Summary

It was not appropriate to discharge an anti-suit injunction preventing the former owners of Liverpool Football Club from issuing proceedings in the United States in relation to the sale of the club.

Facts

The applicants (RBS and B) applied for permission to amend claims brought against the respondent former owners (H) of Liverpool Football Club (LFC). H sought the discharge of an anti-suit injunction obtained by RBS and B. LFC had had to be sold because of a debt due to RBS. H had been parties to side letters whereby they agreed to relinquish control of the sale process. B was appointed as an "independent chairman" to take the lead in securing a sale of the club. On learning of certain offers, H purported to remove by resolution some of the club's directors and replace them with appointees of their own. RBS began proceedings seeking a declaration that the removal of the directors was invalid and an injunction restraining H from acting in breach of the side letters. B also issued proceedings. He sought declarations concerning the invalidity of the resolutions and the validity of a resolution to accept one of the offers. H then obtained a temporary restraining order in Texas which prevented LFC's sale; in doing so, they failed to inform the court that an application for an injunction to restrain the sale had failed in England. On the basis of H's unconscionable conduct, an anti-suit injunction was made which required them to withdraw the Texas proceedings and prohibited them from making further claims in relation to the relevant disputes. The sale of LFC was completed. H's case was that there had been an unlawful means conspiracy by RBS, B and others to exclude them from the sale process and to sell LFC at an undervalue. RBS sought to amend its claim by seeking declarations, among other things, that its conduct did not involve it in dishonestly assisting any breach of fiduciary duty by the directors in relation to LFC's sale, that its conduct did not involve an actionable conspiracy and that it was not prevented from enforcing its rights under its security agreement. B sought to amend his claim by seeking a declaration that he was not liable to H for breach of any duty in respect of his conduct as a director, in particular with regard to his involvement in LFC's sale.

Held

(1) It was appropriate to allow the amendments sought by RBS and B. One of the areas in which it had been indicated that negative declaratory relief might be useful was where a party was "temporizing" about bringing a claim. That description fit H's conduct well. It had to be remembered that H had been content to authorise the issue of the Texas proceedings, which contained allegations of a serious kind in respect of B's conduct of the sale. The proceedings had only been withdrawn because of the anti-suit injunction; the allegations had never been withdrawn, and nothing had changed to alter the grievance H felt about the way the sale was conducted. B had established that it would be useful for him to have the negative declaration sought. H had recognised that, if they failed to resist the amendments in B's action, they would be unable to oppose them in RBS's action (see paras 68, 75 of judgment). (2) The anti-suit injunction would be maintained. Among other things, it would be unrealistic to proceed on the basis that no proceedings were currently threatened. Further, the case against B constituted a breach of the exclusive jurisdiction clause in his letter of appointment. The claim that he had acted in breach of fiduciary duty would be bound to lie at the centre of any future foreign proceedings. Given B's right to have that claim determined in England, the foreign proceedings would be extremely inconvenient and would carry the risk of inconsistent decisions. Moreover, it was difficult to imagine what possible real connection H's claim would have with any jurisdiction in the United States. The disputes concerned an English asset, duties owed by English directors under English law to English companies, and corporate governance arrangements governed by English law. It was also relevant that the proceedings in Texas sought punitive and not merely compensatory damages; a litigant's reliance on the availability of enhanced or punitive damages in a jurisdiction having no connection with a dispute might be an indicator that he was acting oppressively, Societe Nationale Industrielle Aerospatiale (SNIA) v Lee Kui Jak (1987) AC 871 PC (Bru)considered. Further, H had not given a satisfactory explanation of the conduct which led to the application being made in Texas (paras 83, 85-86, 89-91).

Judgment accordingly