If two parties (A and B) enter into a contract conferring exclusive jurisdiction on the English court, then in principle only the English court may resolve any resulting disputes between them. If Party A commences proceedings in a foreign court (or threatens to do so), in defiance of such an agreement, then Party B will likely seek an order from the English court, known as an anti-suit injunction, restraining A from pursuing the foreign proceedings. If A ignores the injunction and persists with the litigation then any resulting judgment of the foreign court is unlikely to be recognised or enforceable in England.
Anti-suit injunctions are a powerful tool in the English court’s armoury and have for a long time been sought and granted to protect English jurisdiction or arbitration agreements against competing litigation elsewhere. A recent example is to be found in the case of AIG Europe SA and Ors v John Wood Group Plc and Ors[1] involving the restraint of parallel proceedings in Canada.
The exception to this is in the European context, where until recently anti-suit relief has not been available. As a member of the European Union the United Kingdom was subject to the Brussels Regulation on the Recognition and Enforcement of Foreign Judgments, which did not permit the courts of any member state to issue an injunction restraining the pursuit of proceedings in the courts of any other member state, a prohibition confirmed by decisions of the European Court of Justice (ECJ) as long ago as 2003.[2] In the above example, therefore, the English court could not restrain Party A from pursuing proceedings in (say) Austria, but would instead be reliant upon the Austrian court to determine for itself that it lacked jurisdiction, applying the uniform rules to be found in the Brussels regime.
In the seminal case of Allianz SpA v. West Tankers Inc[3] the ECJ went on to hold that this prohibition also applied where anti-suit relief was sought in support of an arbitration agreement. Consequently, in that case, the English court could not restrain the pursuit of proceedings in Italy, brought in defiance of an agreement to arbitrate all disputes in England. The same prohibition was reaffirmed after the transition to the Recast Brussels Regulation ((EU) 1215/2012)[4]. It had also long ago been extended beyond EU member states to three of the four EFTA states, namely Iceland, Norway and Switzerland[5], by virtue of the Lugano Convention.
Following the UK’s withdrawal from the European Union it ceased to be bound by the (Recast) Brussels Regulation, though it was widely expected that the UK would instead accede to the Lugano Convention, in its new capacity as a non-EU state, in which case the Brussels prohibition against injunctive relief would effectively continue. While the courts of non-EU Lugano states are not formally bound by decisions of the ECJ, they are nevertheless obliged to “pay due account to the principles laid down” in those decisions[6].
In the event, however, this outcome did not come to pass because the UK’s application to accede to the Lugano Convention was vetoed by the European Commission, following a formal objection lodged in June 2021. Consequently, the UK is not now party to either Brussels or Lugano, and so its courts are once again free to issue anti-suit relief in the European context.
That freedom was very recently exercised in the case of QBE Europe SA/NV and Anor v. Generali España de Seguros y Reaseguros[7]. The applicant in that case, QBE, was the P&I insurer of a vessel said to have been responsible for damage to an undersea power cable linking the islands of Mallorca and Menorca. The cable was operated by Red Eléctrica de España (REE), whose property was insured with Generali. Having indemnified REE for the damage, Generali became subrogated to REE’s rights. Those rights included a direct action claim under Spanish law, against the vessel’s insurers, namely QBE. Generali duly commenced proceedings against QBE in the Spanish court, in response to which QBE applied to the English court for an injunction. QBE pointed out that the P&I policy issued to its insured contained an English arbitration clause, and argued that this must be respected by Generali in the pursuit of its direct claim against QBE.
The central question concerned the nature of the claim being pursued. It was Generali’s position that its right of action was a stand-alone legal remedy conferred by Spanish law, and so not one subject to any restrictions as to dispute resolution that might be found in the policy. The English Commercial Court rejected that argument, finding that the intention and effect of the Spanish statute was not to create a new and independent legal relationship but merely to enable the victim to enforce directly against the insurer the same obligations as those that could have been enforced by the insured. The exercise of that right came with the obligation to arbitrate in England.
The English court also rejected considerations of comity, describing this as “a factor of little or no weight”. Whatever may have been the public policy considerations underpinning the Spanish statute, there was, said the Judge, an obvious English public policy in upholding the contractual obligation to arbitrate. The Judge cited the decision of Longmore LJ in The Yusuf Cepnioglu[8] that the “invocation of comity in cases of this kind is not particularly apposite because it is never clear which country should give way to which”. What is clear from the decision is that, following the UK’s withdrawal from the Brussels Regulation, the English court will assess the matter for itself, in the interests of protecting the choice of English jurisdiction (or arbitration), unrestrained by the questions of reciprocity that underlined the Brussels regime.
