CLAXTON ENGINEERING SERVICES LTD V TXM OLAJ-ES GAZKUTATO KFT (NO 2)

[2011] EWHC 345 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Hamblen, 1 February 2011

Arbitration - English court ruling finding exclusive jurisdiction clause - Respondent commencing arbitration proceedings in Hungary - Whether anti-arbitration injunction should be granted - Senior Courts Act 1981, section 37

Claxton, an English company, agreed to manufacture and supply engineering equipment for TXM, a Hungarian company, and to deliver it to TXM in Hungary. TXM defaulted on payment, and Claxton issued a claim form seeking to recover £2,061,451.20 including interest on late payment. TXM contested the jurisdiction of the English court, and sought a stay of proceedings, on the strength of an arbitration clause set out in its general terms of contracting and specifying arbitration in Hungary. TXM also counterclaimed. Claxton's response was that, as a result of exchanges between the parties, certain amendments were agreed to TXM's terms and conditions, including the deletion of the arbitration clause and its replacement with an exclusive jurisdiction clause. This matter came before Gloster J in Claxton Engineering Services Ltd v TXM Olaj-es Gazkutato Kft [2011] 1 Lloyd's Rep 17 and she decided that it was appropriate for her to deal with the question of jurisdiction rather than staying the proceedings. Gloster J ruled that there was an exclusive jurisdiction agreement in favour of the English courts. After the judgment TXM commenced arbitration in Hungary, and Claxton sought an anti-arbitration injunction in the present proceedings. Hamblen J granted the injunction. (1) The court had jurisdiction under section 37 of the Senior Courts Act 1981 to grant an anti-arbitration injunction. (2) Council Regulation (EC) No 44/2001 did not apply to arbitration, so there was no jurisdictional barrier created by the decision of the European Court of Justice in Allianz SpA v West Tankers Inc Case C-185/07 [2009] 1 Lloyd's Rep 413 on the grant of an anti-arbitration injunction. (3) In the circumstances it was appropriate to grant an injunction.