Scottish court takes rare step to order end to foreign proceedings

Out-Law News | 25 Aug 2022 | 3:04 pm | 2 min. read

A judge in Scotland has taken the unusual step of ordering a company to draw a halt to court proceedings it had initiated in another jurisdiction.

Lord Braid granted the interim anti-suit interdict, known as an anti-suit injunction in other jurisdictions, in a case involving Scottish tea producers, James Finlay (Kenya) Ltd (JFKL).

JFKL obtained court orders in Kenya last month that have the effect of preventing group proceedings lodged against the company in Scotland from being progressed. The grant of the interim anti-suit interdict by Lord Braid, before the Outer House of the Court of Session, requires JFKL to apply to the Kenyan courts to have the orders lifted to allow the Scottish courts to decide whether the group proceedings lodged against JFKL should proceed to a full trial in Scotland. The Scottish court has still to determine if it has jurisdiction to hear the group action.

The group proceedings against the company have been brought in Scotland, where the company is headquartered, by more than 1,000 current and former employees of JFKL. They are seeking damages in respect of various musculoskeletal injuries they allege were sustained while harvesting tea on the firm’s plantations in Kenya.

JFKL is actively defending the group proceedings that have been lodged. It has argued that the Scottish courts’ jurisdiction to hear the case is ousted by the application of Kenyan law and, notwithstanding that, Kenya is the natural forum for litigation in this case because the group members all reside in Kenya and that the relevant tea estates are in that country. At the same time as doing so, it sought an injunction to prevent the claimants from continuing the group action in Scotland from the Kenyan court.

After assessing JFKL’s conduct in raising the Kenyan proceedings and applying the relevant test for whether to issue anti-suit interdicts, which involves assessing the strength of the prima face case and the balance of convenience, Lord Braid granted an anti-suit interdict requiring JFKL to apply to discontinue the Kenyan proceedings.

The judge said there is “no discernible prejudice” to the company in requiring it to raise arguments on proper jurisdiction in the case before the Edinburgh court. In contrast, he said “there is at the very least a serious doubt as to whether the group members would be able to bring substantive damages claims in Kenya”. He said further “serious practical difficulties” are likely in relation to the need for group members to give “instructions for opposition to the anti-suit injunction, and in obtaining funding to do so” in respect of proceedings in Kenya.

Formal group litigation procedure is new to the Scottish courts, having been introduced on 31 July 2020 through a combination of the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 (the Act) and the introduction of supporting procedural rules as Chapter 26A.1 of the Rules of the Court of Session. Prior to this, group litigation was possible but did involve making use of the existing procedure and as a result it was cumbersome and expensive.

Currently, however, the procedure operates on an ‘opt-in’ only basis, whereby a claimant must give express permission for their claim to be part of the group litigation. The Act does make provision for the potential introduction of opt-out procedure for Scottish domiciles and the Scottish Civil Justice Council has stated that it will consider the introduction of an opt-out regime in future.

Like most class action procedures, the Scottish procedure provides for certification of the group proceedings at an early stage. This has the benefit of sifting out unmeritorious or problematic claims before the – often considerable – costs of group litigation begin to be incurred.

There is considerable procedural flexibility within the rules to allow the court to deal with the litigation in an efficient manner.

Given the relatively recent introduction of the rules, Scottish group proceedings are still in their infancy. However, there are several ongoing group litigations progressing through the Scottish courts and Mitchell Abbott of Pinsent Masons said he expects the group proceedings rules will be developed through case law in the coming months and years.