AmTrust Europe Ltd v Trust Risk Group SpA

An English court may restrain foreign arbitral proceedings under section 37 of the Senior Courts Act 1981, but the jurisdiction is exercised with great caution because the courts of the arbitral seat ordinarily have supervisory jurisdiction. An anti-arbitration injunction is generally inappropriate where a valid arbitration agreement exists and the tribunal can determine whether the disputes fall within it. The position may differ where the parties have agreed that the English court should decide the validity or existence of the arbitration agreement, or where that issue has already been determined. An exclusive jurisdiction clause does not by itself justify an injunction when its application to the particular disputes remains contested. The court must decide whether an injunction would be just and convenient.

AmTrust Europe Ltd sought an anti-arbitration injunction restraining Trust Risk Group SpA from pursuing claims in an arbitration seated in Milan. The parties had entered into a Terms of Business Agreement containing an English exclusive jurisdiction clause and a later framework agreement containing an Italian arbitration clause.

Earlier interlocutory proceedings had resulted in an order requiring payment into a designated account. Blair J held that AmTrust had shown a good arguable case that the relevant dispute fell within the Terms of Business Agreement rather than the framework agreement. The Court of Appeal dismissed the appeal, holding that AmTrust had the much better argument for the interlocutory jurisdictional purpose. The present application concerned whether the claims pleaded in the arbitration should nevertheless be restrained.

1. Application refused. The court had jurisdiction under section 37 of the Senior Courts Act 1981 to restrain arbitration proceedings seated abroad, but no proper reason existed to exercise it.
2. The principle in Weissfisch v Julius [2006] EWCA Civ 218 required particular caution because the courts of the seat ordinarily exercise supervisory jurisdiction. That consideration applied with special force where the parties had agreed to arbitration and accepted the tribunal’s competence to determine its own jurisdiction under the principle of Kompetenz-Kompetenz.
3. The reasoning in Donohue v Armco Inc [2001] UKHL 64 was accepted as applicable to anti-arbitration relief where there was no room for argument that an exclusive jurisdiction clause covered the relevant disputes. Here, however, the existence of the jurisdiction clause was undisputed, but its application to the claims before the tribunal was not.
4. The earlier decisions did not finally determine the boundary between the Terms of Business Agreement and the framework agreement. They decided only that AmTrust had satisfied the interlocutory good arguable case requirement. The Court of Appeal’s observations about commission and exclusivity did not define a precise demarcation, and did not prevent the tribunal from determining the scope of the arbitration agreement.
5. The exceptional circumstances identified in Albon v Naza Motor Trading Sdn Bhd [2007] EWCA Civ 1124 were absent. There, the parties had agreed that the English court would determine whether the arbitration agreement was genuine. Here, the parties had not displaced the supervisory role of the Italian courts. The tribunal was required by article 817 of the Italian Code of Civil Procedure to determine its own competence, subject to review by the Milan Court of Appeal under articles 830 and 829.
6. The claims were not shown to be vexatious, oppressive or unconscionable. The fact that the defendant had not paid costs ordered by the Court of Appeal did not justify an injunction. Delay and the claimant’s counterclaims in the arbitration would not have defeated relief if it had otherwise been justified, but they did not alter the conclusion.

Not an appeal. The judgment records earlier interlocutory proceedings in the same litigation:

• High Court (Commercial Court): Blair J ordered payment into the designated account and held that AmTrust had shown a good arguable case that the relevant dispute was governed by the Terms of Business Agreement: [2014] EWHC 4169.
• Court of Appeal: the appeal was dismissed and AmTrust was held to have the much better argument for the interlocutory jurisdictional issue: [2015] EWCA Civ 437.
• High Court (Commercial Court): the present anti-arbitration injunction application was refused.