Brussels Regulation reforms: European Commission proposes to retain arbitration exception | Practical Law

Brussels Regulation reforms: European Commission proposes to retain arbitration exception | Practical Law

The European Commission has published its proposals for the reform of the Brussels Regulation. (Free access).

Brussels Regulation reforms: European Commission proposes to retain arbitration exception

by PLC Arbitration
Published on 15 Dec 2010 • European Union
The European Commission has published its proposals for the reform of the Brussels Regulation. (Free access).
The European Commission published its proposals for the reform of the Brussels Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Regulation 44/2001/EC) on 14 December 2010. The proposal includes a draft amended Regulation which introduces improvements to the interface between the Regulation and arbitration, in particular by retaining the "arbitration exception" and making provision for a stay of court proceedings where the question of arbitral jurisdiction is before either the courts of the seat or an arbitral tribunal.
Under the existing rules in the Regulation, arbitration is excluded from its scope (Article 1(2)(d)). Court proceedings which have arbitration as their subject matter are also excluded. The legislative proposal which has been put forward by the Commission is a modified version of the initial proposal made in its green paper. It retains the arbitration exception, but clarifies it with two new provisions:
  • First, a new rule would require a court seised of a dispute to stay proceedings if its jurisdiction is contested on the basis of an arbitration agreement and an arbitral tribunal has been seised of the case, or court proceedings relating to the arbitration agreement have been commenced in the member state of the seat of the arbitration. The amended Regulation clarifies that this new rule would not prevent courts from declining jurisdiction where there is prima facie an arbitration agreement, if required by national law to do so.
  • Second, the proposal contains a rule specifying when an arbitral tribunal is deemed seised for these purposes.
Sarah Garvey, PSL Counsel for the Litigation and Dispute Resolution Department at Allen & Overy LLP, comments: "Many arbitration practitioners will be relieved that the Commission is only proposing limited reforms in this area, recognising that most respondents expressed general satisfaction with the operation of the 1958 New York Convention. The proposals seek to tackle the problems that have arisen as a result of the decision in Allianz SpA v West Tankers Inc 10 February 2009 (Case C-185/07) (as interpreted by National Navigation Co v Endesa Generacion SA [2010] EWCA Civ 1397). The key innovation is that a tribunal will now effectively be able to "trump" proceedings brought in a court of another member state. Matters arising between an arbitral tribunal and the courts of the seat would remain to be resolved by the national arbitration law."
For a full update on all of the key areas addressed in the Commission's legislative proposal, see Legal update, Brussels Regulations reforms: Commission publishes draft amendments.
Source: Europa