Anti arbitration injunctions - A guest post by Puneeth Nagraj

The following is a guest post by Mr. Puneeth Nagraj of NALSAR University of Law, Hyderabad. Mr. Nagraj was a member of the NALSAR team that reached the round of 16 in the Willem C. Vis International Commercial Arbitration Moot this year.

The New York Convention (NYC) and the UNCITRAL Model Law (UML) have certainly come a long way in creating a framework within which international arbitrations can proceed with minimal interference from courts. However, certain jurisdictional issues sometimes act as roadblocks for the smooth resolution of such disputes. One such issue is that of anti-arbitration injunctions. The main purpose of anti-arbitration injunctions is to prevent parallel proceedings which are against the will of the parties. By issuing such injunctions, courts 'preserve' their jurisdiction over the dispute.

Bombay High Court's anti-arbitration stance

A division bench of the Bombay High Court consisting of Chief Justice Mohit Shah and Justice S C Dharmadhikari, allowed an appeal from a single judge, Justice Roshan Dalvi and restrained the World Sport Group ["WSG"] from proceeding with arbitration against MSM Satellite (Singapore) Pte Ltd ["MSM"].

The original agreement between WSG and MSM stated that any dispute between the parties would be settled through arbitration in Singapore under the auspices of the International Chamber of Commerce (ICC), following English law.

Revenge time: Arbitral tribunals strike back at national courts?

National courts in different jurisdictions have, for long, jealously guarded their monopoly in adjudication. In this process they have sought to keep private adjudication mechanisms including arbitration under their strict control. We have had some discussions on how Indian courts have interpreted the statute to give themselves larger powers over arbitral tribunals. Now, it seems the arbitral tribunals are striking back at courts by holding sovereign States liable under Bilateral Investment Treaties for anti-arbitration decisions taken by their courts.

Landmark French decisions on anti arbitration injunctions

Kluwer Arbitration Blog reports here that in the recent months the Paris Tribunal de Grande Instance (Court of First Instance) has taken the view that anti arbitration injunctions could not be granted even in cases where manifest lack of jurisdiction of the arbitral tribunal and irreparable injury were pleaded. In S.A. Elf Aquitaine and Total v. Mattei, Lai. Kamara and Reiner, an anti arbitration injunction was prayed for on the ground that appointment of arbitrator on behalf of Elf was done by an administrator whose appointment had been annulled by the appointing court and that the continuation of arbitration would cause irreparable injury. In Republic of Equatorial Guinea v Fitzpatrick Equatorial Guinea, de Ly, Owen and Leboulanger the grounds for seeking anti arbitration injunction were that local judicial remedies had not been exhausted as required by the relevant laws and the contract between the parties and that one of the parties was insolvent and hence could not be represented by persons other than the insolvency representative.

In both the cases it was held that the arbitral tribunal enjoyed absolute priority in determining its own jurisdiction. More importantly, a blanket rule appears to have been laid down that French courts were devoid of any jurisdiction to interfere with the arbitral proceedings or to give injunctions to an arbitral tribunal, even when the Tribunal is seated in France.

For a background on judicial interference in arbitration and a summary on the position on intervention in India, U.K., Singapore, Switzerland, France, Sweden, Germany, Netherlands and Austria, readers may find it beneficial to refer to an article titled Judicial Intervention In International Arbitration In India co-authored by Rukmini Das and Anisha Keyal and published in the most recent issue of NUJS Law Review (Volume 2, Issue 4). The full text of the paper is expected to be uploaded here shortly.