Essex Court defeats Debevoise’s Goldsmith in Supreme Court

The Supreme Court this week confirmed that English courts do have jurisdiction to grant injunctive relief in support of an arbitration agreement, even when there is no arbitration is in existence. 

The ruling marks a loss for Debevoise & Plimpton partner Peter Goldsmith QC, who was brought in at the Supreme Court to lead the case for Ust-Kamenogorsk Hydropower Plant JSC (JSC) (10 April 2013).

Goldsmith was defeated by Essex Court Chambers’ Toby Landau QC, who was also brought in at the Supreme Court stage after Essex Court’s Bernard Eder QC, who led at the Court of Appeal, was elevated to the bench. Landau was instructed by Allen & Overy partner Richard Smith for the respondent, AES Ust-Kamenogorsk Hydropower Plant (AES UK).

The case, concerning a power plant in Kazakhstan, spun out of an arbitration anti-suit injunction dispute over a concession agreement in the jurisdiction.

AES UK leased a concession to operate the plant from JSC in Kazakhstan. The agreement was governed by Kazakh law but also contained an arbitration clause under the ICC London rules. When the relationship between the two parties deteriorated, JSC launched a case against AES UK in Kazakhstan.

In response, AES UK obtained an anti-suit injunction in London in a bid to stop the court proceedings overseas. In April 2010 Mr Justice Burton granted an injunction preventing any dispute relating to the concession agreement from reaching the court steps – other than at the ICC in London.

The case ended up in the Supreme Court after an AES UK appeal by Herbert Smith Freehills partner Murray Rosen QC (18 February 2013) and the court was asked to decide upon the scope of English law jurisdiction to grant injunctive relief.

The Supreme Court panel of five, with Suprme Court justice Lord Mance handing down the ruling, upheld AES UK’s argument that the arbitration agreement was a contractual agreement not to bring proceedings in another forum.

The court confirmed that a party does not need to bring an arbitration in order to obtain the protection of its arbitration agreement.

The legal line up:

For the appellant Ust-Kamenogorsk Hydropower Plant:

Debevoise & Plimpton partner Peter Goldsmith QC and partner Sophie Lamb

For the respondent AES Ust-Kamenogorsk Hydropower Plant:

Essex Court Chambers’ Toby Landau QC leading Jessica Wells of the same set instructed by Allen & Overy partner Richard Smith and counsel Angeline Walsh