When life gives you lemons, make lemonade: anti-suit injunctions and arbitration in London post-Brexit

The post below was first published on our Arbitration blog

London has long been a city associated with international arbitration. In 2015, even with the UK referendum on EU membership looming, according to analysis by theCity UK, London was the seat or centre of 4,738 international commercial arbitrations, mediations and adjudications in 2015. These were conducted under the auspices of numerous institutions, with the long-established LCIA governing only a relatively small percentage. In the year preceding the referendum, according to the Queen Mary University of London International Arbitration survey, 47% of participants included London amongst their top three choices of seat (Paris was the next most popular with 38%, followed by Hong Kong with 30%). Many different factors attract international parties to London as a seat of arbitration, including the legislative framework, the supportive powers of the English courts and the pro-arbitration attitude with which they are exercised, the common use of English contract law in commercial transactions (from which the choice of a London seat often follows), the infrastructure of London and the availability of legal, expert and other services to support arbitration.

The referendum outcome has inevitably led to reflection on the commercial, legal and practical effects in so many areas, arbitration included. Whilst the relationship between the UK and the EU is yet to be re-defined, it is timely to consider the ways in which Brexit may have an impact on arbitration in London, whether negative, or indeed positive.

In general terms, Brexit should not have a substantive impact. Arbitration is excluded from EU legislation regarding jurisdiction and enforcement, and a tribunal seated in London is not obliged to follow EU rules regarding choice of governing law. The UK and all other EU Member States are party to the New York Convention, and their obligations under the Convention are entirely independent of EU membership. As such, following Brexit, an agreement to arbitrate in London and a resulting award will continue to be enforceable across the EU. Likewise, an agreement to arbitrate anywhere in the EU (and indeed, in any state which is a contracting party to the New York Convention) and a resulting award will still be enforceable in the UK. And the stability, certainty and predictability of common-law made English contract law will remain unaffected, and as an excellent choice to govern contractual relationships.

But there are of course many issues to consider at a more micro level. This post focuses on an issue which has been the subject of much discussion in the last few years: the significance of the availability of anti-suit relief to halt proceedings in breach of an arbitration agreement in an EU Member State court.  It also considers, among other things, whether Brexit could affect the pool of specialist arbitration practitioners which represents one of the many strengths of London as a seat of arbitration.

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DEVELOPMENT JOINT VENTURES: FUNDAMENTAL ASPECTS, MINORITY RIGHTS AND THE EUROPEAN DIMENSION

The post below was first published on our UK Real Estate Development blog

Author: Paul Chases, Senior Associate and Head of Corporate Real Estate, London

In the UK property market one investment or development project can vary considerably from another.  However, the prevailing feature that many such projects share is the corporate real estate joint venture (the “JV”).  The JV has become central to investment and development activity undertaken by the likes of property companies, private equity funds, institutional/overseas investors, pension funds, sovereign wealth funds and individuals.  Parties are increasingly looking to share financial risk and reward (by way of JV), but never more so than during periods of economic uncertainty and market volatility as riskier (but more competitively priced) opportunities come to the market.

In a series of articles published in the Estates Gazette on 2 July, 9 July and 15 July 2016, Paul Chases of the Herbert Smith Freehills corporate real estate team takes a closer look at:

(i)      the six fundamental areas that should be at the forefront of each party’s mind when contemplating a new JV (deal structuring, future bankability, funding, applicable law and exit);

(ii)    JV minority rights (picking up contractual and statutory protections); and

(iii)   the European dimension as it applies to a JV (and how Brexit might interplay).

Please click on the links below to read the articles.

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THE IMPACT OF BREXIT ON DATA PROTECTION AND CYBER SECURITY

This blog post summarises a number of unanswered questions in data protection and cyber security legislation brought on by Brexit.

The "in-out" Referendum on the question of the UK's membership of the EU has resulted in a majority of voters (on a turnout of approximately 72%) preferring the UK to leave the EU. The vote was 51.9% in favour of leaving, with 48.1% voting to remain.

Under the terms of Article 50 of the Treaty on European Union, which governs the process, the UK must first inform the European Council of its intention to leave the EU. This notification triggers the two-year period specified by the Treaty for the negotiation of the terms of a Member State's withdrawal.

In the sphere of data protection, the referendum results leaves a number of questions unanswered about whether and when organisations in the UK will have to comply with the requirements in the upcoming General Data Protection Regulation ("GDPR").

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Brexit – Implications for insurers

The post below was first published on our Insurance blog

The UK vote to leave the EU raises novel political and legal questions which neither side of the referendum campaign appears to have considered in any meaningful way.  Nonetheless, businesses are having to consider the implications of the vote as best they can while waiting for the outcome of negotiations over the UK’s exit.

Our “at a glance” guide highlights over two pages the key issues raised by the UK’s withdrawal from the EU for insurers and reinsurers.

Our more detailed guide “Access to the single market” – an explanation for the (reinsurance) sector explains the issues raised by Brexit for the (re)insurance market in greater depth.  In particular, it considers Solvency II rules applying to third country branches and whether obtaining equivalence status under Solvency II would allow UK insurers to access EEA insurance markets once they lose their passporting rights.  A particular issue for insurers post-Brexit is the ability to service cross-border business written before the passport is withdrawn.

BREXIT: SOME INDIRECT IMPLICATIONS FOR DEVELOPMENT AND PLANNING

The post below was first published on our UK Real Estate Development blog

The real estate sector as a whole is in a strong position to cope with such short-term volatility.

There are many briefings on what Brexit means for real estate and I don’t intend to repeat them in this article. There are only so many ways of saying that the outlook remains uncertain and some transactions are likely to be put on hold until the situation becomes clearer.

Instead, I want to consider some of the indirect implications of the leave vote. I have spent the last week talking to clients and contacts about their concerns, many of which are less obvious than the headlines would suggest. It would be unfair to identify whom I have spoken to, but equally I cannot claim all the credit for these thoughts either.

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UPCOMING WEBINAR – DISPUTE RESOLUTION CHOICES FOR FINANCE PARTIES: A PRACTICAL LOOK AT RECENT DEVELOPMENTS AFFECTING DISPUTE RESOLUTION OPTIONS

The post below was first published on our Litigation blog

On Thursday 14 July (12.45 – 1.45pm BST), Adam Johnson, Nick Peacock and Vanessa Naish (chair) will deliver a webinar for Herbert Smith Freehills clients and contacts looking at dispute resolution choices for finance parties. Continue reading

Is the consent of the Scottish Parliament required for Brexit?

Westminster retains the right to legislate in relation to Scotland, in any matter – the Sewel Convention does not provide Scottish Parliament with a veto.

It has been suggested that because the laws of Scotland cannot be incompatible with EU law (Article 29(2) Scotland Act 1998), this means that if an Article 50 notice is served by the Prime Minister, or with only the consent of the Westminster Parliament, the notice would be invalid. Our analysis suggests that this is probably incorrect. 

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SURVIVING BREXIT WITHOUT BREAKING THE LAW

There is a real opportunity for businesses to engage in joint lobbying on the shape of the UK exit. But in doing so, they need to keep an eye on competition law risks.

As the UK faces potentially significant legal and regulatory change resulting from the Brexit vote, there is a real opportunity for businesses to engage in joint lobbying on the shape of the UK exit. But in doing so, they need to keep an eye on competition law risks. 

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