On June 12, 2013, the UK Supreme Court handed down its judgment in Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant LLP  UKSC 35. The Court held that, in certain circumstances, parties who have the benefit of an English arbitration clause can obtain anti-suit injunctions from an English court even where there is no arbitration that has commenced or that is even planned. The Arbitration Act 1996 does not restrain the Court's powers under section 37 of the Senior Courts Act to grant such relief. The decision in Ust-Kamenogorsk is therefore incredibly important for parties who have the benefit of English arbitration clauses in their agreements.
The issue initially arose in 2009 and stemmed from a concession agreement relating to a hydroelectric power plant in Kazakhstan. The concession agreement contained an English arbitration clause that had been declared invalid by the Kazakh Supreme Court, and the Kazakh courts therefore refused to stop proceedings brought by the Kazakh owners against the holders of the concession. As a result, a subsidiary of AES applied for and obtained an interim injunction from the High Court in London to halt the Kazakh court proceedings in 2010. AES sought the injunction on the basis of an ICC arbitration clause in the agreement providing for arbitration in England, even though it did not plan to start an arbitration.
Ust-Kamenogorsk challenged the injunction before the English Court of Appeal, arguing that the court's discretionary powers to enjoin foreign proceedings under section 37 of the Senior Courts Act would be against the “terms, scheme, philosophy and parliamentary intention” of the Arbitration Act, which governs arbitral proceedings in the UK. The appeal was dismissed in May 2011.
Ust-Kamenogorsk then appealed to the Supreme Court on the basis that section 44 of the Arbitration Act, which lists the powers that courts can exercise in support of arbitral proceedings, limits the scope of the court’s discretionary powers to grant injunctions in arbitration cases, citing the European Court of Justice’s 2009 ruling in West Tankers.
Nonetheless, in a unanimous decision, the Supreme Court held that it retained the ability to enjoin foreign proceedings where such proceedings are in breach of an arbitration agreement.
Furthermore, the Supreme Court held that, while section 44 outlined areas that could require a court’s intervention, and prevented courts from intervening without permission from a tribunal or the other parties to a case, this had no application in a situation where there was no arbitration proceeding afoot. The Supreme Court also ruled that section 37 of the Senior Courts Act is the sole basis for granting an anti-suit injunction and that the Arbitration Act did not “carve out” its discretionary powers in arbitrations.