Case Alert - [2018] EWHC 1343 (Comm)
Court holds that English Court cannot grant anti-suit injunction to restrain proceedings in another Member State court, which were brought in breach of an arbitration agreement
One of the issues in this case was whether the claimant could obtain an anti-suit injunction to restrain the pursuit of court proceedings in a Member State (Cyprus) which it alleged were brought in breach of an arbitration agreement.
Regulation (EC) 44/2001 provides that where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, the Member State court first seised of proceedings must hear the case. The ECJ decisions in Gasser v Misat (2003) and Turner v Grovit (2004) established that the English courts cannot grant an anti-suit injunction where another Member State is first seised of proceedings, even if that breaches an exclusive jurisdiction clause (although it is still possible to obtain an anti-suit injunction to restrain proceedings outside the EU).
The West Tankers v Allianz case confirmed that the same position applies where there is an alleged breach of an arbitration agreement, even though arbitration is expressly excluded from the scope of Regulation 44/2001. That was because it was held that an anti-suit injunction would undermine the effectiveness of the Regulation.
Regulation (EC) 44/2001 was recast into a new Regulation (1215/2012) in January 2015 ("the recast Regulation"). The recast Regulation restates the arbitration exception and confirms that proceedings relating to arbitration fall outside of its scope. It clarifies that any court proceedings brought in order to support an arbitration (including enforcing or challenging an award and deciding the validity of an arbitration agreement) fall outside the scope of the recast Regulation (and hence the court not first seised can decide these matters) (Recital 12). The recast Regulation also provides that a New York Convention arbitral award will have precedence over a Member State court judgment (if both the arbitration and the Member State proceedings continue to a decision on the merits and reach opposite conclusions). However, the recast Regulation is silent about whether an anti-suit injunction could be granted by a Member State court.
In the CJEU case of "Gazprom OAO", Advocate General Wathelet issued an opinion which provided, broadly, that West Tankers had been overturned and so an anti-suit injunction could now be granted. However, when judgment was handed down in the case, it was decided under Regulation (EC) 44/2001 (and affirmed the West Tankers decision), and so didn't resolve this question under the recast Regulation. Instead, it only held that a Member State court would be free to recognise an anti-injunction award granted by the arbitrators.
In this case, Males J observed that "Neither the Recast Regulation itself nor its recitals say expressly that .... an anti-suit injunction in support of arbitration issued by a court in a member state takes precedence ... If the EU legislature intended to reverse the West Tankers decision, it chose an odd way in which to do so".
He went on to hold that "I conclude that there is nothing in the Recast Regulation to cast doubt on the continuing validity of the decision in West Tankers ... which remains an authoritative statement of EU law. For the reasons which I have explained, I respectfully disagree with the opinion to the contrary of Advocate General Wathelet. Accordingly there can be no injunction to restrain the further pursuit of the [defendant]'s proceedings in Cyprus". Instead, it was for the Cypriot courts to decide if they will hear the case.
A further issue in the case was whether the court should grant an anti-suit injunction (to restrain proceedings taking place outside of the EU) if similar relief can be granted by the arbitrators. The judge concluded that the availability of anti-suit relief from the arbitrators was no reason for the court to refuse an injunction: "Where there has been no application for a stay [of legal proceedings] under section 9 there is no reason why the court should not exercise the jurisdiction to grant anti-suit relief which it undoubtedly has". It was noted that the defendant to the anti-suit injunction (who has commenced proceedings outside the EU in breach of an arbitration clause) is unlikely to seek a stay of the English court proceedings, though, given that it will have adopted the stance that there is no binding arbitration agreement.
COMMENT: The decision regarding the continued applicability of the West Tankers case is arguably correct, given that the recast Regulation does itself appear to contemplate both the arbitral and the Member State court proceedings continuing (and possibly reaching different conclusions). However, given the importance of this point, it is likely to be appealed further before the English courts (and may possibly even go to the CJEU).
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