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The UK Supreme Court has confirmed the longstanding
power of the courts to enjoin foreign proceedings that violate a
contractual arbitration provision -- even in circumstances where no
arbitration is on foot or in contemplation: Ust-Kamenogorsk
Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant
LLP, [2013] UKSC 35. The parties in that litigation had agreed
to refer disputes about a hydro plant in Kazakhstan to arbitration
in London. When a dispute did arise, the Kazakhstan government
obtained an order from a court in that country declaring the
arbitration clause invalid. (There may be a Borat joke to make
here, but we won't go there.) The respondent LLP applied
to the English courts for a declaration that the clause was valid
and a stay of the proceedings in Kazakhstan.
The Commercial Court concluded that it was not bound to
follow the foreign court's determination on the validity of the
clause and that it could enjoin those proceedings, and this has
been upheld by the Supreme Court. Arbitration agreements give rise
to a 'negative obligation' to refrain from commencing
proceedings other than in the forum specified in the arbitration
agreement, and the English courts have the inherent jurisdiction to
enforce this, 'independently of the existence or imminence of
any arbitral proceedings'. The Arbitration Act 1996
does nothing to take that power away.
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Fair Treatment Outside Of A Contract (Video)
