West Tankers Inc (Respondents) v RAS Riunione Adriatica di Sicurta SpA and others (Appellants)

Where the answer to a question of Community law is neither obvious nor unnecessary to the disposition of an appeal, a final national court must refer that question to the Court of Justice under article 234.

In Lord Hoffmann’s opinion, proceedings which enforce a contractual right to arbitration concern arbitration and therefore fall outside EC Regulation 44/2001. An injunction directed to a party, requiring performance of an arbitration agreement, should accordingly be permissible even though it restrains proceedings before a court of another Member State. The House did not finally determine that Community-law issue. It referred the question to the Court of Justice.

A vessel under charter collided with its charterer’s jetty. The charterparty was governed by English law and required arbitration in London. After indemnifying the charterer, its insurers brought a subrogated delictual claim against the shipowner in Italy. The shipowner sought declarations that the insurers were bound by the arbitration clause and an injunction restraining further pursuit of the Italian proceedings.

Colman J held that the transferred claim was subject to the arbitration agreement and granted the injunction: [2005] EWHC 454 (Comm). He certified a direct appeal under section 12 of the Administration of Justice Act 1969.

The central issue was whether EC Regulation 44/2001 permitted a Member State court to restrain proceedings in another Member State because they breached an arbitration agreement.

1. Reference to the Court of Justice. Lord Hoffmann delivered the leading speech. Lord Nicholls, Lord Steyn, Lord Rodger and Lord Mance agreed that the answer to the Community-law question was not obvious and was necessary before judgment could be given. The House unanimously referred the question to the Court of Justice under article 234.

2. Lord Hoffmann’s opinion on the referred question. Arbitration is excluded from EC Regulation 44/2001 by article 1(2)(d). That exclusion covers arbitration itself and court proceedings whose subject matter is the protection of the right to have a dispute determined by arbitration. The English proceedings served precisely that purpose. They therefore fell outside the Regulation and, in Lord Hoffmann’s view, could not be inconsistent with it.

3. The Italian court possessed jurisdiction under article 5(3) to determine the delictual claim. The arbitration clause did not deny that jurisdiction. It constituted an agreement by the parties not to invoke it. The injunction operated personally against the party in breach by requiring performance of that agreement.

4. The mutual-trust reasoning in Gasser and Turner v Grovit governed proceedings within the Regulation’s system for allocating jurisdiction. Arbitration was materially different. It lay outside that system, and there was no equivalent body of uniform Community rules allocating arbitral jurisdiction. Lord Hoffmann therefore regarded those authorities as not extending to an arbitration injunction.

5. Commercial arbitration and party autonomy. Lord Hoffmann considered the injunction an important means of supporting the parties’ choice of arbitration, preventing conflicting decisions and avoiding forced participation in foreign litigation. Lord Mance agreed. He emphasised that such injunctions were a carefully developed and carefully applied means of giving prompt effect to clearly applicable arbitration agreements.

6. Non-Community issues. Lord Hoffmann agreed with Colman J that the injunction was neither inconsistent with the New York Convention nor one which should be refused as a matter of discretion. The House did not finally dispose of the appeal, but invited written comments within 14 days on the proposed reference and question.

1. House of Lords: The House unanimously referred to the European Court of Justice the question whether an injunction restraining proceedings in another Member State, because they breach an arbitration agreement, is consistent with EC Regulation 44/2001. The appeal was not finally determined.

2. High Court, Commercial Court: Colman J held that the insurers’ subrogated claim was subject to the London arbitration clause, made the requested declarations and granted an injunction restraining the Italian proceedings: [2005] EWHC 454 (Comm). He certified a direct appeal under section 12 of the Administration of Justice Act 1969.