Anti-suit injunctions

European cases: the arbitration exception

The English courts have long sought to prevent a party to an arbitration clause from disregarding his obligation to arbitrate by bringing judicial proceedings. If the proceedings are brought in England, s9 of the Arbitration Act 1996 demands that those proceedings are to be stayed. If the proceedings are brought elsewhere, the English courts have almost as a matter of course granted an anti-suit injunction restraining the participation in those proceedings by the party in apparent breach of the arbitration clause. However, the position has been thrown into doubt by two European Court of Justice rulings, Erich Gasser GmbH v Misat Srl (Case-116/02) [2004] 1 Lloyd’s Rep 222 and Turner v Grovit (Case C-159/02) [2004] 1 Lloyd’s Rep 216 . Those cases decided that if a court within the EU or EFTA is first seised of judicial proceedings which fall within any of Council Regulation 44/2001, the Brussels Convention or the Lugano Convention, no other court has jurisdiction to grant an anti-suit injunction to restrain participation in those proceedings as the court first seised may alone resolve doubts as to its own jurisdiction. Thus, in Erich Gasser it was held to be impermissible to restrain an alleged breach of an exclusive jurisdiction clause by anti-suit injunction, and a similar conclusion was reached in Turner in respect of a foreign action which was allegedly abusive. The question addressed by the Court of Appeal in Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co Ltd [2005] 1 Lloyd’s Rep 67 was whether the same principle applies to EU or EFTA actions in breach of an arbitration clause.