CJEU allows arbitrators' anti-suit injunction, but those hoping for review of West Tankers disappointed, says expert

However, commercial disputes expert Richard Dickman of Pinsent Masons, the law firm behind Out-Law.com, said that it was "disappointing" that the Court of Justice of the European Union (CJEU) had limited its decision to the facts of the case, rather than revisiting previous cases on the relationship between arbitration and EU rules on jurisdiction. Many had expected the CJEU to do so, as suggested by one of its advocates general in an opinion on the same case at the end of last year, Dickman said.

"As a result of the decision, a member state's courts are obliged to recognise an anti-suit injunction issued by an arbitral tribunal to prevent or limit the scope of court proceedings the respondent may want to pursue in that member state," he said.

"However, the court drew a distinction between such an anti-suit injunction and one issued by another member state's court. The latter was incompatible with the Brussels I Regulation because it involved one state's court effectively depriving another member state's court of the right to determine its own jurisdiction. This follows the decision in the 2009 West Tankers case, which the advocate general's opinion suggested ought to be revisited," he said.

"In the event, the court confined its decision to the facts of this case and gave no indication that it regarded the West Tankers decision as wrong. This will come as a disappointment to many practitioners," Dickman said.

The Brussels I Regulation determines which member states' courts have jurisdiction over a dispute. It grants exclusive jurisdiction to the court "first seised" of the action, and allows that court to rule on any challenges to that jurisdiction. Arbitration agreements are excluded from the scope of the regulation; and their recognition and enforcement is governed by the New York Convention.

In the 2009 West Tankers case, the CJEU ruled that an English court could not prevent legal proceedings being brought in Italy over a dispute which contained a London arbitration clause. This was because, despite the exclusion of arbitration agreements from the scope of the regulation, allowing the English court to grant an anti-suit injunction in the circumstances would have stripped the Italian court of the power to rule on its own jurisdiction under Brussels I, according to the CJEU.

The West Tankers decision has been a controversial one amongst members of the international arbitration community, so much so that a recast version of the regulation expressly excluded an "action" or "ancillary proceedings" relating to arbitration from its scope. In December 2014, advocate general Melchior Wathelet said that even though the recast version did not come into force until the following month, it should be viewed as explaining how the provision excluding arbitration "must be and always should have been interpreted".

In the present case, the CJEU had been asked by Lithuania's supreme court to clarify whether it should refuse to enforce an arbitration award issued in Stockholm in 2012 in a dispute involving Gazprom, the Russian state-owned energy company, and the Lithuanian Energy Ministry. The award required the Lithuanian Energy Ministry to withdraw claims it had made in the Vilnius Regional Court and refer them to arbitration instead, which the Lithuanian courts claimed limited their ability to rule on their own competence in violation of Brussels I.

In its judgment, the CJEU noted that arbitral tribunals were not bound by "the principle of mutual trust" on which Brussels I was based: that is, the mutual trust that member states were bound to have in the legal systems and judicial institutions of the others. In addition, the case could be distinguished from that of West Tankers because a refusal to enforce the arbitral award "is not capable of resulting in penalties being imposed upon [Lithuania] by a court of another member state", the CJEU said.

"As the order has been made by an arbitral tribunal there can be no question of an infringement of that principle [of mutual trust] by interference of a court of one member state in the jurisdiction of the court of another member state," the CJEU said. "Thus, in those circumstances, neither that arbitral award nor the decision by which, as the case may be, the court of a member state recognises it are capable of affecting the mutual trust between the courts of the various member states upon which [Brussels I] is based."

The power of the Lithuanian courts to recognise or enforce the award, or to refuse to recognise or enforce the award, could only be limited by national laws governing arbitration in Lithuania or by the New York Convention, the CJEU ruled.