There may be times when the involvement of your national court is required in order to ensure the best conduct of the arbitration. One such example could be the use associated with an anti-suit injunction.
In the context of international arbitration, an anti-suit injunction is usually a national order from the court used to protect the jurisdiction in the arbitration tribunal. Through this type of injunction, a celebration can be ordered to never pursue court proceedings initiated in breach of the arbitration agreement. This is, partially, to hold on to the parties with their contractual agreement and in addition out of concern that people court proceedings (unless restrained) could frustrate the arbitration.
The concern has become that such tactical litigation brings about delay and expense. As these so-called “torpedo” actions tend to be brought in countries in which the judicial process is slow or complex, or possibly is likely to favour the local litigant, the chance of frustrating the arbitration process is real. Traditionally, the anti-suit injunction has become viewed in England since the primary way to deal with such tactical litigation.
English courts can’t use their traditional weapon usually chosen. In February 2009 the European Court of Justice (“ECJ”) delivered its controversial decision on anti-suit injunctions regarding West Tankers Inc v Allianz SpA (Case C-185/07). This case handled anti-suit injunctions since they apply within Europe and, particularly, tips on how to apply EC Regulation 44/2001 (“the Judgments Regulation”) to cases involving arbitrations.
After West Tankers, the English courts still can’t use their traditional weapon of, the anti-suit injunction, in reaction to proceedings started elsewhere in EU or Lugano states in breach associated with an agreement to arbitrate.
The effect of West Tankers is in a case where an event has first issued court proceedings in another EU state court, in this case Italy, the Italian court shouldn’t be deprived of its straight away to determine its very own jurisdiction pursuant towards the Judgments Regulation and mustn’t be restrained through the English court pursuant in an anti-suit injunction.
The facts on the case are these. West Tankers Inc had chartered a vessel called The Front Comor to Erg SPA (Erg) pursuant with a charterparty which ship to disputes for being resolved by arbitration in England. The vessel experienced a collision having a jetty inside Italian port of Syracuse, Sicily, causing substantial damage and Erg claimed compensation from the insurers, Allianz, for compensation up towards the limit of the company’s cover. Erg also commenced arbitration proceedings in London against West Tankers to recuperate the balance of the company’s losses.
In the meantime, Allianz, who have been the insurers, commenced subrogated proceedings against West Tankers inside Italian courts in order to extract the sums that they had paid to Erg within the insurance policy.
West Tankers challenged the Italian proceedings inside English courts for the basis the Italian courts lacked jurisdiction as being the insurer’s claim was covered with the arbitration agreement. West Tankers requested, amongst other relief, an anti-suit injunction requiring Allianz to discontinue the Italian proceedings.
The English High Court upheld West Tankers’ claims and granted the anti-suit injunction. The insurers argued how the grant of a very injunction was contrary towards the Judgments Regulation, since they a directly to bring a claim from the Italian courts and, should the Italian courts took jurisdiction, then which should be the end on the matter. On appeal, the House of Lords produced referral towards the ECJ around the question whether anti-suit injunctions issued to offer effect to arbitration agreements are works with the Judgments Regulation.