FL-2025-000012 - [2025] EWHC 2673 (Ch)

The Defendant does not dispute, in the event of my finding for the Claimant on both principal issues, that there should be a declaration, as prayed in the Particulars of Claim, that its instigation and pursuit of the Paris Proceedings is in breach of the Additional Agreement.

What is disputed is whether the Claimant should be granted a final injunction ordering the Defendant to withdraw the Paris Proceedings.

The Claimant argued that although an injunction is always a discretionary remedy, damages will not in principle be and are not in this case an adequate remedy, and that injunctive relief should generally be granted to enforce a negative contractual stipulation unless there is good reason why it should not be. The Court is simply enforcing what the parties agreed that the Defendant should not do.

The Defendant advanced three arguments why the proceedings (which allege unlawful steps taken by Aether) should not be restrained.

First, there is no agreement in clause 5 of the Additional Agreement or elsewhere that Aether can take unlawful action. By granting the injunction, the Court would therefore potentially be giving the Claimant and Aether carte blanche to act unlawfully, by breaching the terms of the Security Documents. (Although the Defendant has made this allegation in the Paris Proceedings, it is strongly disputed by the Claimant.).

Second, it can be seen as unconscionable to deprive the Defendant of a fundamental right of access to the Courts. Unconscionability is one of the circumstances in which a court may (or should) desist from enforcing a negative obligation by injunction.

Third, as a matter of comity, this Court should not prevent a foreign court from adjudicating on the merits of the Defendant’s case there, when the parties have chosen that jurisdiction and when it may be appropriate for the foreign court to prevent a breach of local law.

The difficulty with each of these arguments is that I have already concluded against the Defendant that by the terms of the Additional Agreement it agreed not to challenge Aether’s enforcement under the terms of the Security Documents. It thereby gave up any challenge to enforcement, whether in France, Luxembourg or England, in the event that it was unable to conclude refinancing before the expiry of the standstill period. Whether or not what Aether has done is contrary to the terms of the security documents (which is disputed), the Defendant agreed not to challenge enforcement, as the price of being granted further time to redeem FV Debt’s bonds.

If the argument is presented in terms of a contractual party surrendering the ability to have its rights protected in the chosen jurisdiction, the case naturally sounds more credible than if it is described as the Defendant being given a final chance to avoid insolvency and winding up of its affairs in circumstances where FV Debt could immediately have enforced and brought about those consequences. Having concluded that the language of the Additional Agreement is clear enough to have that effect, it cannot be said that the effect is so oppressive that the court should refuse to enforce the agreement. Nor can it be said that it is unconscionable for the court to enforce what the parties have agreed.

I do not accept that the absence from the Additional Agreement of the equivalent of clause 7 of the Standstill Agreement (specific performance) gives any indication that the parties considered that damages would be an adequate remedy for breach of clause 5 of the Additional Agreement. On the undisputed evidence of Mr Burgio, in his second witness statement dated 15 August 2025, I am also satisfied that damages would not be an adequate remedy for the potential harm to the investment and confusion, and damage to the brand, that would be caused by what might be a temporary reversal of the change of operational control of the hotel.

As for comity, this Court fully respects the autonomy of the Tribunal de Commerce and has not determined issues that are subject to its exclusive jurisdiction, only issues where, as a result of the Additional and Amendment Agreements, there is jurisdiction in this court. The injunction sought is not directed at the Tribunal but at the Defendant, in just the same way as was the interim injunction that required the Defendant to take all steps within its power to adjourn the hearing in Paris. While a final injunction will require the Defendant to withdraw those proceedings entirely, this is no different in principle from an anti-suit injunction, which prevents a respondent from pursuing proceedings in their preferred jurisdiction.

One difference from such a case is that these parties did choose the Tribunal de Commerce as the exclusive jurisdiction for disputes about the Subscription Agreement, the Transfer Agreements and the Fiducie. However, those jurisdiction agreements were necessarily overlain by the subsequent agreement by Company Parties not to contest or prevent Enforcement Action by Aether and to cooperate with the Claimant and Aether in relation to Enforcement Action. In this case, the parties have agreed that the issues should not be litigated at all, not merely that they should not be litigated in particular jurisdictions, and in my judgment the same result should follow.

Accordingly, I will grant a final injunction against the Defendant requiring it to withdraw the Paris Proceedings.