Anti-suit Injunctions within the EU: AG Wathelet delivers his Opinion in Gazprom

The Advocate General Wathelet (the AG) has delivered his much awaited Opinion in the reference to the Court of Justice of the European Union (CJEU) by the Lithuanian Supreme Court in the case of Gazprom (C-536/13). The Lithuanian Court referred to the CJEU three questions pertaining to the effect of the Brussels I Regulation (EC) No 44/2001 (the Regulation). The Regulation determines the member state courts’ jurisdiction and excludes arbitration from its scope. However, the exception has gradually been eroded by the CJEU in decisions such as West Tankers.

The Reference in the present case related to a request to enforce an arbitral award which has a similar effect to an anti-suit injunction and has therefore been of considerable interest to the arbitration community. The background to the reference is more fully explained in our blog post [here]. In his Opinion, AG Wathelet also considered in detail the effect of the Recast Brussels I Regulation (the Recast Regulation), which comes into force on 10 January 2015. This opinion is the first that considers its terms, and, if adopted by the CJEU, would set down a marker for the interpretation of the arbitration exception within the Recast Regulation, with the effect that an anti-suit injunction issued by an arbitral tribunal would be recognisable and enforceable by member state courts.

AG Wathelet concluded that:

  • the Regulation does not require the court of a member state to refuse to recognise and enforce an anti-suit injunction issued by an arbitral tribunal; and
  • the fact that an award contains an anti-suit injunction is not a sufficient ground for refusing to recognise and enforce it on the basis of Article V(2)(b) of the 1958 Convention because the Regulation is not a matter of public policy.

The Opinion holds great interest for its discussion of the implications of the Recast Regulation (even though it was the current Regulation that was in issue). In the AG’s view, the Recast Regulation aims to correct the boundary which the ECJ (now the CJEU) had traced between the application of the Regulation and arbitration in the West Tankers (Case C-185/07). The decision in West Tankers was seen by many as signifying the death of the anti-suit injunction in Europe. In the AG’s view, it is clear from its legislative history that the Recast Regulation seeks to reinstate the position in which the consideration of the validity of an arbitration agreement as an incidental question falls outside the scope of the Recast Regulation.

The AG also opined on what it means for a court to be seised on the question of the validity of an arbitration agreement in the context of the Recast Regulation. He noted that while a court may be seised on the incidental question of validity of an arbitration agreement, this falls outside the scope of the Recast Regulation. A court is not seised on the substance of the dispute (proceedings which do fall within the scope of the Recast Regulation), until it has decided the issue of the validity of the arbitration agreement.

AG Wathelet also observed that an anti-suit injunction issued by an arbitral tribunal could not be considered in the same way as that issued by a member state court.

Whilst it remains to be seen whether the AG’s opinion will be adopted by the CJEU, his interpretation of the effects of Recital 12 of the Recast Regulation offers hope that a party will be able to protect an arbitration agreement by virtue of an anti-suit injunction, even when parallel proceedings are threatened or brought within the EU.

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Upcoming webinar: The recast Brussels Regulation: what it means for commercial parties

Wednesday 19 November, at 12.45 – 1.45pm GMT

The EU rules governing has jurisdiction and enforcement of judgments will change significantly from 10 January 2015, when the recast Brussels Regulation (No 1215/2012) will apply in place of the current regime.

The webinar will consider the key changes and their impact on commercial parties in practice, including a look at the problems addressed by the new rules and a discussion of where uncertainties remain. In broad outline, the main areas of reform are:

  • clarifying the extent and effect of the exclusion of arbitration from the ambit of the Regulation
  • extending the rules relating to jurisdiction agreements and defusing “torpedo” actions
  • new rules on stays in favour of proceedings in a non-member state
  • extending the rules relating to consumers and employees to apply to non-EU domiciled traders and employers
  • making Member State judgments immediately enforceable across the EU

Speakers:

The webinar is part of our series of “Soundbite” webinars, which are designed to update clients and contacts on the latest developments without having to leave their desks. The webinars can be accessed “live”, with a facility to send in questions by e-mail, or can be downloaded as podcasts after the event. If you would like to register for a webinar, or to obtain a link to the archived version, please contact Prudence Heidemans. The webinars, both live and archived, also qualify for one CPD point.

Adam Johnson
Adam Johnson
Partner
+44 20 7466 2064
Nicholas Peacock
Nicholas Peacock
Partner
+44 20 7466 2803
Anna Pertoldi
Anna Pertoldi
Partner
+44 20 7466 2399

Does the Brussels I Regulation forbid recognition of arbitral anti-suit injunctions? Lithuanian Supreme Court refers question to CJEU

Last month, the Lithuanian Supreme Court (the Supreme Court) made a preliminary reference to the Court of Justice of the European Union (CJEU) asking whether an EU member state court can refuse to recognise an arbitration award which restrains a party to the arbitration agreement from continuing proceedings in the courts of another member state (in essence, an anti-suit injunction). The Supreme Court considered that the enforcement of such an award may be contrary to the Brussels I Regulation in light of the reasoning in West Tankers.

The reference has been made to the CJEU under the current Brussels I Regulation but, given the likely proximity of the decision with the entering into force of the revised Brussels I Regulation (Regulation (EU) No. 1215/2012) (the Revised Regulation) on 10 January 2015, it is expected that the CJEU will give consideration to the language of the Revised Regulation in making its decision.

It is hoped that the CJEU’s decision will provide some guidance on the balance to be struck between (i) the rights of member state courts under the Brussels regime to rule on their own jurisdiction and enforce judgments made in breach of an arbitration agreement and (ii) the application of the New York Convention and the enforcement of conflicting arbitral awards by those same courts. Even more interesting will be the CJEU’s interpretation of the award in question and its decision on whether its effect as an anti-suit injunction renders it unenforceable, particularly in light of the precedence of the New York Convention under the Revised Regulation (for our previous commentary on the Revised Regulation, see here).

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