Consultation on the proposals to amend the Brussels 1 Regulation by the Ministry of Justice close on June 24th,, 2009. If adopted, these proposals would restore the power of the courts of the “place of arbitration” to grant provisional measures, such as anit-suit injunctions to compel parties to an arbitration agreement to comply with their obligations to arbitrate their disputes in accordance with the arbitration agreement. This would restore the position to where it was before the decision of the ECJ in The “Front Comor” Case C-185/07.

The Ministry of Justice is consulting on The Report from the Commission to the European Parliament, The Council, and The European Economic and Social Committee on the application of Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters and the Green Paper on the Review of that regulation. Unless extended, this consultation process concludes on 24th June 2009. The Green Paper deals with a number of topics, but of importance for maritime arbitration are paragraphs 3.7 of the Report and Paragraph 7 of the Green Paper. The latter contains the following passage:-

“7. The interface between the Regulation and arbitration
Arbitration is a matter of great importance to international commerce. Arbitration agreements should be given the fullest possible effect and the recognition and enforcement of arbitral awards should be encouraged. The 1958 New York Convention is generally perceived to operate satisfactorily and is appreciated among 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. This should not prevent, however, addressing certain specific points relating to arbitration in the Regulation, not for the sake of regulating arbitration, but in the first place to ensure the smooth circulation of judgments in Europe and prevent parallel proceedings.

In particular, a (partial) deletion of the exclusion of arbitration from the scope of the Regulation might improve the interface of the latter with court proceedings. As a result of such a deletion, court proceedings in support of arbitration might come within the scope of the Regulation. A special rule allocating jurisdiction in such proceedings would enhance legal certainty. For instance, it has been proposed to grant exclusive jurisdiction for such proceedings to the courts of the Member State of the place of arbitration, possibly subject to an agreement between the parties[1]. 

Also, the deletion of the arbitration exception might ensure that all the Regulation's jurisdiction rules apply for the issuance of provisional measures in support of arbitration (not only Article 31). Provisional measures ordered by the courts are important to ensure the effectiveness of arbitration, particularly until the arbitral tribunal is set up. 

Next, a deletion of the exception might allow the recognition of judgments deciding on the validity of an arbitration agreement and clarify the recognition and enforcement of judgments merging an arbitration award. It might also ensure the recognition of a judgment setting aside an arbitral award[2]. This may prevent parallel proceedings between courts and arbitral tribunals where the agreement is held invalid in one Member State and valid in another. 

More generally, the coordination between proceedings concerning the validity of an arbitration agreement before a court and an arbitral tribunal might be addressed. One could, for instance, give priority to the courts of the Member State where the arbitration takes place to decide on the existence, validity, and scope of an arbitration agreement. This might again be combined with a strengthened cooperation between the courts seized, including time limits for the party which contests the validity of the agreement. A uniform conflict rule concerning the validity of arbitration agreements, connecting, for instance, to the law of the State of the place of arbitration, might reduce the risk that the agreement is considered valid in one Member State and invalid in another. This may enhance, at Community level, the effectiveness of arbitration agreements compared to Article II(3) New York Convention. 

Further, as far as recognition and enforcement is concerned, arbitral awards which are enforceable under the New York Convention might benefit from a rule which would allow the refusal of enforcement of a judgment which is irreconcilable with that arbitral award. An alternative or additional way forward might be to grant the Member State where an arbitral award was given exclusive competence to certify the enforceability of the award as well as its procedural fairness, after which the award would freely circulate in the Community. Still another solution suggested consists of taking advantage of Article VII New York Convention to further facilitate at EU level the recognition of arbitral awards (a question which might also be addressed in a separate Community instrument)."

If adopted, the proposals that the courts of the Member State of the place of arbitration be granted exclusive jurisdiction for court proceedings in support of arbitration and that those courts could issue of provisional measures in support of arbitration would permit the Commercial Court to enforce agreements to arbitrate in London. This would effectively restore to the Courts the power to grant anti-suit injunctions which they lost as a result of the decision of the ECJ in The “Front Comor” Case C-185/07. This ruled that anti-suit injunctions may no longer be issued by the English Courts to restrain proceedings brought in the Courts of the Member States of the European Union or European Free Trade Association in circumstances in which those proceedings are in breach of an arbitration clause. Herewith the full text of the Report and the Green Paper.