Anti-Suit Injunctions

• Author: International Law Group

Utrecht - America Finance Company is a Delaware corporation with its main place of business in New York. Indirectly, it is a wholly- owned subsidiary of a Dutch bank doing business as Rabobank Nederland (RN). National Westminister Bank PLC (NWB) and RN each agreed to furnish Yorkshire Food Group PLC (YFG) and certain of its subsidiaries a total of $100,000,000 as a credit facility. The YFG subsidiaries were either English or U.S. corporations.

In October 1997, NWB, Utrecht, RN, YFG and a Delaware subsidiary of YFG d.b.a Yorkshire Dried Fruit & Nuts, Inc. entered into a "take out agreement" (TOA). The TOA brought about a novation under which Utrecht took out or bought NWB's one-half interest in the credit agreement.

Two years later, RN and Utrecht sued NWB plus various individual directors and officers of certain YFG subsidiaries in a California court. Plaintiffs (or "Utrecht") alleged fraudulent concealment of material information, negligent failure to disclose information and a breach of good faith or fair dealing in failing to disclose such information to Utrecht. NWB filed an answer and counterclaim on January 3, 2000 accompanied by a letter stating that it was doing so to avoid waiver or forfeiture under California procedural rules and without prejudice to its right to file suit in the English courts based on the same claims.

Fifteen days later, NWB began the present litigation in England. Three weeks after that, without seeking an interlocutory injunction, it applied for summary judgment seeking declaratory relief and an injunction barring plaintiffs from further proceeding in the California courts. On August 1, 2000, Utrecht applied for an order staying the English action until after completion of the California proceedings. The court of first instance declined to stay the proceedings and issued NWB the requested declaratory judgment and injunction. Upon Utrecht's appeal, the Court of Appeal dismisses.

The TOA contained detailed provisions as to the substance of the agreement and as to the type of information to which each party was to be entitled. In addition, it provided that each party submits to the jurisdiction of the English courts over any dispute arising out of the TOA and the buyer appointed RN, London Branch, as its fully authorized agent to accept process issuing out of any English litigation over the TOA.

Under the TOA, each party waived any forum non conveniens objections to litigating in the English courts and agreed...