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The European Court of Justice determines that anti-suit injunctions issued by an arbitral tribunal addressed to a European Court are compatible with the Brussels I Regulation

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27 May 2015

The European Court of Justice (the ECJ) has issued a judgement in the case Gazprom OAO v Republic of Lithuania (Case C-536/13) (the Judgement or Gazprom), dated 13 May 2015, which declares that the enforcement by the court of a State of arbitral awards that prevent a party from taking the case to a court in that Member State, falls outside the scope of Regulation 44/2001 (Regulation 44/2001)*, and has to be decided pursuant to the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the New York Convention).  

Factual Background

The Gazprom case concerns the supply of gas by Gazprom to Lithuania via the Lithuanian company, Lietuvos Dujos AB (Lietuvos), which was owned by Gazprom, E.ON and the Lithuanian State. An arbitration clause was agreed in a shareholders’ agreement between Gazprom, E.ON and the Lithuanian Ministry of Energy (the Ministry) providing for Stockholm Chamber of Commerce arbitration with Stockholm seat. In 2011 the Ministry brought action against Lietuvos in a domestic court, seeking the initiation of an investigation in respect of the activities of the company and its top managers. Gazprom then filed a request for arbitration in Stockholm under the shareholders’ agreement seeking for the withdrawal of the Ministry court proceedings. By an award of 31 July 2012 the arbitral tribunal ruled to that effect.

In September 2012, the Vilnius Regional Lithuanian court found that the matter fell within its jurisdiction and granted the Ministry request for an investigation. The decision was appealed to the Lithuanian Court of Appeal, which rejected it on the basis that, among others, the arbitral award denied a national court the power that it possesses to determine whether it has jurisdiction, which was contrary to Lithuanian and international public policy. The Ministry argued that recognition of the arbitral tribunal’s award would be contrary to Regulation 44/2001. This decision was later appealed to the Lithuanian Supreme Court, who referred to the ECJ the issue of whether Regulation 44/2001 must be interpreted as precluding a court of a Member State from recognising and enforcing an arbitral award prohibiting a party from bringing certain claims before a court of that Member State.
 

This case is similar to Allianz v West Tankers (Case C-185/07) (Allianz). In this case, the injured party’s insurers of a charter party (Allianz was among them) breached the agreement to refer any dispute to arbitration and commenced proceedings against the other party, West Tankers, in the Italian courts. West Tankers then sought an injunction from the English Courts restraining the insurers from proceeding with the Italian proceedings and a declaration that the dispute was subject to an arbitration clause. The question that was referred to the ECJ was whether a Member State court could grant an injunction against a person bound by an arbitration agreement to restrain them from commencing or pursuing proceedings in the courts of another Member State in breach of the arbitral agreement. The ECJ held that granting anti-suit injunctions in such circumstances was incompatible with the Regulation 44/2001.

Main findings

In Gazprom, the ECJ acknowledged that Regulation 44/2001 only governs conflicts of jurisdiction between courts of the Member States, as Article 1 (2)(d) of Regulation 44/2001 excludes arbitration from its scope. Bearing this in mind, the ECJ denied the application of the principle of mutual trust, according to which each court in the European Judicial area relies, as a matter of principle, on the appropriateness of the judicial systems in other EU Member States, to arbitral tribunals due to the fact that they are not bound by the Regulation 44/2001.
The Judgement differs from the conclusions reached in the judgement in Allianz because in that case the injunction was issued by a court of a Member State. In this regard, the ECJ decided that an injunction by a court of a Member State restraining a party from having recourse to proceedings other than arbitration and from continuing proceedings brought before a court of another Member State, which has jurisdiction under Regulation 44/2001, is not compatible with such Regulation.

In Gazprom, as opposed to the judgement in Allianz, the ECJ noted that, when an anti-suit injunction comes from an arbitral tribunal, neither a conflict of jurisdictions between courts of the Member States arises, nor does the aforementioned mutual trust upon which the Regulation 44/2001 is based apply. Moreover, the Judgement stated that, in this case, any potential limitation of power arising from the anti-suit injunction would result solely from the recognition and enforcement of an arbitral award.


In sum, the ECJ understands that anti-suit injunctions of an arbitral tribunal do not fall within the scope of the Regulation 44/2001. Therefore, the recognition and enforcement by a court of a Member State of the arbitral award containing such anti-suit injunctions will result from the applicable rules of such Member State, i.e. the New York Convention of 1958. The same conclusion would have been reached if new Regulation 1215/2012 had applied.

*Although the new Regulation (EU) 1215/2012 entered into force on 10 January 2015 it is not applicable in the present case according to Article 66 (1): “This Regulation shall apply only to legal proceedings instituted, to authentic instruments formally drawn up or registered and to court settlements approved or concluded on or after 10 January 2015”.

Recital 12 of the Regulation states: “This Regulation should not apply to arbitration. Nothing in this Regulation should prevent the courts of a Member State, when seized of an action in a matter in respect of which the parties have entered into an arbitration agreement, from referring the parties to arbitration, from staying or dismissing the proceedings, or from examining whether the arbitration agreement is null and void, inoperative or incapable of being performed, in accordance with their national law.”