manner provided for in this clause. In the event of any Dispute … such Dispute shall be finally resolved by arbitration to be carried out under the Rules of Arbitration of the London Court of International Arbitration ... ii) The Second NSW Proceedings plead that the Temujin partnership or other arrangement was established or evidenced by the Co-operation Agreement (paras.31, 48(q) & (r)). MWP now seeks to retreat from that position and has amended its pleading to remove reliance on the Co-operation Agreement. The precise form and nature of the Temujin business arrangement and the rights and obligations of the parties under such arrangement would be a matter for the New South Wales court. However, in the arbitration the tribunal made a finding that the Co-operation Agreement, together with a draft facilities agreement and a trust deed to establish an offshore trust to receive any profits earned by Temujin, provided the basic constitution for the new firm of lawyers and business advisors and provided for the establishment of Temujin. No other document has been produced as evidence of the partnership or other arrangement entered into by Messrs Slater, Nicholls and Emmott. iii) The claims for contribution and an account are based on the wrongful diversion of clients, business and opportunities to the Temujin Entities. Any liability on the part of Mr Emmott to Messrs. Slater and/or Nicholls arises out of their respective rights and obligations under the partnership or other arrangement. The arbitration clause in the Co-operation Agreement is sufficiently wide to encompass such claims for contribution and an account as between Messrs Slater, Nicholls and Emmott. iv) TIL and TSL are not parties to the Co-operation Agreement. Reference to those companies in the agreement is not sufficient to make them subject to the arbitration provision. v) TIL and TSL were wholly controlled by the parties to the Co-operation Agreement and MWP accepts that the assignments in its favour are subject to equities. Common control of the companies might be grounds for the court to consider granting anti-suit relief against a non-party to the arbitration agreement. However, given my finding that the claims in the Second NSW Proceedings are subject to arbitration provision in the MWP Agreement, that is not a matter that the court needs to decide. Exercise of the court’s discretion Test

Exercise of the court’s discretion

[47]Where foreign proceedings have been brought in breach of an arbitration agreement, the court will ordinarily grant an anti-suit injunction to restrain them, unless there are strong reasons not to do so: Donohue v Armco Inc [2001] UKHL 64 per Lord Bingham Paras.24-25.[48]However, each case turns on its own facts and the court must exercise its discretion taking into account all material factors in the case, as stated in Deutsche Bank AG v Highland Crusader Partners LP [2009] EWCA Civ 725 per Toulson LJ Para.50:
“1. Under English law the court may restrain a defendant over whom it has personal jurisdiction from instituting or continuing proceedings in a foreign court when it is necessary in the interests of justice to do. 2. It is too narrow to say that such an injunction may be granted only on grounds of vexation or oppression, but, where a matter is justiciable in an English and a foreign court, the party seeking an anti-suit injunction must generally show that proceeding before the foreign court is or would be vexatious or oppressive. 3. The courts have refrained from attempting a comprehensive definition of vexation or oppression, but in order to establish that proceeding in a foreign court is or would be vexatious or oppressive on grounds of forum non conveniens, it is generally necessary to show that (a) England is clearly the more appropriate forum (“the natural forum”), and (b) justice requires that the claimant in the foreign court should be restrained from proceeding there. 4. If the English court considers England to be the natural forum and can see no legitimate personal or juridical advantage in the claimant in the foreign proceedings being allowed to pursue them, it does not automatically follow that an anti-suit injunction should be granted. For that would be to overlook the important restraining influence of considerations of comity. 5. An anti-suit injunction always requires caution because by definition it involves interference with the process or potential process of a foreign court. An injunction to enforce an exclusive jurisdiction clause governed by English law is not regarded as a breach of comity, because it merely requires a party to honour his contract. In other cases, the principle of comity requires the court to recognise that, in deciding questions of weight to be attached to different factors, different judges operating under different legal systems with different legal polices may legitimately arrive at different answers, without occasioning a breach of customary international law or manifest injustice, and that in such circumstances it is not for an English court to arrogate to itself the decision how a foreign court should determine the matter. The stronger the connection of the foreign court with the parties and the subject matter of the dispute, the stronger the argument against intervention. 6. The prosecution of parallel proceedings in different jurisdictions is undesirable but not necessarily vexatious or oppressive. 7. A non-exclusive jurisdiction agreement precludes either party from later arguing that the forum identified is not an appropriate forum on grounds foreseeable at the time of the agreement, for the parties must be taken to have been aware of such matters at the time of the agreement. For that reason an application to stay on forum non conveniens grounds an action brought in England pursuant to an English non-exclusive jurisdiction clause will ordinarily fail unless the factors relied upon were unforeseeable at the time of the agreement. It does not follow that an alternative forum is necessarily inappropriate or inferior... 8. The decision whether or not to grant an anti-suit injunction involves an exercise of discretion and the principles governing it contain an element of flexibility.”
[49]Mr Shepherd QC, for Mr Emmott, submitted that the continuation of the Second NSW Proceedings would be vexatious and oppressive, and an abuse of process, on the following grounds: i) MWP is barred from bringing the claims against Mr Emmott by reason of cause of action estoppel or issue estoppel; ii) the Second NSW Proceedings are a collateral attack on the findings made in the London arbitration and therefore an abuse of process; iii) MWP obtained jurisdiction in the Second NSW Proceedings by falsely representing that Mr Emmott was domiciled and resident in Australia; iv) the Second NSW Proceedings are in breach of the freezing order; v) it would be unfair and contrary to the policy of finality of proceedings to permit Mr Emmott to be subject to further proceedings.[50]Mr Samek QC, for MWP, disputes that continuation of the Second NSW Proceedings would be vexatious and oppressive, or an abuse of process, on the following grounds: i) the claims against Mr Emmott are not barred by reason of cause of action estoppel or issue estoppel; ii) the Second NSW Proceedings are not a collateral attack on the findings made in the London arbitration and therefore not an abuse of process; in any event, it would be a matter for the New South Wales court to determine whether any of the claims were hopeless or otherwise an abuse of its process; iii) Mr Emmott’s solicitors accepted service in the Second NSW Proceedings; iv) the Second NSW Proceedings are not in breach of the freezing order; v) the interests of justice lie in permitting the Second NSW Proceedings to continue, so as to avoid parallel proceedings and inconsistent findings.

Cause of action estoppel

[51]Cause of action estoppel has been summarised by Lord Sumption in the case of Virgin Atlantic Airways Limited v Zodiac Seats UK Limited [2013] UKSC 46 at para.17:
“…once a cause of action has been held to exist or not to exist, that outcome may not be challenged by either party in subsequent proceedings…”
And at para.20 by reference to Lord Keith of Kinkel in Arnold v National Westminster Bank plc [1991] 2 AC 93 p.104D-E:
“…Cause of action estoppel arises where the cause of action in the later proceedings is identical to that in the earlier proceedings, the latter having been between the same parties or their privies and having involved the same subject matter…”
[52]I accept Mr Samek’s submission that the causes of action in the Second NSW Proceedings are different from the causes of action in the arbitration. The claims for contribution and account in the Second NSW Proceedings are brought by MWP against Mr Emmott in respect of the same wrongful acts as those alleged in the arbitration but by reason of different rights, namely, rights arising between joint and several wrongdoers and as a result of the Temujin partnership or other arrangement.[53]Therefore, cause of action estoppel does not arise.

Issue estoppel

[54]Issue estoppel has been summarised by Lord Sumption in the Virgin Atlantic case at para.17:
“…even where the cause of action is not the same in the later action as it was in the earlier one, some issue which is necessarily common to both was decided on the earlier occasion and is binding on the parties …”
And at para.20 by reference to Lord Keith of Kinkel in Arnold p.105E:
“…Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open that issue.”
[55]I accept Mr Shepherd’s submission that a necessary ingredient common to the contribution claim in the proceedings and the arbitration is the breach of contractual and fiduciary duties by Mr Emmott and that a necessary ingredient common to the claim for an account is the diversion of clients and business from MWP to Temujin and the concealment of assets. I reject Mr Samek’s submission that the parties are different. The claims are made by MWP against Mr Emmott. The fact that the claims are assigned claims does not change the fact that MWP is entitled to assert them, and does assert them, in its own name.[56]I am satisfied that those issues were decided on a final basis in the arbitration and therefore an issue estoppel arises in respect of them.

Abuse of process

[57]The principle in Henderson v Henderson has been summarised by Lord Sumption in the Virgin Atlantic case at para.24:
“…the principle in Henderson v Henderson has always been thought to be directed against the abuse of process involved in seeking to raise in subsequent litigation points which could and should have been raised before. …”
And by reference to Lord Bingham in Johnson v Gore-Wood & Co [2002] 2 AC 1 p.31:
“Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel has much in common with them. The underlying public interest is the same: that there should finality in litigation and that a party should not be twice vexed in the same matter … I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the late proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party…”
[58]Mr Samek rightly reminds the court that this is not an application to strike out proceedings and that it is a matter for the court in New South Wales to assess whether any of the claims are “hopeless” or an abuse of its process. However, it does not follow that this court should ignore the issue of abuse of process in considering whether to grant anti-suit relief. It may be an abuse of the arbitration process to mount a collateral attack on a final and binding award. The above factors identified by Lord Bingham should be taken into account as part of the court’s assessment as to whether it would be appropriate to exercise its procedural powers and grant discretionary relief.[59]I accept Mr Shepherd’s submissions that the Second NSW Proceedings amount to an abuse of process. There has been a final and binding arbitration award between the parties in respect of the key issues in dispute. Challenges and appeals have been exhausted. The policy of finality in proceedings requires that Mr Emmott should not have to face further litigation in respect of the same matters. The Second NSW Proceedings are a collateral attack on the arbitration award. The use of assigned rights to bring claims against Mr Emmott is an attempt by MWP to obtain further compensation in respect of the same wrongdoing and damage, and to obtain disclosure in respect of the same benefits and assets, that were the subject of the arbitration, so as to defeat enforcement of the award.

Misrepresentation of Mr Emmott’s address

[60]MWP misrepresented that Mr Emmott was domiciled and resided in New South Wales when issuing the Second NSW Proceedings. MWP knows that Mr Emmott has not lived in New South Wales for many years and used the address of his mother. The fact that Mr Emmott’s solicitors accepted service does not detract from the misrepresentation. That would be a matter for the court in New South Wales to consider on any challenge to jurisdiction but MWP’s dishonesty on this issue is another factor for this court to consider in the exercise of its discretion.

Breach of freezing order

[61]I do not consider that the commencement or continuation of proceedings would be in breach of the freezing order but any further argument in that regard would be a matter to be raised in the application to amend the order that Mr Shepherd has indicated will be issued.

Interests of Justice

[62]The risk of parallel proceedings and inconsistent findings arose because MWP decided, as it was entitled, to pursue others, namely Messrs. Slater, Nicholls and the other Temujin parties, in New South Wales, in addition to the arbitration proceedings that it pursued against Mr Emmott in London. Given that there have been proceedings in various jurisdictions around the world over a period of more than 10 years, this is no longer a material factor. The determining factor is that there have been final and binding proceedings under the dispute resolution procedure agreed by the parties. They should be held to their contractual bargain. It would be unfair and contrary to the policy of finality of proceedings to permit Mr Emmott to be vexed by further litigation.

Interim Relief

[63]Mr Samek submits that the interim anti-suit injunction should be set aside and the application for continuation dismissed on the ground that Mr Emmott misled the court by wrongly stating that the arbitration tribunal found that Mr Emmott was not a partner in the Temujin partnership whereas in fact no such finding was made.[64]If Mr Emmott misled the court in obtaining the interim injunction, that would constitute strong reasons for the court to consider refusing to continue the injunction: Royal Bank of Scotland v Highland Financial Partners [2012] EWHC 1278 per Burton J Paras.173-182.[65]However, I reject the submission that Mr Emmott misled the court on the interim application by stating in his witness statement at paragraph 65 that the arbitral tribunal found that he was not a partner in Temujin. In Section 12 of the quantum award, the tribunal held that MWP had the burden of proving that Mr Emmott was a profit-sharing partner at Temujin but they were not satisfied that it had discharged the burden of proof and were unable to reach a conclusion on the evidence before them whether Mr Emmott was or ever became a partner at Temujin. Although it is arguable that the tribunal made no finding as opposed to determining that the claim failed for want of proof, it is clear that the tribunal were asked, but refused, to make a finding that Mr Emmott was a partner in Temujin. That was accurately reflected in the skeleton for the interim application at paragraph 15.

Service out of the jurisdiction

[66]Mr Emmott applies for permission to serve the arbitration claim form and any documents relating to it on MWP out of the jurisdiction pursuant to CPR 62.5 and for service by an alternative method pursuant to CPR 6.15, namely by email to Mr Wilson.[67]The witness statement in support of the application is based on a misconceived assumption that the injunction is made under section 44 of the Arbitration Act 1996. However, permission may be granted to serve an arbitration claim out of the jurisdiction even where there are no ongoing arbitration proceedings if the remedy or question to be decided by the court affects an arbitration agreement or arbitration award: Ust-Kamenogorsk [2013] UKSC 35 per Lord Mance paras.49-51. The claim raises an issue that is clearly arguable and therefore it would be appropriate to grant permission to serve out of the jurisdiction.[68]Given that the parties have been involved in numerous court applications in respect of this dispute, service by email has been acceptable, and there is no issue regarding notice of the proceedings, it would be appropriate to order service by alternative means, namely, by email to Mr Wilson’s email address.

Conclusion

[69]For the above reasons, the court will continue the anti-suit injunction ordered by Burton J. I understand that there are fresh proceedings in New South Wales and I will hear further argument from the parties as to the form and extent of the order.