Proceedings in the EEA

In its controversial decision in Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co Ltd [2005] 1 Lloyd’s Rep 67, the Court of Appeal established, albeit only for the purposes of English law, that the usual power of the English courts to restrain a party – by way of anti-suit injunction – from pursuing judicial proceedings in breach of an arbitration clause was available irrespective of the location of the court in which the foreign proceedings were commenced. In so deciding, the Court of Appeal held that the jurisdiction rules operating within the European Union and European Free Trade Association (EFTA), enshrined respectively in Council Regulation (EC) No 44/2001 and the Lugano Convention, did not affect the jurisdiction of the English courts in this regard. In West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA, The Front Comor [2005] 2 Lloyd’s Rep 257 Colman J followed the reasoning of the Court of Appeal. That decision has been appealed to the House of Lords under an expedited procedure which allowed the case to leapfrog the Court of Appeal. The House of Lords, in West Tankers Inc v RAS Riunione Adriatica di Sicurta SpA, The Front Comor [2007] UKHL 4, has now decided that it is unclear whether the result of Through Transport is a correct interpretation of the European jurisdiction rules, and the House of Lords took the step of referring the question to the European Court of Justice for a preliminary ruling. Pending that ruling, the English courts will doubtless continue to apply the existing rule and to grant relief in appropriate circumstances, although there must be considerable doubt as to whether this approach will ultimately be upheld by the European Court of Justice. This matter is of crucial importance to insurers and reinsurers alike.