The Court of Appeal has in Youell v La Reunion [2009] EWCA Civ 175 confirmed that, in light of the important West Tankers decision of the European Court of Justice, (see here) the arbitration exclusion to the Brussels I Regulation will be narrowly applied by the English courts.

We have previously reported on the first instance decision in this case. The case concerned a coverage dispute under an insurance policy after a serious helicopter crash. The judge at first instance held that the English High Court had jurisdiction under the Brussels I Regulation to hear the case, notwithstanding a French arbitration clause in the relevant policies.

The Court of Appeal confirmed that the arbitration exception to the Brussels I Regulation on jurisdiction (Article 1(d) states that the Regulation does not apply to arbitration) did not deprive the English High Court of jurisdiction under the Regulation, as had been argued by the Defendants.

In West Tankers, the European Court of Justice held that a court has to look to the substance of any dispute to see whether the arbitration exclusion applies, so that the mere presence of an arbitration clause will not put a case outside the scope of the Brussels I Regulation if the real substance of the dispute concerns the terms of a contract.

The Defendant argued, on appeal, that the "whole foundation" of its claim related to the parties' agreement to arbitrate any dispute. It argued that the dispute in England was the "mirror image" of the claim that was being arbitrated in France under the French arbitration clause in the relevant insurance policies, so that arbitration was the very substance of the dispute and the arbitration exception applied.

But the Court of Appeal found that the real substance of the Defendant's claim concerned the terms of the relevant insurance policies. Accordingly, the provisions of the Brussels I Regulation relating to jurisdiction in contractual and insurance disputes, rather than the arbitration exception, applied. Under these provisions of the Brussels I Regulation, the English High Court did have jurisdiction to hear the case.