Anti-suit Injunctions in International Arbitration

Sarah Johns reviews a selection of recent European cases to explore current attitudes towards anti-suit injunctions and the trends that are developing.

A court or tribunal order, known as an anti-suit injunction, forbids a party from starting or continuing legal action in a jurisdiction or forum other than the one that has been contractually agreed upon. Contempt of court might result from disobeying the order, which carries severe legal repercussions for the offending party.  

While anti-suit injunctions can, therefore, be viewed as a means by which tribunals and courts ensure that the forum selection clauses in legally binding contracts and agreements are honoured,^[1] some view them as unjustified restrictions created by tribunals against the courts of a sovereign state.^[2] The current attitudes toward anti-suit injunctions can be understood by exploring the treatment of these injunctions in recent rulings throughout Europe. These European cases also cast a light on the future of anti-suit injunctions generally.

A favourable view of anti-suit injunctions was established in the Gazprom case by the Court of Justice of the European Union (CJEU).^[3] In this 2012 case, Gazprom, a Russian energy company, obtained an anti-suit injunction from a Stockholm Chamber of Commerce tribunal ordering the other party to “withdraw or limit” the claims it was bringing before Lithuanian courts in violation of the arbitration agreement.^[4] The Lithuanian courts did not enforce the order, and so the issue was brought before the Court of Justice in 2013.^[5] The Court of Justice focused primarily on whether the newly adjusted Brussels I Regulation “must be interpreted as precluding a court of [an EU] Member State from... .  refusing to recognise and enforce [] an arbitral award prohibiting a party from bringing certain claims before a court of that Member State.”^[6] The result of this inquiry was a non-binding advisory opinion which argued that nothing in the Brussels I Regulation requires the Court of Justice to deny anti-suit injunctions issued by arbitral tribunals.^[7] The arguments were justified on two bases:

1. that Recital 12 of the Brussels I Convention displays that arbitration exceptions should be applied to restrictions against anti-suit injunctions, thus permitting such awards against court proceedings in any EU state; and

2. that arbitral tribunals are, by their non-governmental nature, not subject to the Brussels I Regulation and, therefore, EU rules cannot preclude anti-suit injunctions.^[8]

The opinion created great hope throughout the EU for the protection of arbitration agreements, but recent developments have called such optimism into question.^[9]

The 2018 Nori Holding case, decided by the English High Court, rejected the line of reasoning established in Gazprom and determined that the preclusion of anti-suit injunctions between EU Member states is proper, making this the new status quo.^[10] The High Court determined that the Gazprom opinion is not supported by the revised text of the Brussels I Regulation nor by any CJEU case law.^[11] Thus, with no support for its ruling, the High Court determined the Advocate General’s opinion in Gazprom invalid and returned to the EU’s historical rejection of anti-suit injunctions in international arbitration contexts between member states.^[12] The EU status quo is thus that the Brussels I Regulation will prohibit all anti-suit injunctions between EU Member States.^[13] It has been recognised, though, that the UK (which already embraces anti-suit injunctions against non-EU Members) will no longer be constrained by any decisions of the CJEU following its 2020 withdrawal from the EU.^[14] Thus, though the Nori Holding ruling may have quashed some of the optimism regarding arbitration’s future in the EU, the UK’s exit from the EU may signal to international arbitration stakeholders that their anti-suit injunction requests may now be honoured by the UK.^[15] In fact, an anti-suit injunction was honoured in the 2022 QBE Europe case before the England and Wales High Court.^[16] In this case, an anti-suit injunction was granted to prevent a party’s attempts to have their claims heard before courts in Spain in violation of an arbitration agreement.^17] Therefore, though intra-EU anti-suit injunctions may remain an impossibility, the UK has opened doors for these injunctions to make their way into the EU when issued by the English High Court.^[18]

Conclusion

While anti-suit injunctions are an important tool for protecting international arbitration agreements,^[19] the future of anti-suit injunctions seems somewhat contested due to laws such as the Brussels I Regulation, which prohibits tribunals and courts from constraining the courts of other sovereign states.^[20] Nevertheless, jurisdictions such as the UK seem poised to protect international arbitration through anti-suit injunctions. Consequently, by choosing to seat an arbitration in the UK, parties may preserve the protection that anti-suit injunctions provide.^[21]

About the author:  Sarah Johns is a third year Juris Doctor candidate at Brigham Young University's J. Reuben Clark Law School in Utah, United States. Sarah is a student member of Ciarb . She has been a student of international arbitration throughout her law school career, participating in an arbitration academy in Singapore in her first year and, in her second year, spending the summer working at Obeidat Law in Amman, Jordan. Sarah has been published in Notre Dame's Journal of International and Comparative Law. 

All material included in our website is intended for information purposes only and does not represent legal advice. Users should take appropriate steps to verify such information.  Read the full disclaimer.

^[1] Inside arbitration, supra note 3.
^[2] Id.
^[3] Greenwood, supra note 1.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] V. Lazić & P. Chauhan, On (Non) Binding Nature of Pre-insolvency Arbitration Agreements When Avoiding an Underlying Transaction, Executory Contracts, and Anti-suit Injunctions in Support of Arbitration Against Foreign Insolvency Debtors: News from England and Canada, in Crossroads of Insolvency and Arbitration 80 (2022).
^[11 Id.
^[12] Id.
^[13] See, Id.
^[14] Id.
^[15] Id.
^[16] See, QBE Europe SA/NV & Anor v generali espana de seguros y Reaseguros, [2022] EWHC 2062 (comm): England and Wales High Court (Commercial Court), Judgment, law, CASEMINE, https://www.casemine.com/judgement/uk/62e81e238ba02f610a1fd816 (last visited Jan 11, 2023).
^[17] Id.
^[18] See, Id.
^[19] See, Inside arbitration, supra note 3.
^[20] See, Inside arbitration, supra note 3.
^[21]  See, Id.