Another judgment in the long running West Tankers dispute has considered whether, under EU law, an arbitral tribunal had jurisdiction to award equitable damages against a party who had breached an arbitration agreement.

For full details of the underlying case see Legal update, West Tankers ECJ judgment: full report.

In an award in April 2011, an arbitral tribunal concluded, by a majority, that as a matter of English law, it could not award damages against the respondents for breach of contract for bringing proceedings in the Italian courts, rather than by way of arbitration in London, in breach of the underlying arbitration agreement. The tribunal concluded that its jurisdiction was circumscribed because it had to give full effect to the ECJ's decision in this case and what it perceived to be "its underlying philosophy"

Allowing the appeal, Flaux J concluded that the validity of the tribunal's decision depended on whether the reasoning of the ECJ precluded an arbitral tribunal, as opposed to a national court of a member state, from making decisions inconsistent with decisions of the court first seised. Having considered the Advocate General and ECJ's ruling, Flaux J held that arbitration fell outside the Brussels Regulation and the principle of effective judicial protection was not engaged here. The tribunal had been wrong to conclude it did not have jurisdiction to make an award of damages for breach of the obligation to arbitrate or for an indemnity.

A full update on this case will be published shortly.

(West Tankers Inc V Allianz Spa and another [2012] EWHC 854 (Comm).)