The Court of Appeal recently upheld an anti-suit injunction restraining a party from bringing proceedings in the New York courts challenging an award rendered in an arbitration with its seat in London.

The dispute concerned an insurance contract based on the Bermuda Form containing a New York governing law clause and an arbitration clause requiring disputes to be arbitrated in London (which did not specify the law applicable to the arbitration agreement).

Dismissing the insurers' argument that it should be permitted to challenge the award on the wider grounds available under New York law, the Court of Appeal held that English law should govern any challenges to the award. In reaching this conclusion, it held that the arbitration agreement should be presumed to be governed by the law of the seat, which is normally the place with which the agreement to arbitrate (rather than the contract as a whole) has "the closest and most real connection", and commented that "an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause".

Following this case it is crucial that, when drafting an arbitration agreement, if for any reason a party wishes the law governing the arbitration agreement to differ from the law of the chosen seat, this should be stated expressly. (C v D [2007] EWCA Civ 1282, 5 December 2007).