Scottish court issues anti-suit injunction in group action

In a rare turn of events, Scotland’s highest civil court has ordered a Scottish registered company to cease proceedings in Kenya, due to pending legal action in Scotland.

This judgment follows an application by over 1,000 farm workers earlier this year, who applied to the Scottish court to have their claims heard under the new Scottish group procedure rules. The claims related to alleged musculoskeletal injuries sustained while working for the tea producer James Finlay (Kenya) Limited (“JFKL”) at their plantations in Kenya.

The claims were raised in Scotland because JFKL is registered in Scotland. It was argued that the claims would never materialise in Kenya, with the lack of legal aid or any form of group procedure to allow for a sharing of costs.

Kenyan courts assert jurisdiction

The Scottish court granted the workers permission to bring a group action. After an unsuccessful appeal of that decision, JFKL turned its attention to the Employment and Labour Relations Court in Nairobi.

The company argued that the litigation in Scotland constituted “an assault on the sovereignty of the Republic of Kenya" and violated the country's constitution. As workers reside in Kenya and the events in question are alleged to have taken place in Kenya, the Kenyan court agreed and granted an anti-suit injunction prohibiting the workers from continuing with their claim in Scotland.

Scottish courts fight back

Reacting quickly, the workers returned to the Scottish court to seek their own “anti-suit injunction” in the form of an interim interdict, to prevent JFKL from continuing the ongoing anti-suit proceedings in Kenya. The Scottish court responded decisively in granting the interim order - telling JFKL to stop the Kenyan proceedings and allow the Scottish group proceedings to continue.

In what became a litigation forum showdown, Lord Braid was satisfied that the Kenyan proceedings were “unconscionable, vexatious and oppressive” and so the Scottish court could intervene to restrain the Kenyan proceedings.

It was noted that JFKL can make any jurisdiction argument it wishes in the Scottish proceedings, but the general presumption should be that it is for the courts of the place where an action has been raised (not a foreign court) to determine whether it has jurisdiction.

What does this mean for clients?

Aside from this being about as exciting as it gets for litigation lawyers (!), there is a lesson for our clients facing group litigation risk.

We’ve written previously about the uptick in adoption of the new Scottish group procedure rules underlining the potential for any business to face a group claim. Sectors that may be particularly vulnerable could include: pharmaceuticals, medical devices, financial services, automotive, consumer products, travel and tourism, energy, telecommunications, environment and health, and any business dealing with personal data.

Group claims could be brought against businesses with operations in Scotland, selling services or products into Scotland and, as in this case, businesses incorporated in Scotland with operations elsewhere entirely. What is clear is that the Scottish court will protect its own jurisdiction and is prepared to flex its muscles in the group claims context.

Global businesses face global litigation risk, including the risk of a group claim in Scotland. We have leading expertise in the new group procedure in Scotland. Please get in touch if we can assist you in this area.

Please visit our Group Action page to find out more about our team and how we can help.