EU could restore power to enforce arbitration
A EUROPEAN Union green paper on the recognition and enforcement of judgments could restore the courts’ powers to enforce anti-suit injunctions that were lost following the European Court of Justice ruling in the Front Comor case, arbitrators suggest. London Maritime Arbitrators Association arbitrator and mediator Simon Gault said that, if adopted, the Green Paper on the review of Regulation EC 44/2001 would permit the Commercial Court to enforce agreements to arbitrate in London. The UK Ministry of Justice is seeking views on the green paper, with a closing date for submissions set for June 30, according to a ministerial spokeswoman. Some 150 stakeholders including government departments, academics, the legal profession, the judiciary and practitioners and experts in various fields, where the regulation has an effect were contacted for comment. “Because of the tight timescales involved in responding to the European Commission’s consultation, the government, with the commission’s agreement, will not be submitting a formal response until the end of July,” the ministry said. The European Court of Justice ruled in the Front Comor case that anti-suit injunctions could no longer be issued by the English courts to restrain proceedings brought in the courts of member states, even when those proceedings were in breach of an arbitration clause. In theory, if proceedings are brought in breach of an arbitration clause, the court of the member state should stay proceedings and enforce the arbitration agreement. However, there have been fears that in practice some courts in some jurisdictions might not “play the game”, resulting in parallel proceedings taking place in court and before an arbitration tribunal, according to Mr Gault. He also raised concerns over the scope for inconsistent decisions by different jurisdictions. According to Edward Album, who acts as an arbitrator for the London Metal Exchange and the International Chamber of Commerce, while the Front Comor was a logical decision, it was not a practical one. He stressed the importance of the principle of upholding the seat of the arbitration. “A lot of big arbitrations centre on Paris.” Some commentators have suggested that the Front Comor decision might open the way for a clash between European rules and those already enshrined in the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Section seven of the green paper states that the New York Convention is generally perceived to operate satisfactorily and is well regarded by practitioners. “It would therefore seem appropriate to leave the operation of the convention untouched or at least as a basic starting point for further action.” However, the green paper recommends addressing certain points contained in the regulation, not with a view to further regulating arbitration but to prevent parallel proceedings.
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