Does the EU need an arbitration Regulation?

the existence of parallel arbitration and judicial proceedings (lis pendens issues; see also here); and the circulation of arbitral awards and arbitration-related judgments, including the issue of the conclusive and preclusive effects of prior arbitral awards in relation to conflicting judgments (res judicata issues: including whether the priority which the Brussels I-Regulation concedes to the New York Convention, means that a court in a Member State can or indeed must give priority to a conflicting arbitral award over a judgment of the court of another EU Member State).

A great kick-off to a continuing debate. Geert.


The arbitration exception and the review of the Brussels I Regulation – The Council in denial

The Council in June issued its ‘General Approach‘ on the review of the Brussels I Regulation /the Jurisdiction Regulation – just in time as it happened for June exams . The General Approach is the backbone of what will be the Council Common Position, once the European Parliament has held its ‘first reading’ (which is now scheduled for November 2012, after having been postponed twice: from January 2012 it had already been moved to June). I will be posting one or two comments on the General Approach on this blog, starting with the arbitration exception. For background reading please search the blog for ‘West Tankers’.

Pro memoria: The European Parliaments rapporteur and the EP in full afterwards suggested no movement on the issue at all, other than a clearer proviso on the arbitration exclusion, specifying that

not only arbitration proceedings, but also judicial procedures ruling on the validity or extent of arbitral competence as a principal issue or as an incidental or preliminary question, are excluded from the scope of the Regulation.

Consequently the rapporteur called for a more robust protection of arbitration, by ring-fencing arbitration in a more aggressive way.

In its eventual proposal on the review of the JR, COM(2010) 748, the European Commission proposed the specific inclusion of a jurisdictional ground for arbitration:


This Regulation shall not apply to (…)

Arbitration, save as provided for in Articles 29, paragraph 4, and 33, paragraph 3.

 Article 29, paragraph 4, new:

4. Where the agreed or designated seat of an arbitration is in a Member State, the courts of another Member State whose jurisdiction is contested on the basis of an arbitration agreements shall stay proceedings once the courts of the Member State where the seat of the arbitration is located or the arbitral tribunal have been seised of proceedings to determine, as their main object or as an incidental question, the existence, validity or effects of that arbitration agreement.

This paragraph does not prevent the court whose jurisdiction is contested from declining jurisdiction in the situation referred to above if its national law so prescribes.

Where the existence, validity or effects of the arbitration agreements are established, the court seised shall decline jurisdiction.

This paragraph does not apply in disputes concerning matters referred to in Sections 3, 4, and 5 of Chapter II.


Article 33:

For the purpose of this Section, a court shall be deemed to be seised (…)

3. For the purpose of this Section, an arbitral tribunal is deemed to be seised when a party has nominated an arbitrator of when a party has requested the support of an institution, authority or a court for the tribunal’s constitution.


[author’s note: Sections 3, 4 and 5 referred to in the newly proposed Article 29(4), are the sections dealing with the protected parties: insurance contracts; consumers; employment contracts].


The June 2012 ‘General Approach’ document by the Council in my view adopts the worst possible scenario. With respect to arbitration, the Council suggests

–       Not to adopt the aforementioned Articles 29, paragraph 4, and 33, paragraph 3 (these suggested amendments would therefore be deleted in their entirety).

–       To include the following in Article 84:

2. This Regulation shall not affect the application of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1985.

–       Finally, to include a recital as follows:

  • “This Regulation should not apply to arbitration. Nothing in this Regulation should prevent the courts of a Member State, when seised of an action in a matter in respect of which the parties have made an arbitration agreement, from referring the parties to arbitration of from staying or dismissing the proceedings and from examining whether the arbitration agreement is null and void, inoperative or incapable of being performed, in accordance with their national law.
  • A ruling given by a court of a Member State as to whether or not an arbitration agreement is null and void, inoperative of incapable of being performed should not be subject to the rules of recognition and enforcement of this Regulation, regardless of whether the court decided on this as a principal issue or as an incidental question. On the other hand, where a court, exercising jurisdiction under this Regulation or under national law, has determined that an arbitration agreement is null and void, inoperative or incapable of being performed, this should not prevent that the court’s judgment on the substance of the matter be recognised and, as the case may be, enforced in accordance with this Regulation. This should be without prejudice to the competence of the courts of the Member States to decide on the recognition and enforcement of arbitral awards in accordance with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958, which takes precedence over this Regulation.
  • This Regulation should not apply to any action or ancillary proceedings relating to, in particular, the establishment of the arbitral tribunal, the powers of the arbitrators, the conduct of the arbitration procedure or any other aspects of such a procedure, nor to any action or judgment concerning the annulment, review, appeal, recognition and enforcement of an arbitral award.”

The Council would therefore maintain the principal exclusion for arbitration, and emphasise the priority of the New York Convention. However it also maintains the confusion over the exact scope of the arbitration exclusion. Its curious use of an extended recital basically re-iterates all the points of discussion resulting from the current text and the case-law applying it. Any party wanting to stall, torpedo, or otherwise sabotage proceedings with even a hint of arbitration elements in them, will find itself well served with the proposed recital which ― rather adroitly, it has to be said ― manages to integrate all unsettled points of discussion in a matter-of-factly way which amounts to sheer denial of the problems that arise in practice.

Council reports that it has been in consultation with the Parliament, in the run-up to the General Approach. However one hopes that this recital is not one that the EP would be happy to sign off on.


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