LAWS3171 Commercial Conflict of Laws and International Litigation

Lecture 6: Arbitration

T Hartley, International Commercial Litigation (CUP; 3rd edn, 2020) Chapter 10 (especially
pp 305-326)

J Hill and M Shúilleabháin, Clarkson and Hill’s Conflict of Laws (Oxford University Press;
5th edn; 2016), Chapter 2 (especially 2.16)

T Hartley, ‘The Brussels I Regulation and Arbitration’ (2014) 63 International and

Comparative Law Quarterly 8431

Case Law:

Case C-190/89 Marc Rich and Co. v. Società Italiana Impianti EU:1991:319
Case C-391/95 Van Uden EU:C:1998:543
Case C-159/02 Turner v Grovit EU:2004:228
Case C-185/07 Allianz and Generali Assicurazioni Generali v. West Tankers (West Tankers)
EU: 2009:69

Additional Reading:

T Hartley, ‘Arbitration and the Brussels I Regulation – Before and After Brexit’ (2021) 17
Journal of Private International Law 53

Arbitration Act 1996 (http://www.legislation.gov.uk/ukpga/1996/23/contents)

CJEU case law can be found online at: http://curia.europa.eu/juris/recherche.jsf?language=en

Key element of this lecture: The scope of the Brussels regime and the exclusion of arbitration
from it

- Background – arbitration as ADR;

- The background to the Brussels regime (since the entry into force of the Convention,
has included a provision excluding arbitration from its scope);
- Art 1 of the Brussels I bis Regulation (EU) No 1215/2012 sets out its scope;
- Case law of the ECJ;
- Antisuit injunctions;
- Interim measures;
- Reform (?) in recital 12 (a new provision in the Brussels I bis Regulation) deals
entirely with arbitration.

Brief discussion of arbitration and its key characteristics:

- A form of ADR, alternative to litigation; can be sued in a domestic, cross-border or

international context;
- Issues relating to the matters dealt with in the Brussels I bis regulation may also arise
in the context of arbitration; that is, issues concerning jurisdiction (ie determining
1
https://www.cambridge.org/core/services/aop-cambridge-core/content/view/
7752CB0831DDBB7EC0A9EE150E5CFF28/S0020589314000359a.pdf/brussels_i_regulation_and_arbitration.pdf

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 which dispute resolution mechanism is competent), or the recognition and
enforcement abroad of an arbitral award;
- Regulation of arbitration in England and Wales  Arbitration Act 1996;
- Limited, supporting intervention of the courts;
- Arbitration itself may concern a civil and commercial matter, terms which define the
scope of the Brussels regime;
- To what extent is the practice of arbitration affected by the EU rules of procedure?
- The background to the Brussels regime (since the entry into force of the Convention,
has included a provision excluding arbitration from its scope);
o The European legislator at the time made it clear that the New York
Convention on the Recognition and Enforcement of Foreign Arbitral Awards
of 1958 provided a means for the enforcement of arbitration awards and
therefore left this matter outside the scope of the Brussels Convention.

Relevant provisions of the Brussels I bis Regulation

Art 1 Brussels I bis provides:

“1. This Regulation shall apply in civil and commercial matters whatever the nature of the
court or tribunal. It shall not extend, in particular, to revenue, customs or administrative
matters or to the liability of the State for acts and omissions in the exercise of State authority
(acta iure imperii).
2. This Regulation shall not apply to:
…
(d) arbitration;
…”

Recital 12 provides:

“This Regulation should not apply to arbitration. Nothing in this Regulation should prevent
the courts of a Member State, when seised of an action in a matter in respect of which the
parties have entered into an arbitration agreement, from referring the parties to arbitration,
from staying or dismissing the proceedings, or from examining whether the arbitration
agreement is null and void, inoperative or incapable of being performed, in accordance with
their national law.

A ruling given by a court of a Member State as to whether or not an arbitration agreement is

null and void, inoperative or incapable of being performed should not be subject to the rules
of recognition and enforcement laid down in this Regulation, regardless of whether the court
decided on this as a principal issue or as an incidental question.

On the other hand, where a court 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 on the substance of the matter from being recognised or, as the case may be,
enforced in accordance with this Regulation. This should be without prejudice to the
competence of the courts of the Member States to decide on the recognition and enforcement
of arbitral awards in accordance with the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, done at New York on 10 June 1958 (‘the 1958 New York
Convention’), which takes precedence over this Regulation.

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This Regulation should not apply to any action or ancillary proceedings relating to, in
particular, the establishment of an arbitral tribunal, the powers of arbitrators, the conduct of
an arbitration procedure or any other aspects of such a procedure, nor to any action or
judgment concerning the annulment, review, appeal, recognition or enforcement of an arbitral
award.”

We will come back to recital 12 below, and examine reforms made in the Brussels I bis
Regulation.

So far, so simple  per Art 1 Brussels I bis, arbitration is excluded from the scope of the
Brussels I bis regulation.

While the text of this provision might be clear, its application in practice is not. However, it is
clear that encounters and even potential clashes between and arbitration and litigation may
arise; this might include challenges to jurisdiction, or the issuance of provisional measures, or
recognition and enforcement of foreign arbitral awards before a national court. The issue of
exclusion concerns the interpretation of Art 1, and as the Regulation is a European law
instrument, the task of interpretation is one that falls to the European Court of Justice. The
difficulties in interpreting the exclusion have been evidenced in a long line ECJ of case law.

Interpretation of the exclusion – Reports on the implementation of the previous versions of

the Regulation

As the Brussels Convention (1968), Brussels I regulation (2000) and Brussels I bis (2012)
encompassed this exception, it is possible to look at reports on the implementation of the
Convention, and the case law pre-existing the 2012 version.

Jenard Report OJ 1979, C 59

- Report on the original version of the Brussels Convention;
- The Jenard Report provides for three considerations as regards arbitration; 1) the
Brussels Convention does not apply to the recognition of arbitration awards; this
follows from the fact that “judgment” is defined in all the instruments as “any
judgment given by a court or tribunal of a Member State”: Brussels Convention,
Article 25; Brussels 2000, Article 32; Brussels 2012, Article 2(a); 2) the Brussels
Convention does not apply to determine the jurisdiction of courts as regards litigation
relating to arbitration (eg proceedings to set aside an arbitral award); and 3) it does
not apply to the recognition of judgments given in such proceedings.

Should the exclusion apply to all proceedings concerning a dispute that the parties have
agreed should be settled by arbitration? Or should it cover proceedings related to arbitration?
This discussion was one which was raised in the Schlosser Report at the time of the UK’s
accession to the EU.

The Schlosser Report (OJ 1979 C 59) provided examples of when the Convention should not
apply:

 the appointment or dismissal of arbitrators;

 the fixing of the place of arbitration;
 the extension of the time limit for making awards; or
 the obtaining of preliminary rulings on questions of substantive law;

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  court proceedings to determine the validity of an arbitration agreement;
 a court order dictating that the arbitration agreement is invalid and the parties should
not continue with arbitration;
 court proceedings concerning the revocation, amendment, recognition or enforcement
of awards,
 court judgments incorporating awards,
 the recognition and enforcement of arbitration awards;

Schlosser did provide that if an arbitration award is revoked and the revoking court or another
national court itself decides the subject matter in dispute, the 1968 [Brussels] Convention is
applicable. This means that a court judgment following the revocation of an award falls
within the scope of the Brussels regime and should be recognised and enforced under the
rules of the Convention.

Moreover, court proceedings are not deemed to be excluded from the scope of the
Convention because, in the view of other courts, those proceedings are covered by an
arbitration agreement.

As such, if there is an arbitration agreement providing for arbitration in one Member State
(the “seat”) and court proceedings are initiated in another Member State (the “forum”), a
judgment pertaining to the validity (or applicability) of the arbitration agreement by the
courts of the seat will not be binding under the Brussels regime on the courts of the forum:
those courts can still hear the case. A similar ruling by the courts of the forum would not be
binding under the regime on the courts of the seat. While the recognition of a judgment on the
substance given by the courts of the forum would fall within the scope of the regime, the
recognition of the arbitral award could not, even if it was incorporated into a judgment.

The interpretation of the exclusion: the case law of the CJEU

C-190/89 Marc Rich and Co. v. Società Italiana Impianti EU:1991:319

The facts of the case

- The case concerned a contract for the sale of crude oil; the buyer was a Swiss
company (Marc Rich) and the seller an Italian company (Impianti);
- Marc Rich had made an offer to buy the oil, which was accepted by Impianti, subject
to additional terms, which were accepted by Marc Rich. Marc Rich then sent a
communication to Impianti (a telex) adding an English choice-of-law clause and an
English arbitration clause to the contract. No reply was received;
- The oil was shipped but Marc Rich claimed it had been contaminated. Impianti
initiated proceedings before a court in Genova, for a declaration of non-liability and
argued that the arbitration clause was not part of the contract. Marc Rich then
responded by taking steps to commence arbitration proceedings in London;
- Impianti refused to take part and to appoint its arbitrator; Marc Rich applied to the
English High Court for the appointment of an arbitrator on Impianti’s behalf. Impianti
claimed that since the Italian court had been seised prior to the English court, the
latter was required to stay its proceedings under the lis pendens rules in the Brussels
Convention. The rules of lis pendens provide that in proceedings concerning the same
cause of action and between the same parties, once the jurisdiction of the court first

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 seised is established, any other court must stay its proceedings. Impianti argued that
the same parties and same cause of action arose – the validity of the arbitration clause;
- The High Court made a preliminary reference to the ECJ. The ECJ held that the
proceedings before the English courts should be understood as ancillary to the
arbitration proceedings, which are excluded from the scope of the Convention by Art
1(2)(d) (Brussels I bis).

The finding of the CJEU

The Court held:

- In order to determine whether a dispute falls within the scope of the Convention,
reference must be made solely to the subject-matter of the dispute.
- If, by virtue of its subject-matter, such as the appointment of an arbitrator, a dispute
falls outside the scope of the Convention, the existence of a preliminary issue which
the court must resolve in order to determine the dispute cannot, whatever that issue
may be, justify application of the Convention.
- As a result of this finding, the Brussels regime did not apply and the proceedings were
not barred by lis pendens.
- Following the Jenard and Schlosser reports, the ECJ confirmed that court proceedings
ancillary to arbitration proceedings fall outside the scope of the Brussels regime.
- The Court held that in determining whether a matter falls within the scope of the
regime, it is necessary to consider the subject matter of the proceedings and not the
subject matter of an incidental question raised. That is to say, if the subject matter of
the proceedings is outside of the scope of the Convention, the proceedings will not be
brought within its scope because an incidental question or issue relates to a matter that
does fall within the scope of the regime. This rule is subject to a significant condition.

The proceedings in Luxembourg took a long time, more than two years. A number of steps in
the proceedings were taken in the meantime. Marc Rich filed an objection to the continuation
of the Italian proceedings on the basis of the arbitration clause. The issue went to the Corte di
Cassazione, which held that the arbitration clause was not a valid part of the contract. The
proceedings then continued before the Genova court; Marc Rich then contested the claim
made by Impianti on the merits. The English proceedings began again following the ECJ’s
judgment; Marc Rich requested an ASI from the High Court to preclude the Italian
proceedings from going ahead. The court refused this ASI on the basis that Marc Rich had
submitted to the Italian jurisdiction by advancing substantive claims. The Court of Appeal
confirmed this decision. The CA also held that the submission applied to the ruling of the
Corte di Cassazione that the arbitration clause was invalid. As such, this issue could not be
taken further in England. As such, Marc Rich could no longer advance the claim that the
High Court should appoint Impianti’s arbitrator.

This decision on the validity of the arbitration agreement was not in line with the ECJ’s
ruling. Is it in line with English law?

- Today it is clear that a ruling on the validity or applicability of an arbitration

agreement is not subject to recognition under the Brussels I bis Regulation; as such,
the English court could have proceeded with this claim.
- Under English law, if a ruling is to be recognised in England on this basis, all issues
must be decided under English law, including the jurisdiction of the court of origin.

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 - Section 32(1) of the Civil Jurisdiction and Judgments Act 1982 requires that a foreign
judgment will not be recognized in the United Kingdom if the bringing of the foreign
proceedings was contrary to an arbitration agreement. S 32 does not apply if the other
party has submitted to the jurisdiction of the foreign court; under section 33 of the
Act, he is not be treated as having submitted simply because he contested the
jurisdiction of the court, or asked the court to stay them on the basis that there is an
arbitration agreement. The submission must be pleadings on the merits.

Interim measures

The question that arose in a subsequent case of C-391/95 Van Uden EU:C:1998:543
concerned whether asset freezing orders granted in aid of arbitration fall within the scope of
the Regulation or whether they should be considered to be ancillary to arbitration and thus
outside its scope?

In Van Uden, the ECJ found that preliminary measures in support of arbitration granted by a
Dutch court2 are not ancillary to arbitration. While they might operate to support arbitration,
they may also be used to support claims subject to litigation. The applicable law is not part of
the law of arbitration: they are deemed to be independent measures.

The ECJ held that the question of whether preliminary measures fall within the scope of the
Convention is a matter to be determined not by reference to the nature of the measure itself
but of the rights it protects. That is to say, if the subject matter (objet) of the substantive claim
falls within the scope of the Convention, the Convention is applicable to provisional
measures granted in support of it, even if the substantive claim is subject to arbitration.

The claim before the Dutch arbitrators was one for breach of contract, and as such, the
interim measure, the payment order, was covered by the Convention.

Under Art 35 Brussels I bis, a national court which does not have jurisdiction over the
substantive claim can grant provisional measures that are available under its national law. In
the case of Van Uden, the ECJ held that where the case is subject to arbitration, no national
court has jurisdiction over the substance of the claim; as such, reference must also be made to
Art 35. Such measures can only be granted against a party domiciled in another Member
State in terms of Art 35.

Anti-suit Injunctions

Anti-suit injunctions (ASIs) are an English-born mechanism. They are perhaps one of the
most problematic types of measures when examining the relationship between arbitration and
the Brussels I bis Regulation.

What is an anti-suit injunction (ASI)? What if a claim is considered by English law to be

subject to an arbitration clause and it is brought before the courts of another country? What
remedy might be sought before an English court?

2
This is an order, granted (under Dutch law) in summary (“kort geding”) proceedings, requiring the defendant
to pay the claimant part or all of the sum claimed, pending a final decision on the substance. If the final decision
goes against the claimant, he must repay the money.

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It is here that an ASI might come into play. One of the main issues is that these measures find
no similar measure in civil law systems (ie in the systems of – most of – the other EU
Member States).

An ASI operates in the following way. The judge of the petitioned court finds that his court
has jurisdiction to hear the dispute. The ASI precludes the parties from initiating or
continuing with proceedings before another court in another MS. Failure to adhere to the
injunction would place the party who breaches it in contempt of court, and facing potential
penalties.

Within the EU, the issuance of ASIs is deemed to be problematic. Why is this the case?

The issuance of an ASI is deemed to constitute an interference with or restriction of the

jurisdiction of a court of another MS. This interference or restriction is deemed to be
problematic because it is contrary to one of the key principles that underpins the European
judicial area – that of mutual trust and recognition. Moreover, the issuance of ASIs also
undermines the principle of lis pendens.

C-159/02 Turner v Grovit EU:2004:228

The facts of the case:

- NB: Turner v Grovit did not in itself involve arbitration but provided an opportunity
for the ECJ to establish doctrine in relation to the issuance of ASIs within the EU
context.
- An English employee of an Irish-incorporated company, with its central management
in England brought proceedings against the company in England for constructive
wrongful dismissal. The employee had been working temporarily in Spain, working
for an associated Spanish company while still employed by the English company; it
was in Spain that the dismissal had taken place;
- The English proceedings were brought to an end, with a judgment being made in
favour of the employee;
- Thereafter, the Spanish company initiated proceedings against the employee in Spain,
in an effort to relitigate the English proceedings;
- The English Court of Appeal issued an ASI; when the case went to the (then) House
of Lords, a request for a preliminary reference was made to the ECJ;

The finding of the CJEU

- The ECJ held that an ASI could not be granted by the courts of one MS in respect of
proceedings before a court in another MS;
- The reasoning of the ECJ was centred on the principle of mutual trust (see paras 25-
28); it held that the courts of all MS have “equal authority” to interpret the provisions
of the (then) Convention; only in exceptional cases is it possible for the jurisdiction in
a court of a MS to be reviewed by the court of another MS;
- The ECJ held at para 27: “However, a prohibition imposed by a court, backed by a
penalty, restraining a party from commencing or continuing proceedings before a
foreign court undermines the latter court’s jurisdiction to determine the dispute. Any
injunction prohibiting a claimant from bringing such an action must be seen as

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 constituting interference with the jurisdiction of the foreign court which, as such, is
incompatible with the system of the Convention.”
- The ECJ was extremely reluctant to allow ASIs to the extent that they are deemed to
allow the courts of one MS to interfere, restrict and impose its views on jurisdiction,
and thus on the rights to hear a case, on the courts of another MS, with the latter never
having the opportunity to decide the matter for itself;
- NB: the UK government argued that ASIs should be available when the foreign
proceedings have been brought in bad faith – as the employee argued was the case
with the proceedings initiated in Spain by the Spanish company.

C-185/07 Allianz and Generali Assicurazioni Generali v. West Tankers (West Tankers) EU:
2009:69

The finding of the ECJ in Turner v Grovit provides that ASIs are not available and cannot be
issued to restrict proceedings in other MS, where the Brussels regime applies. When we come
to arbitration, we know that arbitration falls outside the scope of the Brussels regime. We
come then to the question of what the scope of the Brussels regime is with regard to
arbitration.

The facts of the case

- The case came before the English courts when a ship that belonged to West Tankers
hit a jetty in Syracuse, Italy, causing considerable damage to the jetty;
- The jetty was owned by an Italian company, Erg;
- Erg claimed for its loss in respect of the jetty against its insurance company, Allianz;
- Allianz compensated Erg to the limit of its insurance policy coverage and Erg claimed
against West Tankers for the loss not covered by its policy;
- At the time of the incident, the ship was chartered to Erg; the charterparty included an
English arbitration clause and so Erg initiated arbitration proceedings against West
Tankers in London;
- Allianz had partially indemnified Erg, and so Erg’s rights in this respect were
subrogated to Allianz (to the extent to which it had compensated Erg); on the basis of
these rights, Allianz initiated proceedings against West Tankers in a court in
Syracuse;
- West Tankers argued that the arbitration agreement that applied between it and Erg,
also applied between it and Allianz, and challenged the jurisdiction of the Syracuse
court;
- West Tankers also initiated judicial proceedings before the High Court in London,
and successfully sought a declaration that the arbitration agreement covered the claim
brought against it by Allianz, and for an antisuit injunction restraining Allianz from
pursuing the claim in Italy;
- Allianz appealed against the decision and the House of Lords requested a preliminary
ruling from the ECJ;
- The question asked by the House of Lords of the ECJ concerned whether the
prohibition against antisuit injunctions applied when the injunction had been given on
the basis that the proceedings brought in the foreign court (ie in Syracuse) were
contrary to an arbitration agreement;
- The question was then essentially whether the exclusion of arbitration from the scope
of the Brussels I Regulation meant that an ASI could be issued as the proceedings in

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 relation to which the ASI was granted were outside of the scope of the Regulation
(essentially going against the ECJ’s finding in Turner v Grovit);

The findings of the ECJ

- The ECJ found that the relevant proceedings were outside of the scope of the
Regulation; nevertheless, it found that there still existed a prohibition against ASIs;
- The ECJ therefore held 1) the proceedings in relation to which the antisuit injunction
was granted did not come within the scope of the Brussels I Regulation, and 2) paras
24-29 judgment;
- West Tankers set out that to determine whether the prohibition against ASIs applies in
a given case, it is necessary to determine whether the proceedings in respect of which
the injunction is given fall within the scope of the Regulation (ie the proceedings in
Syracuse), not whether the proceedings in which the injunction was granted fall
within its scope;
- The question was then whether the proceedings in Syracuse fell within the scope of
the Brussels I Regulation;
- Following Marc Rich, the ECJ identified that it is necessary to examine the subject
matter of the proceedings; in this case, the subject matter was deemed to be a claim
for damages;
- This claim was deemed to fall within the Brussels I Regulation; the ancillary question
that also arose, as to the validity and effect of the arbitration clause, was also deemed
to fall within the scope of the Brussels I Regulation;
- As such, the English court could not issue the ASI in respect of the proceedings in
Syracuse as those proceedings fell within the scope of the Brussels I Regulation.

 On the face of it, West Tankers is about ASIs but in reality, it goes much further;
essentially, it provides that where parties have entered into an arbitration agreement, they can
bring substantive proceedings in the court most likely to find the arbitration clause invalid,
leaving the other party unable to enforce it in any other Member State and with the result that
the courts of the other Member States also have to enforce the substantive judgement given.

C-536/13 Gazprom EU:2015:316

The question arising in Gazprom concerned the situation where an arbitrator gives an order
that requires the parties to cease with the judicial proceedings, and the effect of the Brussels I
Regulation on the recognition and enforcement of that award.

Facts of the case

- Gazprom supplied energy to the Lithuania;

- The Government of Lithuania (Ministry of Energy) brought proceedings in Lithuania
against Gazprom in connection with this energy provision;
- Gazprom argued that their agreement included a provision for arbitration in
Stockholm and initiated arbitral proceedings in Stockholm before the Institute of
Arbitration of the Stockholm Chamber of Commerce;
- The arbitral body made an award that provided that certain dimensions of the
proceedings before the Lithuanian courts were contrary to the arbitration agreement
and required the Lithuanian Government to withdraw the judicial proceedings it had
initiated;

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 - Gazprom unsuccessfully attempted to enforce this award before the Lithuanian courts;
Gazprom then appealed this decision of the Lithuanian Court of Appeal to the
Supreme Court, which then made a reference to the ECJ;
- The Supreme Court in its reference characterised the award of the Stockholm arbitral
tribunal as an ASI, and considered that this award amounted to an interference with
the Lithuanian court’s right to determine its own jurisdiction under the Brussels I
Regulation;
- The question before the ECJ was whether the Lithuanian courts were entitled to refuse
to recognise and enforce the arbitral award on the basis that of the rule prohibiting
ASIs within the scope of Brussels I;

The findings of the ECJ

- Paras 33-34: “33 An injunction issued by a court of a Member State requiring a party
to an arbitration procedure not to pursue proceedings before a court of another
Member State does not observe the general principle that follows from the case law of
the Court of Justice, according to which every court before which a lawsuit is made
determines, by virtue of the applicable legislation, whether it has jurisdiction to settle
the dispute before it. In this regard, it should be recalled that, apart from a few limited
exceptions, Regulation 44/2001 does not authorise the review of the jurisdiction of a
court of a Member by a court of another Member State. This jurisdiction is directly
determined by the regulations laid down in said Regulation, including those relating
to its scope. Consequently, a court of another Member State is no case better placed to
rule on the jurisdiction of a court of another Member State (see Allianz and Generali
Assicurazioni Generali, C.185/07, EU:C:2009:69, paragraph 29). 34 In particular, the
Court of Justice has held that an obstacle, by means of an injunction of this kind, to
the exercise by a court of a Member State of the powers conferred on it by the
aforementioned Regulation is contrary to the mutual trust that Member States grant to
other legal systems and judicial institutions and may prevent the applicant, that
considers an arbitration clause to be void, ineffective or unenforceable, from
accessing the State court before which they have come (see, to this effect, Allianz and
Generali Assicurazioni Generai, C-185/07, EU: C: 2009: 69, paragraphs 30 and 31)”;
- The ECJ provides that national courts cannot issue ASIs to support arbitration where
the proceedings fall within the Brussels I Regulation; the ECJ has held that EU law,
and the principle of mutual trust that underpins it, does not allow a MS court to make
an award that interferes with or controls the exercise of jurisdiction by another MS
court;
- The Regulation was intended to prevent only conflicts of jurisdiction between courts
of the EU Member States and not conflicts between a court and an arbitral tribunal;
- However, where the ASI is made by an arbitral award, the ECJ holds that there is no
conflict of jurisdiction between MS courts; as such, the principle of mutual trust does
not apply, nor does the Brussels I Regulation;
- The ECJ based this on the “principle of mutual trust — accorded by the Member
States to their respective legal systems and judicial institutions” and held that this
principle was not affected in Gazprom, as the case did not involve a tussle for
jurisdiction between state courts;
- Essentially - the powers available to state courts with regard to anti-suit injunctions
relating to proceedings before courts of the EU Member States are fewer than those
available to arbitral tribunals;

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Reform in the Brussels I bis Regulation

The exclusion of arbitration from its scope of application is maintained in Art 1(2)(d);
however, it also provides for some limited changes as regards arbitration and the Brussels
regime3. The Brussels I bis Regulation is applicable from 10 January 2015.

Recital 12, Brussels I bis

The Brussels I bis Regulation introduces a recital dealing with arbitration in particular.
Recitals are intended to offer guidance on the interpretation and application of the provisions
of the Regulation.

Recital 12, para 1 provides that where a MS court is seised in an action in relation to which
the parties have entered into an arbitration agreement, the court can in line with its national
law:

 refer the parties to arbitration,

 stay or dismiss the proceedings, or
 examine the validity of the arbitration agreement (ie if it is null and void, inoperative
or incapable of being performed)

It essentially provides that the regulation does not apply to arbitration, nor to actions or
ancillary proceedings relating to arbitration, e.g. the establishment of the arbitral tribunal, the
powers of the arbitrators, the conduct of arbitration, or to a judgement concerning the
annulment, review, appeal, recognition or enforcement of an arbitral award.

The second paragraph provides that a ruling by a MS court on the validity of the arbitration
agreement is not subject to the rules in the Regulation on the recognition and enforcement.
This is deemed to be the case regardless of the subject matter of the proceedings in which this
ruling is given and regardless of whether the issue is determined as principal decision or as an
incidental question. As such, while a MS can decide whether proceedings before it are subject
to a valid arbitration agreement, applying its own law, this decision is not one that can be

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Article 71(1) Brussels I bis and the New York Convention

Article 71(1) provides:

This Regulation shall not affect any conventions to which the Member States are parties and
which, particular matters, govern jurisdiction or the recognition or enforcement of judgments.

The NYC applies to arbitration; it provides that when a court of a Contracting State is seised
of an action in respect of which the parties have concluded an arbitration agreement, the court
must, at the request of one of the parties, refer the parties to arbitration. With limited
exceptions, the NYC requires an arbitral award to be recognised and enforced. If an arbitral
award is irreconcilable with a judgment, the judgment will not be recognized. As such, the
NYC potentially impacts the recognition and enforcement of judgments.

Article 73(2) provides that:

This Regulation shall not affect the application of the 1958 New York Convention.
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recognised and enforced in line with the rules in Brussels I bis Regulation – instead it is for
the foreign court to decide on the issue itself.

The third paragraph of Recital 12 provides that where an MS court that exercises jurisdiction
under the Regulation or under national law makes a ruling that an arbitration agreement is
null and void, inoperative or incapable of being performed, its judgment on the substance of
the dispute can still be recognised and enforced under the Regulation. As such, it is clear that
under the Brussels I bis Regulation, judicial proceedings are not deemed to be excluded from
its scope on the basis that those proceedings are covered by an arbitration agreement
according to another MS court. The judgment on the substance can still be recognised and
enforced under the Regulation.

However, the national courts still have the competence to decide on the recognition and
enforcement of arbitral awards in accordance with the New York Convention 1958. Indeed,
per Art.73(2) Brussels I bis, the NY Convention takes precedence over the regulation; as
such, a Member State can recognise an arbitration award even if a conflicting judgement has
been rendered in another Member State. The way in which precedence applies is practice is
less clear.

Recital 12 reiterates that the Brussels I bis Regulation does not apply to any action or
ancillary proceedings relating to, in particular, the establishment of an arbitral tribunal, the
powers of arbitrators, the conduct of an arbitration procedure or any other aspects of such a
procedure, nor to any action or judgment concerning the annulment, review, appeal,
recognition or enforcement of an arbitral award. The Regulation has no effect on such
judgments, nor can these judgments be recognised or enforced via the rules established in it.

Some have called into question whether the rewording of the recital suggests a need to
reinterpret the case law on ASIs, particularly West Tankers and Gazprom. See for example,
AG Wathelet in his Opinion in Gazprom, who suggests that recital 12 provides that a court in
one MS can issue an anti-proceedings measure before any further proceedings in another
Member State.

Others have instead suggested that recital 12 in Brussels I bis does not require any change in
the case law. It does not seem that recital 12 makes significant changes to the case law set out
above; instead, it provides clarity on certain issues, particularly the situation that arises where
a court gives a judgment in a dispute which, in the view of a court in another Member State,
is subject to an arbitration agreement.

The current approach can be summarised in the following way: an ASI issued by an
arbitration body will be enforceable through the New York Convention; however, MS courts
should not issue ASIs to control the exercise of jurisdiction of another MS court.

12