Based on the events in the Laker case, and there may be more policy similarities than are first apparent (hint!), critically evaluate the Sunland outcome.

Conflict of Laws

Focus on organisation. Conflict of Laws is a subject that requires stepwise or linear applications of general principles to legal problems. Break the problem down into subparts and use topic headings.

This assignment focuses on what I believe to be one of the most controversial aspects of conflict of laws – injunctions in aid of jurisdiction; that is, anti-suit injunctions. In the international context, this is contentious and sometimes confrontational because it involves a court in one nation interfering with legal proceedings validly constituted in another nation by using the legal fiction of restraining parties as opposed to courts.

Responses that do not focus on conflict of laws issues will not be considered. As you will note, concepts of jurisdiction, forum non conveniens, choice of law and enforcement of judgments are all very relevant to anti-suit injunctions.

Feel free to discuss relevant policy issues. I know that this paper could easily require more than 2500 words to treat every point in depth. I am also aware that there are certain facts missing.

Anti-suit injunctions are unknown in the civil law world; thus limiting these injunctions to a relative handful of primarily English-speaking countries. Traditionally, it seems that the injunctions seem to be a transatlantic phenomenon with New York and London in the leading roles. However, the US Courts have always been more reluctant than their British counterparts to issue these injunctions and, consequently, most of the injunctions have been issued in London.

The US Courts have likely been more reluctant to issue anti-suit injunctions because being a 50-state federation, this type of equitable relief applied among the 50 states has the potential to ignite enormous domestic disharmony. Consequently, the American predisposition is to allow proceedings to proceed in parallel. This is not the British predisposition. But, then again, Britain is not a federation of many states and anti-suit injunctions are always aimed at truly foreign proceedings.

The future of these injunctions is important because Australian courts have become increasingly aggressive. To some observers, this is regrettable because the anti-suit injunction, while ostensibly aimed at individuals, is, in fact, an attack on the sovereignty of another nation.

About ten years ago, British anti-suit injunction proclivities endured a severe wing-clipping. The European Court of Justice effectively outlawed anti-suit injunctions directed at parties proceeding in another EU State. For an excellent background of this, please read Neil Dowers, ‘The Anti-Suit Injunction and the EU: Legal Tradition and Europeanisation in International Private Law’, 2 Cambridge Journal of International and Comparative Law 960-973 (2013). Basically, in disputes pending among member States, anti-suit injunctions are no longer allowed and are to be replaced with the doctrine of mutual trust – a codification of the recognition that local courts will do the right thing.

You should note that while the Civil Law does not recognise forum non conveniens as the basis for staying proceedings, it does recognise lis pendens – stays based on prior actions pending. Dowers stated:

The Court of Justice in Turner effectively banned the use of anti-suit injunctions in situations where the Brussels Convention allocates jurisdiction. Applying the doctrine of mutual trust, the court first-seised which has accepted jurisdiction must allow a court second-seised to determine its own jurisdiction under the Convention, which would mean staying proceedings or declining jurisdiction under the lis pendens rule. English courts would thus no longer be able to issue anti-suit injunctions against proceedings in another member state to protect litigants where the English court has jurisdiction under the Convention, which would include cases where the English court is designated in an exclusive choice of court agreement. Dowers, supra at 967.

The purpose of this project is not to acquire expertise in Convention law but, you need to understand the basic decision of the European Court and its obvious effect on English procedure.

In contrast, there is the traditional common law perspective where anti-suit injunctions seem to fly fast and furious with courts espousing the fiction that they are not interfering in the judicial proceedings of other sovereigns but are merely protecting their own jurisdiction by regulating the conduct of parties over whom they have in personam jurisdiction.

Perhaps the high and low points of anti-suit injunctions were attained in the litigation involving the Estate of Laker Airways. Founded by Sir Freddie Laker in the mid-1970s, Laker Airways challenged the high prices uniformly charged by full-service airlines on the key London-New York route. Traditionally, London-New York is the busiest and most profitable international air route in the world and was served by many carriers – all charging the exact same price. Sir Freddie changed all of that with a stand-by service where for less than 1/3 of the regular tariff, passengers would line up and board his DC-9s on a first come first served basis and enjoy a bare-bone but safe flight across the Atlantic.

The airline leaders of the day such as Pan Am, TWA, British Airways, British Caledonian, Lufthansa, KLM etc were not amused. Although not all of these carriers flew New York – London, they all flew New York to Western Europe. The prospect of passengers flying on Laker to London and then taking a short flight to Frankfurt or Paris posed serious financial issues for the airline industry. In response, the full-service airlines introduced full service flights at the same price as Laker’s bare-bones stand-by.

Laker quickly ran into severe financial trouble and suddenly found that his attempts to re-structure aircraft finance arrangements were being scuttled. He was suspicious that the major airlines who were also customers of McDonnell Douglas (Laker’s supplier) had intervened and made thinly disguised threats against McDonnell Douglas Finance.

Bottom line – Laker Airways went into receivership and was out of business. But, to his credit, Sir Freddie changed air travel forever; competition actually began in the marketplace.

Now, the litigation became somewhat of a battle of the courts. Laker Airways Ltd commenced a lawsuit in the United States District Court for the District of Columbia against all of the major airlines involved in transatlantic travel and McDonnell Douglas. The basic allegation was that these parties had entered into a civil conspiracy in violation of the American antitrust laws (Sherman Act) to reduce competition.

British Airways and British Caledonian promptly commenced litigation in London to obtain an anti-suit injunction directed against prosecution of the US District Court action. The anti-suit injunction was upheld by the Court of Appeal.

In the USDC, Laker sought an anti-anti-suit injunction against the remaining defendants to prevent them from obtaining anti-suit injunctions. This was granted by the USDC.
The temperature escalated further still when the US Department of Justice Antitrust Division initiated a criminal grand jury investigation paralleling Laker’s civil litigation.

The US anti-anti-suit injunction was upheld by the United States Court of Appeals for the DC Circuit.
In the UK, BA was not so lucky. The House of Lords blinked and dissolved the anti-suit injunction.
In the US, the Dept. of Justice criminal proceedings were discontinued.

The battle of the courts – tantamount to a game of chicken was over. The US litigation was allowed to proceed and ultimately settled.

It was all messy and contentious.
For a good overall view of the situation:

Aryeh Friedman, ‘Laker Airways: The Dilemma of Concurrent Jurisdiction and Conflicting National Policies’ (1985) 11 Brooklyn Journal of International Law 181.

Also read, the House of Lords and US Court of Appeals decisions:

British Airways Board v Laker Airways Ltd [1985] A.C. 58, [1984] 3 All E.R. 39, [1984] 3 W.L.R. 413
Laker Airways Ltd v Sabena, Belgian World Airlines, 731 F.2d 909 (D.C. Cir. 1984)

For some more recent treatment by an English Court of an application for an anti-suit injunction in a case involving the courts of the United States and Zambia:

General Star International Indemnity Ltd v Sterling Cooke Brown Reinsurance Brokers Ltd [2003] EWHC 3, [2003] I.L. Pr. 19

U & M Mining Zambia Ltd v. Konkola Copper Mines [2013] EWHC 260, [2013] 1 C.L.C. 456
Very recently, The Supreme Court of Victoria – Court of Appeal had occasion to re-visit anti-suit injunctions in a highly publicized case:

Sunland Waterfront (BVI) Ltd v. Prudentia Investments Pty Ltd [2013] VSCA 237 (please note that this supersedes the Supreme Court citation in your casebook)

Paragraphs 419 – 528 of the Sunland decision deal with the anti-suit inunction.

Your assignment uses Sunland as its point of reference.

Sunland involves Australia and Dubai. While these countries are obviously not subject to the Brussels Regulation, the policy behind the EU decisions is still relevant.

Your task is to write a critical evaluation of anti-suit injunctions in the context of Sunland. In performing this task, you should be certain to do all three of the following:

Explain the anti-suit injunction in Sunland to demonstrate that you understand the basic factual situation, without spending too much time on this. Do not dwell on the facts in this incredibly complex case or you will not have any space for critical analysis.

Based on the events in the Laker case, and there may be more policy similarities than are first apparent (hint!), critically evaluate the Sunland outcome.

Based on your understanding, what do you feel should be the approach of Australia to anti-suit injunctions? Keep in mind that Australia, like England, is rather surrounded by civil law jurisdictions. But, like England, shares a common law tradition with a large neighbor across the sea (not New Zealand). Consider whether the common law should emulate the EU approach.

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