The English courts have jurisdiction to grant injunctions restraining arbitrations seated in a foreign jurisdiction (section 37, Senior Courts Act 1981 (SCA 1981)). However, that jurisdiction is only to be exercised in exceptional circumstances (see Black Clawson International Ltd v Papierwerke Waldhof-Aschaffenberg AG [1981] 2 Lloyd's Rep 446; Weissfisch v Julius and others [2006] [2006] EWCA Civ 218; Claxton Engineering Services Ltd v TXM Olaj-Es Gazkutato KFT [2011] EWHC 345 (discussed in Legal update, Anti-arbitration injunction where English court had already ruled on jurisdiction (High Court))). For detailed discussion about injunctions restraining arbitration proceedings, see Practice note, Remedies for breach of the arbitration agreement: anti-suit injunctions.

Despite the doctrine of Kompetenz-kompetenz, which permits an arbitral tribunal to decide on its own jurisdiction, the Supreme Court confirmed in Dallah Real Estate and Tourism Holding Company v Ministry of Religious Affairs of the Government of Pakistan [2010] UKSC 46, that the English court retained jurisdiction to determine the issue of whether there was an arbitration agreement. The question is whether it is appropriate to do so. (For further discussion on Dallah, see Legal update, Dallah Supreme Court decision: full update.) The interplay between the power of an arbitral tribunal to decide on its jurisdiction and that of the court to determine jurisdictional issues was also considered by Rix LJ in AES Ust-Kamenogorsk Hydropower Plant LLC v Ust-Kamenogorsk Hydropower Plant JSC [2011] EWCA Civ 647 (discussed in Legal update, Anti-suit injunction where no arbitration in prospect (Court of Appeal)).

The court's general powers of case management include the power to stay the whole or part of any proceedings generally or until a specified date or event (CPR 3.1(2)(f)). Where a claimant is applying to stay proceedings that it has voluntarily brought, it must show that there are special, rare or exceptional circumstances justifying a stay (Ledra Fisheries Ltd v Turner [2003] EWHC 1049 (Ch)). Relevant principles governing the grant of a stay of proceedings in favour of proceedings a claimant has commenced elsewhere include the following:

(Klöckner Holdings v Klöckner Beteiligungs [2005] EWHC 1453 (Comm).)

The judge dealt with these two issues together. The starting point was that the English courts had jurisdiction under section 37 of the SCA 1981 to grant anti-arbitration injunctions where the seat of arbitration was in a foreign jurisdiction, although that power was only exercised in exceptional circumstances. Those circumstances included where the issue was whether or not the parties consented to a foreign arbitration. Furthermore, the Supreme Court in Dallah had confirmed the English court's jurisdiction to decide whether there was an arbitration agreement. The question was whether it was appropriate to do so in the particular circumstances of the case. Gloster J rejected Excalibur's submission that, unless the context was an application for a stay of proceedings under section 9 of the Arbitration Act 1996 (AA 1996), the party challenging the jurisdiction of the arbitral tribunal must do so in the courts of the seat or resist enforcement in the court where proceedings to enforce the award were brought. In the judge's view, there was no reason why an injunction could not be granted under section 37 of the SCA even if section 9 of the AA 1996 was not engaged.

In this case, Excalibur had clearly submitted to the jurisdiction of the English court by starting the substantive Commercial Court proceedings. Further, it had previously submitted that the case was substantially connected to England and Wales. Therefore, Excalibur was clearly amenable to the English court's personal and territorial jurisdiction and Gloster J held that she had jurisdiction to grant an anti-arbitration injunction should it be appropriate to do so.

The judge rejected Excalibur's arguments that the Gulf defendants had submitted to the jurisdiction of the ICC, by making jurisdictional objections. On the evidence before her, she was satisfied that the Gulf defendants had made it clear that they did not recognise the jurisdiction of the ICC. On Excalibur's argument that it was for the tribunal, not the English court, to determine the issue of arbitrability, the scheme set out in the AA 1996 showed that the court had jurisdiction to determine that issue in circumstances similar to this case. Section 72 made express provision for the court to make that determination in the context of an English arbitration, provided the person alleged to be a party to arbitral proceedings had not taken part in those arbitral proceedings. The fact that section 30 permits an arbitral tribunal to decide questions of jurisdiction in an English arbitration was "of no consequence", and the AA 1996 did not require a party who maintained that there was no arbitration agreement to have that question decided by an arbitral tribunal. That was supported by the Supreme Court in Dallah and by comments of Rix LJ in AES. Although Rix LJ was not dealing with a foreign arbitration in AES, his analysis supported the proposition that in circumstances such as the present, the court had jurisdiction to decide whether to resolve the issue of whether an arbitration agreement existed itself. The court will look for the most economical way to decide where the real dispute should be resolved, and that was a matter of discretion.

Gloster J held that the Commercial Court, rather than the ICC tribunal, was the appropriate forum for deciding whether the Gulf defendants were party to the arbitration agreement contained in the collaboration agreement. She also decided that it was appropriate to grant an anti-arbitration injunction restraining Excalibur from pursuing the arbitration proceedings. The continuation of those proceedings would be unconscionable, oppressive, vexatious or otherwise an abuse of the due process of the court. The injunction was necessary to protect the Gulf defendants' legitimate interest in continuing the proceedings in England, which was the natural forum for the litigation.

The judge's reasons included the following:

Gloster J held that it would be inappropriate to grant a stay of the Commercial Court proceedings. There were no exceptional circumstances that justified a stay. An example of an exceptional case would be where the claimant had commenced proceedings purely to protect the limitation position. That was not the case here. Furthermore: