Sana Hassib Sabbagh v. Wael Said Khoury and others

At a glance

Parties

Sana Hassib Sabbagh (claimant in the English proceedings) v. Wael Said Khoury and nine other defendants, including Samir and Suheil Hassib Sabbagh, Consolidated Contractors Group SAL (Holding Company) and Hassib Holding SAL

Case no.

Court of Appeal No. A4/2018/1462, [2019] EWCA Civ 1219; High Court No. CL-2013-000666, [2018] EWHC 1330 (Comm)

Court

High Court of England and Wales (Commercial Court); Court of Appeal of England and Wales (Civil Division)

Underlying award(s)

No award. The case concerns an anti-arbitration injunction against a Lebanese-seated arbitration begun under Article 45 of CCG's Articles of Association. The tribunal there had ruled that it had jurisdiction.

Court

High Court: Robin Knowles J. Court of Appeal: David Richards LJ (lead judgment), Haddon-Cave LJ, Sir Timothy Lloyd

Sector

Engineering and construction; family shareholding dispute

Outcome

The High Court granted an injunction restraining the Lebanese arbitration. The Court of Appeal allowed the appeal in part: it discharged the injunction for the shares claim and upheld it for the assets claim.

The dispute

Sana Sabbagh and her brothers Samir and Suheil are the heirs of Hassib Sabbagh, a co-founder of the Consolidated Contractors Company group (CCC group). Its Lebanese holding company is Consolidated Contractors Group SAL (CCG). In July 2013 Sana sued in London, using Wael Khoury's English domicile as the basis for jurisdiction. She brought two claims for conspiracy: that assets and dividends belonging to Hassib had been misappropriated after his stroke in 2002 (the asset misappropriation claim), and that she had been deprived of her one-third inheritance of 399,915 CCG shares, which were transferred to Hassib Holding SAL (the share deprivation claim). In March 2014 Samir, Suheil, CCG and Hassib Holding began an arbitration in Lebanon against Sana under Article 45 of CCG's Articles of Association. They sought declarations on who is entitled to CCG shares (the shares claim) and on the balance of Hassib's shareholder account (the assets claim). In 2017 the Court of Appeal refused to stay the English proceedings. Sana then sought an injunction restraining the arbitration. The arbitration claimants argued that the English court had no power to restrain a foreign-seated arbitration under the Arbitration Act 1996 and the New York Convention, that the shares claim fell within Article 45, and that England was not the natural forum.

Key holdings

1. The High Court held that the claims in the Lebanese arbitration fell within the two English claims. Under the 2017 Court of Appeal judgment, Sana was not bound by Article 45 for those claims, so there was no agreement to arbitrate them. Pressing on with the arbitration in the face of that decision was vexatious and oppressive, and the court granted the injunction as a 'plain and compelling case'. High Court ¶¶ 10, 29, 44–46
2. The English court has power under section 37 of the Senior Courts Act 1981 to restrain a foreign-seated arbitration on the ground that it is vexatious and oppressive. Neither the Arbitration Act 1996 (including sections 1(c) and 72) nor the New York Convention implicitly excludes that power. It must, however, be used with great caution and restraint. Court of Appeal ¶¶ 63–67, 90–91
3. The shares claim in the arbitration falls within Article 45. When the arbitration began, Sana was claiming to be recognised as a CCG shareholder as Hassib's heir, and it was common ground that such a claim must be arbitrated. The 2017 judgment did not decide otherwise, either expressly or implicitly. Sana's later abandonment of the claim in the English proceedings did not take it outside Article 45. Court of Appeal ¶¶ 33–47
4. No anti-arbitration injunction may be granted for a claim that would attract a mandatory stay under section 9 of the 1996 Act. Doing so would be contrary to the principle, underlying the New York Convention and the 1996 Act, that arbitration agreements must be given effect. The injunction for the shares claim was therefore wrongly granted. Court of Appeal ¶¶ 92–99
5. England need not be the natural forum before an anti-arbitration injunction is granted. That requirement for anti-suit injunctions rests on comity towards foreign courts, and the reason does not apply to arbitrations. The 2017 judgment was a 'previous determination' that the assets claim lies outside Article 45, so the injunction for that claim stands. Court of Appeal ¶¶ 106–114
6. Result: the appeal was allowed in part. The injunction was discharged for the shares claim and upheld for the assets claim. Haddon-Cave LJ and Sir Timothy Lloyd agreed with David Richards LJ. Court of Appeal ¶¶ 115–117

Procedural history

1. 9 July 2013Sana issues proceedings in the Commercial Court.
2. 12 March 2014Samir, Suheil, CCG and Hassib Holding file a request for arbitration in Lebanon under Article 45, after a request for mediation on 7 January 2014.
3. 28 July 2017Court of Appeal ([2017] EWCA Civ 1120) rejects the challenges to English jurisdiction and refuses a stay in favour of the arbitration.
4. 12 March 2018The UK Supreme Court refuses permission to appeal the 2017 judgment.
5. 31 May 2018Robin Knowles J grants an interim anti-arbitration injunction ([2018] EWHC 1330 (Comm)).
6. 20–21 March 2019Hearing of the appeal in the Court of Appeal.
7. 12 July 2019Court of Appeal ([2019] EWCA Civ 1219) allows the appeal for the shares claim and dismisses it for the assets claim.

Tribunal, counsel and experts

Decided by

• Robin Knowles Judge, High Court of England and Wales, Commercial Court
• David Richards Judge, Court of Appeal of England and Wales
• Haddon-Cave Judge, Court of Appeal of England and Wales
• Timothy Lloyd Judge, Court of Appeal of England and Wales

For the claimant

Mishcon de Reya LLP

For the respondent

Baker & McKenzie · DLA Piper LLP (US) · CMS Cameron McKenna Nabarro Olswang LLP

Experts

Samir S. Chebli (claimant)

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Keywords

• anti-arbitration injunction
• foreign-seated arbitration
• Lebanon
• vexatious and oppressive
• section 37 Senior Courts Act 1981
• section 9 Arbitration Act 1996
• mandatory stay
• New York Convention Article II(3)
• kompetenz-kompetenz
• natural forum
• anti-suit injunction
• issue estoppel
• articles of association arbitration clause
• Consolidated Contractors
• CCC group
• inheritance
• share deprivation claim
• comity

Summary generated with AI from the published documents — refer to the award for the authoritative text.