An advisory opinion handed down 4 September in the European Court of Justice (ECJ) may have signalled an end to the English court's ability to issue anti-suit injunctions against parties who commence parallel litigation in other EC Member State countries.
The opinion, in Allianz SpA (formerly Riunione Adriatica Di Sicurta SpA) and Others v West Tankers Inc, arises out of the collision of a vessel, owned by West Tankers Inc and chartered to Erg Petroli SpA, with a jetty owned by Erg Petroli in Syracuse, Italy. The charterparty was governed by English law and contained an arbitration agreement providing that all disputes arising from the contract were to be dealt with by arbitration in London.
Erg Petroli commenced arbitration proceedings in London against West Tankers seeking reimbursement of its uninsured losses. In 2003 Erg Petroli's insurers, exercising rights of subrogation, commenced proceedings against West Tankers in Syracuse to recover the amounts which they had paid Erg Petroli. The issues of liability in the court proceedings in Italy were essentially the same as those in the London arbitration proceedings.
In September 2004 West Tankers applied for an injunction from the English court to restrain the insurers from taking any further steps in relation to the dispute except by way of arbitration. The injunction was granted by the High Court but the House of Lords, when considering the issue on appeal, referred to the ECJ for a preliminary ruling as to whether anti-suit injunctions to give effect to arbitration agreements are compatible with the EC Regulation No 44/2001on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the Regulation ).
The English courts have to date been willing to issue anti-suit injunctions in support of arbitration in London, distinguishing the ECJ's previous decision in Turner v Grovit which determined that an anti-suit injunction could not be issued in support of an exclusive jurisdiction clause (where one party commenced proceedings in a court other than the court identified by the exclusive jurisdiction clause) . The Advocate General in her advisory opinion in West Tankers stated that the Regulation precludes a court of a Member State from making an order restraining a person from commencing or continuing proceedings before the courts of another Member State on the basis that, in the opinion of the court, such proceedings are in breach of an arbitration agreement.
The Advocates General's opinion is advisory in nature, but is usually indicative of the outcome likely to be reached by the ECJ. If the ECJ follows the opinion of Advocate General Kokott, the English court will be precluded from issuing an anti-suit injunction against a party who has commenced court proceedings in a Member State court , in breach of an arbitration clause. This will remove much of the comfort available to parties who agree on arbitration in London knowing that the English court will act to enforce such an agreement.