Comments on: The AG Opinion in West Tankers

By: TANKING ARBITRATION OR BREAKING THE SYSTEM TO FIX IT? A SINK OR SWIM APPROACH TO UNIFYING EUROPEAN JUDICIAL SYSTEMS: THE ECJ IN GASSER, TURNER, AND WEST TANKERS | The Columbia Journal of European Law

Sun, 14 Jun 2009 19:36:22 +0000

[...] at the moment, the common law is looking decidedly battered and bruised.” Martin George, The AG’s Opinion in West Tankers, CONFLICT OF LAWS .NET, Sept. 5, [...]

By: Horatia Muir Watt

Horatia Muir Watt — Tue, 20 Jan 2009 07:58:06 +0000

To my mind, the function of mutual trust, which comes up as a leitmotive since Gasser, needs re-thinking. Mutual trust is of course a foundational concept within the common judicial area – every Member State refrains from bringing a value-judgment on the courts of the others. This is what justifies mutual recognition of judgments from the courts of Sister States (except for the very limited margin left to public policy). But it doesn’t seem to me that mutual trust has any relevance as a mechanism for solving conflicts of jurisdiction in cases where there are parallel proceedings. One thing is to say that (say) that the French/Polish court system is perfectly trustworthy, and that judgments emanating from those courts call to be recognised in England/Italy, anther is to invoke mutual trust to give priority to one or the other in a situation where both claim jurisdiction. The way in which mutual trust was used in Gasser means giving precedence on this issue (ie determining jurisdiction) to any court seized (even in bad faith) over the court chosen by the parties. A more discriminating use of the principle of mutual trust could allow, on the contrary, for the absolute priority (notwithstanding the ordinary rules of lis pendens) of the designated court to decide on the effects of the clause (at least if prime facie valid). Similarly, as far as West Tankers and arbitration is concerned, it is difficult, once again, to understand why the principle of mutual trust should lead to consecrating the priority of any court seized (even in bad faith) rather than trusting the courts of the seat of the arbitration.

By: Michael Madoghwe

Michael Madoghwe — Wed, 19 Nov 2008 07:31:14 +0000

I will be disappointed if the ECJ comes out with a contrary decision to that given in Grover v Turner, because of the need to promote the European ideals, but such a decision will affect transnational commercial transactions where arbitration has been chosen as the means of dispute resolution, for instance in Africa. In Nigeria, most international commercial agreements include arbitration clauses and the preference is to make England the seat of the arbitration. A negative decision like that contained in the opinion of AG Kolkott will scare away people from London and this will invariably affect the position of london as the capital of commercial arbitration in the world. This type of judgment will have adverse effect on the few common law countries in Africa who tow the English position on almost all principles of law. For the promotion of globalization, the EU should not prevent the application of anti-suit injunction to arbitration agreements most especially when arbitration is excluded from the Brussels I Regulation.

By: Alka Sood

Alka Sood — Fri, 03 Oct 2008 15:57:09 +0000

Refering to the comment of Mihai Danov, I understood his comment as: If the Italian court considers the arbitration clause under the New York Convention then it has arbitration as its subject matter and therefore is covered by Art 1(2)d- the arbitration exception. The proceedings in England for the anti-suit injunction are covered under the exception however the question is the about the Italian proceedings which the anti-suit injunction targets and by Mihail Danovs argument that would fall within the scope of the arbitration exception as well.
I am waiting to hear Adrian Briggs response to Mihail Danovs argument. (I am a student so excuse me for my curiosity)

By: John Gaffney

John Gaffney — Fri, 03 Oct 2008 11:13:28 +0000

May I offer the following thoughts on the Opinion:

The exclusion of “arbitration” (under Article 1(4)) from the scope of Regulation 44/2001 recognizes the lack of Community competence in this area and the consequent exclusion of matters governed by international and bilateral instruments in the area, including the New York Convention and, in so far as they relate to arbitration, the treaty and conventions listed in article article 69 of the Regulation, such as not to interfere with the commitments of Member State courts under those instruments.

Hence, in a situation contemplated and governed by Article II(3) the Convention – where the a Contracting State court, seised of an action in a matter in respect of which the parties have made an arbitration agreement is obliged, at the request of one of the parties, to refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed – the Regulation does not apply. This is recognized in Van Uden where the Court of Justice states:

“Under Article 1, second paragraph, point 4, of the Convention, arbitration is excluded from its scope. By that provision, the Contracting Parties intended to exclude arbitration in its entirety, including proceedings brought before national courts (Case C-190/89 Rich v Società Italiana Impianti [1991] ECR I-3855, paragraph 18).” [emphasis added]

Hence, the Regulation ought not to apply to the proceedings of the type to which an anti-suit injunction in the West Tankers case was directed. (And, therefore, the Member State court seized of such proceedings cannot be regarded as first-seized for the purpose of the Regulation.) The fact that pursuant to Article II(3) the Member State court may enquire in whether arbitration agreement is null and void, inoperative or incapable of being performed should not affect this analysis (see Experts’ Report (OJ 1979 C 59, p. 71, at pp. 92-93).

Let’s turn to the proceedings in which anti-suit relief is sought. It’s not clear to me whether such proceedings are governed or contemplated by the New York Convention. However, I am inclined to think not; if anything Article II(3) appears to contemplate any challenge to the institution of proceedings in breach of an arbitration agreement as being made within (rather than outwith) the jurisdiction where such proceedings are instituted. As such, the Regulation does not appear to be prima facie excluded. One must therefore consider whether such anti-suit proceedings are governed by the Regulation according to Van Uden/Turner case law cited in the present case.

One might consider an analogy with the issue of provisional measures sought in aid of arbitration, which was considered in Van Uden. In that case, it was held that “provisional measures are not in principle ancillary to arbitration proceedings but are ordered in parallel to such proceedings and are intended as measures of support. They concern not arbitration as such but the protection of a wide variety of rights. Their place in the scope of the Convention is thus determined not by their own nature but by the nature of the rights which they serve to protect…It must therefore be concluded that where…the subject-matter of an application for provisional measures relates to a question falling within the scope ratione materiae of the Convention, the Convention is applicable and Article 24 thereof may confer jurisdiction on the court hearing that application even where proceedings have already been, or may be, commenced on the substance of the case and even where those proceedings are to be conducted before arbitrators.” [emphasis added]

It seems clear that in contrast to the measures considered in Van Uden, the relief sought in the case of an anti-suit injunction application certainly does concern arbitration, which, according to that case (and the Rich case), includes proceedings before national courts. Moreover, such relief is expressly intended to protect the applicant’s rights to arbitration. Therefore, regardless of whether the arbitration relates to matters falling within the scope ratione materiae of the Regulation, such anti-suit proceedings ought to fall outside the Regulation. In this way, such a case may be distinguished from Turner, where the Court held that the Brussels Convention precludes the imposition of an anti-suit injunction in connection with proceedings before the court of another Member State – in that case the anti-suit injunction was concerned with proceedings falling within the scope of the Regulation.

Otherwise, one would have the strange situation where the proceedings, which are the subject matter of the anti-suit proceedings, would fall outside the scope of the Regulation, leaving the court to which such an application is made as the court “first seised” for the purpose of the Regulation.

By: Oliver L. Knoefel

Oliver L. Knoefel — Tue, 16 Sep 2008 16:09:40 +0000

Yes indeed, there is “a view, regrettably prevalent in Germany” (Adrian Briggs, Comment no 8), that oh so many devices of English procedural and arbitral law are liable, if not designed, to promote London’s attraction as a center of dispute resolution. Leo terram propriam protegat… Mind you, after the high-end legal industry of Frankfurt, Hamburg and Munich has spent almost 15 years in some kind of British Overseas Territory (and has been told that this is the “internationalization of the practice of law”), the German legal profession is learning slowly, but steadily how to do the trick (see recently, and most instructive, Volker Triebel, Anwaltsblatt 2008, p. 305).

By: Anteo Picello

Anteo Picello — Wed, 10 Sep 2008 10:42:13 +0000

Dont forget the landmark case judged by the European Court of Justice, the Nordsee Case, regarding a reference to that Court of preliminary ruling by an Arbitrator. Many themes have been mentioned as aspects of the right to refer, but definitely the most important is the interpretation of Article 234 (ex Article 177) of the EC Treaty, that provides in verbis:

“Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court of Justice.”

New legislation at a European Level is needed, otherwise arbitration and litigation will end up damaged in credibility both in the UK and in the EU as a whole. Parties that today choose london would end up in New York, not in other European cities, for both legal (legal certainty) and financial (low US Dollar) reasons.
The EU needs to face this situation seriously.

By: Mihail Danov

Mihail Danov — Tue, 09 Sep 2008 18:11:03 +0000

I agree that the right of a person to say ‘I am entitled to sue, and I did not agree to arbitrate’ should not be rubbished. Certainly, every court should examine the conditions as set out in the New York Convention – at [54-55] (the AG opinion). However, it seems to me that the question whether A is bound by an arbitration agreement made by B is quite an important issue which goes to the heart of the court’s (the arbitral tribunal’s) jurisdiction. To provide an answer to this question, a national court should certainly go beyond a mere check of whether the conditions of Article II of the NY Convention have been satisfied. (For example, such a dispute may be quite complex, raising an issue of the law governing the arbitration agreement.) Article 1(2)(d) of the Brussels I Regulation seems to indicate that the court’s jurisdiction to hear and determine such a dispute should be derived by the Member State law, but not by the Brussels I Regulation. If my understanding were right, then the arbitration exception would have covered an anti-suit injunction as well.

By: Adrian Briggs

Adrian Briggs — Tue, 09 Sep 2008 08:45:44 +0000

Fair enough, but two things should not be overlooked. One, it’s only the anti-suit injunction which is proposed to be prohibited. Something like a mandatory injunction to proceed with the arbitration does not appear to be affected (though no doubt it will produce some moaning about effets utiles). But two, the person who says that he did not agree to arbitrate is not always up to no good, despite the local assumption that arbitration is so good for you that if you stray within a country mile of the alleged agreement, you should honour and obey it. The idea that A is bound by an arbitration agreement made by B will not strike everyone, in every case, as compelling (think back to those Article 17/23 cases). Given that, the right of a person to say ‘I am entitled to sue, and I did not agree to arbitrate’ ought not be rubbished; and in this case it may be that this is how it struck or will strike the Italian court. We have a different set of tools for dealing with cases in which one court says: ‘pay damages (and, by the way, you were not bound to arbitrate)’ while another says ‘as far as we can see, this should have been referred to arbitration, and the judicial order for the payment of damages ought not have been made, nd we will listen to submissions about what follows from the finding that it should not have been made’. Okay, it is not the law on injunctions which is allowed to provide the solution. A highly effective weapon has been outlawed, but this happens, and not just in law. It simply means that we will develop more effective replacements and, in the end, may come to recognise these as being rather more sophisticated than what went before.

By: Mihail Danov

Mihail Danov — Mon, 08 Sep 2008 17:37:17 +0000

I have my doubts whether a Member State court could rule under the Brussels I Regulation on such a “preliminary issue” as the scope of an arbitration clause. It seems to me that the AG concept of “preliminary issue”, if adopted by the ECJ, would fly in the face Article 1(2)(d).
Are we not talking about an application for a stay of court proceedings brought by the defendant before the Italian court on the basis of Article II of the New York Convention? Well, if that were a “preliminary issue” for the purposes of the Brussels I Regulation, then I wonder when “arbitration” would be an issue that the action is principally concerned with.
It appears that before an arbitral award had been rendered, “arbitration” would normally arise as a “preliminary issue” in national courts. (The court proceedings would have arbitration as their subject matter in cases where an application for anti-suit injunction is brought. But, then such an injunction could not be issued ….) If that were so, then what is the point of having Article 1(2)(d)?