Anti-suit injunctions from West Tankers to Gazprom and Brexit

Definition of an anti-suit injunction

An anti-suit injunction (ASI) is an equitable tool utilised by common law courts to give effect to jurisdiction clauses and arbitration agreements.[1] It is an order designed to restrain a party from commencing or continuing a legal action in a foreign jurisdiction that is different from the chosen court or not in accordance with an arbitration agreement.[2] In McHenry[3] Jessel MR expressed that it is within the general jurisdiction of the courts of England and Wales to prevent a defendant from being ‘improperly vexed’ by a legal procedure. Arbitral anti-suit orders (ASO) serve analogous functions with an ASI. The difference is that they are issued by arbitrators and designed to prevent a party from commencing or continuing proceedings in a forum other than the one specified in the arbitration agreement.[4] In other words, where there are two separate legal actions, one of them being in England and the other in a foreign country, with the result of vexing one of the parties, the courts are endowed with the power to restrain the one seeking foreign proceedings. 

The rationale is that parties wish to bring an action in the forum through which they can obtain the most favourable outcome on the merits of their case.[5] The result of such conduct is that one of the parties incurs additional costs and inconvenience as a result of the wrongly initiated set of proceedings. The purpose of an anti-suit injunction is to prevent the inequity that arises as a consequence. The effectiveness of an ASI is ensured by the variety of tools at the court’s disposal. Advocate general Kokott stated in West Tankers[6] that a party can be liable for contempt of court if it does not comply. Other measures include imprisonment, fines and seizure of property. An additional remedy might be not to enforce the decision obtained from the foreign forum.[7] The controversy of anti-suit injunctions and arbitral anti-suit orders lies in the fact they interfere with the competence of the other adjudicative body to determine its jurisdiction.[8] For that reason, European Union law treats them in an extremely restrictive manner.

Anti-suit injunctions in the European context

The authority regulating ASIs and ASOs in European law is the Brussels Regulation on the Recognition and Enforcement of Foreign Judgements[9] (Brussels I Regulation). The legal regime was elaborated on in a regulation from 2012 known as the Brussels I Recast.[10] The principle is that the courts of member states are prohibited from granting an anti-suit injunction if that will interfere with the decision of a court in another member state in relation to a matter falling within the ambit of the Brussels I Regulation. Saliently, the ASI will be invalid even if it was granted in correlation with a matter falling outside the scope of the regulation. The Court of Justice of the European Union (CJEU) held that ASIs are incompatible with the Brussels I Regulation in Turner v Grovit.[11] In Turner the UK government argued that as ASIs affect only private individuals they do not interfere with the jurisdiction of the courts of other member states. This reasoning may seem true on paper, but it ignores practical realities. The CJEU held that by threatening, and thereby restricting, a party from pursuing a legal action in a foreign court, the said court is deprived of its jurisdiction to deal with the case.[12]

In West Tankers[13] Coleman distinguished Turner on the basis that the present case concerned an arbitration agreement and by virtue of Article 1(2)(d) of the Brussels I Regulation matters concerning arbitration fall outside of its scope. This approach was upheld by the House of Lords but on referral to the CJEU the court held that anti-suit injunctions are incompatible with the Brussels I Regulation even when granted in relation to matters falling outside of its scope.[14] The rationale of the CJEU ran in similar lines with the Turner case. The basis was that an ASI would have prevented the court from exercising its jurisdictional rights under the Brussels I Regulation. Significantly, the court held that even though an arbitration agreement triggers the application of the New York Convention[15], the application of the Brussels I Regulation is not impeded in any material way. 

In summary, the effects of the Brussels I Regulation and the West Tankers case is that member states of the European Union are prevented from issuing anti-suit injunctions in matters concerning the jurisdiction of member states. It should be remembered, however, that states retain the right to grant ASIs in matters regarding third countries. A recent example is the case of AIG Europe v Ors involving the restraint of parallel proceedings in Canada.[16]

Gazprom and arbitral anti-suit orders

Arbitral tribunals are not classified as a court of a member state. Therefore, it is unclear whether such a tribunal is endowed with the power to grant an anti-suit order as it is not bound by the Brussels I Regulation. Although controversial, it is agreed that a party can seek such an order. The rationale is that the power of arbitrators is derived from the parties’ agreement to arbitrate.[17] The Gazprom[18] case suggests that ASOs may be permissible in the context of arbitration. The question that the CJEU had to assess was whether the recognition and enforcement of an arbitral ASO is incompatible with the Brussels I Regulation. The court held that an award conferred by an arbitration tribunal can be distinguished from the right of recognition and enforcement of the decisions of national courts of other member states.[19] Therefore, such awards fall outside the scope of the Brussels I Regulation. Consequently, the national court has a discretion as to whether to recognise the ASO or not. The CJEU held that this process is defined by principle of national and international law rather than EU law. 

In summary, arbitral panels are endowed with the right to grant anti-suit orders but their enforceability will be dependent on the national courts of the member states. However, the climate has changed significantly since the United Kingdom exited the European Union. 

Post-Brexit Environment

The ramifications of Brexit are twofold. Firstly, the courts of England & Wales are no longer proscribed from issuing ASIs in relation to member states of the European Union. Secondly, individuals have to re-evaluate choosing England as a preferred jurisdiction and a seat of arbitration. 

Two cases from last year demonstrate the willingness of the courts to grant ASIs to enforce the contractual bargains of parties in regard to member states just as they would with other third states. The case of QBE Europe[20] concerned an application for an ASI to restrain parties from proceedings commenced in Spain contrary to the terms of a London arbitration clause. In Ebury Partners[21] the claimant sought an ASI in respect of proceedings commenced in Belgium contrary to the terms of an exclusive jurisdiction clause in favour of the courts of England and Wales. An anti-suit injunction was successfully granted in both cases. That is a testament to the fact that member states will no longer receive special treatment from the courts of England & Wales. As a result, individuals should carefully assess the drawbacks and benefits of the current approach before choosing the UK in matters concerning both litigation and arbitration. 

Conclusion 

Anti-suit injunctions are an effective tool for restricting the costly exercise of pursuing two separate legal actions in separate jurisdictions. There is a general expectation that countries signatories of the New York Convention will give effect to such measures except in circumstances expressly specified. The situation is different regarding member states of the European Union. The Brussels I Regulation and the Weston Tankers case establish that having regard to the mutual recognition between members and respect for national judicial institutions the issuing of anti-suit injunctions is forbidden. This approach notwithstanding in Gazprom the CJEU held that arbitral tribunals are not affected by this regime. More recently, Brexit has fundamentally changed the situation in England & Wales where the courts had already granted anti-suit injunctions on multiple occasions in relation to both jurisdiction clauses and arbitration agreements. 

[1] W Hueske, "Rule, Britannia! A Proposed Revival of the British Antisuit Injunction in the 

EU Legal Framework" (2009) George Washington International Law Review 433, 434 

[2] TC Hartley, "Comity and the Use of Antisuit Injunctions in International Litigation" (1987) American Journal of Comparative Law 487-511, 487

[3] McHenry v Lewis [1881] 22 Ch D 397, at 399

[4] R Moloo, "Arbitrators Granting Antisuit Orders: When should they and What Authority?" (2009) JournalofInternationalArbitration675-700, 676;

[5] A Pullen, "The Future of International Arbitration in Europe: West Tankers and the EU

Green Paper" (2009) International Arbitration Law Review 56-61, 58.

[6] Case C-185/07 West Tankers Inc v Allianz SpA [2009] ECR 1-00663, at [14]

[7] M Black and R Reece, "Anti-Suit Injunctions and Arbitration Proceedings" (2006) Arbitration 207-16, 211

[8] B Steinbruck, "The Impact of EU Law on Anti-Suit Injunctions in aid of English Arbitration Proceedings" (2007) Civil Justice Quarterly, 358-75, 365;

[9] Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement

of judgments in civil and commercial matters [2001] OJ L12/1

[10] Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) [2012] OJ L351/1

[11] Case C-159/02 Turner v Grovit [2005] ECR 1-03565

[12] Ibid, at [34]

[13] West Tankers Inc v Ras Riunione Adriatica Di Sicurta "The Front Comor" [2005] 2  Lloyd's Rep 257, 268 [50]. 

[14] West Tankers, supra n 6, at [35]

[15] New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958

[16]AIG Europe SA and Ors v John Wood Group Plc and Ors [2022] EWCA Civ 781

[17] R Moloo, "Arbitrators Granting Antisuit Orders: When should they and What Authority?" (2009) JournalofInternationalArbitration675-700, 676.

[18] Case C-536/13 Gazprom v Lithuania ECLI:EU:C:2015:316

[19] Ibid, at [34]

[20] QBE Europe SA/NV v Generali España de Seguros Y Reaseguros [2022] EWHC 2062 (Comm)

[21] Ebury Partners Belgium SA/NV v Technical Touch BV [2022] EWHC 2927 (Comm)