The Advocate-General's (AG) Opinion in "The Front Comor" was released this month. Given that the European Court of Justice (ECJ) invariably rubber-stamps the AG's opinion, the ECJ's judgment is now practically a foregone conclusion.
The issue that the House of Lords asked the ECJ to determine in The Front Comor was 'Is it consistent with Regulation (EC) No 44/2001 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?'
This has been treated by the English courts as a separate issue to that determined in Turner v Grovit because of the exception in Article 1 para 2(d) of the Regulation which provides that 'The Regulation shall not apply to:..... arbitration.' The reason for the exception was, quite simply, to ensure that the Regulation was not incompatible with the New York Convention.
Unsurprisingly, the AG has recommended that the ECJ holds that the English Court has NO jurisdiction to issue an anti-suit injunction where there are competing proceedings in another Member State, in breach of an English arbitration agreement.
The AG's opinion refers to the travaux preparatoires to the Regulation to determine what is meant by 'arbitration' in the Regulation. The English and European courts take different views on this. The AG reached the conclusion that the European approach, namely that when determining what a dispute is about you should look to the 'subject matter' of the dispute, should be adopted rather than the English approach, that once a matter is referred to 'arbitration' it is a matter of 'arbitration'. The AG was therefore able to conclude in this case that the dispute concerned a claim in tort and so was subject to the Regulation.
It is necessary to put the Opinion in context. The Claimant charterers, Erg Petroli claimed in arbitration under the arbitration agreement between them and tanker owners, West Tankers , after the tanker collided with a jetty also owned by charterers.
The problem arose when Erg Petroli's insurers commenced proceedings against West Tankers in Italy, (where the jetty was situated), to recover the monies they had paid to Erg Petroli under the insurance policies. West Tankers sought an anti-suit injunction before the English courts to restrain those proceedings on the grounds that the proceedings were in breach of the arbitration agreement.
It should be borne in mind, therefore, that in this case the insurance companies were not parties to the contract but the English High Court was of the view that by claiming a right of subrogation under the contract they were bound by the arbitration clause.
As referred to above, the AG has now held that in such a case the English court cannot exercise its powers to grant anti-suit injunctions. The question to be asked when considering whether an anti-suit injunction can be granted is not whether the underlying dispute was to be determined in arbitration but what is the nature of the dispute to be heard in the proceedings sought to be restrained: if those proceedings are covered by the Regulation then no anti-suit injunction can be made.
The AG refers to the general principle that every court is entitled to examine its own jurisdiction, and that the existence of an arbitration agreement cannot remove that entitlement. The AG therefore anticipates a situation where, where the existence of an arbitration agreement is in issue, the court seized of the disputes considers as a preliminary issue the validity and scope of the agreement. If the court then determines that the arbitration agreement is valid and applicable to the dispute, the NY convention requires that the dispute be referred to arbitration. She also accepts that there is a danger that the national court in the country of the arbitration seat and the court which has jurisdiction under the Regulation may reach different decisions on this question. This leaves open the possibility of inconsistent judgments which the Regulation is at pains to avoid. Notwithstanding this, the AG is of the view that anti-suit injunctions are not the answer and that instead a 'solution by way of law is called for'. We therefore await the decision of the ECJ with interest.