Jurisdiction and discretion to grant relief

A series of English cases have decided that English courts have the power to grant an injunction to restrain a person from pursuing arbitration proceedings in another jurisdiction. The exercise of that power is plainly limited to exceptional cases, as otherwise the English court runs the risk of usurping the arbitration agreement and also, where there is a dispute as to the existence or scope of the arbitration clause, the jurisdiction of the arbitrators to resolve the matter for themselves. In Excalibur Ventures LLC v Texas Keystone Inc [2011] EWHC 1624 (Comm) Gloster J was faced with exceptional circumstances which in her view justified the grant of an anti-arbitration injunction. The particular circumstance was that the claimant had commenced both judicial and arbitration proceedings, and there was a dispute as to who was a party to the arbitration clause.

Excalibur: the facts

Excalibur, a Delaware company run by RW and EW, held itself out as offering advisory, investment procurement and public relations services in the energy sector. On 16 February 2006 Excalibur entered into a Collaboration Agreement with Texas Keystone Inc (TKI), a company incorporated in Texas. TKI’s business was the acquisition, exploration, development and production of natural gas and oil resources, and it was controlled by the Kozel family. The family also controlled three other companies (the Gulf defendants), GKP and GKPIL (companies incorporated in Bermuda) and GKPUK (incorporated in England), but they were not in the same group as a matter of law and they were not parties to the Collaboration Agreement. The agreement related to gas and oil exploration in Kurdistan, and the parties agreed that they would prepare bids for the acquisition of petroleum ‘blocks’ in that region. The respective interests of the parties were 30% for Excalibur and 70% for TKI. The agreement contained an arbitration clause providing that disputes were to be submitted to arbitration under ICC Arbitration Rules with the seat of the arbitration in New York.