In Nori Holdings and others v BOFC [2018] EWHC 1343 (Comm) the Commercial Court has declined an opportunity, in the context of the Brussels I Recast, to resurrect intra-EU court anti-suit injunctions in support of arbitration from the graveyard of the West Tankers ruling. Whilst many may shrug (the prevailing view being in line with this), the decision may be a little more of a missed opportunity then some think.

Background – West Tankers, The Brussels I Recast and Gazprom

The case of West Tankers (C-185/07) will need little introduction. It prohibited, under the scheme of EU Regulation 44/2001, the grant, by an EU Member State court, of an anti-suit injunction to restrain court proceedings brought in another EU Member State in “breach” of an arbitration clause.

In Nori Holdings (the precise facts of which are not necessary to delve into for present purposes) the English Commercial Court was asked for such a remedy in respect of court proceedings brought in Cyprus in alleged breach of arbitration clauses with seat in England. 

Why did a litigant even bother revisiting this question? The answer lies in the fact that the proceedings in Nori Holdings, due to the time at which they were commenced, fell within EU Regulation 1215/2012 (the “Brussels I Recast”) - rather than the preceding Regulation 44/2001. This provided the claimants, who sought the anti-suit injunction, with ammunition in two respects.

First, the Brussels I Recast has a new Recital 12 which was intended to further clarify the separation of arbitration and court proceedings within the EU.

Second, was the case of Gazprom (C-536/13). That case was a decision under Regulation 44/2001 in which the CJEU held that West Tankers did not apply to an anti-suit order made by an arbitral tribunal. Despite those key differences with the situation in Nori Holdings, the reason why Gazprom was (potentially) relevant was that in that case the Advocate General (“AG”) handed down an innovative opinion in which he proposed approving the tribunal anti-suit order on the basis that:(i) Recital 12 of the Brussels I Recast had retrospective effect to proceedings under Regulation 44/2001; and that (ii) in a reversal of this aspect of West Tankers,  Recital 12 of the Recast now permitted an EU Member State court to order an anti-suit injunction against proceedings before another EU Member State court brought in breach of an arbitration clause (that being the case, the AG reasoned, it equally could not be said that a tribunal awarded measure was offensive). Although, in Gazprom, the CJEU reached the same result as the AG regarding the tribunal ordered measures it did so by way of a far more conventional analysis. However, it did not necessarily say anything, in particular, about the AG’s approach to point (ii) (an issue which we will revisit below). For more on Gazprom click here and here.

The English Commercial Court sticks to West Tankers

Males J rejected the claimants’ reliance on the above points. His ruling on this issue appears at [69]-[102]. His adherence to the West Tankers position was based on the following. First, he attacked any per se reliance on the AG’s opinion in Gazprom as flawed on the basis that the CJEU did not adopt the AG’s reasoning and clearly regarded West Tankers as a correct statement of law under Regulation 44/2001 (albeit one which did not extend to anti-suit awards by a tribunal). Second, he disagreed with the AG’s analysis of the width of various provisions of Recital 12 in so far as anti-suit injunctions in support of arbitration are concerned under the Brussels I Recast.

Whilst it would be true to say that Males J’s ultimate conclusion in this respect is in line with prevailing opinion on this issue, two short points can be made in support of a view that the position may not be quite as clear cut as set out in his ruling. First, as described above, Males J’s ruling was influenced by a view that the CJEU in Gazprom had positively rejected the AG’s stance on the position under the Brussels I Recast. It is suggested that this conclusion does not necessarily follow. In Gazprom the CJEU did not actually expressly address the AG’s opinion. Instead, its reasoning simply proceeded on the basis that Regulation 44/2001 applied to the case and that, under that instrument, West Tankers was (unsurprisingly) good law. The only thing that can be necessarily inferred from this is that the CJEU did not agree with point (i) of the AGs reasoning, above (i.e. the different and distinct proposition that Recital 12 of the Recast had retrospective effect under 44/2001). On such a view the CJEU’s judgment in Gazprom was simply silent on point (ii) i.e. the relevant issue of what the position under the Recast actually is in relation to intra-EU court anti-suit injunctions in aid of arbitration.

Second, when analysing the scope of Recital 12 itself, it could be argued that Males J somewhat undersold the impact of that Recital. The Recital did not simply preserve the status quo of 44/2001. For example, one important aspect of the West Tankers judgment quite apart from the anti-suit injunction issue was its insistence that the wrongly seised court’s decision on the arbitration clause was one which required recognition and enforcement under the terms of the Regulation. Subsequent litigation in England (see The Wadi Sudr [2009] EWCA Civ 1397) illustrate the issues this could create. Paragraph (3) of Recital 12 has, however, reversed that position. Males J does not mention any of this wider context - but the point is that from such a starting point the proposition that, say, Recital 12 (6) goes further than merely repeating the pre-existing position under Marc Rich is a little less difficult to believe (that paragraph excludes from the scope of the Recast any ancillary proceedings in relation to arbitration procedure).   

Only time, and the degree to which the Brussels I Recast continues to apply to the UK in future in the light of Brexit, will tell whether the English courts will get to revisit this point again. 

Stephen Lacey

Counsel PSL
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