Electronic Arts CV v CTO SpA

An anti-suit injunction restraining proceedings brought in breach of an arbitration agreement concerns the enforcement of the agreement to arbitrate. It therefore falls within the arbitration exception in Article 1.2(d) of EC Regulation 44/2001. A court should ordinarily grant such relief unless the defendant shows strong reasons to refuse it. Public-policy concerns arising from possible foreign review of an award, the prospect of parallel proceedings, and comity will not necessarily amount to strong reasons. The court must assess those matters in the circumstances, while giving effect to the parties’ contractual choice of arbitration.

Electronic Arts CV sought an interim injunction restraining CTO SpA from continuing proceedings in the Bologna Court of Appeal concerning the interpretation and enforcement of a distribution agreement. The agreement was governed by English law and contained an ICC arbitration clause providing for arbitration seated in London.

CTO alleged that the agreement permitted unlawful price fixing under Italian and European competition law. It argued that the English claim fell within the scope of EC Regulation 44/2001, that the Italian court was first seised, and that public policy, multiplicity of proceedings and comity justified refusing relief. The central questions were whether the Italian claims fell within the arbitration agreement, whether the injunction claim was within the arbitration exception, and whether the court should exercise its discretion to grant an injunction.

1. The court held that clause 16.1 created a binding arbitration agreement. CTO accepted that its claims against EA were, at least arguably, within the agreement.

2. The relevant question under Article 1.2(d) of EC Regulation 44/2001 was the subject matter of the English claim. Following Marc Rich [1992] 1 Lloyd’s Reports 342, the court considered that the claim was concerned with enforcing the agreement to arbitrate. It followed the later first-instance decisions in Toepfer International v Société Cargill France [1997] 2 Lloyd’s Reports 98 and The Ivan Zagubanski [2002] 1 Lloyd’s Reports 106, rather than The Heidberg [1994] 2 Lloyd’s Reports 287 and Toepfer International v Molino Boschi [1996] 1 Lloyd’s Reports 150. The anti-suit claim therefore fell within the arbitration exception and outside the Regulation.

3. The discretion to grant an injunction was governed by the principle that relief should ordinarily be granted to enforce the contractual bargain unless the defendant showed strong reasons to refuse it. The court applied The Angelic Grace [1995] 1 Lloyd’s Reports 87, subject to the qualification that the weight of particular factors depends on the circumstances.

4. The possible operation of Italian or European public policy did not constitute a strong reason. EA accepted the risk that an award might not be enforceable in Italy or might be reconsidered on enforcement. Nor did multiplicity of proceedings justify refusal, since parallel proceedings and inconsistent findings were possible whether or not the injunction was granted. Donohue v Armco Inc [2001] UKHL 64; [2002] Lloyd’s Reports 452 was distinguished because that case concerned the possibility of avoiding parallel proceedings through a single forum. Comity required caution, but the evidence did not establish a sufficiently strong reason.

5. An interim injunction was granted restraining CTO from continuing the Italian proceedings against EA, until trial or further order. The associated companies were excluded from the order. EA was awarded £20,000 on account of costs, subject to detailed assessment, and gave the usual cross-undertaking in damages. Permission to appeal was granted on the jurisdiction issue but refused on discretion.

No appellate decision is stated. Permission to appeal was granted on the jurisdiction issue and refused on the exercise of discretion.