Posts Tagged Arbitration
Thank you Pawel Sikora for flagging some time back, and subsequently analysing in detail (p.221 onwards) the decisions of the Polish Courts particularly at Reszow, on whether arbitrated claims can be secured with a European account preservation order under Regulation 655/2014: not something I recall having been discussed elsewhere before. Article 2(2)(e) of the regulation explicitly states that “it does not apply to arbitration”: Brussels I- aficionados will be familiar with the expression.
The Courts discussed C-391/95 Van Uden in particular, with the Rzeszow Appellate Court holding that an EAPO may be granted for arbitrated claims. Using Van Uden language, in the Court’s view provisional measures such as freezing orders (which must be ordered by the courts in ordinary, not the arbitral panels) are not in principle ancillary to arbitration proceedings, but rather they are ordered in parallel to such proceedings and intended as measures of support.
Some might read in the judgment further encouragement for the EU to consider drafting an EU arbitration Regulation.
(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 220.127.116.11.2.
Update 6 August 2018 the report of the hearing in Dutch and French is here.
I was at the Belgian Parliament yesterday for a hearing on the BIBC, following publication of the Government’s draft bill. For those of you who read Dutch, my notes are attached. We were limited to two pages of comments – the note is succinct.
An important change vis-a-vis the initial version (on which I commented here) is that the Court will now be subject to Belgian private international law (including primacy of EU instruments) for choice of law, rather than being able to pick the most appropriate law (arbitration panel style). That brings the court firmly within Brussels I. Also note my view and references on the Court being able to refer to the CJEU for preliminary review.
Nori Holdings: High Court holds that West Tankers is still good authority even following Brussels I Recast. (Told you so).
In  EWHC 1343 (Comm) Nori Holdings v Otkritie Males J follows exactly the same line as mine in commenting on West Tankers – specifically the bodged attempt in Brussels I Recast to accommodate the concerns over West Tankers’ sailing the Brussels I ship way too far into arbitral shores.
For my general discussion of the jurisdictional /arbitration issues see here. A timeline:
- When the Council came up with its first draft of what became more or less verbatim the infamous recital 12 I was not enthusiastic.
- When Wathelet AG in his Opinion in Gazprom suggested recital 12 did overturn West Tankers, I was not convinced. (Most of those supporting this view read much into recital 12 first para’s instruction that the Regulation does not impede courts’ power ‘from referring the parties to arbitration’).
- Indeed the CJEU’s judgment in Gazprom did not commit itself either way (seeing as it did not entertain the new Regulation).
- Cooke J was on the right track in Toyota v Prolat: in his view the Recast did not change West Tankers.
- Males J confirms: West Tankers is still good authority. At 69 ff he does not just point out that Wathelet was not followed by the Court. 92 ff he adds five more reasons not to follow the suggestion that West Tankers has been overruled. He concludes ‘that there is nothing in the Recast Regulation to cast doubt on the continuing validity of the decision in West Tankers (Case C-185/07)  AC 1138 which remains an authoritative statement of EU law’.
(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 18.104.22.168.2.
I reported earlier on Sulamerica and the need properly and preferably, expressly to provide for choice of law vis-a-vis arbitration agreements, in particular vis-a-vis three elements: lex arbitri, lex curia, lex contractus. In Shagang the High Court added its view on the possible relevance of a fourth factor: the geographical venue of the arbitration, and its impact in particular on the curial law: the law which determines the procedure which is to be followed.
Atlas Power Ltd -v- National Transmission and Despatch Co Ltd  EWHC 1052 is another good illustration of the relevance (but in practice: rarity) of the proper identification of all four factors.
Bracewell excellently identify the four take away points from Atlas Power:
- It is the seat of arbitration that determines the curial law of the arbitration, not the governing law of the contract.
- (To English Courts) the choice of the seat of arbitration is akin to an exclusive jurisdiction clause in favour of the courts of the place designated as the seat of the arbitration having the supervisory role over the arbitration.
- The English courts can and will use their powers to grant anti-suit injunctions to prevent a party from commencing foreign proceedings in breach of an arbitration agreement.
- Complex drafting increases the risk of satellite litigation and the accompanying delay and expense.
The core point which Atlas Power illustrates is that specific identification of arbitration venue, curial law, lex contractus and lex arbitri is best done in simple terms. Overcomplication, particularly variance of any of these four points, is a truly bad idea. Specifically: the arbitration clause in the contracts between the parties (text from Bracewell’s overview)
- Started by providing that the “arbitration shall be conducted in Lahore, Pakistan”.
- Then stated that if the value of the dispute was above a certain threshold or fell within a certain category, either party could require that the arbitration be conducted in London.
- Finally, the clause provided that, notwithstanding the previous sentences, either party may require that the arbitration of any dispute be conducted in London, provided that if the dispute did not satisfy the threshold or category requirements set out earlier in the clause the referring party would pay the costs of the arbitration incurred by the other party in excess of the costs that would have been incurred had the arbitration taken place in Pakistan.
Various procedural events led to Phillips J essentially having to decide: whether the parties had validly and lawfully chosen London as the seat of the arbitration (answer: yes); and whether, in light of Pakistani law (which was the law governing the contracts), the choice of London as the seat of arbitration did not result in the English courts having exclusive supervisory jurisdiction with the effect that the courts of Pakistan had at least concurrent jurisdiction (answer: no, for this would result in an unsatisfactory situation where more than one jurisdiction could entertain challenges to an award)
Variation of any litigation relevant articles really does open all sorts of cans of worms.
Clearing up my backlog.
In  EWCH 2208 (Comm) Zavod Ekran v Magneco the Blair J held in September 2017 that a company must not hide behind documents initiating arbitration being drafted in Russian, when a properly observant litigant should have known that arbitration proceedings were being commenced. The most important point from a practical perspective was found to be that the heading of a letter, in English, states that it comes from the Moscow arbitration body—the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation. From that alone it should have been obvious that an arbitration was being commenced. There was no other reason for ICAC to be writing to the company.
An utterly practical approach.
Lois de police /ordre public /overriding mandatory law in arbitration: Paris Court of Appeal in MK Group v Onyx
Julien Huet and colleagues at White & Case have excellent insight in MK Group v Onyx. The Paris Court of appeal set aside an ICC arbitral award for violation of Laos overriding mandatory law. As such the violation of foreign ‘lois de police’ (overriding mandatory law in European private international law jargon) was seen as being comprised in French ‘ordre public international’.
It is clear that this approach increases the grip of the courts in ordinary on arbitral panels – lest the Cour de Cassation disagrees.
Thank you Michael Wise for alerting me to  NSWSC 1759 Live Group v Rabbi Ulman in which Sackar J at the NSW Supreme Court displays both sensitivity and adroitness in addressing the relationship between a Beth Din (a Jewish court) and the courts in ordinary.
The case I imagine will be of interest for those studying church /religion and state relations. It would seem to conclude that a Beth Din (or equivalents in other faiths) threat to impose religious sanctions on an unwilling party, will be considered contempt of the courts in ordinary and thus a no-go zone. However that as such the State courts should not hesitate to support arbitration through religious courts by compelling those who agreed to it in commercial relations, to submit to it. (Sackar J does highlight features of the particular case as not meeting natural justice requirements).