European Union: Gazprom Decision Of The Court Of Justice Of The European Union On Anti-Suit Injunctions

Anti-suit injunctions are issued by national courts or arbitral tribunals, used especially in common law jurisdictions, in order to protect the jurisdiction of arbitral tribunals, or to prevent the tribunal from assuming jurisdiction. The general explanations on anti-suit injunctions are analyzed in our Newsletter article published in February1.

With regard to anti-suit injunctions, the Court of Justice of the European Union ("CJEU") rendered a decision on May 13th, 2015, in case numbered C-536/13. The case concerned the questions addressed to the CJEU by the Lithuanian Supreme Court that arose in a lawsuit between Gazprom OAO ("Gazprom") and the Republic of Lithuania, with respect to the enforcement of anti-suit injunctions issued by arbitral tribunals. The Gazprom decision of the CJEU is analyzed in this article.

Legal Background

The recognition and enforcement of anti-suit injunctions has always been an issue of debate. Anti-suit injunctions may be considered as an infringement of the mutual trust principle within the European Union, when filed by the court of a member state, concerning the proceedings to be initiated in another member state.

In 2009, the CJEU, in its West Tankers decision, ruled that anti-suit injunctions issued by courts of member states, which deprive the courts of another member state of the ability to rule in their own jurisdiction, would be inconsistent with Council Regulation No. 44/2001 ("Brussels I Regulation").

The Brussels I Regulation sets forth that the Regulation does not apply to arbitration; however, it does not clarify the scope of this exception. On the other hand, the Recast Brussels Regulation that entered into force on January 10th, 2015, clarified that proceedings ancillary to arbitration agreements are not within the scope of the Brussels I Regulation. The Gazprom decision of the CJEU should be considered within this framework.

Summary of the Facts

The facts giving rise to the Gazprom decision are related to a dispute between Gazprom and the Ministry of Energy of Lithuania2 ("Ministry"). The dispute arose out of a shareholders' agreement entered into by and between Gazprom and the Ministry. Pursuant to the arbitration clause in the shareholders' agreement, any claim, disputes or contravention with the agreement or its breach, validity, effect, or termination shall be finally determined through arbitration.

In spite of the arbitration clause in the agreement, the Ministry filed a lawsuit before the Vilnius Regional Court in Lithuania, seeking initiation of an investigation in respect of the activities of a legal person. The lawsuit related to some members of the board of directors of Gazprom. The Ministry also claimed that coercive measures provided under the Lithuanian Civil Code should be imposed, if the actions of the company or the board of directors were found to be improper.

In reaction to the lawsuits filed by the Ministry, Gazprom took the view that the application was in breach of the arbitration clause, and initiated arbitration proceedings before the Arbitration Institute of the Stockholm Chamber of Commerce. Gazprom also requested that the arbitral tribunal should order the ministry to discontinue the proceedings initiated before the Lithuanian courts.

The arbitral tribunal, in its award dated 31.07.2012, declared that the Ministry partially breached the arbitration clause, and ordered the Ministry to withdraw or limit some of the claims that it had brought before the Lithuanian court. Gazprom initiated recognition and enforcement proceedings in Lithuania, in order to enforce the award. The request of enforcement was denied by the Lithuanian court, based on the grounds that the award limited the Ministry's capacity to bring proceedings before a Lithuanian court, and also denied the national court the power to determine its own jurisdiction. Therefore, it was decided that the arbitral tribunal infringed upon the national sovereignty of Lithuania, in contradiction with Lithuanian and international public policy.

Upon the appeal of the decision, the Supreme Court of Lithuania declared that it was uncertain, based on the case law of the CJEU and under the Brussels I Regulation, whether recognition and enforcement of the anti-suit injunction may be refused by the Lithuanian courts, and addressed to the CJEU three questions on the relevant issue.

Decision of the CJEU

In its decision, the CJEU stated that anti-suit injunctions ordered by a member state court requiring a party not to continue proceedings before a court of another member state is contrary to the principle that every court seized of itself determines, under its applicable laws, whether it has jurisdiction. The Brussels I Regulation does not, except in a few limited exceptions, authorize the jurisdiction of a member state court to be reviewed by another member state court.

Considering the above issue, the CJEU clarified that arbitration does not fall within the scope of the Brussels I Regulation, since the latter governs conflicts of jurisdiction between the courts of member states. Concerning the principle of mutual trust, the CJEU pointed out that as the order has been made by an arbitral tribunal, and not by a state court, the principle of mutual trust has not been infringed in the case at hand.

In its decision, the CJEU stated that the Brussels I Regulation does not preclude the courts of European Union member states from giving effect to anti-suit injunctions given by arbitral tribunals. As a result of this determination, whether anti-suit injunctions would be enforced or not should be determined by the national arbitration legislation of the state of enforcement, and by the Convention on Recognition and Enforcement of Foreign Arbitral Awards of 1958 ("New York Convention"), if applicable.

It should also be emphasized that the CJEU pronounced the Gazprom decision under the Brussels I Regulation, and not the Recast Brussels Regulation. Even though the Gazprom decision is given under the Brussels I Regulation, it would also be applicable under the Recast Brussels Regulation, since the latter has established a clearer separation between court proceedings and arbitration proceedings.

Conclusion

The decision of the CJEU should be welcomed with regard to arbitrations with the seat of arbitration within the European Union. In light of this decision, anti-suit injunctions ordered by arbitrators will not be impeded by the Brussels I Regulation, and there will be no mutual trust concerns between European Union member states concerning arbitrator-granted anti-suit injunctions. Pursuant to the Gazprom decision, each member state court will lean on its own arbitration laws, in respect of the effect to be given to anti-suit injunctions. Accordingly, if the relevant jurisdiction is party to the New York Convention, the latter should be applied.

Footnotes

[1] Please see Anti-Suit Injunctions in International Arbitrations, in our February 2015 Newsletter. Link: http://www.erdem-erdem.com/en/articles/anti-suit-injunctions-in-international-arbitration/

[2] The Judgment of the court may be accessed at the following link: http://curia.europa.eu/juris/document/document.jsf?text=&docid=164260&pageIndex=0&doclang=EN&mode=req&dir=&occ=first∂=1&cid=461949.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.