Obeying or Disobeying Anti-suit Injunctions - Chapter 9 - Anti-suit Injunctions in International Arbitration
Originally from Anti-suit Injunctions in International Arbitration
It is necessary to examine why parties comply with anti-suit injunctions granted by courts and arbitral tribunals. When an anti-suit injunction is issued against a recalcitrant party, one may wonder why the defendant would bother to comply with such an “order”. While considering this issue, one needs to be mindful of the fact that arbitrators, unlike courts, cannot issue provisional measures that can be enforced by third parties or for which compliance by the parties is legally required. This distinction is important because courts derive their authority from a sovereign state whereas arbitrators only derive their powers from the mutual understanding of parties to arbitrate. Therefore, parties cannot enforce the orders of arbitrators, especially against third parties, without first obtaining an enforcing order from a competent court. For instance, an arbitrator’s order to freeze the bank accounts of a defendant would have little direct effect since such an order lacks enforceability, unlike a court’s order for the bank, unless the defendant decides to obey such an order voluntarily. Given this significant difference, one wonders why in practice defendants usually comply with anti-suit injunctions, which are “provisional” and merely subject to voluntary compliance.
2. Voluntary Compliance
It is common to see a defendant who initiates or about to initiate parallel proceedings elsewhere, complying with anti-suit injunctions voluntarily and continuing with arbitration. Nevertheless, it is not wise to depend on such voluntary compliance since in cases of non-compliance, enforcement of such an order will be impossible due to the lack of enforcement power of arbitrators. Yet voluntary compliance is a common practice and the underlying reasons for such compliance are worth a closer look.