European Parliament Recommends that the Effect of the 'FRONT COMOR' be Reversed

Regulation 44/2001 has recently been the focus of the European Parliament's attention and has resulted in a Resolution addressing a number of areas that may need improving.

A review of the European Parliament Resolution ("the Resolution"), on the implementation and review of Council Regulation (EC) No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("the Regulation") adopted on 7 September 2010.

The recent European Parliament Resolution deems Regulation 44/2001 to have been successful at promoting legal certainty within Europe, yet at the same time it looks to address issues arising out of a number of decisions by the European Court of Justice ("ECJ") which have been perceived to go against the realities of commercial litigation.

One such recommendation, found in paragraph 10, seeks to reverse the much criticised ECJ decision in the "FRONT COMOR" 1. In this case, the ECJ held that the English courts were not permitted to grant an anti-suit injunction to restrain a party from commencing or continuing proceedings before the court of an EU member, even though this was in breach of a London arbitration clause contained in the agreement between the parties. Under the new proposals, the court would be able to grant the anti-suit injunction. This, in effect, would mean that Regulation 44/2001 would not only exclude arbitration proceedings from its scope of application but also judicial rulings on arbitral competence.

In addition to the above, the Resolution proposes a solution to what have become known as "torpedo actions" – actions brought in a jurisdiction where protracted litigation is commonplace, in breach of an exclusive jurisdiction clause contained in the original agreement. Paragraph 12 of the Resolution proposes that the court designated in the agreement would no longer be obliged to stay its proceedings under the lis pendens rules which it is currently required to do following the decision of the ECJ in Erich Gasser G.m.b.H v...