The question raised in West Tankers Inc. v. RAS, The Front Comor (House of Lords, February 2007) was whether it was consistent with the Brussels Regulation for a court of one EU Member State to restrain a person from commencing or continuing proceedings in another Member State on the ground that such proceedings were in breach of an arbitration agreement. The House of Lords referred the question to the European Court of Justice.
The Front Comor, a vessel owned by West Tankers Inc. ("West Tankers") and chartered to Erg Petroli SpA ("Erg"), collided with Erg's jetty at Syracuse and caused damage. The charterparty was governed by English law and contained a clause providing for arbitration in London. Erg claimed upon its insurers up to the limit of its cover and brought arbitration proceedings against West Tankers for the excess. West Tankers denied liability. At the same time, the insurers commenced proceedings against West Tankers in Syracuse to recover the amounts which it had paid Erg under the policies.
West Tankers obtained a permanent injunction in the Commercial Court against the insurers restraining them from prosecuting the Syracuse proceedings. When granting the injunction, Colman J. said that he was bound by the decision of the Court of Appeal in Through Transport Mutual Insurance Association (Eurasia) Ltd v. New India Assurance Co. Ltd [2005] to hold that such an injunction would be consistent with the Brussels Regulation.
The issue is whether the approach established by the ECJ in Gasser v. MISAT and Turner v. Grovit extends to the context of arbitration. These two cases decided that anti-suit injunctions could not be granted to restrain a party from pursuing proceedings in another Member State that were brought in breach of an exclusive jurisdiction clause. Both decisions are based upon the proposition that the Brussels Regulation provides a complete set of uniform rules for the allocation of jurisdiction between EU Member States and that the courts of each Member State have to trust the courts of other Member States to apply those rules correctly.
Whilst current English authority is against the view that the decisions in Gasser v. MISAT and Turner v. Grovit apply to arbitration, European academic opinion exists both for and against such an extension. Although the House of Lords referred the question to the ECJ, Lord Hoffmann (with whom the other Law Lords agreed) and Lord Mance delivered strong opinions opposing such an extension.
Lord Hoffmann held that arbitration is altogether excluded from the scope of the Brussels Regulation and that the principles by which the Brussels Regulation allocates jurisdiction – giving priority to the domicile of the defendant (subject to exceptions) – are entirely unsuited to arbitration in which the forum and applicable law are generally chosen by the parties on grounds of "neutrality, availability of legal services and the unobtrusive effectiveness of the supervisory jurisdiction". The most important consideration, in Lord Hoffmann's view, is the "practical reality of arbitration as a method of resolving commercial disputes". He emphasised that people choose arbitration in order to be outside the procedures of any national court, preferring the privacy, informality and efficiency of arbitration, and that the principle of autonomy of the parties should allow them these choices.
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