In Allianz SpA (formerly Riunione Adriatica Di Sicurta SpA) v West Tankers Inc [2009] C-185/07 (unreported), the European Court of Justice (ECJ) ruled that anti-suit injunctions are incompatible with Regulation 44/2001/EC (the Brussels Regulation) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

In September 2004, West Tankers commenced High Court proceedings in the United Kingdom against insurers, seeking a declaration that an earlier related dispute in Syracuse arose out of a charterparty and that the insurers were bound by an arbitration agreement. West Tankers therefore applied for an injunction to restrain the insurers from taking any further steps in relation to the dispute except by way of arbitration and, in particular, requiring them to discontinue the proceedings in Syracuse. In the United Kingdom, the issue went all the way to the House of Lords which decided to refer the following question to the ECJ for a preliminary ruling: “Is it consistent with Regulation 44/2001/EC for a court of a Member State to make an order to restrain a person from commencing or continuing proceedings in another Member State on the ground that such proceedings are in breach of an arbitration agreement.”

The ECJ held that even though the English proceedings did not come within the scope of the Regulation, they might have consequences that undermined its effectiveness. It was therefore appropriate to consider whether the earlier proceedings brought by the insurers against West Tankers before the Tribunale di Siracusa themselves came within the scope of the Regulation. It could then be ascertained what were the effects of the anti-suit injunction on those proceedings.

Adopting this approach, the Court found that if, because of the subject-matter of the dispute, the proceedings came within the scope of the Regulation, a preliminary issue concerning the applicability of an arbitration agreement (and including in particular its validity) also came within its scope. Thus the objection of lack of jurisdiction raised by West Tankers before the Tribunale di Siracusa on the basis of the existence of an arbitration agreement, including the question of the validity of that agreement, came within the scope of the Regulation. It was therefore exclusively for that Court to rule on that objection and on its own jurisdiction.

It followed that an anti-suit injunction, such as that sought in the main proceedings, was contrary to the general principle derived from case law on the Brussels Convention (on which the Regulation is based), that every court itself determines whether it has jurisdiction to resolve the dispute before it (Gasser [2003] C-116/02 ECR I-14693). Moreover, such injunctions ran counter to the trust which the Member States accord to one another’s legal systems and judicial institutions and on which the system of jurisdiction under the Regulation was based (Turner). The concerns raised at the prospect of the Advocate General’s opinion being followed by the ECJ have now crystallised. It has been suggested that London’s status as a prime arbitral seat could be undermined and arbitrators’ powers to determine their own jurisdiction may be ceded to national courts other than those in the seat of arbitration. Consequently, tactical proceedings designed to delay the arbitration process seem inevitable.