‘New Teeth’ For Arbitration Anti-Suit Injunctions

The Supreme Court has today handed down judgment in the important case of Ust-Kamenogorsk Hydropower Plant JSC (Appellant) v AES Ust-Kamenogorsk Hydropower Plant LLP (Respondent) [2013] UKSC 35.1 In their decision the Court has held that, in certain circumstances, parties who have the benefit of an English arbitration clause can obtain anti-suit injunctions from the English Court even though there is no actual arbitration in existence or contemplated. The Arbitration Act 1996 does not restrain the Court's powers under s. 37 of the Senior Courts Act to grant such relief. Permission to serve out of the jurisdiction under CPR 62.2 (an arbitration claim) is also valid in such circumstances. The decision in Ust-Kamenogorsk greatly assists clients who have the benefit of an English arbitration clause. The judgment merits careful reading. Ust-Kamenogorsk involves a long-running arbitration anti-suit injunction case arising out of a concession agreement relating to a hydroelectric power plant in Kazakhstan. The concession agreement contained an English arbitration clause that had been declared invalid from the Kazakh Supreme Court, and the Kazakh Courts had refused to stop proceedings before it brought by the Kazakh owners against the holders of the concession. The English Commercial Court had granted an interim anti-suit injunction against the Kazakh appellants, holding that it was not bound to follow the Kazakh Court's previous ruling on the validity of the arbitration agreement. Concerned about the Appellant's continuing with their claims in breach of the arbitration clause, the Respondents decided to press on with the Commercial Court proceedings. At a final hearing, the Commercial Court had granted a declaration that the arbitration clause was valid and enforceable, and granted a final anti-suit injunction. The appellant appealed to the Supreme Court of the United Kingdom on the grounds that English courts have no jurisdiction to injunct the commencement or continuation of legal proceedings brought in a foreign jurisdiction outside the Brussels Regulation / Lugano regime where no arbitral proceedings had actually been commenced or are proposed. In a unanimous judgment, given by Lord Mance, the appeal was dismissed. The Court held that English courts have a long standing jurisdiction to restrain foreign proceedings brought in violation of an arbitration agreement, even when there was no arbitration on foot or in contemplation. Nothing in the...