Anti-Suit Injunctions

• Author: International Law Group

A Mr. Donohue is involved in litigation in New York and has asked the English courts to enjoin five companies in the Armco group from further prosecution of their civil action. The New York plaintiffs consist of Armco Inc, which is the parent company of the Armco group, a U.S. conglomerate along with four companies known as AFSC, AFSIL, APL and NNIC. These five are potential defendants in the English courts and named appellants before the House of Lords. In addition to Donohue, there are a number of potential co-claimants (PCCs), all of them defendants in the New York proceedings: Mr. Rossi and his Ohio company known as ITRS; Mr. Stinson and his Ohio company known as IROS; Wingfield Ltd., a Jersey company, and another Jersey company known as CISHL.

The British National Insurance Group (BNIG) used to be part of the Armco group but stopped writing new policies in 1984 leaving Armco to deal with claims under existing policies. Long time Armco executives, Messrs. Rossi and Stinson, both U. S. citizens and residents, handled the negotiations for Armco. The prospective buyers were Messrs. Donohue and Atkins (who have since settled out of court). The latter were senior Armco executives, both of them being U.K. citizens who lived in Singapore and England respectively.

AFSIL and AFSEL had owned the shares of BNIG. To carry out a sale of the business, Armco sold its shares in BNIG to newly- incorporated CISHL. Various corporations in the group then injected over $42 million in cash and shares into CISHL. In September 1991, AFSIL and AFSEL transferred all of their assets in BNIG into CISHL.

On the same date, a Jersey company named Wingfield acquired all of the CISHL shares under a sale and purchase agreement. BNIG then renamed itself the North Atlantic Insurance Group (NAG). The leading company in this group was the North Atlantic Insurance Company, Ltd. (NAIC).

In 1997, NAIC went into provisional liquidation with other group companies which filed winding-up petitions before the English High Court. Mr. Atkins had quit the NAG in 1995 but made several important statements to Armco lawyers during 1998 on which Armco heavily relies to support their case. On August 5, 1998, the five Armco appellants filed suit in New York federal court against NAIC, Messrs. Donohue and Atkins, all of the six PCCs, i.e., Messrs. Rossi and Stinson and their respective companies, Wingfield and CISHL, and NPV Ltd. (a Nevis company). The complaint alleged "an international fraud of immense proportions."

As the Lords' lead opinion summarizes the complex Armco side's case: "[t]hey contend that a secret agreement (recorded in writing) was made between Messrs. Donohue, Atkins, Rossi and Stinson in New York in April 1991...