12/12/2023

Penal notices and the Babanaft proviso in anti-suit injunctions

Andrew Dinsmore and Alexandros Demetriades appeared for the claimant in Renaissance Securities v Chlodwig Enterprises Limited [2023] EWHC 3160 (Comm). This was a significant judgment for injunction practitioners, in that it clarified (i) the approach to naming individuals in a penal notice and when it is appropriate to dispense with personal service of the injunction where there are anticipated contempt proceedings; and (ii) whether it was appropriate to include the Babanaft proviso in anti-suit and anti-anti-suit injunctions (the “ASI”).

Mr Justice Butcher granted the claimant’s applications to order (i) the continuation of the ASI, and (ii) that personal service of the ASI be dispensed with for the purposes of CPR r.81.4(2)(c).

Mr Justice Butcher held that classes of persons who do not fall within the definition of de jure, de facto directors or officers of the corporate defendants may be named as categories within “any other person” where they knowingly help or permit a party who is restrained by an injunction in doing acts in breach of that injunction (the ‘Seaward jurisdiction’, after Seaward v Paterson [1897] 1 Ch 545) (at paragraphs 15–16). In the absence of evidence that an individual was a de jure or de facto director, it was not appropriate to name them in the paragraph of the penal notice that warned them of potential liability for contempt under the ‘Body Corporate Provision’. The judge did not decide whether, on the facts, the relevant named individuals were de facto directors or officers of the defendants.

On what Mr Justice Butcher described as “the most fundamental” matter in this case, he accepted the claimant’s position that it was not appropriate to include a Babanaft proviso in the terms of the anti-suit injunction (at paragraphs 26–30).

More: The judgment forms part of a wider dispute in which Mrs Justice Dias had granted an ex parte US$130 million ASI in support of London-seated arbitration ([2023] EWHC 2816). The claimant’s counsel team in the Renaissance litigation is led by Paul Lowenstein KC. See: www.twentyessex.com/deploying-anti-suit-and-anti-anti-suit-injunctions-to-protect-a-london-seated-arbitration-agreement