West Tankers Inc. v Ras Riunione Adriatica di Sicurta SpA (The Front Comor) (Case C-185/07) (The Front Comor)
| Jurisdiction | UK Non-devolved |
| Judge | LORD NICHOLLS OF BIRKENHEAD,LORD STEYN,LORD HOFFMANN,LORD RODGER OF EARLSFERRY,LORD MANCE |
| Judgment Date | 21 February 2007 |
| Neutral Citation | [2007] UKHL 4 |
| Date | 21 February 2007 |
| Court | House of Lords |
and others
[2007] UKHL 4
Appellate Committee
Lord Nicholls of Birkenhead
Lord Steyn
Lord Hoffmann
Lord Rodger of Earlsferry
Lord Mance
HOUSE OF LORDS
Appellants:
Stephen Males QC
Sara Masters
(Instructed by MFB
Respondents:
Timothy Brenton QC
David Bailey QC
(Instructed by Ince & Co)
My Lords,
I have had the advantage of reading in draft the opinion of my noble and learned friend Lord Hoffmann. I agree that, for the reasons he gives, a question should be referred to the European Court of Justice in the terms proposed by him.
My Lords,
I have read the judgment prepared by my noble and learned friend Lord Hoffmann. I agree with it. In particular I agree with the opinion which Lord Hoffmann expressed on the question referred.
LORD HOFFMANNMyLords,
Introduction
The main question in this appeal is whether a court of a Member State may grant an injunction against a person bound by an arbitration agreement to restrain him from commencing or prosecuting proceedings in breach of the agreement in a court of another Member State which has jurisdiction to entertain the proceedings under EC Regulation 44/2001("the Regulation"). After hearing the arguments of counsel, I am of opinion that an answer to this questionis not obvious and is necessary to enable the House to give judgment. It is therefore the duty of the House to refer the question to the Court of Justice under article 234.
The Facts
In August 2000 the Front Comor, avessel owned by West Tankers Inc ("Tankers") and chartered to Erg Petroli SpA ("Erg") collided with a jetty owned by Erg at Syracuse and caused damage. The charterparty was expressed to be governed by English law and contained a clause providing for arbitration in London. Erg claimed upon its insurers, Ras Riunione Adriatica di Sicurtà SpA and Generali Assicurazioni Generali SpA ("theinsurers") up to the limit of its insurance cover and commenced arbitration proceedings against Tankers in London for the excess. Tankers counterclaimed that it was not liable for any of the damage caused by the collision. The pleadings in the arbitration are complete.
On 30 July 2003 the insurers commenced proceedings against Tankers before the Tribunale di Siracusa to recover the amounts which it had paid Erg under the policies. It brought a delictual claim by virtue of its statutory right of subrogation to Erg's claims under Article 1916 of the Italian Civil Code. Subject to any application for a stay pursuant to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which Italy is a party, the Italian courts have jurisdiction under article 5(3) of the Regulation.
The English proceedings
On 10 September 1994 Tankers commenced these proceedings against the insurers, claiming declarations that the dispute which was the subject of the proceedings in Syracusearose out of the charterparty and that the insurers claiming by right of subrogation were therefore bound by the agreement to refer it to arbitration in London. Tankers also claimed an in junction to restrain the insurers fromtaking any further steps in relation to the dispute except by way of arbitration and in particular requiring them to discontinue the proceedings in Syracuse.
Colman J gave a judgment on 21 March 2005. He decided that both in English and Italian law the right to the delictual claim which had been transferred to the insurers by subrogation was subject to the arbitration clause in the charterparty. He therefore made the declarations claimed by Tankers. On the question of whether it would be consistent with the Regulation to grant an injunction to restrain further prosecution of the proceedings in Syracuse, he said that he was bound by the decision of the Court of Appeal in Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co Ltd [2005] 1 Lloyd's Rep 67 to hold that it was. He therefore granted the injunction.
Colman J certified that, as the question of whether an injunction could be granted had been previously decided by the Court of Appeal, the case was suitable for appeal directly to the House of Lords under section 12 of the Administration of Justice Act 1969. He also certified two other issues which do not raise questions of European law, namely, whether the grant of the injunction was inconsistent with the New York Convention and whether as a matter of discretion an English court should refuse to restrain proceedings in another Member State. In my opinion the judge was right to give negative answers to both these questions and it is unnecessary to enlarge upon the reasons which he gave.
The Community Legal Provisions
The jurisdictions of the Courts of Member States are governed by the Regulation. But article 1(2)(d) of the Regulation provides that it is not to apply to arbitration.
The National Legal Provisions
By section 37(1) of the Supreme Court Act 1981 the High Court has jurisdiction to grant an injunction (whether interlocutory or final) "in all cases in which it appears to the court to be just and convenient to do so." The English courts have regularly exercised this power to grant injunctions to restrain parties to an arbitration agreement from instituting or continuing proceedings in the courts of other countries: see The Angelic Grace [1995] 1 Lloyd's Rep 87. In addition, by section 44(1) and (2)(e) of the Arbitration Act 1996 the court has power to grant an interim injunction "for the purposes of and in relation to arbitral proceedings".
Observations
In case it should be of any assistance to the Court of Justice, I shall state my own opinion on the question referred. For convenience I shall refer only to the Regulation and its articles, even though some of the cases were decided under the equivalent articles of the Brussels Convention.
Gasser GmbH v MISAT Srl( Case C-116/02) [2003] ECR I- 14693 (which decides that a court of a Member State on which exclusive jurisdiction has been conferred pursuant to article 23 cannot issue an injunction to restrain a party from prosecuting proceedings before a court of another Member State if that court was first seised of the dispute) and Turner v Grovit( Case C-159/02) [2004] ECR I - 3565 (which decides that a court of a Member State may not issue an injunction to restrain a party from commencing or prosecuting proceedings in another Member State which has jurisdiction under the Regulation, on the ground that those proceedings have been commenced in bad faith) are both based upon the proposition that the Regulation provides a complete set of uniform rules for the allocation of jurisdiction between Member States and that the courts of each Member State have to trust the courts of other Member States to apply those rules correctly.
Thus in Gasser GmbH v MISAT Srl( Case C-116/02) [2003] ECR I-14693, article 27 required the court of exclusive jurisdiction to stay proceedings until the court first seised had applied article 23 and refused jurisdiction. In Turner v Grovit( Case C-159/02) [2004] ECR I - 3565 the one court had to trust the other to dismiss the proceedings on the ground that they had been brought in bad faith. In each case, the court which had granted the injunction had been purporting to act pursuant to a jurisdiction within the scope of the Regulation.
Arbitration, however, is altogether excluded from the scope of the Regulation by article 1(2)(d). The basic principles by which the Regulation allocates jurisdiction, giving priority (subject to exceptions) to the domicile of the defendant, are entirely unsuited to arbitration, in which the situs and governing law are generally chosen by the parties on grounds of neutrality, availability of legal services and the unobtrusive effectiveness of the supervisory jurisdiction. There is no set of uniform Community rules which Member States can or must trust each other to apply. While it is true that all Member States adhere to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (which article 71 of the Regulation declares to be unaffected) the Convention is not a Community instrument and does not create a system for the allocation of jurisdiction comparable with the Regulation.
It is settled by the decision of the Court of Justice in Marc Rich & Co AG v Società Italiana Impianti PA [1991] ECR I-3855 ("the Atlantic Emperor") that the exclusion applies not only to arbitration proceedings as such but also to Court proceedings in which the subject-matter is arbitration. In Van Uden Maritime BV v Deco-Line [1998] ECR...
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