EUPillar West Tankers v Ras Riunione Adriatica di Sicurta (The Front Comor) [2005] EWHC 454 (Comm)

Summary

The dispute between the parties arose out of a collision on 8 August 2000 between the West Tankers’ vessel “Front Comor” and an oil jetty owned by Erg Petroli, who also were the Front Comor’s charterers. The collision occurred at the Erg’s oil refinery in Syracuse, Italy. The dispute arose as Erg suffered losses regarding repair costs and disruption of refinery operations. The insurers, Allianz SpA (formerly known as Ras Riunione di Sicurta SpA), paid Erg over 15 million Euros to cover its insured losses. The charterparty contained an arbitration clause. The seat of arbitration was London, and English law was chosen to apply. Erg initiated arbitration proceedings against West Tankers in London, and sought compensation for its uninsured losses. Allianz commenced court proceedings against West Tankers in Italy in order to recover the money they paid to Erg, invoking its rights of subrogation under the Italian civil code. On 20 September 2004, Mr Justice Gross granted an interim anti-suit injunction, restraining Allianz from continuing with the legal proceedings in Italy. The insurers made an application, seeking for Mr Justice Gross’s order to be set aside. On 21 March 2005, Allianz’s application was dismissed by the English High Court. Mr Justice Colman held that: “72. The right to be protected against a breach of an agreement to arbitrate is to be enforced unless strong reasons are shown to the contrary: see Donohue v. Armco Inc [2002] 1 Lloyd's Rep 425, para 23 per Lord Bingham. The authorities, such as The Angelic Grace and The Jay Bola leave it in no doubt that strong cause is not normally to be provided by forum non conveniens considerations alone. In principle, the fact that evidence relevant to the cause of action in tort may be exclusively or substantially located in Italy or that the tort or the contract of insurance are governed by Italian Law are thus considerations which yield to the need to protect the Owners' contractual rights. So also must any sensitivity to the risk of affront to the Italian courts by an approach analogous to that in Turner v. Grovit.” [72] The case reached the House of Lords where it was held that: “18 [Arbitration] needs the support of the courts; but, for the reasons eloquently stated by Advocate General Darmon in The Atlantic Emperor (cited above), it is important for the commercial interests of the European Community that it should give such support. Different national systems give support in different ways and an important aspect of the autonomy of the parties is the right to choose the governing law and seat of the arbitration according to what they consider will best serve their interests. 19 The courts of the United Kingdom have for many years exercised the jurisdiction to restrain foreign court proceedings […]. It is generally regarded as an important and valuable weapon in the hands of a court exercising supervisory jurisdiction over the arbitration. It promotes legal certainty and reduces the possibility of conflict between the arbitration award and the judgment of a national court. […]” [2007] UKHL 4 [18-19]. The UK most senior judges made a reference to the CJEU, asking about the compatibility of anti-suit injunctions with Regulation 44/2001. The Court of Justice noted that an anti-suit injunction cannot be used to prevent a court of a Member State to take a view on the applicability of the regulation under Article 1(2)(d), holding that “it is incompatible with Regulation No 44/2001 for a court of a Member State to make an order to restrain a person from commencing or continuing proceedings before the courts of another Member State on the ground that such proceedings would be contrary to an arbitration agreement.” Case C-185/07 [34] However, the matter reached the English courts again as West Tankers sued for damages for breach of an arbitration agreement. (see West Tankers Inc v Allianz SpA and Generali Assicurazioni Generali SpA [2012] EWHC 854 (Comm))