¹ ‘Insolvency’ is the term used in most English-speaking countries while ‘bankruptcy‘ in many countries is an unknown term or is limited to the bankruptcy of natural persons. Westbrook, Jay Lawrence, ‘Creating International Insolvency Law’ 70 Am Bankr LJ 563, 564 n 3 (1996)Google Scholar. Nevertheless, ‘insolvency’ and ‘bankruptcy’ will be used interchangeably in this article as clarity and ease of expression require.

² Eg, In re Chapman (1872) LR 15 Eq 75 (involving liquidation proceedings in London and creditors in New York).

³ Recent well-known insolvencies include In re Maxwell Communication Corp, 93 F 3d 1036 (2nd Cir. 1996) (involving two main proceedings, one in the United Kingdom and one in the United States); United States v BCCI Holdings (Luxembourg) SA, 48 F 3d 551 (DDC 1995) (involving subsidiary banks operating in some seventy-five countries and proceedings in the United Kingdom and the United States); In re Olympia & York Developments Ltd, [1993] 12 OR 3d 500 (Ont Gen Div) (proceedings in Canada and the United States); In re Maruko Inc, 160 BR 633 (Bankr SD Cal 1993) (proceedings in the United States, Japan, and Australia); In re Axona International Credit & Commerce Ltd, 88 BR 597 (Bankr SDNY 1988) (proceedings in Hong Kong and the United States).

⁴ Different countries have different names for their formal insolvency procedures, such as liquidation and administration under English law, Chapter 7 liquidation and Chapter 11 reorganisation under US law, corporate special liquidation (tokebetsu seisan) and corporate reorganisation (kaisha kosei) under Japanese law etc.

⁵ See Thomas H Jackson, The Logic and Limits of Bankruptcy Law (Cambridge: Harvard University Press, 1986).

⁶ In re Schimmelpenninck, 183 F 3d 347, 353 (5th Cir 1999).

⁷ In re Treco, 240 F 3d 148, 154; In re Maxwell Communication Corp, 170 BR 800, 816 (Bankr SDNY 1994), aff d, 186 BR 807 (SDNY 1995), aff d, 93 F 3d 1036 (2nd Cir 1996); Westbrook, Jay Lawrence, ‘Theory and Pragmatism in Global Insolvencies: Choice of Law and Choice of Forum’ 65 Am Bankr LJ 457, 513 (1991).Google Scholar

⁸ Lowell, John, ‘Conflict of Laws as Applied to Assignments of Creditors’ 1 Harv L Rev 259, 264 (1888).CrossRefGoogle Scholar

⁹ ‘In the course of the 19th century, there developed a line of cases in which assets were being administered by the English court, and one interested person sought to gain an advantage over other interested persons by prosecuting proceedings in a foreign country where part of the assets were situated. In such cases, for example, where a person sought in this way to gain the benefit of foreign assets … of a bankrupt after his petition in bankruptcy (see, eg, In re Distin (1871) 24 LT 157 [sic]), or of a company after winding up proceedings had been commenced (see, e.g. In re North Carolina Estate Co Ltd (1889) 5 TLR 328), such a person has been restrained by injunction from pursuing foreign proceedings, but only if he were a domiciled Englishman or otherwise amenable to the jurisdiction of the English court’, Bank of Tokyo Ltd. v Karoon (Note) [1987] AC 45, 60 (CA) (Robert Goff LJ).

¹⁰ Fletcher, Ian F, Insolvency in Private International Law (Oxford: Oxford University Press, 1999)Google Scholar (hereinafter Fletcher, Insolvency), 85. The modern source of power to grant an anti-suit injunction is statutory, now found in s 37(1) of the Supreme Court Act 1981.

¹¹ ‘In recent years the considerable growth in the extent to which commercial and industrial concerns trade in more than one country, and the vast increase in international travel, have created conditions in which it is less uncommon than formerly (though still rare) for it to be possible to commence an action based on the same facts in two or more jurisdictions’, Barclays Bank plc v Roman [1993] BCLC 680, 697 (CA) (Glidewell LJ).

¹² Wright, Skelly, ‘The Federal Courts and the Nature and Quality of State Law’ 13 Wayne L Rev 317, 333 (1967).Google Scholar

¹³ Another method is through the doctrine of forum non conveniens. See Airbus Industrie GIE v Patel [1999] 1 AC 119, 131–2 (HL).

¹⁴ Keeton v Hustler Magazine, Inc., 465 US 770, 779 (1984).

¹⁵ See the latest House of Lords pronouncements on this subject in Donohue v Armco Inc [2001] UKHL 64; [2002] 1 All ER 749 (HL) and Turner v Grovit [2001] UKHL 65; [2002] 1 WLR 107. (HL).

¹⁶ The leading cases are still for example Re Distin, ex p Ormiston (1871) 24 LT 197; In re Tait & Co (1872) LR 13 Eq 311; and In re North Carolina Estate Co (1889) 5 TLR 328.

¹⁷ Barclays Bank plc v Homan [1993] BCLC 680 (CA) came close but did not quite get there. US case law on the other hand has applied the established anti-suit injunction jurisprudence in the non-bankruptcy context to bankruptcy litigation. See, eg, In re Hopewell International Insurance Ltd., 272 BR 396 (Bankr SDNY 2002).

¹⁸ Eg, Lawrence, Collins (ed), Dicey & Morris on the Conflict of Laws, 13th edn (London: Sweet & Maxwell, 2000)Google Scholar (hereinafter Dicey & Morris) devotes only one short paragraph to ‘Restraining creditors from suing abroad’ in the chapter on Bankruptcy, para 31–034; Briggs, Adrian and Rees, Peter, Civil Jurisdiction and Judgments, 3rd edn (London: LLP, 2002)Google Scholar (hereinafter Briggs and Rees) devotes only one sentence to the use of anti-suit injunction in the bankruptcy context, 379; Bailey, Edward, Groves, Hugo, and Smith, Cormac, Corporate Insolvency Law and Practice, 2nd edn (London: Butterworths, 2001)Google Scholar does not discuss the role of anti-suit injunction in international insolvency litigation, despite a chapter purporting to compare (with scant citation of US case law) English law and American law under which anti-suit injunction jurisprudence is already established pursuant to §304 of the US Bankruptcy Code. Fletcher, Insolvency (n 10 above), 84–6 and id, The Law of Insolvency, 3rd edn (London: Sweet & Maxwell, 2002)Google Scholar (hereinafter Fletcher, Law of Insolvency), 805–9 discuss at some length the ability of English court to restrain creditors’ actions abroad in light of Barclays Bank plc v Homan [1993] BCLC 680 (CA), but, with respect, do not sufficiently consider the effect of subsequent development in international commercial litigation exemplified by Airbus Industrie GIE v Patel [1999] 1 AC 119, 131–2 (HL). Smart, Philip St J, Cross-Border Insolvency, 2nd edn (London: Butterworths, 1998)Google Scholar (hereinafter Smart, Cross-Border Insolvency), 287–8, attempts to confront the question whether the insolvency cases on anti-suit injunction fit in with the modern non-bankruptcy related authorities, but, with respect, Smart's analysis has not sufficiently considered the full implications of these modern authorities.

¹⁹ Which came into force on 31 May 2002.

²⁰ Which the Secretary of State may introduce into English law pursuant to section 14 of the Insolvency Act 2000.

²¹ From In re Chapman (1872) LR 15 Eq 75 to In re Maxwell Communication Corp., 93 F 3d 1036 (2nd Cir 1996).

²² In this regard it pays to be reminded that ‘it is not merely legitimate but desirable that courts in this country should pay due regard to developments in sister common law jurisdictions, notably the United States; this is especially desirable when the court is concerned with principles of law affecting the relationship between our two jurisdictions …’ Bank of Tokyo Ltd. v Karoon (Note) [1987] AC 45, 59 (CA) (Robert Goff LJ). Cf. ‘Legal concepts do not stop at passport control. Similar problems are faced by all societies governed by the rule of law … [O]nly the most arrogant of lawyers could think that nothing said or done by foreign jurists can assist in legal analysis.’ (David Pannick QC, The Times, 9 July 2002).

²³ Small wonder that US courts often consider English case law. See, eg, Grupo Mexicano de Desarrollo, SA v Alliance Bond Fund, Inc. 527 US 308 (1999) considering the application of English Mareva injunction (freezing order); and In re Hopewell International Insurance Ltd, 272 BR 396 (Bankr SDNY 2002) considering the House of Lords decision in Turner v Grovit [2001] UKHL 65; [2002] 1 WLR 107 (HL). The House of Lords in Airbus Industrie GIE v Patel [1999] 1 AC 119 (HL) also considered the US jurisprudence on anti-suit injunction. Such cross-fertilisation can only be fruitful.

²⁴ This is borrowed from Dworkin, Ronald, Life's Dominion (London: Harper Collins, 1993), 28–9Google Scholar. In summary, there are two ways to connect theory with practice. One may construct general theories based on general human experience and select one or more of these ready-made theories on the racks for subsequent practical application. This might be called philosophy from the outside in. On the other hand, when we reason from the inside out, we begin with practical problems, such as whether and in what circumstances an anti-suit injunction should be granted, and then ask which general philosophical or theoretical issues we must confront in order to resolve those practical problems. In other words, when we employ philosophy from the inside out, theories are bespoke, tailor-made for the occasion.

²⁵ This methodology follows the teaching of Dworkin, Ronald, Law's Empire (Oxford: Hart Publishing, 1986).Google Scholar

²⁶ Since it operates in personam, the court must have personal jurisdiction over the defendant. If it is necessary to serve a defendant out of the jurisdiction in accordance with Part 6 of the CPR, there is currently no head of r 6.20 which applies in terms to applications for an anti-suit injunction.

²⁷ Turner v Grovit [2001] UKHL 65; [2002] 1 WLR 107, 117, para 23 (HL).

²⁸ An example is the injunction granted as part of the Laker Airways litigation by the US District Court for the District of Columbia to prevent certain defendants from joining an existing anti-suit injunction proceeding in England. Laker Airways Ltd. v Pan Am World Airways, 559 F Supp 1124(DDC 1983) aff'd sub nom Laker Airways Ltd v Sabena, Belgian World Airlines, 731 F 2d 909 (DC Cir 1984). For a full account of the Laker Airways litigation saga, see Ft Banks, The Rise and Fall of Freddie Laker (1982); Leigh, , ‘Judicial Decisions’ 78 Am J Int'l L 666 (1984)CrossRefGoogle Scholar; Friedman, Aryeh S, ‘Laker Airways: The Dilemma of Concurrent Jurisdiction and Conflicting National Policies’ 11 Brook J Int'I L 181 (1985)Google Scholar; Libow, Daryl A, ‘The Laker Antitrust Litigation: The Jurisdictional ‘Rule of Reason‘ Applied to Transnational Injunctive Relief’ 71 Cornell L Rev 645 (1986)Google Scholar; Lowenfeld, Andreas F, International Litigation and the Quest for Reasonableness: Essays in Private International Law (New York: Oxford University Press, 1996), 5–14.Google Scholar

²⁹ Turner v Grovit [2000] 1 QB 345, 364 (CA).

³⁰ Turner v Grovit [2001] UKHL 65; [2002] 1 WLR 107, 123, para 37 (HL).

³¹ In re Hopewell International Insurance Ltd, 272 BR 396, 401, 410 (Bankr SDNY 2002); citing China Trade & Development Corp. v MV Choong Yong, 837 F 2d 33 (2nd Cir 1987). Similarly in Re the Enforcement of an English Anti-Suit Injunction [1997] ILPr 320, the Dusseldorf Court of Appeal held the anti-suit injunction in question to be an infringement of German sovereignty.

³² Briggs and Rees (n 18 above), 365.

³³ Adrian Briggs, The Conflict of Laws (Oxford: Oxford University Press, 2002), 107, n 338.

³⁴ A respectable academic view has been expressed that ‘all anti-suit injunctions are wrong, especially injunctions issued in one state designed to restrain proceedings in another state. Even if the courts of State A are not prepared to recognise judgments rendered by the courts of B, they ought not to interfere with litigation in progress in B’. Lowenfeld, International Litigation and the Quest for Reasonableness, 10.

³⁵ [2000] 1 QB 345, 362 (CA).

³⁶ [2000] 1 QB 345, 358 (CA).

³⁷ Turner v Grovit [2001] UKHL 65; [2002] 1 WLR 107, 123, para 38 (HL).

³⁸ Briggs and Rees (n 18 above), 381.

³⁹ It is therefore odd that both the Court of Appeal and House of Lords were at pains trying to point out that an anti-suit injunction was not directed at a foreign court.

⁴⁰ Airbus Industrie GIE v Patel [1999] 1 AC 119, 138 (HL); SirNorth, Peter and Fawcett, JJ, Cheshire and North's Private International Law, 13th edn (London: Butterworths, 1999)Google Scholar (hereinafter Cheshire and North), 360.

⁴¹ See Hartley, Trevor C, ‘Comity and the Use of Antisuit Injunctions in International Litigation’ 35 Am J Comp L 487, 506 (1987).CrossRefGoogle Scholar

⁴² [1999] 1 AC 119, 138, 141 (HL). For a full account of the Airbus litigation and its relevance to American jurisprudence, see Anderson, Kent, ‘What Can the United States Learn from English Anti-Suit Injunctions? An American Perspective on Airbus Industrie GIE v Patel’ 25 Yale J Int'l L 195 (2000).Google Scholar

⁴³ It has been said that ‘the distinction between alternative forum cases and single forum cases is illusory and it would greatly simplify and improve the law relating to anti-suit injunctions if it could be dropped. It may well be in certain cases, like those involved in the Laker anti-trust litigation, that the plaintiff may have no prospect of success on the merits in an English court; but this does not mean there is a single forum available for resolution of his claim, and it is quite wrong to describe these as cases “where England was not available at all for the trial of the main action.”’ Peel, , ‘Anti-Suit Injunctions—the House of Lords Declines to Act as International Policeman’ (1998) 114 LQR 543, 544Google Scholar; quoting Harris, , ‘Anti-Suit Injunctions—A Home Comfort?’ [1997] LMCLQ 413, 422Google Scholar. But whether or not this criticism is valid, it does not affect the general principle in Airbus Industrie GIE v Patel requiring sufficient English interest in, or connection with, the matter in question to justify the interference with the foreign court by anti-suit injunction. Lord Goff's discussion of Midland Bank Pic v Laker Airways Ltd [1986] QB 689 (CA) (a single forum case) actually reinforces the general principle. [1999] 1 AC 119, 138 (HL).

⁴⁴ ‘Natural forum’ means forum conveniens as developed by successive House of Lords decisions in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 (HL), Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438 (HL); Connelly v RTZ Corporation plc [1998] AC 845 (HL) and Lubbe v Cape plc [2000] 1 WLR 1545 (HL).

⁴⁵ Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 (PC).

⁴⁶ Airbus Industrie GIE v Patel [1999] 1 AC 119, 139 (HL).

⁴⁷ Airbus Industrie GIE v Patel [1999] 1 AC 119, 139 (HL).

⁴⁸ Airbus Industrie GIE v Patel [1999] 1 AC 119, 133 (HL).

⁴⁹ Cheshire and North (n 40), 361 (footnotes omitted).

⁵⁰ Cf in a domestic context, a claimant's conduct in instituting proceedings would be considered as vexatious if it is ‘a hopeless vendetta’. Jolly v Jay (31 May 2002).

⁵¹ See also Glencore International AG v Metro Trading International [2002] EWCA Civ 528 (18 Apr 2002); and Sabah Shipyard (Pakistan) Limited v Islamic Republic of Pakistan [2002] EWCA Civ 1643 (14 Nov 2002).

⁵² Airbus Industrie GIE v Patel [1999] 1 AC 119, 140 (HL). However, one must treat this with caution as the oppression there was based on the Court of Appeal's findings resting on an incorrect understanding of Texan law. See Anderson, Kent, ‘What Can the United States Learn from English Anti-Suit Injunctions? An American Perspective on Airbus Industrie GIE v Patel’ 25 Yale J Int'l L 195, 217–26 (2000).Google Scholar

⁵³ Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 (PC).

⁵⁴ Airbus Industrie GIE v Patel [1999] 1 AC 119, 140 (HL).

⁵⁵ Turner v Grovit [2001] UKHL 65; [2002] 1 WLR 107, 119, para 27 (HL). This statement has also been expressly adopted in Glencore International AG v Metro Trading International [2002] EWCA Civ 528, para 42 (18 Apr 2002).

⁵⁶ Briggs and Rees (n 18 above), 381.

⁵⁷ Cf Midland Bank Plc v Laker Airways Ltd [1986] QB 689 (CA).

⁵⁸ South Carolina Insurance Co v Assurantic Maatschappij ‘de Zeven Provincien’ NV [1987] 1 AC 24 (HL).

⁵⁹ Barclays Bank plc v Homan [1993] BCLC 680, 687 (Hoffmann J).

⁶⁰ Midland Bank Plc. v Laker Airways Ltd [1986] QB 689 (CA).

⁶¹ A non-exclusive clause selecting England would not suffice for this purpose because the claimant in bringing proceedings abroad would not be breaching the forum selection clause. ‘The [difference between an exclusive and a nonexclusive jurisdiction clause] in principle is that, in the former case both parties are contractually bound to the chosen forum whereas in the latter case it is only the defendant who is so bound.’ JP Morgan Securities Asia Private Limited v Malaysian Newsprint Industries Sdn Bhd (15 Dec 2000). Cf Sabah Shipyard (Pakistan) Limited v Islamic Republic of Pakistan [2002] EWCA Civ 1643 (14 Nov 2002)

⁶² Cf Airbus Industrie GIE v Patel [1999] 1 AC 119, 141 (HL). If a contract governed by the law of Transvania contains an exclusive jurisdiction clause for the courts of Arcania, and an English party to the contract brings suit for breach of contract in Zemblia, it is submitted that English court would not issue an injunction to restrain the English party, even if the courts of Arcania are powerless to do so.

⁶³ [2001] UKHL 64; [2002] 1 All ER 749 (HL).

⁶⁴ [2001] UKHL 64; [2002] 1 All ER 749, 760, para 27 (HL).

⁶⁵ [2001] UKHL 64; [2002] 1 All ER 749, 765, 769, 774–5, paras 36, 48, 75 (HL).

⁶⁶ See, eg, Peel, Edwin, ‘Exclusive jurisdiction agreements: purity and pragmatism in the conflict of laws’ [1998] LMCLQ 182, 224–6Google Scholar; Males, Stephen, ‘Comity and anti-suit injunctions’ [1998] LMCLQ 543, 550Google Scholar; Briggs and Rees (n 18 above), 293–5.

⁶⁷ Briggs and Rees (n 18 above), 294 (footnote omitted).

⁶⁸ Peter, Birks (ed), English Private Law (Oxford: Oxford University Press, 2000), 752.Google Scholar

⁶⁹ Peel, Edwin, ‘Exclusive jurisdiction agreements: purity and pragmatism in the conflict of laws’ [1998] LMCLQ 182, 224–5.Google Scholar

⁷⁰ See text to n 67 above.

⁷¹ Briggs and Rees (n 18 above), 385 (emphasis added).

⁷² Using the example in n 62 above, if a contract governed by the law of Transvania contains an exclusive jurisdiction clause for the courts of Arcania, and an English party to the contract brings suit for breach of contract in Zemblia, it is submitted that English court would not entertain a claim for damages for breach of the exclusive jurisdiction clause, even though the clause is not void or voidable under Arcanian, Transvanian, Zemblian, or English law.

⁷³ That is the authority of a court to hear certain types of dispute.

⁷⁴ For instance, if the court's ability to review an arbitration award is a question of subject matter jurisdiction, parties to an arbitration agreement may not expand the jurisdiction of the court beyond that provided by statute so that there could be no review on the merits. Parties cannot by their stipulation confer jurisdiction on the court where none exists. See Crowell v Downey Community Hospital Foundation 95 Cal App 4th 730 (Cal 2nd App Dist 2002).

⁷⁵ That is the authority to subject persons or things to the process of a court. ‘Personal jurisdiction’ is often used to convey the same concept. See MacKinnon v Donaldson, Luflcin and Jenrette Securities Corporation [1986] Ch 482, 493 and Restatement (Third) of the Foreign Relations Law of the United States (1987), §401.

⁷⁶ Lowenfeld, Andreas F, Conflict of Laws: Federal, State, and International Perspectives, 2nd edn (New York: Matthew Bender, 1998), 308.Google Scholar

⁷⁷ Ibid, 308 (footnote omitted).

⁷⁸ This of course leaves out Art 23 of the EC Regulation on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters (hereinafter ‘Brussels Regulation’) which dictates that the selected court has mandatory jurisdiction. But this only shows that the exercise of jurisdiction is not derived from the jurisdiction clause itself, though it is a trigger.

⁷⁹ Briggs and Rees (n 18 above), 294.

⁸⁰ Peel, Edwin, ‘Exclusive jurisdiction agreements: purity and pragmatism in the conflict of laws’ [1998] LMCLQ 182, 225.Google Scholar

⁸¹ Ibid, 221.

⁸² Ibid, 225.

⁸³ Cf. There is a line of analogous US authorities relating to pre-bankruptcy contractual waiver of automatic stay under the Bankruptcy Code. It has been held that such contractual waiver is something the bankruptcy court may take into account in considering whether to lift the automatic stay. See In re Shady Grove Tech Center Associates Limited Partnership, 216 BR 386 (Bankr D Maryland 1998). However, such contractual waiver is not self-executing. Relief from stay must be granted by the bankruptcy court. See In re Sky Group International, Inc, 108 BR 86 (Bankr WD Pa 1989). Similarly if a forum selection clause is properly understood as a statement of consent to jurisdiction of the selected court, which consent is something the court may take into account in considering whether to accept jurisdiction, there is no difficulty at all with the notion that a jurisdiction clause is not self-executing or independently enforceable; thus its dishonour would not lead to an award of damages.

⁸⁴ 122 BR 621 (Bankr DDC 1991).

⁸⁵ See also Allstate Life Ins Co v Linter Group Ltd, 994 F 2d 996 (2nd Cir 1993); Official Comm v Transpacific Corp (In re Commodore Int'l, Ltd), 242 BR 243. (Bankr SDNY 1999).

⁸⁶ Vesta Fire Insurance Corp v New Cap Reinsurance Corp, 244 BR 209, 221 (SDNY 2000). See text to n 97 below.

⁸⁷ See n 9 above.

⁸⁸ (1871) 24 LT 197.

⁸⁹ Re Distin, ex p Ormiston (1871) 24 LT 197, 198.

⁹⁰ (1889) 5 TLR 328.

⁹¹ (1872) LR 13 Eq 311.

⁹² This case shows that Millett LJ was incorrect to say that ‘[i]n all the cases in which the court has hitherto exercised this jurisdiction [to restrain creditors from bringing or continuing the foreign execution process], the creditors in question were resident in England’. Mitchell v Carter [1997] 1 BCLC 673, 687 (CA). Cf In re Morton, exp Robertson (1875) LR 20 Eq 733.

⁹³ (1874) LR 9 Ch App 557 (CA).

⁹⁴ In re Oriental Inland Steam Company, ex p Scinde Railway Company (1874) LR 9 Ch App 557, 559 (CA).

⁹⁵ 133 US 107 (1890).

⁹⁶ (1747) 4 Term R 193 (note).

⁹⁷ 244 BR 209 (SDNY 2000).

⁹⁸ Note that there was already a stay in England of all proceedings against the company pursuant to s 426 of the Insolvency Act 1986.

⁹⁹ 244 BR 209, 216 (SDNY 2000) (citations omitted).

¹⁰⁰ Carron Iron Co v Maclaren (1855) 5 HL Cas 416, 440 (HL).

¹⁰¹ [1932] 2 Ch 196, 209–10.

¹⁰² (1872) LR 15 Eq 75, 77.

¹⁰³ Carron Iron Co v Maclaren (1855) 5 HL Cas 416, 443 (HL) (Lord Chancellor).

¹⁰⁴ (1879) 10 Ch D 681.

¹⁰⁵ See text to n 42 above. Similarly, Lord Goff in Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 (PC) held that, in a case where there is simply a difference of view between the English court and the foreign court as to which is the natural forum, the English court cannot arrogate to itself, by the grant of an injunction, the power to resolve that dispute because it would be inconsistent with comity.

¹⁰⁶ Dicey and Morris (n 18 above), para 1–011.

¹⁰⁷ Donohue v Armco Inc [2001] UKHL 64; [2002] 1 All ER 749 (HL) and Turner v Grovit [2001] UKHL 65; [2002] 1 WLR 107 (HL).

¹⁰⁸ Cole v Cunningham 133 US 107, 122 (1890).

¹⁰⁹ Briggs, Adrian, ‘Anti-Suit Injunctions in a Complex World’, in Rose, Francis D (ed), Lex Mercatoria: Essays on International Commercial Law in Honour of Francis Reynolds (London: LLP, 2000), 237Google Scholar. See also Briggs and Rees (n 18 above), 371 and Cheshire and North (n 40 above), 360.

¹¹⁰ Hartley, Trevor C, ‘Comity and the Use of Antisuit Injunctions in International Litigation’ 35 Am J Comp L 487, 506 (1987)CrossRefGoogle Scholar (footnote omitted, emphasis in original).

¹¹¹ Briggs, Adrian, The Conflict of Laws (Oxford: Oxford University Press, 2002), 109.Google Scholar

¹¹² For an account of the development of comity in international law and its use in different legal systems, see Paul, Joel R, ‘Comity in International Law’ 32 Harv Int'l LJ 1 (1991).Google Scholar

¹¹³ Fletcher, Insolvency (n 10 above), 96.

¹¹⁴ 159 US 113, 163–4(1895).

¹¹⁵ Schibsby v Westenholz (1870) LR. 6 QB 155, 159; Adams v Cape Industries plc [1990] Ch 433 (CA). ‘Comity has never been the basis on which we recognise or give effect to foreign judgments’, Indyka v Indyka [1969] 1 AC 33, 58 (HL) (Lord Reid).

¹¹⁶ See, eg, In re Johnson [1903] 1 Ch 821, 829; Barclays Bank plc v Homan [1993] BCLC 680, 706 (CA).

¹¹⁷ ‘Comity has been defined variously as the basis of international law, a rule of international law, a synonym for private international law, a rule of choice of law, courtesy, politeness, convenience or goodwill between sovereigns, a moral necessity, expediency, reciprocity or ‘considerations of high international politics concerned with maintaining amicable and workable relationships between nations.’ Some writers have distinguished between public and private aspects of comity, while others have denied such a distinction is possible. Various authorities have asserted that comity is derived from ius gentium, natural law, or medieval law. The term is found both in civil and common law systems, as well as in Islamic law. In sum, despite ubiquitous invocation of the doctrine of comity, its meaning is surprisingly elusive’, Paul, Joel R, ‘Comity in International Law’ 32 Harv Int'l LJ 1, 3–4 (1991)Google Scholar (footnotes omitted). In fact this elusiveness has been judicially recognised; see Turner Entertainment Co v Degeto Film GmbH 25 F 3d 1512, 1519 n 10 (11th Cir 1994); Kaepa, Inc v Achilles Corporation, 76 F 3d 624, 629 n 1 (5th Cir 1996).

¹¹⁸ ‘In Hilton v Guyot … the United States Supreme Court treated the enforceability of foreign country judgments as a matter of “comity of nations”, and concluded that comity called for enforcement of judgments rendered in a foreign state in favor of a citizen of that state against a non-citizen only on the basis of reciprocity’, Restatement (Third) of the Foreign Relations Law of the United States (1987) §481, RN1.

¹¹⁹ ‘Some United States courts have applied the principle of reasonableness as a requirement of comity, that term being understood not merely as an act of discretion and courtesy but as reflecting a sense of obligation among states. This section states the principle of reasonableness as a rule of international law. The principle applies regardless of the status of relations between the state exercising jurisdiction and another state whose interests may be affected’, Restatement (Third) of the Foreign Relations Law of the United States (1987) §403, Comment a.

¹²⁰ Lowenfeld, International Litigation and the Quest for Reasonableness, 19.

¹²¹ Societe Nationale Industrielle Aerospatiale v United States District Court for the Southern District of Iowa, 482 US 522, 543 n 27, 554 (1987).

¹²² Somportex Ltd v Philadelphia Chewing Gum Corp, 453 F 2d 435, 440 (3rd Cir 1971).

¹²³ Laker Airways Ltd v Sabena, Belgian World Airlines, 731 F 2d 909, 937 (DC Cir 1984) (footnotes omitted).

¹²⁴ Eg, Societe Cooperative Sidmetal v Titan Inter-National Ltd. [1966] 1 QB 828, 845; Settebello Ltd v Banco Totta and Acores [1985] 1 WLR 1050, 1059 (CA).

¹²⁵ Eg, The Abidin Daver [1984] AC 398, 411 (HL); Settebello Ltd v Banco Totta and Acores [1985] 1 WLR 1050, 1057 (CA).

¹²⁶ ‘[C]omity is far too vague and shifting a notion to serve as a satisfactory theoretical underpinning for a sophisticated system of private international law,’ Collier, JG, Conflict of Laws, 3rd edn (Cambridge: Cambridge University Press, 2001), 379.CrossRefGoogle Scholar

¹²⁷ Fortunately not all commentators have followed the comity route unthinkingly. As was argued by one commentator, ‘[the] inquiries [of the effect to be given in US courts to the legislative, executive, or judicial acts of a foreign country] are often described as aspects of a doctrine designated “international comity”. However, “international comity” is in this regard an unfortunate phrase best dismissed from the discourse. It is an expression of unexplained authority, imprecise meaning and uncertain application. Its use confuses inquiries that ought to be clear and distinct, and submerges issues that should be carefully and forthrightly considered. Its invocation has produced a series of international cases explicable only by reference to ill-defined judicial intuitions. Abandoning appeals to “international comity” in favor of more precise terminology would go a fair way toward rectifying the confusion that prevails in this area’, Michael D Ramsey, ‘Escaping ‘International Comity’’ 83 Iowa L Rev 893 (1998). See also Weinberg, Louise, ‘Against Comity’ 80 Geo LJ 53 (1991).Google Scholar

¹²⁸ A perspicuous embodiment of this statement is Cheshire and North (n 40 above), 5, 360, which criticises that comity ‘has been employed in a meaningless or misleading way’, but at the same time supports the comity approach.

¹²⁹ This means treating all judicial systems as equals, rather than treating them equally.

¹³⁰ Thus in a globalised economy ‘[w]e cannot have trade and commerce in world markets and international waters exclusively on our terms, governed by our laws, and resolved in our courts’, Bremen v Zapata Off-Shore Co, 407 US 1, 9 (1972).

¹³¹ It is thus unsurprising that some courts would view an anti-suit injunction as infringing its sovereignty. See n 31 above.

¹³² Eg, Amin Rasheed Shipping Corporation v Kuwait Insurance Co [1984] AC 50 (HL); The Abidin Daver [1984] AC 398,411 (HL); Lubbe v Cape plc [2000] 1 WLR 1545 (HL). On the other hand, we would accord little respect to systems which neglect or sacrifice impartiality for illegitimate gains, such as corruption, because such systems have debased self-respect and trivialised their own dignity. English courts would then be justified in comparing the quality of justice obtained in England with that obtained elsewhere. Cf Mohammed v Bank of Kuwait and the Middle East KSC [1996] 1 WLR 1483 (CA).

¹³³ Smith Kline & French Laboratories Ltd v Bloch [1983] 1 WLR 730, 733–4 (CA) (Lord Denning).

¹³⁴ In re Union Carbide Corp. Gas Plant Disaster, 634 F Supp 842, 867 (SDNY 1986), aff'd and modified, 809 F 2d 195 (2nd Cir 1987), cert denied, 484 US 871 (1987).

¹³⁵ Just as in our private lives, we feel particular responsibilities towards people we have special relationships with.

¹³⁶ Though not a sufficient basis.

¹³⁷ Peel, Edwin, ‘Anti-Suit Injunctions—the House of Lords Declines to Act as International Policeman’ (1998) 114 LQR 543, 545.Google Scholar

¹³⁸ Gannon v Payne 706 SW 2d 304 (Tex 1986); Golden Rule Insurance Co v Harper, 925 SW 2d 649 (Tex 1996).

¹³⁹ Not all avoidance provisions are aimed at preserving the order of distributional priority. For example, transactions at an undervalue under s 238 of the Insolvency Act 1986 are only concerned with the conservation of the estate, rather than with the exact pecking order of distribution. See Mokal, and Ho, , ‘Consideration, Characterisation, Evaluation: Transactions at an Undervalue after Phillips v Brewin Dolphin’ (2001) 1 Journal of Corporate Law Studies 359.CrossRefGoogle Scholar

¹⁴⁰ HR Rep No 595, 95th Cong, 1st Sess 177 (1977).

¹⁴¹ Goode, Roy, Principle of Corporate Insolvency Law, 2nd (London: Sweet & Maxwell, 1997)Google Scholar (hereinafter Goode).

¹⁴² HR Rep No 595, 95th Cong, 1st Sess 340 (1977).

¹⁴³ Westbrook, Jay Lawrence, ‘Choice of Avoidance Law in Global Insolvencies’ 17 Brook J Int'l L 499, 508–9 (1991)Google Scholar (footnote omitted).

¹⁴⁴ Countryman, Vern, ‘The Concept of a Voidable Preference in Bankruptcy’ 38 Vand L Rev 713, 748 (1985).Google Scholar

¹⁴⁵ Westbrook, , ‘Choice of Avoidance Law in Global Insolvencies’, 508–9 (1991).Google Scholar

¹⁴⁶ Dworkin, Ronald, Sovereign Virtue (Cambridge: Harvard University Press, 2000), 125–6.Google Scholar

¹⁴⁷ §507(a)(5)(A) of the US Bankruptcy Code.

¹⁴⁸ For an excellent examination of the principle, see Mokal, ‘Priority as Pathology: The Pari Passu Myth’ (2001) 60 CLJ 581.

¹⁴⁹ See Wood, Philip R, Principles of International Insolvency (London: Sweet & Maxwell, 1995), § 1–14Google Scholar. ‘In practice even the most cursory examination of bankruptcy internationally shows that the pari passu rule is nowhere honoured.’

¹⁵⁰ Draft legislative guide on insolvency law in Report of the Secretary-General of the United Nations General Assembly, UNCITRAL Working Group on Insolvency Law, 24^th session, New York, 23 July – 3 Aug 2001; A/CN.9/WG.V/WP.54.

¹⁵¹ Fletcher, Law of Insolvency (n 18 above), 659 (emphasis in original) (footnote omitted).

¹⁵² Eg, Fletcher, Law of Insolvency (n 18 above), 659. ‘Not only is it the case that the pari passu principle is applied in a non-unitary manner, but also there are significant exceptions to its application in a variety of cases.’

¹⁵³ Mokal, , ‘Priority as Pathology: The Pari Passu Myth’ (2001) 60 CLJ 581, 584.CrossRefGoogle Scholar

¹⁵⁴ Fletcher, Law of Insolvency (n 18 above), 2 (emphasis added).

¹⁵⁵ Section 130(2) of the Insolvency Act 1986.

¹⁵⁶ Sections 128 and 183 of the Insolvency Act 1986.

¹⁵⁷ Section 127 of the Insolvency Act 1986.

¹⁵⁸ Fletcher, Insolvency (n 10 above), 159.

¹⁵⁹ Westbrook, Jay Lawrence, ‘Choice of Avoidance Law in Global Insolvencies’ 17 Brook J int'l L 499, 508 (1991).Google Scholar

¹⁶⁰ This is of course not the only situation. See Barclays Bank plc v Homan [1993] BCLC 680 (CA) where it was sought to restrain the administrator of the debtor to pursue creditors abroad for preferential payments.

¹⁶¹ (1872) LR 13 Eq 311.

¹⁶² [1993] BCLC 680, 691.

¹⁶³ Fletcher, unsurprisingly, sees the function of anti-suit injunction in such circumstances as preventing the ‘contravention of the pari passu principle’. Fletcher, Law of Insolvency (n 18 above), 808. Readers are referred to the discussion in Part IV above for the reasons why this view is untenable.

¹⁶⁴ The US parallel is to be found in Cole v Cunningham 133 US 107 (1890) and Vesta Fire Insurance Corp v New Cap Reinsurance Corp, 244 BR 209, 221 (SDNY 2000).

¹⁶⁵ Hughes v Hannover Ruckversicherungs-Aktiengesellschaft [1997] 1 BCLC 497 (CA).

¹⁶⁶ That is, the power to order a litigant to comply under pain of contempt of court.

¹⁶⁷ However, if the secured creditor is a floating chargee and his enforcement abroad would prejudice the position of preferential creditors, thereby disrupting the bankruptcy distribution regime, there will be a case for issuing anti-suit injunction. For otherwise the floating chargee would gain an unjustified priority. See s 175 of the Insolvency Act 1986.

¹⁶⁸ Whether in relation to an English company or foreign company under s 426 of the Insolvency Act 1986. See Re Dallhold Estates (UK) Pty Ltd [1992] BCLC 621.

¹⁶⁹ Section 10 of the Insolvency Act 1986.

¹⁷⁰ In re Vocation (Foreign) Ltd [1932] 2 Ch 196.

¹⁷¹ Lightman, & Moss, , The Law of Receivers and Administrators of Companies, 3rd edn (London: Sweet & Maxwell, 2000)Google Scholar (hereinafter Lightman & Moss), 495 (footnotes omitted).

¹⁷² Lightman & Moss, 495.

¹⁷³ Lightman & Moss sees such injunctions as preventing efforts ‘calculated to defeat the right on the winding-up of all unsecured creditors (who are in the nature of cestuis que trust with beneficial interests extending to all the company's property under the statutory scheme) to the administration and distribution of the company's assets on the basis of equality and payment pari passu’. Lightman & Moss, 494–5 (footnotes omitted).

¹⁷⁴ True, allowing secured creditors to enforce their security abroad might hinder reorganisation efforts. But the author does not believe that this is strong enough reason for the aggressive move of enforcing the statutory moratorium overseas. Coordination of reorganisation efforts should be done through channels like the UNCITRAL Model Law, EC Regulation on Insolvency Proceedings and the like. In fact Lightman & Moss concedes that even if the statutory moratorium applies extra-territorially, ‘[s]ecured creditors will readily be given leave to commence proceedings against the company. To the extent that they rest on their security, they are outside the statutory scheme and in any proceedings against the company they are enforcing rights, not against the company, but to their own property’, Lightman & Moss, 494–5 (citation omitted).

¹⁷⁵ In re Bank of Credit and Commerce International SA (No 10) [1997] AC 213, 246.

¹⁷⁶ SirMillett, Peter, ‘Cross-Border Insolvency: The Judicial Approach’ 6 Int Insolv Rev 99, 103 (1997).CrossRefGoogle Scholar

¹⁷⁷ See text to n 57 above.

¹⁷⁸ Hughes v Hannover Ruckversicherungs-Aktiengesellschaft [1997] 1 BCLC 497 (CA).

¹⁷⁹ [1992] BCLC 570, 577.

¹⁸⁰ [1993] Ch 223, 239 (CA).

¹⁸¹ [1993] BCLC 680, 691.

¹⁸² Assuming that the Secretary of State will soon give effect to the Model Law pursuant to s 14 of the Insolvency Act 2000.

¹⁸³ Art 16.

¹⁸⁴ Schollmeyer, Eberhard, ‘The New European Convention on International Insolvency’ 13 Bankr Dev J 421, 436 (1997).Google Scholar

¹⁸⁵ See the preamble to the EC Regulation.

¹⁸⁶ Cf Barclays Bank plc v Roman [1993] BCLC 680, 693.

¹⁸⁷ See the preamble to the Model Law.

¹⁸⁸ Art 17.

¹⁸⁹ Art 2(b).

¹⁹⁰ Art 20.

¹⁹¹ Art 21.

¹⁹² Birks, Peter, ‘This Heap of Good Learning: The Jurist in the Common Law Tradition’, in Markesinis, Basil S (ed), Law Making, Law Finding and Law Shaping: The Diverse Influences (Oxford: Oxford University Press, 1997), 133.Google Scholar

¹⁹³ Any proper discussion on the winding up jurisdiction of English courts would require a paper on its own. For present purposes, only a note of caution is sounded. Cf: Some commentators have questioned the broad reach of the US Bankruptcy Code, specifically 11 USC §109(a) which permits any person that resides, or has a domicile, place of business or property in the United States to commence a plenary bankruptcy case in the US. ‘This all-encompassing concept of eligibility under § 109 does not appear to be a very promising start in advancing the concept of international harmony and cooperation’ See Jeremy V Richards, ‘How Well Does the U.S. Bankruptcy Code Support the Emerging Standards of Comity in Cross-Border Insolvencies?’ 16-Oct Am Bankr Inst J 20 (Oct 1997).

¹⁹⁴ Goode (n 141 above), 141. Quite apart from everything else, the pari passu principle, as a rule of distribution, is profoundly lacking in intellectual appeal. The bankruptcy corridor is peopled by claimants wielding divergent and often conflicting rights arising from a myriad of legal regimes (such as the laws of contract, tort, restitution, tax and the like). Shaped by such concerns as economic efficiency and substantive justice, bankruptcy law has to make inevitable distributional choices, resolving conflicts between claimants and favouring one claimant over another. Uninterested in and uninformed about these conflicts, the pari passu principle simply supplies a blanket to paper over these divergences and imposes an iron-clad idea of equity as equality. As an all-encompassing standard for bankruptcy distribution, theparipassu rule is bankrupt of legitimacy and sclerotic. And it does not lend itself to aggiornamento through Fletcher's sequential reinterpretation.

¹⁹⁵ See Westbrook, Jay Lawrence, ‘A Global Solution to Multinational Default’ 98 Mich L Rev 2276, 2288–92 (2000).CrossRefGoogle Scholar