Thursday, June 24, 2010

Arbitration Agreements and Anti-suit injunctions

The Kluwer Arbitration Blog carries this post on a recent decision of In AES UST-Kamenogorsk Hydropower Plant LLP v UST-Kamenogorsk Hydropower Plant JSC [2010] EWHC 772 (Comm) where an anti-suit injunction was granted on the basis of the principle in Turner v Grovit [2002] 1 WLR 107, where in a case where the applicant was “relying upon a contractual right not to be sued in the foreign country” (this right essentially was through the existence of an arbitration agreement), and the House of Lords held that  he has by reason of his contract a legitimate interest in enforcing that right against the other party to the contract” – in other words, an anti-suit injunction was granted vis-à-vis a foreign court on the basis of an arbitration agreement. 

What makes the decision in AES more interesting is that the Court makes (according to the Kluwer Arbitration Blog) a distinction “between parties seeking to enforce an arbitration clause who subsequently intend to make a claim within it and those who simply seek to enforce their contractual right not to be sued other than in arbitration…” and holds (again, as summarised by the Kluwer arbitration blog) “in respect of the former, the court will respect the principle of non-intervention… leaving the issue of the validity of the clause to the tribunal… while in the case of the latter, the intervention of the court to determine validity may be entirely appropriate…”

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