Threshold to grant an anti-arbitration injunction against proceedings abroad

Categories: Business Law
Typology: Case Law

A few weeks ago (8th July 2015), the High Court of Justice (Queen's bench division, Commercial court) delivered its judgment in the case between AmTrust Europe Limited and Trust Risk Group SpA ([2015] EWHC 1927 (Comm)). The Court refused ATEL's application to grant an anti-suit injunction.

The root of the case is to be found in inconsistent dispute resolution clauses in agreements between the same parties. In 2010, ATEL, an English insurance company, conducted business with TRG, an insurance broker incorporated in Italy, whereby TRG placed ATEL policies, mostly with Italian hospitals, in the Italian market. The parties entered into a contractual document entitled "Terms of Business Agreement" in 2010. The ToBa included a jurisdiction clause in favour of the English Courts. In 2011, the same companies entered into a "Framework Agreement". It included at clause 6 a provision providing that should any party consider it not possible to reach an amicable settlement or in any event after elapsing of a thirty days period, then any dispute arising out of or in connection with the agreement shall be finally settled by an arbitration panel composed of three arbitrators applying Italian Law and sitting in Milan.

In October 2014 TRG sent ATEL notice that it had brought arbitration proceedings in Italy. In November 2014 ATEL and AFS appointed an arbitrator in the Italian reference, while disputing the tribunal's jurisdiction. In January 2015 ATEL applied for a so-called "anti-arbitration" injunction. It was made on the grounds that the parties have agreed upon the exclusive jurisdiction of the English courts, and TRG's refusal to undertake to stay or discontinue Italian arbitration proceedings is vexatious, oppressive and unconscionable.

The judge (Mr Justice Andrew Smith) rejected the application after noting at paragraph 20 that TRG advances, in its pleadings in the arbitration, claims under the framework agreement and not under the ToBA. The Arbitration Tribunal may conclude differently (i.e. the claims arise under the ToBA), but that is not a sufficient basis to restrain TRG from pursuing arbitration proceedings. The judge added that even if he considered the claims to be unarguable, the court has no supervisory jurisdiction to dismiss unarguable claims brought in an English arbitration (Nomihold v Mobile Telesystems Finance SA, [2012] EWHC 130 at para 49), and there is no proper basis for assuming it in respect of a foreign arbitration.

Moreover, the judge recalls at paragraph 23 that there is no dispute that the English court has personal jurisdiction over TRG and that therefore it has jurisdiction under the Senior Courts Act, 1981 s. 37 to make an injunction restraining the pursuit of arbitration proceedings, notwithstanding their seat is in another jurisdiction. However, the judge quotes Dicey, Morris & Collins, The Conflict of Laws (2012, 15th Ed) as stating that the power of the court to grant an injunction restraining foreign arbitral proceedings is only exercised in exceptional circumstances and with caution, the cases cited where injunctions were made having as a common feature that in them "the essential claim was that there was no arbitration agreement at all, and the English court either had determined or was entitled to determine that point". By contrast, it is undisputed that the arbitration agreement exists in the present case. The reason for this cautious policy is that it is a well-established principle of English law that the courts of the seat of the arbitration should have supervisory jurisdiction (paragraph 26). The judge relied on the evidence provided by a lawyer that should ATEL be dissatisfied with the Arbitration Tribunal assessment of its own jurisdiction, an appeal was possible before the Milan Court of Appeal according to article 830 of the Italian Code of Civil Procedure and if ATEL considered that an award goes beyond the limits of the arbitration agreement, it can challenge it under article 829.

(Altalex, 26 October 2015. Article by Emmanuel Guinchard)

England and Wales High Court of Justice

Queen's bench division, Commercial Court

Decisions 8 July 2015

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