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Oxford Law Citator

15 Alternative Remedies

Thomas Raphael

From: The Anti-Suit Injunction (2nd Edition)

Thomas Raphael QC

Previous Edition (1 ed.)

Content type:: Book content

Product:: Private International Law [PRIL]

Series:: Oxford Private International Law Series

Published in print:: 12 September 2019

ISBN:: 9780198778936

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Subject(s):: Injunctions to restrain proceedings in England and Wales — Alternative compensation schemes

(p. 335) 15 Alternative Remedies

A. Introduction

15.01 Anti-suit injunctions, and claims for damages, are not the only available tools for resolving or shaping conflicts of jurisdiction. This chapter considers alternative remedies which may be granted by the English courts to shape, pre-empt, or respond to the pursuit of litigation elsewhere. The limitations imposed by the Brussels–Lugano regime on anti-suit injunctions mean that this topic has grown in importance. This chapter proceeds (for the most part) on the assumption that the Brussels–Lugano regime, or something like it, will remain English law irrespective of Brexit.¹

15.02 We consider in particular the following procedural remedies or strategies:

• claims for declarations;
• applications for the appointment of an arbitrator;
• procedural management;
• resistance to enforcement.

B. Declarations

1. The Contractual Situation

15.03 Where foreign proceedings are in breach of a contractual exclusive jurisdiction or arbitration clause, the courts will in appropriate cases grant declarations that a given set of claims is covered by an English contractual forum clause,² or that the defendant is obliged to bring (p. 336) those claims before the chosen forum or cannot bring them elsewhere,³ or that the foreign proceedings are in breach of contract.⁴ This has been done in numerous cases.⁵

15.04 There are arguments to the effect that parallel declarations to recognize or enforce an arbitration clause should only be granted in the limited circumstances envisaged in section 32 of the Arbitration Act 1996, but as discussed further at paras 15.21–15.31, these arguments have so far not prevented the court from granting such declarations to protect English arbitrations against competing foreign proceedings more widely, independent of section 32.

15.05 Such declarations are a legitimate form of relief when a party to such a clause has commenced, or may well commence, litigation before a foreign court which is not the agreed forum according to the clause, even if no parallel litigation or arbitration has yet been commenced in England.⁶

15.06 Whether and in what form declaratory relief will be appropriate in quasi-contractual cases will depend on the nature of the quasi-contractual connection to the contractual forum clause. In Through Transport the injunction defendant wished to make a substantive claim before the Finnish courts under a Finnish third-party rights statute, in respect of contractual rights subject to an English arbitration clause. The court was willing to grant a declaration that the injunction defendant was obliged to bring any claim arising out of the contract in the contractual forum, but not a declaration that the Finnish litigation was actually in breach of contract, as the claimant in Finland was not a party to the contract, and could not break it.⁷

15.07 A declaration of this kind is always a discretionary remedy. In general, declarations will be granted if they serve a useful purpose.⁸ However, the court may decline to grant such declarations if they are inconsistent with comity. Thus, in Toepfer v Molino Boschi the foreign proceedings had been allowed to continue in breach of the arbitration clause for many years, with the result that it was inappropriate for the English court to grant a declaration with the aim of pre-empting the decision of the foreign court, at such a late stage.⁹ However, (p. 337) a declaration raises fewer comity concerns than an anti-suit injunction in similar circumstances, and may be granted where an injunction would not be.¹⁰

15.08 There are also many ways in which such declarations can serve a useful purpose. First, they can be used to create res judicata effects abroad.¹¹ Second, as discussed further at paras 15.09–15.20, such declarations may be used defensively in resistance to attempts to enforce the foreign judgment in England. Third, declarations that an exclusive forum clause is contractually binding can also provide a springboard for claims for damages; and they may assist in enforcing arbitration awards obtained under the terms of an arbitration clause.¹² The courts have, in general, taken a relatively liberal approach to the utility of such declarations. Thus, it has been considered appropriate to grant declarations that might assist in resisting enforcement of a prospective Brussels–Lugano judgment on the basis only that there was a ‘real prospect’ that the declaration would have such an effect, without deciding that it actually would do so.¹³

2. The Defensive Use of Declarations to Resist Enforcement

15.09 Section 32(1)(a) of the Civil Jurisdiction and Judgments Act 1982 provides that, outside the Brussels–Lugano context, a foreign judgment will not be enforced if it is in breach of an exclusive forum clause, subject to certain exceptions, of which the most important is a submission to the jurisdiction of the foreign court.

(p. 338) 15.10 A declaration that an exclusive forum clause is binding will therefore often provide an effective anticipatory defence to recognition of a non-Brussels–Lugano judgment obtained in breach of the clause, since it would establish in advance that section 32(1)(a) would apply.

15.11 A declaration as to the binding effect of an exclusive jurisdiction clause should also provide the practical answer to proceedings in another EU court in breach of that clause. Following the coming into force of the Brussels I Recast, Recital 22 and Article 31 of the Brussels I Recast should have the effect that if the English court is the agreed court under an exclusive jurisdiction clause, then even if it is second seised, the bringing of a claim before it for a declaration as to its own jurisdiction should lead to the temporary stay of the competing foreign proceedings pending its determination (Art 31(2)); and if the declaration is granted, the foreign court will then be required to decline jurisdiction (Art 31(3)). In addition, a prior English court judgment on the merits would prevent enforcement of a subsequent Brussels–Lugano judgment, which would be ‘irreconcilable’ with the prior English judgment under Article 45(1)(c) of the Recast.

15.12 The position in relation to arbitration clauses is less clear. Although in the course of the pre-legislative process that led to the Brussels I Recast there were proposals to give the courts of the seat of the arbitration the same primary role in relation to arbitration clauses as Article 31 of the Recast gives the chosen court in respect of exclusive jurisdiction clauses,¹⁴ these proposals were not adopted. Instead, the philosophy of the Brussels I Recast in its final form was to seek to reinforce the exclusion of arbitration from the scope of the Brussels–Lugano regime, partly reversing the effect of The Front Comor through Recital 12.

15.13 Although the point has not yet been definitively decided, the better view appears to be that if an arbitration award on the merits has been obtained, and has been enforced as a judgment by the English court, then recognition of an inconsistent Brussels–Lugano judgment on the merits should be refused on grounds of irreconcilability under Article 45(1)(c) of the Brussels I Recast.¹⁵ The English courts have so far accepted that it is legitimate to apply to (p. 339) enforce as a judgment a declaratory arbitration award on the merits of the dispute for such a purpose.¹⁶

15.14 Indeed, if the arbitration award on the merits has been obtained, but not yet enforced as a judgment by the English court, enforcement of the inconsistent foreign judgment should also be refused. Even if the award cannot be treated as a ‘judgment’ within Article 45(1)(c),¹⁷ the prior award on the merits should still justify refusal of enforcement as a matter of public policy under Article 45(1)(a). If the award is an English arbitration award, then it is res judicata (unless successfully challenged under sections 67–69 of the Arbitration Act 1996).¹⁸ Further, if it is a foreign award or an English award which is not a domestic award, the English court is bound to enforce it under Article III of the New York Convention, which takes precedence, and displaces the recognition rules of the Regulation by virtue of Article 73 of the Recast. The additional step of obtaining prior enforcement of the award by a judgment of the English court is thus an optional extra, which on this analysis is not necessary to prevent enforcement of a subsequent inconsistent Brussels–Lugano judgment.¹⁹

15.15 However, it is less clear whether a prior English arbitration award or court declaration as to the binding effect of an arbitration clause, and which does not decide the merits of the dispute, will itself preclude the enforcement of an inconsistent Brussels–Lugano judgment on the merits of the dispute.

15.16 It is arguable that an English court declaration holding that an exclusive jurisdiction clause or arbitration clause is binding would preclude enforcement in England of a Brussels–Lugano judgment obtained in breach of that clause, on the basis that the English declaration is ‘irreconcilable’ with the Brussels–Lugano judgment under Article 45(1)(c) of the (p. 340) Recast.²⁰ However, the point is uncertain, in particular²¹ as the inconsistency is not as direct as between judgments or awards on the merits;²² and the English case law suggests that for the purposes of Article 29 of the Recast claims for breach of an exclusive jurisdiction clause are not the same cause of action as the underlying claims for substantive relief.²³

15.17 In The Wadi Sudr, Waller LJ made a rather cryptic obiter comment, in respect of declarations as to the effect of arbitration clauses, that may suggest he did not perceive any irreconcilability with a later foreign judgment on the merits, but the better reading may be that he was simply not addressing this point.²⁴ Conversely, in African Fertilizers, Beatson J was of the view that there was a real prospect that a declaration as to the effect of an arbitration clause would prevent the enforcement of a subsequent judgment on the merits obtained in breach of the clause, and was willing to enforce as a judgment an arbitration award declaring the binding force of the arbitration clause.²⁵

(p. 341) 15.18 The other, and possibly stronger, argument is that recognition should be refused because it would be ‘manifestly contrary to public policy’ under Article 45(1)(a) of the Recast to enforce a judgment which had been obtained inconsistently with a jurisdiction clause, or an arbitration clause, which an English judgment, or arbitration award enforceable in England, had held binding. The ‘manifestly contrary’ threshold is a high one, requiring infringement of ‘some fundamental principle’ of the domestic legal order,²⁶ and it could be said that refusing recognition would involve applying public policy to the foreign court’s assumption of jurisdiction, which is precluded by Article 45(3) of the Recast.²⁷ In the Wadi Sudr, Waller LJ doubted obiter that public policy would permit refusal of recognition of a foreign judgment obtained inconsistently with an English declaration as to the existence of an arbitration clause.²⁸

15.19 Nevertheless, it is suggested that the correct answer in principle is that recognition of a Brussels–Lugano judgment should be refused if there has been a prior declaratory judgment holding that the foreign litigation is in breach of the exclusive forum clause. The contrary result would be incoherent: the English legal system would simultaneously be holding that the foreign judgment had been unlawfully obtained, by its prior declaration, which is capable of supporting a claim in damages; and also treating the foreign judgment as a binding source of legal obligation, by recognizing it. Notwithstanding the obiter views of Waller LJ, it is suggested such a situation could fairly be described as infringing a fundamental principle of the domestic legal order.²⁹

15.20 Further, it is also suggested that the same answer should also follow if there has been a valid prior arbitration award declaring that the arbitration clause is binding, even if that award has not yet been enforced as a judgment of the court. There is a strong case in principle that it would be contrary to public policy, or directly contrary to the New York Convention, which takes precedence over the recognition and enforcement rules of the Recast via Recital 12 and Article 73 of the Recast, for the English court to be obliged to enforce a Brussels–Lugano judgment, if the English court is also bound by the prior arbitration award as to the effect of the clause, where that award is res judicata. The binding effect of the award will necessarily mean the foreign judgment had been obtained unlawfully.³⁰ (p. 342) However, whether the European Court would adopt these solutions remains to be seen.³¹

3. Section 32 of the Arbitration Act 1996

15.21 The policy of the Arbitration Act 1996 is that challenges to the jurisdiction of the tribunal are primarily to be made before the arbitrators themselves under section 30, and the arbitrators may also grant declarations as to their own jurisdiction. Appeals from both lie to the court under section 67 of the Act. The 1996 Act also provides, in section 32, a restricted procedure for the grant of a declaration by the court that a tribunal has jurisdiction under an arbitration agreement. The permission of the tribunal or the opposing party is required to trigger the procedure; and even then, the court should only hear the claim in appropriate circumstances.

15.22 There was previously a line of first instance decisions in other contexts, led by Vale do Rio Doce v Shanghai Bao Steel, which suggested that section 32 is an exclusive remedy and that, save perhaps in abnormal circumstances,³² declarations as to the jurisdiction of an arbitration tribunal should not be granted by the court independently of section 32,³³ as otherwise they would be an ‘intervention’ in the arbitration which the court should not commit, by reason of section 1(c) of the Arbitration Act. However, it was not clear whether this line of case law reflected a conclusion of jurisdiction or merely an approach to discretion.³⁴

(p. 343) 15.23 But this line of case law would have been inconvenient, and has not been followed, in cases where foreign court proceedings are competing with English arbitration proceedings, and where the declaration would serve to ratify and protect the English arbitration clause.

15.24 In many cases, where the argument that sections 1(c) and 32 of the Arbitration Act 1996 preclude the grant of such declarations outside the narrow confines of section 32 appears not even to have been raised, the English courts had shown no hesitation in granting declarations as to the validity of English arbitration clauses, without reference to section 32, even after the Arbitration Act 1996 came into force.³⁵ This usually occurred in cases where a declaration was claimed as a parallel remedy alongside an anti-suit injunction, and where the declaration formalized the conclusions the court had reached on the force of the arbitration clause as part of its reasoning for the injunction.³⁶

15.25 In the days when European law was not viewed as imposing a material restriction on the grant of anti-suit injunctions, the question of whether such a declaration could also be granted was of lesser significance. But following the removal of the anti-suit injunction within the Brussels–Lugano regime from the court’s toolbox, by European Court’s decision in The Front Comor, the availability of a free-standing declaration has become of more importance.

15.26 The question whether section 32 precluded the grant of an injunction or a declaration in support of arbitration was argued in Ust-Kamenogorsk, where in the Court of Appeal, Rix LJ held that he did not agree with any interpretation of Vale do Rio to the effect that there was a rule of jurisdiction which prevented the court granting a declaration outside section 32 to protect an arbitration clause against competing foreign proceedings. Instead, whether section 32 should lead a court to decline to grant a declaration was a question of principle or discretion dependent on the facts: ‘a court asked to protect an agreement to arbitrate by granting declarations or injunctions in respect of it has to steer a careful path between: on the one hand, adequate support for the parties’ agreement, without which support that agreement may be effectively nullified by foreign proceedings taken in breach of it; and on the other hand a proper concern not to intervene in an arbitration or prospective arbitration, or to usurp the role of arbitrators’.³⁷ He observed that a declaration by the court that an arbitration clause was definitively binding would not unacceptably trespass on the possibility that the arbitrators might in due course address the question of their own jurisdiction.

15.27 In the Supreme Court, Lord Mance decided the case on the narrower basis that any preclusionary effect of section 32 could not apply to preclude the grant of an anti-suit injunction in a case where no arbitration proceedings were on foot or proposed.³⁸ However, his reasoning is also inconsistent with any rigid preclusionary doctrine of jurisdiction which would prevent the court from granting a declaration outside section 32 to protect (p. 344) the arbitration clause, even if an arbitration had been commenced. He did not view the case law stemming from Vale do Rio as laying down any absolute rule; and regarded any limiting doctrine as justified by the principle of ‘Kompetenz-Kompetenz’ (Competence-Competence) which ‘makes sense where a tribunal is asked to exercise a substantive jurisdiction and hears submissions at the outset as to whether it has such a jurisdiction’.³⁹ He concluded that the correct approach in relation to injunctions was that the power in section 37 of the Supreme Court Act 1981 should be exercised ‘sensitively and, in particular, with due regard for the scheme and terms of the 1996 Act when any arbitration is on foot or proposed’,⁴⁰ and it is submitted that the same logic applies in principle to declarations sought outside section 32 of the 1996 Act.

15.28 The other argument historically for a restrictive approach is the contractual contention that the binding force of the arbitration clause falls within the scope of the agreement to arbitrate, and therefore a declaration on the question is a matter within the exclusive jurisdiction of arbitrators. However, this argument has never found any favour.⁴¹ There are numerous situations where the court has to decide on the binding effect of arbitration clauses, such as applications to stay court proceedings under section 9 of the Arbitration Act 1996. The best contractual rationalization appears to be that the preclusive contractual effect of the agreement to arbitrate is to be construed as expressly or impliedly qualified to allow for the court’s ability to grant supportive measures, including declarations as to the effect of the agreement to arbitrate, in appropriate cases.⁴² In such situations, the court and the arbitrators have a concurrent jurisdiction.⁴³

15.29 The effect of Ust-Kamenogorsk was considered in HC Tradeland Malta v Tradeland Commodities, in which a claim was made for a declaration as to the force of the arbitration clause where there was no problem of competing foreign proceedings, and the claimant (p. 345) could, and intended to, commence arbitral proceedings in which any necessary declaration could be granted. The court accepted that there was no bar of jurisdiction to the grant of declarations as to the effect of arbitration clauses but held that on those facts it would be wrong to grant a declaration as a matter of principle, or anyway that it should decline to grant a declaration in its discretion. Granting a declaration in such a situation would circumvent sections 30 and 32 of the Act and usurp the arbitrators’ role. But the court made clear that it was distinguishing what it called the ‘anti-suit’ situation; and it also distinguished the situation in Through Transport, where a declaration but not an injunction had been granted in a case of competing proceedings elsewhere in the Brussels–Lugano zone.⁴⁴

15.30 In the circumstances, the best view of the law is that neither section 1(c) nor section 32, nor the contractual effect of the arbitration clause, impose any absolute or jurisdictional constraint on the grant of declarations to enforce arbitration clauses.

15.31 Instead, whether or not a declaration should be granted, or whether it should be left to the arbitrators, or sought only through section 32, is a question of principle and discretion, and depends on the context. In general, it is necessary to use ‘sensitivity’ to the arbitrators’ role and the scheme of the 1996 Act,⁴⁵ and to avoid ‘usurpation’⁴⁶ of the arbitrators’ jurisdiction as to their own jurisdiction—their ‘Competence-Competence’.

15.32 Even if an arbitration is underway or on the point of commencement, there will be situations where a declaration by a court will be appropriate. One such situation is where the court will, in reality, be resolving the question of jurisdiction in the context of an anti-suit injunction, and there is little purpose in requiring a further hearing before arbitrators before a declaration is granted. A further situation may be where (within the Brussels–Lugano zone) an injunction is prohibited and only a declaration can be granted by the court to protect the arbitration process, but the grant of a declaration would be of real utility. In contrast, where there is no reason not to use the normal arbitral processes other than a desire to avoid the normal process of an arbitral award on jurisdiction and then a subsequent appeal, and no issue of competing foreign proceedings, it seems in the light of HC Tradeland that it would be wrong in principle, or at least discretion, to grant a declaration.

15.33 In the light of this, the practice of granting declarations alongside or in place of anti-suit injunctions, to protect an arbitration against competing foreign proceedings, does not need to be abandoned. Nevertheless, the readiness with which declarations have been granted in the past may now deserve some rethinking. Indeed, the principle of avoiding usurpation of the arbitrators’ role means that there may be circumstances, even if the court is intervening to protect the arbitration from competing foreign proceedings, where the final determination of the binding scope of the arbitration clause should be left to the arbitrators. This might mean, for example, that the appropriate relief will be an interim anti-suit injunction, rather than any final declaration.⁴⁷ But the appropriate resolution will be context-dependent.

(p. 346) 4. Jurisdiction to Hear Claims for Contractual Declarations

15.34 Where a claimant seeks a declaration that an English exclusive jurisdiction clause is binding, the English courts will generally have jurisdiction under Article 25 of the Recast or the Hague Convention on the Choice of Court, or in the rarer cases where neither of these apply,⁴⁸ under CPR Part 6 PD 6B para 3.1(6)(c) and (d).⁴⁹

15.35 Before the Brussels I Recast, there were potential lis pendens problems where the foreign proceedings in another EU state had been commenced first.⁵⁰ However, in The Alexandros T the Supreme Court adopted a robust approach to lis pendens and concluded that claims for declarations as to the effect of exclusive jurisdiction clauses were not ‘the same cause of action’ as foreign claims on the merits, and so did not have to be stayed under Article 29.⁵¹ The Supreme Court further held that, although the declarations were related to the foreign proceedings on the merits, they should not be stayed in the court’s discretion under Article 30, in particular because the English court as the chosen court was best placed to determine questions of the scope of the contractual agreements in question.⁵²

15.36 Furthermore, all such lis pendens problems have now been removed under the Recast by Article 31, and Recital 22, which make clear that in cases concerning exclusive jurisdiction clauses the purportedly chosen court is entitled to determine its jurisdiction first.⁵³

15.37 If a declaration is sought to establish the binding force of an arbitration clause, the claim will fall within the arbitration exception to the Brussels–Lugano regime.⁵⁴ As a result, the English court will usually have jurisdiction to hear a claim for a declaration that an English arbitration clause is binding, under CPR 62.5(1)(c), because the claim ‘affects’ an arbitration agreement, and it seems also under CPR PD 6B para 3.1(6)(c), as an agreement for (p. 347) arbitration in England will normally be governed by English law.⁵⁵ In addition, since they fall outside the regime, claims for declarations as to the effect of arbitration clauses will not be affected by lis pendens under Articles 29 and 30 of the Recast.⁵⁶

5. Declarations by Arbitrators

15.38 Under English arbitration law, arbitrators have jurisdiction under sections 30 and 31 of the Arbitration Act 1996 to grant awards that an arbitration clause is binding, either on the application of the arbitration claimant who wishes to uphold the validity of the clause, or when dismissing a jurisdiction challenge by the arbitration respondent.⁵⁷ Obviously, claims before arbitrators do not face difficulties of service out of the jurisdiction, nor are they affected by the lis pendens effect of prior proceedings elsewhere in the Brussels–Lugano zone.

15.39 If an award that an arbitration clause is binding, or that certain claims fall within the scope of the arbitration clause, has been obtained, the successful party can either ask the court to enter judgment in the terms of the award by the summary procedure under section 66 of the Arbitration Act,⁵⁸ or, if necessary,⁵⁹ bring a common law claim on the award to obtain a court declaration ratifying the Tribunal’s finding that the arbitration agreement is binding. A judgment by the court enforcing the arbitrators’ declaration that an arbitration clause is binding should have the same effect and consequences as a declaration made by the court in the first instance. The English courts have so far been willing to permit enforcement of awards in order to assist with resisting enforcement of inconsistent foreign judgments, on the basis that there is a ‘real prospect’ that such enforcement would provide an (additional) ground to refuse recognition.⁶⁰ Where the arbitration award is an English award, and is res judicata, a court judgment enforcing the award may in the final analysis add little; as enforcement of a foreign judgment which contradicted a prior binding award should be contrary to public policy and section 54 of the Arbitration Act 1996.⁶¹ But it may be a useful additional pre-emptive precaution, in particular in the face of a potential competing Brussels–Lugano judgment, since the correct interpretation of the Brussels–Lugano instruments in this regard has not yet been resolved.

(p. 348) 15.40 The court will have power to serve such proceedings out of the jurisdiction.⁶² Claims to enforce an arbitration award declaring that the arbitrators have jurisdiction, whether under the common law or under section 66, will fall outside the scope of the Brussels–Lugano regime and should not be precluded by the principle of mutual trust.⁶³ Similarly, arguments that such section 66 applications should be stayed in favour of prior competing court proceedings in another EU state as a matter of public policy or discretion have also been rejected.⁶⁴

6. Non-Contractual Declarations

15.41 In contrast, there is no reported example of an attempt to claim a declaration that foreign proceedings are vexatious or oppressive in a non-contractual case. The intangible nature of a substantive finding that foreign proceedings were vexatious or oppressive, independent of any concrete remedy, may mean that this is a remedy the court would be unlikely to grant. Further, a declaration of this nature might well be meaningless, since if no injunction were sought, there would appear to be no obvious remedial consequence.⁶⁵

15.42 In Deaville v Aeroflot, where there were competing proceedings in England and France, and the case fell within the scope of the Warsaw Convention, the Judge concluded that it would be contrary to comity for the court to grant a declaration that the jurisdiction of the French courts was precluded by the Warsaw Convention.⁶⁶

7. Pre-Emptive Declarations as to Recognition and Enforcement

15.43 The courts have in the past generally refused to grant pre-emptive declarations as to whether they will enforce foreign judgments,⁶⁷ or as to whether they will admit evidence which is being sought in foreign evidence-gathering proceedings,⁶⁸ preferring to reserve their position until the moment when enforcement is sought, or the evidence is adduced. However, (p. 349) there are signs of change. In recent cases, the courts have been willing to enforce arbitration awards under section 66 of the Arbitration Act 1996 on the basis that such enforcement would give (additional) ‘good prospects’ of resisting enforcement.⁶⁹ The restrictions imposed by European law on the use of anti-suit injunctions may also encourage a more liberal approach.⁷⁰

C. Applications for the Appointment of an Arbitrator

15.44 A party who is bringing court proceedings abroad in arguable breach of an arbitration agreement, and whose case abroad depends on a denial that the arbitration clause is valid and binding, will frequently refuse to cooperate in the appointment of an arbitrator in the English arbitration. If the contractual appointment procedure has failed, the court can appoint an arbitrator under section 18 of the Arbitration Act 1996.

15.45 Applications to appoint an arbitrator fall outside the scope of the Brussels–Lugano regime,⁷¹ and they do not infringe the principle of mutual trust.⁷² The court has power to serve applications for the appointment of an arbitrator out of the jurisdiction under CPR 62.5.⁷³

15.46 Where the English courts have concluded that an arbitration clause is binding and applicable, they are willing to deploy their powers to appoint an arbitrator to enable arbitration proceedings in England to be pushed forwards, ahead of competing court proceedings elsewhere, whether within the Brussels–Lugano regime, or outside it.⁷⁴

D. Procedural Management

15.47 There is a range of procedural techniques available to litigants before the English courts that can be deployed to influence the result of conflicts of jurisdictions, without obtaining an anti-suit injunction, or any other substantive remedy. In this context ‘the Court will exercise its discretion … to give effect to the parties’ rights and obligations as it understands them to be’.⁷⁵ Consequently, a party who can show that a particular procedural step will assist in ensuring that the substantive dispute will in effect be resolved in the contractual forum, or (p. 350) in the otherwise most appropriate forum, will have a strong case to persuade the court to exercise its discretion in his favour.⁷⁶

15.48 Where the substantive dispute is within the scope of the Brussels–Lugano regime, the simplest and most effective technique is to issue proceedings first, if necessary by way of an action for negative declaratory relief, and thus to ensure that there is a lis pendens under Article 29 of the Brussels I Recast, which should preclude any competing proceedings elsewhere in the Brussels–Lugano zone. However, the important new provisions of Article 31 of the Recast, which give the chosen court under a jurisdiction clause priority in the determination of its jurisdiction even if it was second seised, mean that the race for first seisin is now of less importance.⁷⁷ The chosen court, even if second seised, has priority to hear a declaration as to its own jurisdiction, and if it determines its own jurisdiction, that should lead to the automatic rejection of the jurisdiction of the other EU court.

15.49 The commencement of arbitration proceedings has no lis pendens effect, but the grant of an arbitration award on the merits, and even more so, the subsequent entry of judgment in the terms of that arbitration award, should preclude the recognition or enforcement in England of a contrary subsequent Brussels–Lugano judgment,⁷⁸ or any other foreign judgment.

15.50 If the foreign proceedings have been brought outside the Brussels–Lugano zone, or if the English or the foreign proceedings fall outside the material scope of the Brussels–Lugano regime, then the lis pendens rules of the Brussels I Recast will not automatically resolve the question of priority (Articles 33 and 34 of the Recast are discretionary even where they apply), and unless an application for a stay of proceedings succeeds either in England or abroad, both actions will proceed to judgment. Which action ‘wins the race’ and gets to judgment first can be of great importance, as the first decision can create a res judicata, possibly in the other action, or failing that in the courts of a third country where an attempt is made to enforce the second decision.

15.51 English courts and arbitration tribunals have undoubted powers to control proceedings before them, and have many devices at their disposal to accelerate a final decision, including the setting of tight timetables, the omitting of unnecessary procedural steps, and if necessary, an order for an expedited trial.⁷⁹ It is suggested that, in a case where the winning of the litigation race matters, and where the English court or tribunal has concluded that the foreign proceedings are in breach of contract, it is legitimate for the English court or tribunal to take appropriate procedural measures to advance the English action, so long as the requirements of a fair trial are not infringed.

15.52 A more aggressive procedural device would be for the court to use the threat of adverse procedural decisions to pressure the claimant abroad to give undertakings that he will not progress his proceedings abroad pending determination of the English proceedings. At least as matters currently stand, it is suggested that there would need to be some connection (p. 351) between the procedural step in question and the inconveniences produced by the continuation of the foreign litigation for it to be legitimate to require an undertaking of this kind.⁸⁰ However, it may be that the courts will become increasingly creative, now that the remedy of an anti-suit injunction is prohibited in many cases.

15.53 In Hemain v Hemain, the claimant abroad was vexatiously using the delay introduced by an application for a stay of English proceedings on grounds of forum non conveniens to steal a march by advancing his foreign proceedings in the meanwhile. The Court of Appeal suggested that it would be a legitimate course to dismiss the stay application out of hand unless the claimant abroad gave undertakings to postpone his competing foreign litigation until after the determination of the stay application.⁸¹

E. Resisting Enforcement

15.54 A party who considers that proceedings abroad are illegitimate or inappropriate in some way can choose not to participate in the foreign proceedings, allowing judgment to be entered in his absence, with the intention of resisting enforcement of the foreign judgment in England, or any other relevant jurisdiction where he may have assets.

15.55 This is an easier strategy where the foreign proceedings are outside the Brussels–Lugano zone or outside the material scope of the Brussels–Lugano regime,⁸² because unless the defendant is present within the jurisdiction of the foreign court, or submits to the jurisdiction of the foreign court, or there is a jurisdiction clause in favour of the foreign court, or one of the limited statutory regimes for the registration of foreign judgments apply,⁸³ the foreign court’s judgment will not be recognized in England.⁸⁴ Further, provided that the defendant did not submit to the jurisdiction of the foreign court, section 32 of the Civil Jurisdiction and Judgments Act 1932 provides that any foreign judgment which has been obtained in breach of an exclusive forum clause will not be enforceable in England.⁸⁵ There are also (p. 352) other defences to recognition of a foreign judgment, namely breach of English public policy, fraud, and breach of natural justice.⁸⁶ The public policy ground of recognition includes inconsistency with a prior English judgment that is res judicata,⁸⁷ and this principle must also apply to inconsistency with a prior English arbitration award that is res judicata.

15.56 Further, in principle, breach of an anti-suit injunction restraining pursuit of the foreign proceedings should also lead to refusal of recognition or enforcement of the foreign judgment, on grounds of public policy.⁸⁸ In any event, the party in breach of the injunction would be in contempt, and it could be forcefully argued that he could not be heard to enforce his judgment unless his contempt was purged by reversing that very judgment.⁸⁹

15.57 In contrast, Carr J’s decision in Spliethoff’s holds that a foreign judgment obtained in breach of an anti-suit award given by English arbitrators should still be enforced in England, if (p. 353) there has been submission to the jurisdiction of the foreign court,⁹⁰ but with respect the reasoning is unsatisfactory, and the result unattractive. (It is also distinguishable from the situation of anti-suit injunctions granted by the court, which are different juridically, since anti-suit awards have only contractual force.) Carr J reasoned that an arbitral anti-suit should be no more protection than an arbitration clause itself, and seemed to regard submission as determinative of public policy at least as regards anti-suit awards. But an anti-suit award prima facie should be res judicata (a point on which Carr J may not have been addressed). Submission should not in itself, reverse a res judicata; and as a matter of policy an anti-suit award goes further than a contestable arbitration clause since it decides, with what should be binding effect, that there should be protection from the foreign litigation.⁹¹

15.58 However, if the foreign proceedings are unfolding in another member state of the Brussels–Lugano regime, the opportunities for resisting the recognition or enforcement of any resulting judgment are less safe.⁹²

15.59 Under Articles 36–51 of the Brussels I Recast, a Brussels–Lugano judgment must, in general, be recognized and enforced in England irrespective of whether the defendant submitted to the jurisdiction of the foreign court,⁹³ unless it is irreconcilable with a prior decision that is res judicata,⁹⁴ or unless recognition is ‘manifestly contrary to public policy’.⁹⁵ Article 45(3) expressly states that ‘The test of public policy … may not be applied to the rules relating to jurisdiction.’⁹⁶ However, by Article 73, the Recast ‘shall not affect’ the operation of the New York Convention on international arbitration.

15.60 It seems likely that the judgment of another Brussels–Lugano court, within the material scope of the Brussels–Lugano regime, must be recognized under the Recast by the English courts, even if to English eyes it has been obtained in breach of an exclusive jurisdiction clause, as to refuse recognition on this ground would be contrary to the structure of the Recast.⁹⁷

(p. 354) 15.61 The defendant’s arguments against recognition would be stronger if the English courts had granted a declaration that an exclusive jurisdiction clause obliged the claimant abroad to litigate in England, although even in that case there remains a risk that the foreign judgment would have to be enforced under the Brussels–Lugano regime.⁹⁸ The best mechanism for protecting a jurisdiction clause in such a case is therefore to commence proceedings in the chosen court on the merits. In cases where the Recast applies, the chosen court will have priority even if it was second seised, pursuant to Article 31. In Lugano Convention cases, it will, however, remain important to ensure that the English court is first seised.

15.62 There has been considerable controversy about whether a judgment on the merits given by another Brussels–Lugano court must be recognized under the Brussels–Lugano regime by the English courts if it has been obtained in breach of an arbitration agreement. The United Kingdom and the existing contracting parties did not agree how to resolve this question on the United Kingdom’s accession, and the text of the Brussels Convention as revised left it open.⁹⁹

15.63 The writers of the various reports on the earlier Brussels instruments before the Recast, and the European Court’s advocates general, approached this question in differing ways, none of which were decisive.¹⁰⁰ The variation of opinion reflects different attitudes to arbitration in the member states.¹⁰¹

(p. 355) 15.64 The English decisions have also expressed different views on the question.¹⁰² Most recently, in The Wadi Sudr, the Spanish court had reached a prior decision that an arbitration clause was not binding.¹⁰³ Applying the law as it stood under Brussels I Regulation, in the light of the Front Comor, this decision fell within the scope of the Regulation (because it had been reached in the context of Regulation proceedings and the merits) and so was a binding and enforceable Regulation judgment. The English court therefore had to recognize it, and treat it as res judicata, unless public policy was a ground to refuse recognition. It was held that the mere fact that the English court would have reached a different decision as to the force of the arbitration clause was not enough to justify a refusal of recognition of the judgment as to the effect of the arbitration clause on grounds of public policy. The res judicata on the force of the clause was decisive.

15.65 This does not, however, definitively resolve the question of what happens if there is no foreign judgment with res judicata effect on the force of the arbitration clause, nor what happens now under the Brussels I Recast. The effect of para 2 of Recital 12 of the Brussels I Recast (reversing the effect of The Front Comor) is that a foreign judgment on the force of an arbitration clause is now not enforceable under the Recast. The res judicata effect of the Spanish judgment on that very point, which was the heart of the decision in The Wadi Sudr, will therefore not recur automatically.

15.66 Of the two judges that gave reasoned judgments in Wadi Sudr, Waller LJ’s reasoning is focused on the situation where the foreign judgment on the effect of the arbitration clause has res judicata effect. Moore Bick LJ’s reasoning potentially goes broader. In terms that may be applicable independently of a foreign res judicata, he concluded that breach of an arbitration clause (to English eyes) would in general be insufficient, in itself, to render enforcement of the foreign judgment contrary to public policy (and the logic would seem to be the same, whether it is a judgment on the force of the clause or a judgment on the merits). However, on what may be the crucial question, whether enforcement would be contrary to the New York Convention if to English eyes there was a binding arbitration clause, Moore Bick LJ’s reasoning is apparently dependent on the res judicata effect of the Spanish judgment.¹⁰⁴

(p. 356) 15.67 This particular hot potato was tossed around during the pre-legislative debates that led to the Brussels I Recast.¹⁰⁵ The final result again bears the hallmarks of a messy compromise. Recital 12 of the Recast again does not clearly resolve the question, stating that:

where a court of a Member State, 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 preclude that court’s judgment from being recognised, or as the case may be, enforced in accordance with this Regulation.

This could be read as leaving the point open, by simply preventing preclusion of recognition based on the mere fact that an arbitration agreement has been previously raised before the original court. But it may reflect an implicit assumption that recognition is the likely starting point.

15.68 It follows that sitting back and relying on the existence of an arbitration clause, enforceable in the eyes of English law, is not a safe strategy when faced with litigation elsewhere in the Brussels–Lugano zone. In contrast, if a prior declaration has been obtained from the English court, or the arbitrators, holding that the arbitration clause was applicable and binding, then there would be strong arguments that a Brussels–Lugano judgment reached inconsistently with that declaration should not be recognized in England under the Brussels–Lugano regime.¹⁰⁶ If a prior arbitration award on the merits has been obtained, and a fortiori if such award has been enforced by a judgment in England, the case against enforcement of an inconsistent Brussels–Lugano judgment is even stronger.¹⁰⁷

Footnotes:

¹ It also assumes that pursuant to Article 26(6) of the Hague Convention on the Choice of Court, the Hague Convention does not affect the operation of the Brussels–Lugano regime, on the assumptions that the situations discussed do not fall within the exceptions identified in Article 26(6). The operation of the Hague Convention (in cases within Article 26(6), or where the Brussels–Lugano regime does not apply) is outside the scope of this chapter, although the Convention will be touched on briefly at points.

² See eg Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98, 101, and Declaration §1 at 111.

³ See eg Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98, 101, and Declaration §2 at 111; Through Transport Mutual Insurance Association (Eurasia) v New India Assurance [2005] 1 Lloyds Rep 67 (CA) [63]–[64]; West Tankers v Allianz [2012] 2 Lloyds Rep 103 [7]; National Navigation v Endesa Generacion (The Wadi Sudr) [2009] 1 Lloyds Rep 666 [74], [127] (overturned on appeal, but on a distinct point [2010] 1 Lloyds Rep 193 (CA) [133]); AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2012] 1 WLR 920 (CA), [2013] 1 WLR 1889 (SC) [2], [14]–[18].

⁴ See eg Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98, 101, Declaration §3 at 111; Ust-Kamenogorsk Hydropower Plant JSC (Appellant) v AES Ust-Kamenogorsk Hydropower Plant LLP [2013] 1 WLR 1889 (SC) [14]–[18]; Ecom Agroindustrial v Mosharaf Composite Textile Mill [2013] 2 Lloyds Rep 196 [15], [40]–[43].

⁵ Ecom Agroindustrial v Mosharaf Composite Textile Mill [2013] 2 Lloyds Rep 196 [41].

⁶ The contention that a declaration to enforce an arbitration clause could not be granted unless an arbitration had already been commenced was rejected in Ust-Kamenogorsk Hydropower Plant JSC (Appellant) v AES Ust-Kamenogorsk Hydropower Plant LLP [2013] 1 WLR 1889 (SC), upholding [2010] 2 Lloyds Rep 493, [2012] 1 WLR 920 (CA).

⁷ Through Transport Mutual Insurance Association (Eurasia) v New India Assurance [2005] 1 Lloyds Rep 67 (CA) [63]–[65].

⁸ Messier-Dowty v Sabena [2000] 1 WLR 2040 (CA). For relevant examples, see Through Transport Mutual Insurance Association (Eurasia) v New India Assurance [2005] 1 Lloyds Rep 67 (CA) [65] (in respect of the second declaration); Toepfer International v Molino Boschi [1996] 1 Lloyds Rep 510, 518; Ecom Agroindustrial v Mosharaf Composite Textile Mill [2013] 2 Lloyds Rep 196 [15], [40]–[43]; London Steamship Owners’ Mutual Insurance v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyd Rep 309 [181]–[199].

⁹ Toepfer International v Molino Boschi [1996] 1 Lloyds Rep 510, 518.

¹⁰ Declarations have been granted where anti-suit injunctions have been refused: see Through Transport Mutual Insurance Association (Eurasia) v New India Assurance [2005] 1 Lloyds Rep 67 (CA) [63]–[64] and World Pride Shipping v Daiichi Chuo Kisen Kaisha (The Golden Anne) [1984] 2 Lloyds Rep 489, 493, 496, 498; Essar Shipping v Bank of China [2016] 1 Lloyds Rep 417 [76] (injunction refused on grounds of delay, but declaration granted). See also Ecom Agroindustrial v Mosharaf Composite Textile [2013] 2 Lloyds Rep 196 [15], [40]–[43].

¹¹ If the competing litigation is in a non-Brussels–Lugano state, then the positive external effect of English declarations that exclusive forum clauses are binding will depend on the laws of recognition and res judicata of the country in question, and potentially the Hague Convention on the Choice of Court in another contracting state to the Hague Convention.

If the competing litigation is in another EU state, a declaration by the English court that an English exclusive jurisdiction clause is binding will be a Regulation judgment which should be treated as binding in other Regulation states and should lead other Regulation courts to decline jurisdiction automatically pursuant to Article 31(3) of the Brussels I Recast (see Case C-469/11, Gothaer Allgemeine Versicherung v Samskip [2013] QB 548). Further, the effect of Article 31(2) of the Recast is that the English court, as the agreed court, can determine its own jurisdiction even if the other court was seised first on the merits. This reverses Case C-116/02, Erich Gasser v Misat [2003] ECR I-14693.

However, the position is different for declarations as to the effect of an arbitration clause. A free-standing claim for a declaration that an arbitration clause is binding will be treated as ‘arbitration’, within the arbitration exception, and outside the Brussels–Lugano regime, and therefore will only be enforceable in other European states if their domestic rules of recognition and res judicata so permit. It is true that, under the Brussels I Regulation before the Brussels I Recast, it was held, controversially, that a decision that an arbitration clause was not binding reached in the course of proceedings that were otherwise within the scope of the Regulation would itself fall within the scope of the Regulation: C-185/07, Allianz v West Tankers (The Front Comor) [2009] ECR I-663 [26]. However, this would not apply to court proceedings whose focus was to obtain a declaration in respect of the binding force of the arbitration agreement. Further, under the Brussels I Recast the exclusion of arbitration is reinforced by Recital 12 so that even decisions on the scope of an arbitration clause in the context of Regulation proceedings should not be enforceable under the Brussels–Lugano regime.

¹² Ecom Agroindustrial Corp Ltd v Mosharaf Composite Textile Mill Ltd [2013] 2 Lloyds Rep 196 [15], [40]–[43].

¹³ West Tankers v Allianz (The Front Comor) [2011] 2 Lloyds Rep 117, [28]–[31]; African Fertilizers and Chemicals NIG v BD Shipsnavo [2011] 2 Lloyds Rep 531 [27]–[28]; London Steamship Owners’ Mutual Insurance v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [181]–[199].

¹⁴ See See Professors Burkhard Hess and Thomas Pfeiffer, Report on the Application of Regulation Brussels I in the Member States, 2007, 350–51 (hereafter the ‘Heidelberg Report’). Such a proposal was included in the initial Commission Memorandum: see Commission Proposal for a Regulation of the European Parliament and Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, COM(2010) 748 Final, 3.1.4. However, following resistance the proposal was not pursued.

¹⁵ National Navigation v Endesa Generacion (The Wadi Sudr) [2010] 1 Lloyds Rep 193 (CA) [63] (obiter); West Tankers v Allianz (The Front Comor) [2011] 2 Lloyds Rep 117 [28]–[31] (not finally decided, but concluding that there was a ‘real prospect’ of recognition being refused); African Fertilizers and Chemicals NIG (Nigeria) v BD Shipsnavo [2011] 2 Lloyds Rep 531 [27]–[28] (relating to the yet more difficult case of a declaration as to the force of the exclusion forum clause); see also London Steamship Owners’ Mutual Insurance v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [181]–[199] (not deciding the point but similarly holding that there was a ‘real prospect’ that recognition might be refused, [187]).

The principal counter-argument is that the judgment enforcing the award is ‘arbitration’ and thus outside the scope of the Brussels–Lugano regime: see the decision of the French Cour de Cassation in Republic of Congo v Groupe Antoine Tabet (4 July 2007) Rev Crit DIP (2007) 822 (Note Usunier). The Brussels I Recast makes clear that the Regulation does not apply to any judgment concerning the enforcement of an arbitration award: see Recital 12. However, it is submitted that ‘judgment’ within Article 45(1)(c) should be read more broadly than ‘judgment’ in the recognition and enforcement provisions of the Brussels I Regulation, so as to include domestic judgments enforcing arbitration awards (and probably also declarations as to the effect of arbitration clauses): see Briggs, para 7.22, whose reasoning was cited with approval in West Tankers v Allianz (The Front Comor) [2011] 2 Lloyds Rep 117 [26]–[28]. The exclusion of such judgments from the scope of the Brussels–Lugano regime generally means they do not benefit from its recognition provisions abroad, but should not prevent them having effect as ‘irreconcilable’ judgments, since otherwise domestic rules of res judicata would be undermined in an incoherent way.

In principle it should also be arguable that the arbitration award should be treated as a ‘judgment’ for the purpose of Article 45(1)(c) and (d) of the Recast. As matters stand, such arguments face the difficulty that in the odd decision of Case C-414/92, Solo Kleinmotoren v Emilio Boch [1994] ECR I-2237 the European Court held that only judgments given by a court fell within Article 45(1)(c); but in the Shipsnavo case, Beatson J interpreted Solo Kleinmotoren as really only concerned with consensual settlements, and not to the outcome of the arbitration (at [28]). The better point may be that, in any event, enforcement of a foreign judgment that is inconsistent with a New York Convention award, and in turn with a prior English judgment enforcing such an award, would be inconsistent with the New York Convention, which takes precedence over the Brussels regime in this regard, under Article 73 of the Recast.

Recital 12 to the Brussels I Recast contains some unclear wording that if a court of a member state has determined that an arbitration agreement is null and void, ‘this should not preclude’ that court’s judgment being enforced under the Brussels regime. This probably means only that the mere fact of an arbitration clause having been raised and dismissed does not exclude subsequent recognition; and the Recital goes on to make clear that such an approach ‘should be without prejudice to the competence of the courts of the member states to decide on the recognition and enforcement of arbitration awards in accordance with [The New York Convention] which takes precedence over this Regulation’.

¹⁶ West Tankers v Allianz (The Front Comor) [2011] 2 Lloyds Rep 117 [28]–[31] (upheld on appeal [2012] 1 Lloyds Rep 398 (CA), although Field J’s exercise of discretion was not challenged: see at [38]); African Fertilizers and Chemicals NIG (Nigeria) v BD Shipsnavo [2011] 2 Lloyds Rep 531 [27]–[28] (relating to the more difficult case of a declaration as to the force of the exclusive forum clause). In London Steamship Owners’ Mutual Insurance v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [181]–[199], the argument that granting a declaration for this purpose would subvert the scheme of the Regulation was rejected.

¹⁷ See n 15.

¹⁸ Emirates Trading v Sociedade de Fomento Industrial [2015] EWHC 1452 (Comm) [22]–[25]; and see also Doe d Davy v Haddon (1783) 3 Doug KB 310, 99 ER 969; Commings v Heard (1869) LR 4 QB 669; Imperial Gas Light v Broadbent (1859) 7 HL Cas 600; Caledonian Railway v Turcan [1898] AC 256; Fidelitas Shipping v V/O Exportschleb [1966] 1 QB 630; Associated Electric & Gas Insurance Services v European Reinsurance Co of Zurich [2003] 1 WLR 1041 [9], [15].

¹⁹ Nevertheless, the cases permitting enforcement of such awards as judgments (see para 15.13 n 16) are still justifiable as the prior judgment is useful as a supplementary precaution.

²⁰ See Philip Alexander Securities & Futures v Bamberger [1997] ILPr 73 [112]–[113], [121], where Waller J suggested that such a declaration would preclude recognition because the subsequent Brussels–Lugano judgment would be ‘irreconcilable’ with the English judgment, within Article 45(1)(c) (then Art 34(3)). However, he may have changed his mind by the time of The Wadi Sudr: see National Navigation v Endesa Generacion (The Wadi Sudr) [2010] 1 Lloyds Rep 193 (CA) [63] (obiter), discussed at n 24.

²¹ It is also arguable that such declarations, when made in respect of arbitration clauses, are ‘arbitration’ and so not judgments within Article 45(1)(c) at all, and Recital 12 of the Recast makes clear that such declarations do not benefit from the recognition and enforcement rules of the Brussels regime. However, the more attractive view is that ‘judgment’ is being used in two senses in the Recast, and that such a declaration given by a court can fall within Article 45(1)(c) for the purposes of domestic irreconcilability, even though it is not a ‘judgment’ for the purposes of Articles 39–45 of the Recast generally, and therefore does not have to be recognized in other EU states: see Briggs, para 7.22. In African Fertilizers and Chemicals NIG v BD Shipsnavo [2011] 2 Lloyds Rep 531 [9], [27]–[28], Beatson J rejected the proposition that Article 45(1)(c) does not apply to such judgments, although he did not consider the ‘arbitration’ exception point.

²² In Case C-145/86, Hoffmann v Krieg [1988] ECR 645 [22] the ECJ laid down the principle that for judgments to be irreconcilable within Article 45(1)(c), they must ‘entail legal consequences that are mutually exclusive’. The case concerned a foreign judgment that spousal maintenance had to be paid and a prior domestic judgment that the marriage had been dissolved by divorce. The ECJ concluded that the foreign maintenance judgment presupposed the continuing validity of the marital relationship and was therefore irreconcilable with the domestic judgment: at [25]. Similarly, in Case C-80/00, Italian Leather v Weco Polstermöbel [2002] ECR I-4995 [44]–[48], the ECJ accepted that ‘irreconcilability lies in the effects of judgments’ and extended beyond the limited case where one judgment had positively concluded the inverse of another. So, it could be argued, by analogy to Hoffmann v Krieg, that the foreign judgment presupposes that the forum clause is not binding and therefore is irreconcilable with the domestic declaration as to the binding force of the clause.

²³ Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 1 Lloyds Rep 223 (SC) [38].

²⁴ National Navigation v Endesa Generacion (The Wadi Sudr) [2010] 1 Lloyds Rep 193 (CA) [63]. Waller LJ commented obiter that where a declaration as to the binding effect of an arbitration clause had been obtained it was unlikely that the public policy exception ‘would need to be invoked or could be invoked’, because the claimant could proceed with the arbitration in England and obtain an award (and possibly judgment) on the merits. However, this does not clearly answer the question of irreconcilability with the declaration on the effect of the clause if no award (or judgment) on the merits has been obtained before enforcement of the Brussels–Lugano judgment, for example for reasons of procedural timing. In this respect, it is unclear whether Waller LJ’s views had changed from Philip Alexander Securities & Futures v Bamberger [1997] ILPr 73 [112]–[113], [121], where he had concluded that such irreconcilability could be relied on.

²⁵ African Fertilizers and Chemicals NIG v BD Shipsnavo [2011] 2 Lloyds Rep 531 [7], [12], [26], [28]. However, Beatson J may not have paid sufficient regard to the distinction between an arbitration award on the merits and an award on the binding effect of the arbitration clause, and may therefore have over-interpreted the (somewhat cryptic) comments of Waller LJ in The Wadi Sudr. See also London Steamship Owners’ Mutual Insurance v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [9], [181]–[199], where the awards enforced related to both the merits and the binding force of the arbitration clause, and it was concluded that there was ‘real prospect of establishing the primacy of the award over any inconsistent judgment which may be rendered in Spain’ [187]. However, no clear distinction was drawn between the award on the effect of the arbitration clause, and the award on the merits.

²⁶ Case C-7/98 Bamberski v Krombach [2000] ECR I-1935 [20].

²⁷ Formerly Article 35(3) of the Brussels I Regulation. See National Navigation v Endesa Generacion (The Wadi Sudr) [2010] 1 Lloyds Rep 193 (CA) [125].

²⁸ See Waller LJ in National Navigation v Endesa Generacion (The Wadi Sudr) [2010] 1 Lloyds Rep 193 [63], [65]. This was a change of mind from his earlier obiter comments in Philip Alexander Securities & Futures Ltd v Bamberger [1997] ILPr 73 [112]–[113], [121]. The actual fact situation in The Wadi Sudr is, however, specific, and will not recur. There was no prior English judgment as to the enforceability of the arbitration clause. Instead, there was a prior Spanish judgment that the clause was not binding. Applying the law as it then stood in the light of The Front Comor, before the Brussels I Recast, this Spanish judgment was to be recognized in England, and was therefore res judicata unless defeated by a public policy objection. In that context, the public policy arguments were weaker: see Moore-Bick LJ at [125]. However, now that Recital 12 of the Brussels I Recast has made clear that foreign judgments on the effect of arbitration clauses do not come within the Brussels enforcement rules, the premise of the judgment in The Wadi Sudr would no longer exist.

²⁹ See Report on the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, rapporteur P Jenard [1979] OJ C59/1, 45 (the ‘Jenard Report’): ‘there can be no doubt that the rule of law in a state would be disturbed if it were possible to take advantage of two conflicting judgments’.

³⁰ This argument may be inconsistent, in cases where there has been a submission to the jurisdiction of the foreign court, with parts of the reasoning in the perplexing and incorrect decision of Carr J in Spliethoff’s Bevrachtingskantoor v Bank of China [2015] 2 Lloyds Rep 623 [109]–[137]. Carr J concluded that, where there had been submission to the jurisdiction of the foreign court, anti-suit orders by arbitrators were not a ground to refuse enforcement of a foreign judgment. However, that decision is wrong on many levels, and to the extent its reasoning touches on this particular issue (which it does not do clearly), is not a good guide. Indeed, the question of prior res judicata arising out of the arbitrators’ anti-suit orders does not appear to have been addressed (and the nature of the arbitrators’ decisions that led to those orders is not clear from the report). It is submitted that any suggestion that submission to a foreign judgment trumps what would otherwise be a public policy defence to recognition based on a prior res judicata must be wrong. Indeed, in many of the key cases where foreign judgments were refused recognition on grounds of a prior English res judicata, there had been submission to the jurisdiction of the foreign court, where the matter was fought out on the merits. See Vervaeke v Smith [1983] 1 AC 145 (HL).

We shall discuss further below at para 15.57 why (on top of considerations of res judicata) Carr J’s reasoning in Splietthoff’s is also wrong, more generally, in not accepting that breach of anti-suit arbitral awards should be a ground to refuse recognition as matter of public policy. See also para 15.56 n 88 (in relation to injunctions).

(Further, although the issue is beyond the scope of this book, Carr J’s reasoning is yet further contestable because she did not follow Rix LJ’s conclusions in AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2012] 1 WLR 920 (CA) [149]–[151], that recognition in the case of breach of an exclusive forum clause, even where there was submission, would remain a question of ‘evaluative judgment’. The other recent authorities follow Rix LJ: see Ecobank Transnational v Tanoh [2015] EWHC 1874 (Comm) [27], [2016] 1 WLR 2231 (CA) [43]; and see the comment in Exmek Pharmaceuticals v Alkem Laboratories [2016] 1 Lloyds Rep 239 [39].)

³¹ Y Baatz, ‘Should Third Parties be Bound by Arbitration Clauses?’ [2015] LMCLQ 85, 109–10, regards the question as uncertain.

³² The existence or scope of any possible proviso for abnormal circumstances was not entirely clear. In ABB Lummus Global v Keppel Fels [1999] 2 Lloyds Rep 24, Clarke J appears to have considered that the exclusivity of s 32 was absolute. But in Vale do Rio Doce Navegaçao v Shanghai Bao Steel Ocean Shipping [2000] 2 Lloyds Rep 1, although Thomas J held that in the case before him the court had no power to grant a declaration that the tribunal had jurisdiction, part of his reasoning was that the circumstances of that case cannot have been unanticipated: see [53]–[54]. So, it appears Thomas J might have made an exception in certain abnormal and therefore unanticipated circumstances. Yet this is not certain; and Thomas J did not expressly differ from ABB Lummus. See also JT Mackley v Gosport Marina [2002] EWHC 1315 (TCC) [24]–[31], which might be read to allow a broader scope to the exception.

³³ See ABB Lummus Global v Keppel Fels [1999] 2 Lloyds Rep 24, 30, 37. This was so even where the application for a declaration was made before the appointment of an arbitrator by the unwilling party: Vale do Rio Doce Navegaçao v Shanghai Bao Steel Ocean Shipping [2000] 2 Lloyds Rep 1, 10–12 [52].

³⁴ AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC v [2012] 1 WLR 920 (CA) [47], [99]–[100].

³⁵ See eg Toepfer International v Société Cargill France [1997] 2 Lloyds Rep 98 (involving a pre-1996 Act arbitration); Navigation Maritime Bulgare v Rustal Trading (The Ivan Zagubanski) [2002] 1 Lloyds Rep 106; Through Transport Mutual Insurance Association (Eurasia) v New India Assurance [2005] 1 Lloyds Rep 67 (CA).

³⁶ For a case where a declaration was granted, but an injunction was not, see Through Transport Mutual Insurance Association (Eurasia) v New India Assurance [2005] 1 Lloyds Rep 67 (CA).

³⁷ AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2012] 1 WLR 920 (CA) [99]–[100].

³⁸ Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant LLP [2013] 1 WLR 1889 (SC) [40]–[42].

³⁹ Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant LLP [2013] 1 WLR 1889 (SC) [39]–[40]. In HC Tradeland Malta v Tradeland Commodities [2016] 1 WLR 3120 [12]–[15], [27]–[29], the court similarly concluded that s 32 did not create any absolute bar of jurisdiction.

⁴⁰ Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant LLP [2013] 1 WLR 1889 (SC) [60].

⁴¹ Any such conclusion for arbitration clauses in general would be inconsistent with the result in the Ust-Kamenogorsk case.

Further, in Toepfer International GmbH v Société Cargill France [1997] 2 Lloyds Rep 98, 107, 109, Colman J rejected the argument that even a Scott v Avery clause should preclude the grant of injunctive relief, and also rejected the parallel argument that it precluded the grant of declaratory relief, because (a) the Scott v Avery clause applied only to substantive disputes; and (b) the declarations sought merely to establish the factual basis for the injunctions, and the fact that declarations were sought to ratify the court’s conclusions on this point did not engage the Scott v Avery clause. On appeal, the Court of Appeal upheld the Judge’s conclusion in respect of injunctive relief (albeit on slightly different grounds, and in terms that no longer reflect the law), and implicitly approved his grant of declarations, but did not specifically consider the question of declaratory relief: [1998] 1 Lloyds Rep 379 (CA) 385. It is submitted, with respect, that although Colman J’s conclusion is correct, his reasoning may bear further examination. In particular, the conclusion that the arbitration clause only applied to substantive disputes is also dubious, as it would preclude the arbitrators themselves from granting parallel declarations. The better answer may be that, as is suggested in the main text, the court’s ability to grant remedial measures in support of an arbitration, including injunctions to enforce the arbitration and declarations as to its scope, is an exception, if necessary by the implication of an implied term, to the preclusive scope of the arbitration clause (see also Ch 7, para 7.58).

⁴² Rix LJ referred to the parallel reasoning in the first edition of this work with apparent approval in AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2012] 1 WLR 920 (CA) [104]. The same analysis was also approved by Teare J in Sheffield United FC v West Ham United FC [2009] 1 Lloyds Rep 167 [40]; and Andrew Smith J in Nomihold Securities v Mobile Telesystems Finance (No 2) [2012] 1 Lloyds Rep 442 at [46]–[47]. The issues are discussed further in Ch 7, para 7.58, which addresses the difficult authority of B v S [2011] 2 Lloyds Rep 18 (at Ch 7, 7.58, n 114).

⁴³ See Nomihold Securities v Mobile Telesystems Finance (No 2) [2012] 1 Lloyds Rep 442 at [46]–[51].

⁴⁴ HC Tradeland Malta v Tradeland Commodities [2016] 1 WLR 3120.

⁴⁵ Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant LLP [2013] 1 WLR 1889 (SC) [60].

⁴⁶ AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2010] 2 Lloyds Rep 493 [21], [2012] 1 WLR 920 (CA) [108]–[110] and HC Tradeland Malta v Tradeland Commodities [2016] 1 WLR 3120.

⁴⁷ See AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2010] 2 Lloyds Rep 493 [21], [2012] 1 WLR 920 (CA) [108]–[110]. In that case Burton J fashioned an apparent middle solution, in which a declaration was granted that the injunction defendant could not bring his claim otherwise than in arbitration. The aim was to avoid prejudging the arbitrators’ determination of their own jurisdiction. It may, however, be doubted whether this is a valid middle solution. Even a declaration that claims cannot be brought otherwise than in arbitration will involve a final determination of the scope of the arbitration clause. An interim anti-suit injunction, in contrast, has the advantage of avoiding any final determination of the contractual scope of the clause.

⁴⁸ Article 23 of the Brussels I Regulation applied only where one of the parties to the jurisdiction clause was domiciled within the EU: Ravennavi v New Century Shipbuilding [2007] 2 Lloyds Rep 24 (CA) [3]. But Article 25 of the Recast gives jurisdiction to the court chosen by the jurisdiction clause irrespective of domicile.

⁴⁹ See Gulf T Bank v Mitsubishi Heavy Industries [1994] 1 Lloyds Rep 323, 327–28, under the RSC. The same result will follow under the broader wording of the CPR: see Albon v Naza Motor Trading [2007] 1 WLR 2489 [25]–[26]. The correctness of this is implicit from the existence of CPR PD 6B para 3.1(8), which permits service out of the jurisdiction of declarations that a contract does not exist.

⁵⁰ In contrast, claims for declarations from arbitrators are not directly affected by the lis pendens rules of the Brussels–Lugano regime: see para 15.37.

⁵¹ Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 1 Lloyds Rep 223 (SC) [38]. The position was potentially different for declarations as to the effect of settlement agreements, which were arguably characterized as declarations of non-liability, as to which a reference was made to the European Court of Justice. The decision has been followed in Barclays Bank v Ente Nazionale de Previdenza ed Assistenza dei Medici e Degli Odontoiatri [2015] 2 Lloyds Rep 527 [63]–[91], [2016] 2 CLC 859 (CA) [20]–[28].

⁵² Starlight Shipping v Allianz Marine & Aviation Versicherungs (The Alexandros T) [2014] 1 Lloyds Rep 223 (SC) [91]–[97]; followed by Barclays Bank v Ente Nazionale de Previdenza ed Assistenza dei Medici e Degli Odontoiatri [2015] 2 Lloyds Rep 527 [92]–[97], [2016] 2 CLC 859 (CA) [29]–[31]. This was a difference of approach to some of the earlier case law: see Toepfer International v Molino Boschi [1996] 1 Lloyds Rep 510, 513–15 and Toepfer International v Société Cargill [1998] 1 Lloyds Rep 379 (CA) 388.

⁵³ Discussed in Dexia Crediop v Provincia di Brescia [2016] EWHC 3261 [139]–[141].

⁵⁴ See Ch 12, para 12.80.

⁵⁵ Gulf Bank v Mitsubishi Heavy Industries [1994] 1 Lloyds Rep 323, 327–28; AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2010] 2 Lloyds Rep 493 [19]–[20] (62.5(1)(c), [25], [2012] 1 WLR 920 (CA) [112]–[121], [127]–128], [141]; [2013] 1 WLR 1889 (SC) [51]; Shipowners’ Mutual Protection and Indemnity Association (Luxembourg) v Containerships Denizcilik Nakliyat ve Ticaret (The Yusuf Cepnioglu) [2015] 1 Lloyds Rep 567 [41]–[45], 48]–[49].

⁵⁶ Case C-190/89, Marc Rich v Società Italiana Impianti (The Atlantic Emperor) [1991] ECR I-3855, AG [95], ECJ [30]; Toepfer International v Société Cargill [1997] 2 Lloyds Rep 98, 105 (Colman J); Sovarex v Alvarez [2011] 2 Lloyds Rep 320 [57]–[65]; London Steamship Owners’ Mutual Insurance v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [190]–[193].

⁵⁷ For a recent example, see African Fertilizers and Chemicals NIG v BD Shipsnavo [2011] 2 Lloyds Rep 531 [5].

⁵⁸ See eg African Fertilizers and Chemicals NIG v BD Shipsnavo [2011] 2 Lloyds Rep 531; West Tankers v Allianz (The Front Comor) [2011] 2 Lloyds Rep 117; London Steamship Owners’ Mutual Insurance v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [9], [187]–[198].

⁵⁹ Applications under s 66 are the usual course as they are quicker and cheaper. A common law action on the award will only be necessary if for some reason a full trial is required to determine whether the award should be enforced, in which case the summary procedure would be inappropriate.

⁶⁰ National Navigation v Endesa Generacion (The Wadi Sudr) [2010] 1 Lloyd Rep 193 (CA) [63]; West Tankers v Allianz (The Front Comor) [2011] 2 Lloyds Rep 117 (upheld on appeal [2012] 1 Lloyds Rep 398 (CA); African Fertilizers and Chemicals NIG v BD Shipsnavo [2011] 2 Lloyds Rep 531; London Steamship Owners’ Mutual Insurance v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [9] and [187]–[198].

⁶¹ See para 15.14.

⁶² In respect of actions to enforce an award, the relevant power is provided by CPR PD 6B para 3.1(10). In respect of summary enforcement of an award under Arbitration Act 1996, s 66, the relevant power is provided by CPR 62.18.

⁶³ See National Navigation v Endesa Generacion (The Wadi Sudr) [2010] 1 Lloyds Rep 193 (CA) [38(i)]; Sovarex v Alvarez [2011] 2 Lloyds Rep 320 [52]–[65]; London Steamship Owners’ Mutual Insurance v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [187]–[198]. See further Ch 12, para 12.80.

⁶⁴ Sovarex v Alvarez [2011] 2 Lloyds Rep 320 [52]–[65]; London Steamship Owners’ Mutual Insurance v Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [186]–[198].

⁶⁵ A Briggs, ‘The Unrestrained Reach of an Anti-Suit Injunction: A Pause for Thought’ [1997] LMCLQ 90, 101, suggests that a declaration that the foreign proceedings were vexatious and oppressive would be useful and appropriate, as it could be relied on subsequently to resist enforcement or recognition of the foreign judgment. But within the Brussels–Lugano regime, this would seem to involve an evaluative assessment of the basis of the other Brussels–Lugano court’s assumption of jurisdiction.

⁶⁶ Deaville v Aeroflot Russian International Airlines [1997] 2 Lloyds Rep 67, 70, 72, 75.

⁶⁷ EI Du Pont de Nemours v IC Agnew (No 2) [1988] 2 Lloyds Rep 240 (CA) 245, 249, 250; Toepfer International v Molino Boschi [1996] 1 Lloyds Rep 510, 518 (obiter); Philip Alexander Securities & Futures v Bamberger [1997] ILPr 73 [123] (Waller J) (the Court of Appeal declined to interfere with his discretion at [45]–[46], although in terms that suggested that an alternative conclusion could legitimately have been reached). However, such a declaration was granted in Ellerman Lines v Landi (The Falernian) (1927) 29 Ll L Rep 15, 23 (where it was viewed as a question of convenience; the point was not challenged on appeal). A Briggs, ‘The Unrestrained Reach of an Anti-Suit Injunction: A Pause for Thought’ [1997] LMCLQ 90, 100–02, suggests that such declarations may be appropriate.

⁶⁸ cf Bankers Trust International v PT Dharmala Sakti Sejahtera (No 1) [1996] CLC 252, 253H.

⁶⁹ See n 15.

⁷⁰ D Tan, ‘Enforcing International Arbitration Agreements in Federal Courts: Rethinking the Court’s Remedial Powers’ (2007) 47 Virg J Intl L 545, 609, argues that anticipatory declarations of non-recognition in respect of foreign litigation in breach of contract should be available in principle, under US law.

⁷¹ Case C-190/89, Marc Rich v Società Italiana Impianti (The Atlantic Emperor) [1991] ECR I-3855, ECJ [19], upholding Hirst J in [1989] 1 Lloyds Rep 548; and see Union de Remorquage et de Sauvetage v Lake Avery Inc (The Lake Avery) [1997] 1 Lloyds Rep 540; Nori Holding v Bank Otkritie Financial Corporation [2018] 2 Lloyds Rep 80 [89]. This is confirmed by Recital 12 of the Recast.

⁷² See Ch 12, nn 64 and 118.

⁷³ See Hirst J in Marc Rich v Società Italiana Impianti (The Atlantic Emperor) (No 1) [1989] 1 Lloyds Rep 548 (a decision under RSC Ord 73, r 7, the ancestor of CPR 62.5).

⁷⁴ Through Transport Mutual Insurance Association (Eurasia) v New India Assurance (No 2) [2005] 2 Lloyds Rep 378 [36]–[39]; West Tankers Inc v Ras Riunione Adriatica di Sicurta (The Front Comor) (No 2) [2007] EWHC 2184; see also Atlanska Providba v Consignaciones Asturianas (The Lapad) [2004] 2 Lloyds Rep 109 [25]–[34].

⁷⁵ Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co Ltd (No 2) [2005] 2 Lloyds Rep 378, 388.

⁷⁶ See by analogy Sovarex v Alvarez [2011] 2 Lloyds Rep 320 [52]–[65]; London Steamship Owners’ Mutual Insurance v The Kingdom of Spain (The Prestige) (No 2) [2014] 1 Lloyds Rep 309 [186]–[198].

⁷⁷ The race to first seisin remains just as important under the Lugano Convention, for now, as the Lugano Convention has not yet been brought in line with the Brussels I Recast.

⁷⁸ See paras 15.13–15.14.

⁷⁹ See eg Banque Cantonale Vaudoise v Waterlily Maritime [1997] 2 Lloyds Rep 347, 357–58.

⁸⁰ In Credit Suisse First Boston (Europe) v MLC (Bermuda) [1999] 1 Lloyds Rep 767, 783, Rix J considered that it would be a misuse of the court’s discretion to make an extension of time for a defence in England conditional on the giving of an undertaking to discontinue competing foreign proceedings.

⁸¹ Hemain v Hemain [1988] 2 FLR 388, 393B–C (CA) 393F–394A. It should be noted, however, that the authority of Hemain is questionable (in particular as regards injunctions): see Ch 13, paras 13.59–13.61.

⁸² We leave aside here the effect of the Hague Convention on the Choice of Court where it is applicable.

⁸³ Namely, the Administration of Justice Act 1920, and the Foreign Judgment (Reciprocal Enforcement) Act 1920.

⁸⁴ See generally Briggs, para 7.37ff. The fact that foreign proceedings were ‘vexatious and oppressive’ is not in itself a ground to resist enforcement under the current law. However, A Briggs, ‘The Unrestrained Reach of an Anti-Suit Injunction: A Pause for Thought’ [1997] LMCLQ 90, 100–02, suggests that a declaration that foreign litigation is vexatious and oppressive should be a ground for subsequently resisting enforcement. The case law has not yet explored the overlap and differences between the concepts of a foreign judgment being contrary to public policy and it being obtained in a vexatious and oppressive manner.

⁸⁵ Civil Jurisdiction and Judgments Act 1982, s 32.

There is controversy as to whether, if there has been submission, there should then be enforcement irrespective of the forum clause (subject to any other separate defence to enforcement), or whether the effect of submission is solely to remove the automatic barrier to enforcement created by s 32, leaving a remaining question of evaluative judgment as to whether the foreign judgment should be enforced, notwithstanding the breach of the forum clause. In favour of the ‘evaluative judgment’ approach, see AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2012] 1 WLR 920 (CA) [149]–[151] (Rix LJ); Ecobank Transnational v Tanoh [2015] EWHC 1874 (Comm) [27], [2016] 1 WLR 2231 (CA) [43]; and see the comment in Exmek Pharmaceuticals v Alkem Laboratories [2016] 1 Lloyds Rep 239 [39]. Against, see Spliethoff’s Bevrachtingskantoor BV v Bank of China Ltd [2015] 2 Lloyds Rep 623 [109]–[137]. The issue is beyond the scope of this work.

⁸⁶ See generally Briggs, Ch 7.

⁸⁷ Vervaeke v Smith [1983] 1 AC 145 (HL).

⁸⁸ Toepfer v Molino Boschi [2006] 1 Lloyds Rep 510, 514 (Brussels–Lugano, obiter); Philip Alexander Securities & Futures v Bamberger [1997] ILPr 73 [120] (Waller J), [43] (CA); followed obiter in Through Transport Mutual Insurance Association (Eurasia) v New India Assurance [2004] 1 Lloyds Rep 206 [42]; AK Investment v Kyrgyz Mobil Tel [2012] 1 WLR 1804 (JCPC) [121] (injunction from third state court); Whitworths v Synergy Food and Processing [2014] EWHC 2439 (QB) [71]; see also Navigation v Endesa Generacion (The Wadi Sudr) [2010] 1 Lloyds Rep 193 (CA) [125]. In Singapore, see WSG Nimbus Pte v Board of Control for Cricket in Sri Lanka [2002] 3 SLR 603 (Sing HC) [58]–[65].

This principle should apply, at least in general, even if the injunction claimant has subsequently submitted to the jurisdiction of the foreign court. Indeed, all of the mentioned cases were either cases where submission had, or would have, occurred. Although submission is one of the initial preconditions for recognition at common law, it is a confusion to regard it as in itself overriding defences against recognition, and it should not, it is submitted, without more defeat the strong public policy against recognition of the foreign judgment where an anti-suit injunction has been breached. Any other result would undervalue the importance of enforcement of the court’s orders, undermine the coherence of the anti-suit jurisdiction, and be inconsistent with the application of the law of contempt. It would put injunction claimants, faced by injunction defendants who are willing to be in contempt, in impossible positions, as the injunction claimant may then have no real choice but to engage in the foreign litigation while still insisting on the importance of respect for his injunction; sanctions for contempt of court may then be ineffective because of their territorial limitations. It would be strange if in such a situation the foreign judgment were then enforced in England merely on the grounds of a submission to the foreign court.

We need to consider whether Golubovich v Golubovich [2011] Fam 88 (CA), is a counter-example, but on analysis it is not. That judgment was reached in the context of very special facts: in the family law context, a divorce granted in Russia, and which as a matter of personal status would have effect similar to an in rem judgment, had been obtained in breach of an anti-suit injunction requiring the Russian proceedings to be suspended. Nevertheless, the divorce was recognized in England. But the circumstances were confused and the injunction claimant seemed to have been much to blame for the breach of the injunction. Further, as a matter of public policy, since the dissolution of the marriage would be recognized internationally, and it is important for all courts to speak with consistent clarity as to whether two persons are married or not, there were strong policy reasons to recognize the validity of the divorce ([75], [78]); the presumptive statutory obligation under the Family Law Act 1986 to recognize the foreign divorce therefore prevailed. Yet further, the recognition of the divorce did not matter much, in itself, as notwithstanding the in rem effect of the divorce itself, the Court of Appeal made clear that the English courts would retain jurisdiction over ancillary financial relief, and that the consequences of breach of the injunction could be visited on the husband in the context of any ancillary relief applications ([76]–[77]). Finally, the Court of Appeal’s attention was not drawn to any of the previous authorities in the commercial context other than Wadi Sudr. It is submitted that the case is specific to the divorce context, and does not undermine the force of the basic principle that breach of an anti-suit injunction should in general suffice to justify refusal of enforcement of the resulting foreign judgment on grounds of public policy.

In Spliethoff’s Bevrachtingskantoor v Bank of China Ltd [2015] 2 Lloyds Rep 623 [109]–[137], Carr J declined to apply the statements in Bamberger, AK v Kyrgz, and WSG Nimbus (the other authorities were not cited to her) to the separate and distinct question of enforcement of foreign judgments obtained in breach of anti-suit awards given by arbitrators (which are different to court injunctions in key respects), where there had been a submission to the jurisdiction of the foreign court. Aspects of her reasoning might also be read as being in tension with the conclusions in relation to court injunctions, although this is not very clear. With respect, however, it is submitted that to the extent there is a tension, it is the reasoning in Spliethoff’s which is incorrect, and inconsistent with authority and principle, for the reasons given. The decision can in any event easily be distinguished and treated as applicable only, at most, to anti-suit awards.

⁸⁹ Whitworths v Synergy Food and Processing [2014] EWHC 2439 (QB) [71]; see also Fakih Bros v AP Moller (Copenhagen) [1994] 1 Lloyds Rep 103, 108.

⁹⁰ Spliethoff’s Bevrachtingskantoor v Bank of China [2015] 2 Lloyds Rep 623 [109]–[137].

⁹¹ Carr J’s reasoning on submission more generally also appears to be wrong: see n 30.

⁹² The ability to resist enforcement is even more limited under Regulation 805/2004, creating a European Enforcement Order (‘EEO’). This can apply where a judgment was uncontested in the state of origin. The court of origin can issue an EEO certificate, and if so, then unless there is a prior res judicata, recognition in another member state is automatic: Article 5. It has been argued that Article 20, which provides for enforcement to take place according to national law, preserves national law defences to enforcement (see G Cuniberti, ‘The Recognition of Foreign Judgments Lacking Reasons in Europe: Access to Justice, Foreign Court Avoidance, and Efficiency (2008) 57 ICLQ 25, 50–51) but this is controversial, and could be said to undermine the purpose of the EEO Regulation. So, an uncontested judgment reached in breach of an exclusive forum clause might be automatically enforceable under the EEO Regulation. However, ‘arbitration’ is excluded from the scope of the EEO Regulation: see Article 2(d), and so for parallel reasons to those ventilated at paras 15.62–15.63, it is arguable that judgments reached in breach of arbitration clauses fall outside the scope of the EEO Regulation.

⁹³ Section 32 of the Civil Jurisdiction and Judgments Act 1982 provides no protection, because s 32(4)(a) provides that it shall not affect judgments which are required to be recognized or enforced under the Brussels–Lugano regime.

⁹⁴ Articles 45(1)(c) and 45(1)(d) of the Recast.

⁹⁵ Article 45(1)(a). It is for national law to determine what is contrary to public policy. However, recourse to the public policy exception can only be made in exceptional cases, and European law circumscribes the limits within which national public policy is allowed to operate: Case C-7/98, Bamberski v Krombach [2000] ECR I-1935, [22]–[23]; Case C-38/98, Régie Nationale des Usines Renault v Maxicar [2000] ECR I-2973, [30].

⁹⁶ See Case C-7/98, Bamberski v Krombach [2000] ECR I-1935, [23]. Further, a judgment cannot be refused on grounds of public policy merely because the state of judgment applied a different legal rule to that which would have been applied in the recognizing state: Case C-38/98, Régie Nationale des Usines Renault v Maxicar [2000] ECR I-2973, ECJ [29].

⁹⁷ Article 45(1)(e) of the Recast lists those sections which, if breached, in the opinion of the receiving court, entitle the receiving court to refuse recognition; but Section 7 (and Article 25) on jurisdiction clauses, is not included in the list. Thus, an argument that a jurisdiction clause has been breached would appear to amount to an illegitimate attempt to re-assess the foreign court’s assumption of jurisdiction inconsistently with Article 45(3) of the Recast. In The Wadi Sudr it was held that the mere fact that the foreign court’s decision on the applicability of an arbitration clause is inconsistent with how an English court would have decided the point is not sufficient to justify a refusal of recognition: see National Navigation v Endesa Generacion (The Wadi Sudr) [2010] 1 Lloyds Rep 193 (CA) [125].

⁹⁸ See para 15.16.

⁹⁹ See Report on the Convention on the Association of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention and to the Protocol on its Interpretation by the Court of Justice, rapporteur Professor P Schlosser, para 62 (hereafter the ‘Schlosser Report), suggesting that the point could be dealt with in national implementing legislation. This was an opportunity which the UK did not take up, although it could be done by a suitable amendment to s 32 of the Civil Jurisdiction and Judgments Act 1982. In Partenreederei M/S Heidberg v Grosvenor Grain and Feed (The Heidberg) [1994] 2 Lloyds Rep 287, 301, Judge Diamond QC concluded that Parliament’s failure to provide expressly to the contrary meant that s 32 should be understood to accept that Brussels–Lugano judgments reached in breach of an arbitration clause should be enforced; but the better view is that s 32 leaves the point open: Philip Alexander Securities & Futures v Bamberger [1997] ILPr 73 (Waller J), [94]–[97].

¹⁰⁰ The Schlosser Report (paras 61–62) discusses the arguments for and against recognition of judgment of the courts of other member states reached in breach of an arbitration clause but leaves the point open. The Report on the Accession of the Hellenic Republic to the Community Convention on Jurisdiction and the enforcement of Judgments in Civil and Commercial Matters [1986] OJ C 298, 24 November 1986 (hereafter the ‘Evrigenis and Kerameus Report’) (which is less influential) supports recognition (para 35). In Case C-190/89, Marc Rich v Società Italiana Impianti (The Atlantic Emperor) [1991] ECR I-3855, Darmon AG viewed the point as open, and appeared to disapprove of the statements in the Evrigenis and Kerameus report (AG [45]).

The European Court itself has not expressed a view. Arguments can be made that Case-145/86, Hoffmann v Krieg [1988] ECR 645 suggests that a judgment reached in breach of an arbitration clause need not be treated as Brussels–Lugano judgment, and also that Case C-391/95, Van Uden Maritime BV v Kommanditgesellschaft in Firma Deco-Line [1998] ECR I-7091 suggests the contrary; but neither case is directly on point.

The decision of the French Cour de Cassation, in Assurances Générales de France v Goettgens (No 98-21627, 14 November 2000) appears not to decide the point of principle, as the ground of the conclusion that the German judgment should be recognized notwithstanding the arbitration clause appears to have been that the defendant had not relied on the arbitration clause before the German court.

For academic opinions in favour of recognition, see P Kaye, ‘The Judgments Convention and Arbitration: Mutual Spheres of Influence’ (1991) 7 Arb Intl, 289, 291–92; for academic opinions against recognition see Briggs, paras 2.30–2.31, 7.08, 7.11, 7.13; Sir L Collins et al (eds), Dicey, Morris & Collins on the Conflict of Laws (15th edn, Sweet & Maxwell 2012) para 14.197; B Audit, ‘Arbitration and the Brussels Convention’ (1993) 9 Arb Intl 1, 20–25; D Hascher, ‘Recognition and Enforcement of Judgments on the Existence and Validity of an Arbitration Clause under the Brussels Convention’ (1997) 13 Arb Intl 33 (suggesting that the answer lies in the New York Convention and Art 57 of the Brussels Convention, now Art 71 of the Regulation); S Dutson, ‘Breach of an Arbitration or Exclusive Jurisdiction Clause: The Legal Remedies if it Continues’ (2000) 16 Arb Intl 89, 99 n 48; H Gaudemet-Tallon, Compétence et Exécution des Jugements en Europe (3rd edn, LDGJ 2002) para 363; C Ambrose, ‘Arbitration and the Free Movement of Judgments’ (2003) 19 Arb Intl, 3, 14–20.

¹⁰¹ See Schlosser Report, para 62.

¹⁰² In Partenreederei M/S Heidberg v Grosvenor Grain and Feed (The Heidberg) [1994] 2 Lloyds Rep 287, 301–02, it was held that the foreign judgment on the substance of the dispute should be recognized, even if reached in breach of an arbitration clause; and in Marc Rich v Società Italiana Impianti (The Atlantic Emperor) (No 2) [1992] 1 Lloyds Rep 624 (CA) 629–33, the point was left open. Further, in Toepfer International GmbH v Société Cargill France [1997] 2 Lloyds Rep 98 (CA) 111, Colman J accepted that in light of The Heidberg, a Brussels–Lugano judgment reached in breach of an arbitration clause ‘might well be enforceable in another Convention country’.

However, in Philip Alexander Securities & Futures v Bamberger [1997] ILPr 73 [88]–[115], Waller J concluded that a judgment reached in breach of an arbitration clause fell within the scope of the Brussels–Lugano regime but suggested that recognition might be refused on grounds of public policy (the Court of Appeal held that this point was referable but did not need to make the reference, at [44]); and in Navigation Maritime Bulgare v Rustal Trading Ltd (The Ivan Zagubanski) [2002] 1 Lloyds Rep 106 [104], Aikens J referred to Waller J’s decision with no apparent disapproval (and refused to follow The Heidberg on other points, at [100(1))]. In Banco Nacional de Comercio Exterior v Empresa de Telecommuniciones de Cuba [2007] ILPr 59, [14], Tomlinson J described the question as ‘difficult and unresolved’. The most recent decision on the point is The Wadi Sudr, discussed in the main text, in which Waller LJ reached different conclusions to his earlier views in the Bamberger case.

¹⁰³ National Navigation Co v Endesa Generacion SA (The Wadi Sudr) [2010] 1 Lloyds Rep 193 (CA).

¹⁰⁴ National Navigation v Endesa Generacion (The Wadi Sudr) [2010] 1 Lloyds Rep 193 (CA) [125], [127], [131]. Further, he observed that ‘different considerations would arise if the judgment was obtained through conscious wrongdoing, for example by pursuing proceedings in defiance of an injunction’.

¹⁰⁵ See the Heidelberg Report, paras 106–136, summarizing aspects of the debate, stating that the current case law across Europe did not indicate that breach of an arbitration clause was not being treated as a public policy ground to refuse recognition, and suggesting that non-compliance with an arbitration clause should not be incorporated as a new express ground of refusal of recognition (para 128). The Commission Green Paper (Com(2009) 175 final) suggested that it might be appropriate to include a ground of refusal on the basis of irreconcilability with an arbitral award (see 9). The Commission Proposal for the Brussels I Recast (Com(2010) 748 final) addressed the problem in a completely different and more radical way. Picking up on suggestions in the Heidelberg Report, it included a proposal to bring arbitration partially within the Brussels–Lugano regime, including a mechanism (akin to Art 31 of the Recast for exclusive jurisdiction agreements) by which if an application had been made to the court of the seat of the arbitration, or if an arbitration tribunal had been seised of the dispute, competing court proceedings in another member state would have to be stayed. However, this radical suggestion was rejected, and does not feature in the eventual Recast.

¹⁰⁶ See paras 15.19–15.20. It is suggested that such declarations do not infringe the principle of mutual trust: see Ch 12, section M, ‘Injunctions Granted before Accession’.

¹⁰⁷ See paras 15.13 and 15.14.

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