Conflicts of Law Issues: Arbitration

This note considers the significance of the seat in international arbitration against the background of increased harmonisation of national arbitration laws and institutional rules. The concept of delocalised arbitration and the relevance of national laws are addressed.

A case tracker outlining progress in the case of West Tankers v Allianz SpA and another, including summaries of the decisions and links to associated PLC legal updates and articles.

An article highlighting the key investment treaty arbitration-related developments in 2012/2013. 

In India-related contracts, including a dispute resolution clause appropriately tailored to the Indian legal environment is particularly crucial. Litigation (inside or outside India) is rarely an attractive option for foreign investors in India. Similarly, arbitration in India suffers from a number of shortcomings. That leaves arbitration outside India, but several recent Indian court decisions potentially expand the scope for Indian court intervention in such arbitration, absent drafting of the arbitration clause.

On 20 December 2012, Denmark notified the European Commission of its decision to implement Regulation (EU) 1215/2013 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. This Regulation recasts Council Regulation (EC) 44/2001 of 22 December 2000 (Brussels I Regulation).

The recast of Council Regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Regulation) has been published in the Official Journal. It will apply from 10 January 2015.

The European Parliament adopted the draft text of the recast Brussels Regulation at first reading on 20 November 2012.

We have published an article discussing the various stages in the dispute between West Tankers and Allianz SpA which has given rise to a series of decisions by different courts and tribunals. Free access.

In Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others [2012] EWCA Civ 638, the Court of Appeal considered an appeal against an anti-suit injunction restraining Brazilian proceedings, which involved determining the law governing an arbitration agreement between the parties.

We have published a new case tracker outlining the progress of the case of West Tankers v Allianz SpA and another. (Free access.)

In West Tankers Inc v Allianz SpA & Anor [2012] EWHC 854 (Comm) (04 April 2012), the court considered whether EU law deprived an arbitral tribunal of jurisdiction to award damages for breach of an obligation to arbitrate. (Free access)

An update on the European Parliament's Committee on Legal Affairs' draft report on the review of the Brussels Regulation, which rejects the proposal to abolish the arbitration exclusion in the Regulation.

An update on the judgment of the European Court of Justice in Allianz SpA, formerly Riunione Adriatica di Sicurtà SpA v West Tankers Inc (Case C-185/07).

The Court of Appeal has upheld the decision of Cooke J (see Legal update, Interplay of substantive and curial law in international arbitration) and ordered the continuation of a final injunction preventing the defendant insurers from bringing proceedings in New York to challenge an award. In C v D [2007] EWCA Civ 1282, the underlying contract was a "Bermuda Form" insurance policy in the usual terms, referring disputes to arbitration in London, and applying New York law to issues arising under the policy. On appeal, the defendant argued that as the arbitration agreement was silent as to its proper law, it should not follow the seat of the arbitration (namely London) but should follow the proper law of the contract (namely New York law) thus allowing challenges to the award in the New York courts. The Court of Appeal dismissed the appeal and continued the injunction. By chosing London as the seat of arbitration, the parties must be taken as having agreed that proceedings on the award should only be those permitted by English law. To allow the remedies available under New York law would be a recipe for litigation. Even where there is no express law of the arbitration agreement, it will rarely be the case that the law of the (separable) arbitration agreement will be different from the law of the seat of the arbitration. It is more likely that the law with which the arbitration agreement has its most close and real connection will be the law of the seat of arbitration,

The Delhi High Court has considered the applicability of Part I of the Arbitration and Conciliation Act 1996 to a London-seated arbitration.

In Abuja International Hotels Ltd v Meridien Sas [2012] EWHC 87 (Comm), the Commercial Court considered a challenge to the validity of an arbitration agreement under section 67 of the Arbitration Act 1996 and proceeded on the basis of the tribunal's finding that the law governing the arbitration agreement was the law of the seat, rather than the law of the host contract.

An update on Shashoua and another v Sharma [2010] EWCA Civ 15, in which permission to appeal was granted.

A full update on the ECJ judgment in Allianz SpA v West Tankers Inc (Case C-185/07), which was concerned with anti-suit injunctions.

Note: This decision was upheld by the Court of Appeal on 5 December 2007 (see Legal update, Law of seat determines scope of permissible challenges to arbitral award). In C v D [2007] EWHC 1541 (Comm), the claimants sought injunctive relief restraining the pursuit of legal proceedings in New York in which the defendant had sought to challenge a London arbitration award. Granting the injunction, the court held that the fact the underlying contract was governed by New York law did not entitle the defendant to bring proceedings in the New York courts. The arbitration agreement was governed by English law, and the lex curiae was English. In those circumstances, the English court could and should intervene so as to prevent the claimant's rights being infringed by the New York proceedings. The judgment of Mr Justice Cooke considers, in particular, the relevance and interplay of substantive and curial laws in arbitral proceedings.