To set the case in context, it is necessary to understand two earlier events: the Court of Justice’s decision in Allianz SpA and Generali Assicurazioni Generali SpA v West Tankers Inc. (C-185/07); and efforts to reform the Brussels I Regulation, which culminated in a ‘recast’ Brussels I Regulation which came into force on January 10, 2015.
The Court’s decision in West Tankers
The Brussels I Regulation does not cover arbitration. Article 1(2)(d) states that ‘[t]he Regulation shall not apply to … arbitration.’
Despite this exclusion, in West Tankers the Court of Justice controversially ruled that a preliminary issue concerning the application of an arbitration agreement, including its validity, falls within the scope of the Brussels I Regulation if the main subject matter of the proceedings comes within scope. As a result, the Court of Justice held that it was incompatible with the Brussels I Regulation ‘for a court of a Member State to make an order to restrain a person from commencing or continuing proceedings before the courts of another Member State on the ground that such proceedings would be contrary to an arbitration agreement.’
This narrow interpretation of the arbitration exception had significant implications for arbitration in Europe. Many practitioners considered anti-suit injunctions in favour of arbitration to be an essential component of the supervisory authority of courts in the seat of arbitration. This led some commentators to postulate that parties could delay or frustrate an arbitration by commencing proceedings in their court of choice concerning the existence or validity of an arbitration agreement – so-called ‘torpedo’ actions.
However, in the West Tankers decision, the Court of Justice did not address the interaction between the Brussels I Regulation and the New York Convention, a treaty governing the recognition and enforcement of foreign arbitral awards to which all EU Member States are party.
Reforms to the Brussels I Regulation
In 2012, the Brussels I Regulation was ‘recast’ to provide unified rules on conflicts of jurisdiction in civil and commercial matters and to ensure the rapid recognition and enforcement of judgments given in Member States. The recast Brussels I Regulation came into effect on January 10, 2015, and includes revisions to the arbitration exception.
Article 1 of the recast Brussels I Regulation continues to exclude arbitration from its scope. To address the issues raised by the West Tankers ruling, amongst others, the recast Brussels I Regulation clarifies (in its Recital 12) that there is an absolute exclusion of arbitration from its scope. It recognises ‘the competence of the courts of the Member States to decide on the recognition and enforcement of arbitral awards in accordance with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958 … which takes precedence over this Regulation’.
In the absence of an authoritative interpretation of the recast Brussels I Regulation, it is not clear whether the recast Brussels I Regulation prohibits anti-suit injunctions issued by Member State courts in support of arbitration.