EUPillar C-185/07 Allianz SpA, formerly Riunione Adriatica di Sicurtà SpA, Generali Assicurazioni Generali SpA v West Tankers Inc. (Grand Chamber) [2009] ECR I-00663

Summary

The Front Comor, a vessel owned by West Tankers and chartered by Erg Petroli SpA (‘Erg’), collided in Syracuse (Italy) with a jetty owned by Erg and caused damage. The charterparty contained a clause providing for arbitration in London. Erg claimed compensation from its insurers Allianz and Generali up to the limit of its insurance cover and commenced arbitration proceedings in London against West Tankers for the excess. Having paid Erg compensation under the insurance policies for the loss it had suffered, Allianz and Generali brought proceedings against West Tankers before the Tribunale di Siracusa (Italy) in order to recover the sums they had paid to Erg. The action was based on their statutory right of subrogation to Erg’s claims. West Tankers raised an objection of lack of jurisdiction on the basis of the existence of the arbitration agreement. West Tankers brought proceedings before the Commercial Court in London seeking a declaration that the dispute between itself and Allianz and Generali was to be settled by arbitration pursuant to the arbitration agreement. West Tankers also sought an injunction restraining Allianz and Generali from pursuing any proceedings other than arbitration and requiring them to discontinue the proceedings commenced before the Tribunale di Siracusa (‘the anti-suit injunction’). The Commercial Court granted the anti-suit injunction sought against Allianz and Generali. The latter appealed against that judgment to the House of Lords arguing that the grant of such an injunction is contrary to Brussels I. The House of Lords referred to C-116/02 Gasser and C-159/02 Turner, which decided that an injunction restraining a party from commencing or continuing proceedings in a court of a Member State is contrary to Brussels I because of mutual trust. However, mutual trust cannot, in the view of the House of Lords, be extended to arbitration, which is completely excluded from the scope of Brussels I by virtue of Art 1(2)(d). The referring court asked this question to the CJEU: ‘Is it consistent with Brussels I for a court of a Member State to make an order to restrain a person from commencing or continuing proceedings in another Member State on the ground that such proceedings are in breach of an arbitration agreement?’ The CJEU agreeing with AG Kokott (paras 53 and 54 of her Opinion) found that if the main subject matter of the proceedings in the court first seised comes within the scope of Brussels I, a preliminary issue concerning the applicability of an arbitration agreement, including in particular its validity, also comes within its scope. This finding is supported by para 35 of the Evrigenis and Kerameus Report on the Greek accession to the Brussels Convention. It follows that the objection of lack of jurisdiction raised by West Tankers before the Tribunale di Siracusa on the basis of the existence of an arbitration agreement, including the question of the validity of that agreement, comes within the scope of Brussels I and that it is therefore exclusively for that court to rule on that objection and on its own jurisdiction, pursuant to Arts 1(2)(d) and 5(3). Accordingly, the use of an anti-suit injunction to prevent a court of a Member State, which normally has jurisdiction to resolve a dispute under Art 5(3), from ruling, in accordance with Art 1(2)(d), on the very applicability of Brussels I to the dispute brought before it necessarily amounts to stripping that court of the power to rule on its own jurisdiction. Such an anti-suit injunction also runs counter to the trust which the Member States accord to one another’s legal systems and judicial institutions and on which the system of jurisdiction under Brussels I is based (see, to that effect, Turner, para 24). This is a highly controversial decision of the CJEU that led to a reinforcing of the exclusion of arbitration from the scope of Brussels Ia (see Recital 12 and Art 73(2)) without expressly reversing this decision.