Several recent cases in England have demonstrated the Court's reluctance to intervene in arbitration proceedings, despite its power to do so. Most recently, in the case of J Jarvis & Sons Ltd v Blue Circle Dartford Estates Ltd [2007] EWHC 1262 (TCC), the Court refused to grant an injunction to halt an arbitration, holding that the possible existence of concurrent arbitration and court proceedings could not in itself justify the grant of injunctive relief.

The case arose from a construction dispute in which Blue Circle had contracted with Jarvis to design and build a warehouse. Their construction contract contained an arbitration clause. Blue Circle sold the warehouse to Guardian Nominees Ltd who subsequently resold to GP Nominees Limited, also assigning its contractual rights against Blue Circle and its rights against Jarvis under a warranty. GP was not bound by any arbitration clause. When problems emerged with the warehouse foundations, GP indicated its intention to pursue claims against both Blue Circle and Jarvis. To protect its position, Blue Circle commenced arbitral proceedings against Jarvis.

After failing in an application to the arbitrator to stay the arbitration, Jarvis applied to the High Court for an anti-arbitration injunction. Jarvis argued that the arbitration proceedings were oppressive, as Jarvis could face a further claim for damages from GP and the risk of having to pay damages twice in respect of the same defects. Jarvis also submitted that parallel proceedings could result in different and inconsistent findings, and that continuing the arbitration served only to drive up costs.

Mr Justice Jackson found that the Court had the power to grant anti-arbitration injunctions, but that this discretion should be used sparingly, in accordance with the principles underlying the Arbitration Act 1996. In rejecting Jarvis's application, Justice Jackson took note of an undertaking from Blue Circle that double recovery from Jarvis would be avoided through either a direct transfer of damages awarded against Jarvis in the arbitration to GP, or through a trust scheme. This meant that the arbitration proceedings could not be regarded as oppressive, and that the possibility of parallel proceedings did not in itself render the arbitration vexatious, unconscionable or an abuse of process. By way of further useful clarification, the Judge noted that a delay in making an anti-arbitration injunction application would be material, and in some cases fatal to the process.

In Elektrim SA v. Vivendi Universal SA and others [2007] EWHC 571 (Comm), the parties had entered into an agreement requiring certain share transfers to be effected and government approvals to be obtained. The approvals were not obtained and Vivendi sought to avoid the agreement on the basis of Elektrim's alleged breach of contract. An LCIA Tribunal rendered a partial award. A draft settlement agreement was then produced between several parties involved in the dispute which provided for ICC arbitration in Geneva.

When Vivendi submitted a request for arbitration to the ICC under the terms of this settlement agreement, the LCIA Tribunal refused to stay its own proceedings to await the outcome of the Geneva proceedings. Elektrim applied to the English court for an injunction restraining Vivendi from pursuing the LCIA arbitration, claiming that it was vexatious and oppressive. Refusing to grant the injunction, Mr Justice Aikens noted that the 1996 Act aimed to prevent unnecessary court interference with the arbitration process and that, whilst complex transactions may result in several valid concurrent proceedings, this does not necessarily make any of them vexatious or oppressive.

These cases highlight the importance of pre-empting parallel proceedings where possible at the stage of drafting an arbitration agreement. It is advisable, in multi-party cases involving chains of contracts with different dispute resolution provisions, to ensure that the dispute resolution provisions are consistent and that they provide for consolidation of arbitral proceedings. Failure to do so will not, it appears, be corrected by the court.