The Court of Appeal has allowed an appeal from a finding by Teare J that a knowing assistance claim by a company (MWP) against defendants (S) was an abuse of process of the court because it was a collateral attack on a previous arbitration decision between MWP and another party (E). The court confirmed that there is no “hard edged” rule that a prior arbitration award cannot found an argument that subsequent litigation is an abuse of process. The categories of abuse of process are not fixed. However, the court did not agree that this was one of the rare cases where court proceedings against a non-party to a previous arbitration could be said to be an abuse of process.
The court did not consider that the fact that one of the defendants was a witness in the prior arbitration, and funded the defence, bore any material weight, in the light of S’s equivocal approach to the arbitration. S had been invited to be a party and refused. Further, even if the tribunal’s findings were in favour of S and it had authorised disclosure to S and expected that S would benefit as a result, the tribunal did not have jurisdiction to adjudicate on the claims in a way that bound MWP in relation to a non-party. Nor could it grant any relief to a non-party.
The circumstances also could not be said to fall within the “spirit” of the issue estoppel rule since S were not E’s privies and there was no mutuality.
MWP was also not vexing E twice as MWP was not pursuing E in the litigation. E was only a potential witness. The abuse jurisdiction was concerned with manifest unfairness to a party, not a witness.
The Court of Appeal’s view now establishes a consistent principle: court proceedings can be struck out for abuse of process on the basis of collateral attack on a previous decision where the previous decision was made in an arbitration. However, it also suggests that the limitations of the abuse principle mean that findings of abuse where there is subsequent court action against a non-party to an arbitration should be very rare indeed. (Michael Wilson & Partners Ltd v Sinclair and others  EWCA Civ 3.)