|
THE CHARTERED INSTITUTE OF ARBITRATORS |
Home | Contact Us | Site Map | FAQs |
|
|
THE CHARTERED INSTITUTE OF ARBITRATORS |
Home | Contact Us | Site Map | FAQs |
The Institute...About the Institute Apply for Membership Courses  |
CIArb Reacts to Case: West Tankers Inc v. RAS Riunione Adriatica di Sicurta SpA & OrsEuropean Court of Justice Decision could Potentially Seriously Affect EU ArbitrationOn 21st February, in the case West Tankers Inc v. RAS RiunioneAdriatica di Sicurta SpA & Ors ([2007] UKHL 4), the House of Lords decided (as it is obliged to do under Art.234 of the Treaty of Rome) to refer a key question to the European Court of Justice (ECJ) for decision. The ECJ's answer may have a substantial, and potentially serious effect, on arbitrations in EU arbitration centres such as London. The question, abbreviated, is: "may a court of a Member State grant an anti-suit injunction restraining a party from bringing proceedings in a court of another Member State where the parties have previously agreed to arbitrate their disputes".
Traditionally, in such circumstances, the court in the country where the arbitration was to take place (known as the arbitral seat) would issue an anti-suit injunction to restrain court proceedings elsewhere in order for the disputes to be resolved by arbitration. ECJ case law prohibits anti-suit injunctions in respect of litigation in other EU courts, but it has always been assumed that this did not apply to arbitration proceedings because EC Regulation 44/2001 (the Regulation) specifically excludes arbitration. Although it can be argued that any court order in any civil or commercial proceedings conflicts with the Regulation, it is notable that the New York Convention 1958 (the Convention), to which all EU Member States are party, obliges (with limited exceptions) courts to stay legal proceedings initiated in defiance of an arbitration agreement.
While the House of Lords is obliged to refer to the ECJ, the question of whether a court can grant an anti-suit injunction in support of arbitration, their Lordships have made it robustly clear that the answer to the question must be "yes", thereby both continuing the long-standing status quo and remaining compliant with Convention obligations. The argument for a "no" answer was described by Lord Hoffman, quoting a distinguished German academic, as 'divorced from reality' since to extend the application of the Regulation to orders made in proceedings to which the Regulation did not apply went far beyond the case law and ignored the practical realities of international commerce. "This case has the potential to change, significantly and adversely, the face of arbitration in the EU with consequent damage to London and other EU arbitration centres. At the heart of the issue is a tension between EU regulation on the one hand and the realities and requirements of private dispute resolution, particularly international commercial arbitration, on the other. Likely losers in arbitration will be able to play the litigation game, preferably in courts which take years to come to a substantive hearing, in order to derail arbitrations. International parties will, as Lords Hoffman and others sagely observe, merely go elsewhere for arbitration. The CIArb strongly supports their Lordships' stated opinions and urges the ECJ to endorse them."
Commenting, Peter Rees, of Debevoise & Plimpton, Chairman of the Practice & Standards Committee of the Chartered institute of Arbitrators and Editor of Civil Jurisdiction and Judgments, said: "For all the reasons expressed in the House of Lords, I sincerely hope the ECJ will take the approach of supporting parties who have chosen arbitration proceedings, including allowing anti-suit injunctions. But I fear, given the recent track record of the ECJ, it may well come to a different conclusion. If it does, the effect on arbitration in England, and the rest of the EU, could be far-reaching indeed.”
Ends- About The Chartered Institute of Arbitrators The CIArb is an international centre of excellence for the promotion and facilitation of dispute resolution. Widely regarded as the professional home for all dispute resolvers, CIArb membership supports the professional credibility of more than 11,000 individuals and gives users confidence that the very best individual is helping to resolve their dispute.
In addition to providing education and training for arbitrators, mediators and adjudicators, the CIArb acts as an international resource centre for practitioners, policy makers, academics and those in business concerned with the cost effective and early settlement of disputes.
To find out more, please contact - Noreen Shah T +44 (0)20 7421 7434 |
 |
Quick Links |
||
Membership |
Courses and Events |
Dispute Resolution |
The Institute... |
Meeting Rooms |
Book Store |
|
|||
|
Copyright © Chartered Institute of Arbitrators 2005 12 Bloomsbury Square, London WC1A 2LP |
|||
Print this page