Commerce Meets Comity: The Anti-Suit Equation

New Zealand Redraws the Boundaries of Anti-Suit Relief

A significant judgment from New Zealand's Court of Appeal (Wikeley v Kea Investments Limited [2024] NZCA 609) this month has brought fresh clarity to the difficult question of when domestic courts should restrain parties from pursuing foreign litigation. The decision, which curtails the use of worldwide anti-suit injunctions, represents a notable shift towards judicial restraint in cross-border disputes.

Anti-suit injunctions are perhaps the most dramatic expression of domestic judicial power in the international sphere. While nominally directed at parties rather than courts, they effectively direct foreign jurisdictions to cease hearing cases or not to enforce their own judgments.

The Court of Appeal's judgment is notable in that it effectively dismantles what it terms the "pretence" that such injunctions merely regulate party behavior rather than interfere with foreign courts. This forthright acknowledgment marks a departure from the more euphemistic treatments of the issue in earlier cases (for example Société Nationale Industrielle Aérospatiale v Lee Kui Jak [1987] AC 871).

At the heart of the Court's reasoning lies a sophisticated approach to what Professor Andrew Dickinson has termed "the most unsatisfactory state" of anti-suit injunction law. The judgment suggests four key principles that may reshape how such relief is granted:

1. First, anti-suit injunctions should be measures of "last resort", available only after foreign remedies are exhausted. This marks a significant development in private international law theory, effectively importing principles of prudential exhaustion from public international law into the private sphere.
2. Second, the existence of fraud alone does not justify immediate intervention in foreign proceedings. The Court rejected the notion that domestic courts should act as guardians against fraud in foreign jurisdictions, considering this approach potentially patronising to other judicial systems.
3. Third, worldwide anti-enforcement orders represent an "exorbitant" exercise of jurisdiction that should be granted only in exceptional circumstances. While domestic courts might properly restrain enforcement within their own jurisdiction, attempting to regulate enforcement globally raises serious comity concerns.
4. Fourth, the traditional grounds for anti-suit relief - such as vexatious, unconscionable, or oppressive conduct - require reconsideration in an era of increasing judicial cooperation. The judgment suggests these concepts may have outlived their utility as organising principles, and that more precision should be possible in explaining the basis for anti-suit and anti-enforcement injunctions.

Several aspects of the judgment may prove controversial. The requirement to exhaust foreign remedies before seeking anti-suit relief arguably sets a higher bar than previous authorities and could leave parties exposed to irreparable harm while those appeals proceed. The Court's treatment of worldwide anti-enforcement orders as "exorbitant" jurisdiction sits uneasily with precedents like Donohue v. Armco Inc [2001] UKHL 64, where the English courts have been more receptive to such relief (although, in that case, it was ultimately declined).

Further, the Court's explicit rejection of the notion that anti-suit injunctions are directed only at parties rather than courts, while refreshingly honest, may complicate future arguments for such relief. This acknowledgment of their true nature could make it harder for courts to justify anti-suit injunctions, even in cases where they might be appropriate.

The judgment arrives at a crucial moment. As commercial disputes become increasingly transnational, courts face mounting pressure to protect domestic interests while respecting foreign sovereignty. This decision suggests that while domestic courts should not shy away from identifying improper conduct, they should exercise considerable restraint in attempting to regulate its consequences internationally.

While some may question whether the Court's emphasis on comity goes too far, its framework offers a coherent path forward for an area of law long criticised as unsatisfactory. The judgment stands as a quiet rebuke to judicial parochialism - even if, ironically, that means allowing some questionable foreign judgments to stand.

Disclaimer: This analysis represents an AI-generated exploration of the judgment, and does not constitute legal advice or the view of individual members of chambers.