Law Report: Interim injunction refused pending proceedings in US: Phonogram Ltd and another v Def American Inc Chancery Division (Mr Justice Evans-Lombe), 30 August 1994

An English court had jurisdiction to grant an interlocutory injunction in proceedings which had been stayed and were to be tried in a foreign court, but the power would only be exercised in an unusual case.

Mr Justice Evans-Lombe refused to grant the defendant interlocutory relief.

The first plaintiff, Phonogram, and the defendant, which produces musical recordings, entered into distribution arrangments and a joint venture agreement whereby Phonogram was licensed to exploit the defendant's repertoire in the United Kingdom and the rest of the world, excluding North America. The defendant brought proceedings in California claiming that Phonogram had repudiated the agreement. Phonogram started proceedings in the Chancery Division claiming that the agreements still subsisted and injunctions restraining the defendant from breaching its obligations.

Phonogram agreed to a stay of the English proceedings pending adjudication in California. The defendant sought an injunction that Phonogram would not interfere with the defendant's exploitation of its repertoire in the UK.

Joseph Smouha (Mishcon de Reya) for Phonogram; John McDonnell QC and Simon Barker (Richards Butler) for the defendant.

MR JUSTICE EVANS-LOMBE said that there were two questions. The first was whether the court would have jurisdiction to make an interlocutory order and the second was whether, having jurisdiction, the court would make the order. By parity of reasons with the House of Lords in Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd (1993) AC 334 there seemed no reason why the court should not have jurisdiction to grant interlocutory injunctions in support of rights claimed in proceedings, where the relevant causes of action were within the jurisdiction of the English Court, notwithstanding that for reasons of forum non conveniens the court was inclined to stay the proceedings pending resolution in a foreign court also having such jurisdiction.

However it must be an unusual case where the English court would preempt any ruling of the foreign court by making such interlocutory orders, which the foreign court might subsequently find to be inappropriate.

If the foreign court had no power to make such an order the English court would be likely to refuse the relief sought on the ground that the applicant was 'forum shopping'.

The defendant had not demonstrated a case to be tried that there existed some legal or equitable right for the enforcement of which Phonogram was amenable to the jurisdiction of the court and in support of which right the defendant sought the injunction. The injunction would not be granted.