Brexit: The Return Of The EU Anti-Suit Injunction?

When disputes arise parties look to their contracts to see how the dispute should be resolved. Sometimes this is a straight-forward matter and the parties proceed as previously agreed. Sometimes however it is either unclear as to which court or tribunal has jurisdiction over the dispute, or a party sees a strategic advantage in creating a jurisdictional diversion.

The anti-suit injunction

Where a party commences litigation in the English court in breach of an arbitration agreement, a party may apply to the English court for that litigation to be stayed (s9 Arbitration Act 1996). Where the litigation was commenced in a foreign court, the wronged party could apply for an order of the English court to prevent the foreign litigation from continuing (an anti-suit injunction). The remedy was thought to be available as between EU Member States as arbitration is 'carved out' of the Brussels regime on jurisdiction which applies between Member State courts.

However, in 2009 a decision of the European Court of Justice (ECJ, a part of the Court of Justice of the European Union (CJEU)) in the West Tankers dispute determined that that the Brussels regime precluded the courts of a Member State making an order restraining a person from commencing or continuing proceedings in another Member State on grounds that such proceedings would be in breach of an arbitration agreement as to do so would be incompatible with EU law.

The rationale on the facts of West Tankers was that both the subject matter of the proceedings commenced in the other Member State (Italy) and the preliminary question as to whether the arbitration agreement was applicable did fall within the scope of the Brussels regime. This decision prevented any EU Member State court from issuing an anti-suit injunction in favour of arbitration against claims brought in breach of a jurisdiction in another Member State. Instead the court would hear the arguments on jurisdiction and make their own determination.

Given the mutual respect and co-operation between EU Member State courts the premise was that the court seized of the proceedings would review the jurisdiction clause and, where appropriate, find that it did not have jurisdiction and that proceedings had been started in breach of the agreement. However, even if this was the case, time and money can be wasted and the tactic of frustrating or stalling proceedings by commencing proceedings in an 'incorrect jurisdiction' remained open.

Does Brexit...