Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (hereinafter “Brussels I bis” or “Recast”) was passed by the European Union (EU) Parliament and the Council of the EU on December 12, 2012, and entered into effect on January 10, 2015.1The new law is officially known as Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on Judgment and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (Dec. 20, 2012). Regulation 1215/2012, 2012 O.J. (L 351) (EU) [hereinafter “Brussels I bis”].1 The Recast replaced Regulation (EC) 44/2001 (hereinafter “Brussels I”)2See Council Regulation 44/2001 of Dec. 22, 2000, art. 73, 2001 O.J. (L 12) (EC) [hereinafter “Brussels I”].2—although Brussels I was hailed as a success, there had remained persistent criticism of unintended consequences arising from the application of certain of its provisions, mostly in regards to provisions that exclude arbitration from the Brussels I; provisions regulating exclusive jurisdiction for national courts over certain matters; and provisions dealing with provisional or interim measures. This paper examines the Brussels I bis in light of its amendments in these areas. In particular, this paper assesses how the amendments have impacted the jurisdiction of EU national courts to grant provisional measures in support of arbitration, especially a court at the arbitral seat of arbitration. This article also examines the reception to Brussels I bis since its enactment, in particular against the backdrop of the debates preceding the new law over the status of arbitration agreements under Brussels I.
Section I introduces the background issues that led to the formation of a Study Group by the European Commission (“the Commission”), which undertook the review and evaluation of Brussels I.3The study was undertaken at the Institute for Private International Law, University of Heidelberg, under the supervision of three experienced academics—Professors Burkhard Hess, Thomas Pfeiffer and Peter Schlosser. See BURKHARD HESS ET AL., STUDY JLS/C4/2005/03: REPORT ON THE APPLICATION OF REGULATION BRUSSELS I IN THE MEMBER STATES (Institute for Private International Law, University of Heidelberg 2007) [hereinafter, “Hess Report”], http://ec.europa.eu/civiljustice/news/docs/study_application_brussels_1_en.pdf. It should be noted that Brussels I provided for an assessment of its operation by the Commission after an initial five-year period.3 Section II briefly discussions the Report of the Study Group and the Commission’s Green Paper and Proposal. Section III appraises the provisions of the Recast with regard to the arbitration exclusion and the availability of provisional measures in support of arbitration, contrasting the positive achievement in regards to choice of court contracts against lackluster amendments in regards to provisional measures. Section IV concludes with a survey of the various responses to the Recast, concluding that the area of provisional measures in aid of arbitration, in particular, did not receive satisfactory attention.
The Brussels I regulation, which was acclaimed as one of the most important pieces of EU legislation, was unable to provide answers to several complex procedural and substantive law problems arising from its provisions on arbitration, provisional measures, and forum selection clauses.1See Hess Report, supra note 3, at 2; see also, Christa Roodt, Conflicts of Procedure Between Courts and Arbitral Tribunals with Particular Reference to the Right of Access to Court, 19 Afr. J. Int’l & Comp. L. 236, 238–39 (2011). Roodt highlighted its failure with regard to arbitration.1 However, the international of Brussels I with arbitration, as interpreted by the Court of Justice of the European Union (CJEU), gave rise to heated debate. In fact, the Court’s decisions in this regard have been viewed as generally unfriendly to international arbitration.
For context, the ongoing integration within the EU brings with it jurisdictional clashes between independent national courts, which are exacerbated by proceedings that involve arbitration. While relevant community laws, like Brussels I, sought to address these conflicts by excluding arbitration agreements from their purview, these same laws and decisions permitted national courts to grant provisional measures in support of arbitration proceedings, thereby bringing some aspects of the arbitration proceeding within their scope.
Article 1(2)(d) of Brussels I, in particular, excludes arbitration from its scope of application. However, Article II(3) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter “NY Convention”) mandates a court to refer parties before it to arbitration when the parties have agreed to arbitration, unless the court finds that the alleged arbitration agreement is null and void, inoperative, or incapable of being performed.2Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, June 10, 1958, art. II (3), 330 U.N.T.S. 38 (1959), 21 U.S.T 2517, 7 I.L.M. 1046 [hereinafter “NY Convention”]. 2 Therefore, these two international norms presume a simple solution to a procedural question they did not provide guidance in answering. Thus, the underlying question involves a determination of issues within the arbitral tribunal’s exclusive authority to decide, as well as some that are not, i.e., issues that may directly impact the substance of the agreement to arbitrate, as distinguished from those that are merely incidental to it. This issue is generally known as the “arbitrability question” among arbitration practitioners.
Further, the intention of the EU Parliament and Council to exclude arbitration from the operation of the Recast is clear. However, it is unclear whether matters incidental to arbitration are also excluded from the Recast. For instance, it is not clear which courts have the jurisdiction to decide the question of “arbitrability,” or under what circumstances. Here, a distinction was required between what constituted ancillary arbitral issues, on the one hand, and what constituted preliminary matters on the other. The former was integral to arbitration proceedings and the latter was not. The former was outside the scope of Brussels I, while the latter was within it.
The implication is that while only the court of the seat of arbitration, or the designated court in respect of forum selection clauses, could entertain ancillary matters, preliminary matters could be entertained by every EU national court. The further implication is that in situations where multiple national courts are simultaneously involved with regard to the above matters, a jurisdictional problem arises. Thus, arbitration is disadvantaged in the face of such jurisdictional complications. By virtue of its role and position as the highest Court of the EU, only the CJEU could bring clarity to these issues through a series of seminal cases summarized directly below.
A. CJEU Case Law on Arbitration, Jurisdiction, and Provisional Measures
In Marc Rich v. Italiana Impianti PA, the CJEU decided that the appointment of an arbitrator was an ancillary matter that fell outside the operation of the Brussels Convention.3Case C-190/89, Marc Rich & Co AG v. Società Italiana Impianti, PA, 1991 E.C.R., I-03855, ¶¶19–21.3 In that case, the petitioner had earlier taken steps to initiate arbitration in London by asking an English court to appoint an arbitrator in the face of the respondent’s refusal to do so. The respondent sought to pre-empt arbitration by requesting an Italian court to declare that it had no liability towards the petitioner for breach of contract. The effect of the English Court’s decision was to deprive the Italian Court of the jurisdiction it would have had under the Brussels Convention, which applied to similar situations arising in regards to Article 28 of Brussels I.4Id. ¶¶ 19, 29. The English court noted that the fact that the Italian court would have to examine a preliminary issue affecting the existence or validity of the arbitration agreement, did not bring under Brussels I what was otherwise expressly excluded—that is, the appointment of an arbitrator. March Rich, ¶¶ 26–28.4
In Van Uden Maritime v. Deco Line, Van Uden brought arbitration proceedings against Deco-Line in the Netherlands.5Case C-391/95, Van Uden Maritime BV (t/a Van Uden Africa Line) v. Kommanditgesellschaft in Firma Deco-Line and Another, 1998 E.C.R. I-07091;  2 WLR 1181.5 Van Uden subsequently sought provisional measures from the Dutch courts because it suspected that Deco-Line was stalling progress in the arbitration. Deco-Line argued that prior to the Dutch court action it had commenced a suit in Germany, and that the German Court thus had overriding jurisdiction. The CJEU held that notwithstanding the exclusion of arbitration from the Brussels Convention, the grant of interim relief in a dispute wherein arbitration is also implicated must be regarded as parallel and supportive of the arbitration, rather than ancillary to it.6Id. ¶¶ 31–33 & 48.6 Thus, the CJEU distinguished acts that interfere with the arbitral procedure from those that support it.
The CJEU appeared to rule differently in two other cases, however. Specifically, in Turner v. Grovit, the Court decided that a defendant who had acted in the exact same way as the defendant in the Marc Rich case could not be restrained from proceeding with an action he had instituted in Spain in defiance of a previously instituted civil action in England.7Case C-159/02, Gregory Paul Turner v. Felix Fareed Ismail Grovit and Others, 2004 E.C.R. I-3565.7 The CJEU held that one EU national court could not order an injunction that would restrain proceedings in another EU national court; and that it was immaterial that the second proceeding was motivated by bad faith.8Id. ¶¶ 27–28, 31. See also, Case C-116/02, Erich Gasser GmbH v. MISAT Srl, 2003 E.C.R. I-14693, in which the CJEU held that a second national court, though exercising exclusive jurisdiction, could also not restrain a party from continuing proceedings in the court first seized.8
The Turner v. Grovit decision set the scene for the far more controversial and hotly debated decision in West Tankers.9Case C-185/07, Allianz SpA (formerly Riunione Adriatica di Sicurta SpA) & Generali Assicurazioni Generali SpA v. West Tankers Inc. 2009 E.C.R. I-00663.9 West Tankers was before an Italian court due to an action brought by a non-party to the original contract, which contained an arbitration clause, and an arbitration proceeding was also pending against West Tankers in London by virtue of the same contract. In this context, West Tankers won an order for an anti-suit injunction from the English courts restraining the Italian proceedings in view of the existence of the arbitration agreement. On a preliminary reference to the CJEU, the CJEU held that such an injunction was incompatible with Brussels I, and was contrary to the principle of mutual trust as was envisaged amongst sister (EU) national courts. The Court held that the Italian court had assumed jurisdiction under Brussels I and must be allowed to determine its own jurisdiction and not stripped of its powers to do so via an anti-suit injunction, even if the anti-suit injunction was founded on the existence of an arbitration agreement.10Id. ¶¶ 28–30.10
In sum, as set out in these CJEU decisions, the Court reaffirmed the exclusion of arbitration agreements as provided for under article 1(2)(d) of Brussels I, and distinguished between matters that are ancillary to arbitration and those that are preliminary to it, and clarified the criteria for such determination—a national court dealing with ancillary issues is interfering and encroaching upon the jurisdiction of the arbitral tribunal.
B. Commentary on the CJEU Case Law
In the Marc Rich case, the CJEU seemed to strongly side in favor of arbitration by stressing that all evidence pointed to an intention to keep arbitration out of the scope of the Brussels Convention by operation of the NY Convention.11See Case C-190/89, Marc Rich & Co AG v. Società Italiana Impianti, PA, 1991 E.C.R., I-03855, ¶¶17, 21;  1 Lloyd’s Rep 342, ¶¶ 17, 21 (ECJ); this referred to the opinion of experts involved in the drafting of the Convention, relating to the fact that the deliberate exclusion of arbitration was due mainly to the fact that other international conventions notably, the 1958 New York Convention (NY Convention) had already covered this area. See, e.g., Paul Jenard, Report on the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (signed at Brussels, 27 September 1968), 1979 O.J. (C59/1) 13 (1979) [hereinafter “The Jenard Report”], aei.pitt.edu/1465/1/commercial_report_jenard_C59_79.pdf. The subsequent report by Professor Peter Schlosser on the accession of Denmark, Ireland and the United Kingdom, was more detailed. See, Peter Schlosser, Report on the Convention on the Association of the Kingdom of Demark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters and to the Protocol on its Interpretation by the Court of Justice (Signed at Luxembourg, 9 October 1978), [Year]O.J. (C59/71) ¶ 61–65 (1979) [hereinafter “The Schlosser Report”], aei.pitt.edu/1467/1/commercial_reports_schlosser_C_59_79.pdf. According to Schlosser, an initial dispute between the original six EEC states and the UK regarding what was to constitute arbitration matters as far as the then article 1(4) was concerned, was unwisely left un-amended or harmonized because a compromise could not be reached.11 That decision was viewed as a fillip to “the increasingly important role played by arbitration in international transactions.”12Wolfram Krohn, Decisions of Regional and Foreign Courts, Marc Rich & Co,. A.G. v. Società Italiana Impianti P.A. Case No. C-190/89, 86 Am. J. Int’l L. 134, 136 (1992). Krohn also welcomed the “strong position” adopted by A-G Darmon in support of “unimpeded arbitration.” 137–38; see Opinion of Advocate General Marco Darmon in Case C-190/89 (Marc Rich & Co. A.G. v. Società Italiana Impianti P.A.), ¶ 22, http://curia.europa.eu/juris/showPdf.jsf?docid=96695&doclang=en. However, Krohn appeared to disagree with A-G Darmon, who assumed that the interface problems between arbitration and the Regulation could be resolved by the extant provisions of the Convention. See also Alan Redfern, et al., Law And Practice Of International Commercial Arbitration, 262, § 5-63 (4th ed. 2004).12 It was easy for the CJEU to avoid the tricky task of balancing the interests of arbitration and litigation in relation to national courts’ jurisdiction. The CJEU steered clear of ruling on an objection to the jurisdiction of the Italian Court based on the existence of the arbitration agreement, but that issue was unavoidable as later decisions showed.13See Wolfram Krohn, Decisions of Regional and Foreign Courts, Marc Rich & Co,. A.G. v. Società Italiana Impianti P.A. Case No. C-190/89, 86 Am. J. Int’l L. 134, 136 (1992).13
Following the Van Uden decision, concerns arose as to the lack of clarity surrounding the arbitration exception and its impact on the jurisdiction of national courts to, amongst others, grant interim relief.14Id. Redfern, supra note 15 at 263, § 5-63.14 Rogerson argued that the effect of that decision—that parallel issues like provisional measures, which are given in support of arbitration, fall within the scope of the NY Convention—is to narrow the arbitration exception.15Pippa Rogerson, Scope of Art 1, in European Commentaries on Private International Law: Brussels I Regulation, 45, 65 (Ulrich Magnus & Peter Mankowski, eds. 2009). Rogerson commented that the concept of exclusion adopted by the CJEU in the Marc Rich case was “wide,” but that its effect was “unclear.” Id. at 63–64. Rogerson also noted that English lawyers preferred a wide interpretation that would include most of the sundry issues connected with an arbitration proceeding. Id.15 In effect, the real arguments centered on whether the arbitration exception in Brussels I was to be construed on “a broad or narrow sense.”16Alexander R. Markus & Sandrine Giroud, A Swiss Perspective on West Tankers and its Aftermath: What about the Lugano Convention?, 28 ASA Bull. 230, 234 (2010), www.lalive.ch/data/publications/2010-MAR+SGI-ASA-A_Swiss_Perspective_on_West_Tankers_and_its_Aftermath.pdf. The authors saw this tension as a “dispute between the common law and the continental European schools of law.” Id. at 234.16 It was only a matter of time before the ill-defined limits of the arbitration exception became a full blown controversy—a problem that did not seem to matter hitherto—judging by the Jenard, Schlosser, and Evrigenis-Kerameus Reports which, respectively, marked the entry of the UK, Ireland, Denmark, and Greece into the EEC (EU).17See Paul Jenard, Report on the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (signed at Brussels, 27 September 1968), 1979 O.J. (C59/1) 13, aei.pitt.edu/1465/1/commercial_report_jenard_C59_79.pdf.; The Schlosser Report, supra note 14, at 64; Demetrios I. Evrigenis & Konstantine Kerameus, Report on the Accession of the Hellenic Republic to the Community Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, in 1986 O.J. (C298/1) 35 (1986), http://aei.pitt.edu/5623/1/5623.pdf. The Evrigenis-Kerameus Report was credited with opening the door to the West Tankers decision. Id. at 233.17
The West Tankers decision revealed the lack of clarity and confusion in this area, a state of affairs that seem to favor parties who were not keen on proceeding to arbitration. In West Tankers, as discussed above, the same party was simultaneously defending itself in civil litigation and arbitration proceedings instituted by two distinct parties in Italy and London. Yet, the CJEU held that this did not warrant the use of an anti-suit injunction. According to the CJEU, the amity and cooperation existing amongst member EU states would be adversely affected by such anti-suit injunctions.18Case C-185/07, Allianz SpA (formerly Riunione Adriatica di Sicurta SpA) & Generali Assicurazioni Generali SpA v. West Tankers Inc., 2009 E.C.R. I-00663, ¶ 33, http://curia.europa.eu/juris/document/document.jsf?text=&docid=72841&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=6899896.18 The West Tankers decision created a sharp divide on two levels: between the arbitration community and others; and between common law and civil law practitioners. In general terms, however, there is something to be argued for both sides. On the one hand, courts in a community as the EU must have the confidence that they are regarded as equal partners by their counterparts elsewhere, in the promotion of their shared European values. On the other hand, it is a fundamental principle of international law that agreements must be obeyed; parties who bind themselves in a contract to settle their future disputes by arbitration ought to be held to that agreement. Most of the arguments for or against the CJEU decision in West Tankers are based on one of these two positions.
Moses argued that one probable negative consequence of disallowing anti-suit injunctions in support of arbitration is that it would encourage parallel proceedings and a tendency for such proceedings to become tactical weapons to derail or abort an arbitration.19Margaret L. Moses, The Principles and Practice of International Commercial Arbitration 100 (Cambridge University Press, 2008). Another commentator concluded that it was “naïve,” to assume that courts would usually “reach the correct decision on jurisdiction,” and by so doing save the agreement to arbitrate. See Jacob Grierson, Comment on West Tankers Inc. v. RAS Riunione Adriatica di Sicurta S.p.A. (The Front Comor) 26 J. Int’l Arb. 891, 900 (2009).19 Two writers—Grierson and Hascher—independently criticized Advocate General (AG) Kokott’s Opinion, upon which the CJEU relied for its decision.20Opinion of Advocate General Kokott in Case C-185/07 (Allianz SpA (formerly Riunione Adriatica Di Sircurta SpA) and Others v. West Tankers Inc.) ¶ 66 (Sept. 4, 2004), http://curia.europa.eu/juris/document/document.jsf?docid=66648&doclang=en.20 For example, AG Kokott’s view that purely economic issues could not justify breach of Community law was dismissed by Hascher as unconvincing.21See Jacob Grierson, Comment on West Tankers Inc. v. RAS Riunione Adriatica di Sicurta S.p.A. (The Front Comor) 26 J. Int’l Arb. 891, 896, 900 (2009); see Dominique T. Hascher, Injunctions in Favor of and Against Arbitration, 21 Am. Rev. Int’l Arb. 189, 195 (2010). Grierson, an arbitration practitioner, rendered the first view; followed by Hascher, a French Judge. France is another prominent European arbitration seat. It must be stated, however, that besides derogating from the principles of party autonomy and competence-competence; it is difficult to see what warrants the conclusion that A-G Kokott’s reasoning in this respect is unconvincing. Another writer, Savin, criticized the Court’s readiness to accord the party suing under Brussels I more assistance than the party relying on an arbitration contract. Andrej Savin, The Arbitration Exception and Protection of Arbitration Agreements in the EU 6–7 (Jan. 13, 2010) (unpublished manuscript), http://ssrn.com/abstract=1624504.21 Fentiman, on his part described the reasoning underlying the West Tankers decision as “profoundly unsatisfying” and “alarmingly insecure,” etc.22See Richard Fentiman, Arbitration and Antisuit Injunctions in Europe, 68 Cambridge L.J. 278, 279–80 (2009). Nonetheless, Fentiman commends the Court for keeping arbitration within the confines of national laws except where the civil jurisdiction of national courts (the Brussels I) was in issue. Id. 278–81.22
Ambrose, who wrote while the decision in Turner v Grovit was still pending, had predicted a bright future for the anti-suit injunction in Europe, especially as an aid to arbitration.23See Clare Ambrose, Can Anti-Suit Injunctions Survive European Community Law? 52 Int’l & Comp. L.Q. 401, 408–409 (2003). However, Ambrose criticized as “superficially attractive.” the view that an anti-suit injunction is aimed not at the court but at the individual; Ambrose concluded that such injunctions would remain unpopular in non-common law jurisdictions, no matter how politely couched the language of the injunction might be. Id. at 408, 412–14.23 While her prediction that the CJEU would likely have to rule on the effect of an anti-suit injunction in support of arbitration became a reality; her expectations that the decision would favor arbitration did not materialize. Ambrose had hoped that the CJEU would endorse as legitimate the power of a court to restrain the pursuit of foreign proceedings where this amounts to an abuse of its own process because the prevention of such abuse is “an overriding principle common to all legal systems.”24Id. at 416. Kim argued that the West Tankers decision “severely crippled” the powers of British courts to protect arbitration, and “undermines the underlying principles” of the NY Convention, see Grace G. Kim, After the ECJ’s West Tankers: The Clash of Civilizations on the Issue of an Anti-Suit Injunction, 12 Cardozo j. Conflict. Resol. 573, 589–91, 594 (2011). In West Tankers, the English High Court was of the view that the award of damages as an alternative to anti-suit injunctions is compatible with the CJEU’ decision in West Tankers. Case C-185/07, Allianz SpA (formerly Riunione Adriatica di Sicurta SpA) & Generali Assicurazioni Generali SpA v. West Tankers Inc. 2009 E.C.R. I-00663, ¶¶ 60, 62, 64, 68, 71, 75, 77–78. Two writers approved this decision, but they expressed skepticism as to its effectiveness against a recalcitrant party, see, Elizabeth Kantor, The West Tankers Saga Continues: Can Damages Compensate for Breach of an Arbitration Clause?, Kluwer Arb., May 1, 2012, http://arbitrationblog.kluwerarbitration.com/2012/05/01/the-west-tankers-saga-continues-can-damages-compensate-for-breach-of-an-arbitration-clause/; Stephen Lacey, The West Tankers Saga Continues (2): The Arbitral Tribunal Dodges the Torpedo, Kluwer Arb., May 4, 2012, http://arbitrationblog.kluwerarbitration.com/2012/05/04/the-west-tankers-saga-continues-2-the-arbitral-tribunal-dodges-the-torpedo/.24
Criticisms of the West Tankers decision from common law Europe were matched by support for the decision in the continent. Thus, Santomauro saw the decision as sound in law and logic, and consisting of “sensible and comprehensive legal argumentation,” which resolved the clash between the two legal traditions.25Patrizio Santomauro, Sense and Sensibility: Reviewing West Tankers and Dealing with its Implications in the Wake of the Reform of EC Regulation 44/2001, 6 J. Priv. Int’l L. 281, 287 (2010). Grierson had described the Court’s explanations as “disappointingly scant,” see Jacob Grierson, Comment on West Tankers Inc. v. RAS Riunione Adriatica di Sicurta S.p.A. (The Front Comor) 26 J. Int’l Arb. 891, 900 (2009), 895.25 He argued that judicial protection as guaranteed under public law should take precedence over a procedural private law initiative like arbitration. And further that an arbitration agreement must, like all other contracts, be subject to a court’s ordinary jurisdiction, especially where the existence of that contract is in issue.26Santomauro, supra note 28, at 290. Common law critics also welcomed the “wide” view taken by the court; Piper Rogerson argued that most English lawyers favored “a wide interpretation to ensure that all these cases [ancillary as well as preliminary issues] would likewise fall outside the scope of the Regulation.” see Rogerson, supra note 17, at 63–64. Santomauro argued for this wide interpretation to be the case across the board, from Marc Rich to West Tankers and beyond. Santomauro, supra note 27, at 291. The implication is that the same CJEU decisions were relied upon by critics to advance or support opposing views. While proponents praised the Marc Rich decision as good for arbitration, having returned arbitral issues to the arbitral seat; they were disappointed that West Tankers did not toe the same line. On the other hand, their opponents criticized the width of the Marc Rich ruling, but applauded the West Tankers decision. On the whole, the CJEU’s rulings in these cases seemed to have left both sides dissatisfied. One author criticized the Court’s imprecise distinction between ancillary and preliminary matters. See Klara Svobodova, Arbitration Exception in the Regulation Brussels I, www.law.muni.cz/sborniky/dp08/files/pdf/mezinaro/svobodova.pdf.26 Santomauro concluded that the principles of party autonomy and competence-competence were not abridged by the West Tankers decision.27Santomauro, supra note 28, at 292.27
Similarly, Illmer, who argued from a more balanced perspective, wrote that the Court should not be blamed for leaving arbitration contracts vulnerable, and that, “[a]s a matter of law, its decision …, as unsatisfactory as its result may be, was correct,” and should be seen “rather [as] an expression of judicial self-restraint than ignorance.”28Martin Illmer, Brussels I and Arbitration Revisited: The European Commission’s Proposal COM (2010) 748 Final, 75 The Rabel j. Comp. & Int’l Priv. L. 645, 655 (2011).28
As previously stated, there is an arguable point to be made for both sides of the contention. Thus, it is not altogether strange to assert that considerations of sovereignty and comity are to be weighed carefully against those of party autonomy and competence-competence to ascertain which is to be accorded priority, depending on the factual situation.29For example, Fentiman had well before the controversial events described here, stated that the crux of the issue with regard to anti-suit injunction is “whether any court..., is entitled to determine the acceptability of proceedings elsewhere.” He suggested “a more restrictive view of antisuit relief” if the concept of comity is to thrive. See Richard Fentiman, Comity and Antisuit Injunctions, 57 Cambridge L.J. 467, 467–69 (1998). Cf. with, Fentiman, supra note 25 at 278–81. Here, Fentiman criticized almost unrestrainedly, the CJEU decision in West Tankers, paying less heed to his past comments on the principle of comity. See also, Thalia Kruger, The Anti-Suit Injunction in the European Judicial Space: Turner v Grovit, 53 Int’l. & Comp. L.Q. 1030, 1035 (2004). Kruger viewed mutual trust as a more weighty consideration than comity; she saw mutual trust as the singular most important argument that overshadows any merits that anti-suit injunctions may have to offer. Id. at 1036. See also Delia Ferri, An End to Abusive Litigation Tactics within the EU? New Perspectives under Brussels I Recast, Ir. Bus. L. Rev. 21 (2013).29
Fentiman, who did not share in what little sympathy Illmer had for West Tankers, or Santomauro’s enthusiasm for it, argued that an arbitration agreement “signals the parties’ intention that their dispute is a private matter, unconstrained by the [Brussels I] Regulation.”30Fentiman, supra note 25 at 279.30 Thus, substantive and procedural rules by virtue of article 1(2)(d) of Brussels I must be interpreted in such a way as to be compatible with the object of that article, and are, therefore, subject to, and not superior to the arbitration exception.
To counter the argument that an anti-suit injunction strips the foreign court of competence to determine its jurisdiction, Fentiman argued that the principles of the court first seized and that of competence-competence—with a view to avoiding parallel proceedings—were irrelevant in a case such as West Tankers, which involved arbitration and judicial proceedings.31Id. at 280.31 It should be noted, however, that the competence-competence, principle is more relevant with regard to the arbitral tribunal than a national court. After all, competence-competence is an international law concept which evolved as a result of the need to protect the jurisdiction of international and transnational tribunals. Protection of the jurisdiction of these tribunals requires that they must have the power to determine their own jurisdiction.32See Hefin Rees, A Seminar on International Commercial Arbitration, Anti-Suit Injunctions after West Tankers—the rise of the “Foreign Torpedo,” 12, 15 (May 13, 2010) www.39essex.com/docs/articles/internationalarbitrationseminarhr.pdf. Rees criticized West Tankers for ignoring the competence-competence concept as regards the arbitral tribunal.32 As far as Europe is concerned, arbitral tribunals have been recognized as possessing competence-competence. John Barcelo noted that the French, the Swiss, and German civil law jurisdictions have all recognized this principle as invaluable for effective arbitration.33John J. Barceló III, Who Decides the Arbitrators’ Jurisdiction? Separability and Competence-Competence in Transnational Perspective, 36 Vand. J. Transnat’l L. 1115, 1122–24 (2003). An arbitral seat court applying the “negative competence-competence” principle, would usually decline jurisdiction once an arbitral tribunal is seized. But even before this time, such a court embarks only on a prima facie scrutiny of the agreement, to determine its jurisdiction. According to Barceló, this approach is hinged on the policy of preventing parties “from obstructing or delaying arbitration.” Id. at 1125.33
Moreover, it is debatable that article II(3) of the NY Convention envisaged courts of equal jurisdiction, as those in a supranational regional structure like the EU that cooperate and function with sister courts based on the principle of mutual trust; instead of courts within a national jurisdiction, which interacted with each other in a hierarchical order.34The NY Convention predated the Brussels Convention of 1968; the march towards greater cooperation and integration began in earnest in 1992 with the Maastricht Treaty.34 Thus, if parties have committed to arbitrating their future disputes and have reinforced that commitment by designating a seat for such arbitration in a NY Convention country, the NY Convention should be read as empowering first the courts of the seat of that arbitration. In situations were neither the seat nor the procedure to be adopted is mentioned, we must assume that the term refers to the courts of the eventual seat of such arbitration.
Another argument in relation to the NY Convention may be summarized as follows. If the NY Convention is a tool for the promotion of arbitration and the recognition and enforcement of arbitral awards, the West Tankers decision is in direct opposition to that goal. Moreover, the decision is also a negative influence in so far as it encourages signatories to the NY Convention to ignore its underlying policy.35One of the objectives of the NY Convention is “to give full effect to arbitration agreements by requiring courts to deny the parties access to court in contravention of their agreement.” See Introduction (in Objectives) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, June 10 1958, 330 U.N.T.S. 38 (1959), 21 U.S.T 2517, 7 I.L.M. 1046. See also Daniel Rainer, The Impact of West Tankers on Parties’ Choice of a Seat of Arbitration 95 Cornell. L. Rev. 431, 453–55 (2010). See Dimitri Santoro, Forum Non Conveniens: A Valid Defense Under the New York Convention? 21 ASA Bull. 713 (2003). On his part, Barcelo recognized the practical difficulties associated with anti-suit injunctions, but argued that by virtue of the arbitration contract, and based on the objectives of the NY Convention; such injunctions should be permissible unless “strong policy considerations” demanded otherwise See, John J. Barceló III, Anti-Foreign-Suit Injunctions to Enforce Arbitration Agreements, in Contemporary Issues In International Arbitration & Mediation: The Fordham Papers 107–18 (Arthur W1. Rovin ed. 2008), http://scholarship.law.cornell.edu/lsrp_papers/87.35 It may be recalled also that under article 71 of Brussels I, the NY Convention is a specialized treaty whose provisions take precedence over those of the Brussels I Regulation.36See Case C-406/92, The Owners of the Cargo Lately Laden on Board the Ship “Tatry” v. The Owners of the Ship “Maciej Rataj” 1994 E.C.R. I-5439, ¶¶ 23–24, 27.36 The same contention may be raised mutatis mutandis, in regard to the UNCITRAL Model Law.37UNCITRAL Model Law on International Commercial Arbitration 1985, with Amendments as Adopted in 2006, U.N. Doc. A/40/17, annex I and A/61/17, annex I (2006) [hereinafter “UNCITRAL Model Law”]. For example, when articles 8 and 16 of the Model Law are read together, they indicate that, although, international arbitration recognizes the need for support from national courts; the intention was not to devalue arbitration contracts. Id. at art. 8 and 16.37
However, the difficult circumstances in which the above CJEU decisions were rendered must also be appreciated. It is not surprising, therefore, that Brussels I bis, which seeks to accommodate the relevant procedural aspects of the civil and common law traditions, is already facing criticism.38See, e.g., Robert Merkin & Louis Flannery, Arbitration Act 1996 283 (5th ed. 2014). See also Pamela Kiesselbach, Brussels Regulation: The Commission's Proposals for Reform, Practical Law, Jan. 26, 2011, http://www.uk.practicallaw.com/0-504-5668.38
Reports and EU Documents
We shall now evaluate the Hess Report and the Commission’s Green Paper, which followed it.
A. The Hess Report
The Hess Report, authored by Professors Burkhard Hess, Thomas Pfeiffer and Peter Schlosser studied, among other topics related to the operation of Brussels I, the status of arbitration. The Report indicated that a majority of the respondents favored the retention of the arbitration exception1See Hess Report, supra note 3, at 52 n. 156. The Report noted that the NY Convention was “applauded almost unanimously by the national reports.” Id. at 57. Most jurisdictions, for different reasons (not necessarily in the best interests of arbitration), did not want the Regulation extended to arbitration. For instance, although, Italy argued against the extension, section 818 of the Italian Code of Civil Procedure denies arbitrators the power to grant interim measures. See Anna de Luca & Georgio Sacerdoti, Italy in Interim Measures in International Arbitration 438 (Lawrence Newman & Colin Ong eds. 2014).1 and that the New York Convention was working satisfactorily well in this area.2Hess Report, supra note 3, at 52, 54. However, the Report cites van Houtte as advocating the inclusion of arbitration in the Regulation, provided exclusive jurisdiction over ancillary matters was left to the seat court, but the Report criticized this view. Hess Report, supra note 3, at 59.2 The Hess Report also found that there was a widespread satisfaction with the provisions relating to jurisdiction and that there was no need for a general review.3Id. at 73.3 With regard to forum selection clauses, the Report recommended either that the EU accede to the Hague Convention, or, extend article 23 of Brussels I in such a way that the chosen court would have exclusive jurisdiction until it determines otherwise.4See Hague Convention on Choice of Court Agreements, art. 6, Oct. 1, 2005, I-53483, https://treaties.un.org/doc/Publication/UNTS/No%20Volume/53483/Part/I-53483-08000002804613e4.pdf [hereinafter “Hague Convention”]. This paper argues that a workable alternative to the Regulation and arbitration interface problems would be to make any aspects not provided for in the NY Convention subject to the Regulation—by providing for exclusive jurisdiction for the tribunal and the arbitral seat court, in terms of the parties’ agreement. On the other hand, the Hague Convention accords similar deference to the NY Convention by excluding arbitration and related proceedings from the scope of its operation. See, Hague Convention, supra not 44, art. 2(4). Article 26 of the Hague Convention, which sought to achieve compatibility with other international treaties, seemed to have failed in relation to article 23 of Brussels I, which stresses the priority of courts rather than exclusivity of jurisdiction. See, Ved P. Nanda, The Landmark 2005 Hague Convention on Choice of Court Agreements, 42 Tex. Int'l L.J. 773, 776, 785 (2007), www.tilj.org/content/journal/42/num3/Nanda773.pdf.4 It recommended a new clause in article 8 (jurisdictional matters), which enjoins other courts to decline jurisdiction in matters of which exclusive jurisdiction under article 22 was conferred on a particular court.5Hess Report, supra note 3.5 Arbitration would have benefitted from such a provision had the view that Brussels I also covers arbitration been accepted.6See Commission Proposal for a Regulation of the European Parliament and of the Council on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (Recast), at 9 § 3.1.3.–3.1.5, COM (2010) 748 final (Dec. 14, 2010) [hereinafter “COM (2010) 748 Final”]; which proposed inter alia an “enhancement” of Choice of Court contracts; the “improvement” of the interface between Brussels I and arbitration; and “better coordination” of proceedings in national courts, respectively. See Brussels I bis, supra note 1, at recital 12, art. 1(2)(d).6
The Hess Report suggested that national courts having original jurisdiction should—according to their national laws—have the power to vary provisional measures issued outside their jurisdictions under article 31.7See Hess Report, supra note 3, at 362; it referred to the previous situation as deplorable.7 In addition, the report suggested that “[p]rovisional forum shopping,” in order to access the appropriate range of measures across jurisdictions, should be encouraged.8Id. at 363. Having adopted this view, it also adopted the CJEU interpretation of article 31 of Brussels I (former article 24); that the jurisdiction to grant measures by national courts was unaffected by an arbitration agreement. See, Van Uden Maritime, supra note 8, ¶¶ 25, 34.8 It also recommended an amendment to article 1 of Brussels I, which would empower all national courts to grant provisional measures, notwithstanding the existence of an arbitration agreement.9Hess Report, supra note 3, at 324, 327, 364.9 Finally, the Report concluded that anti-suit injunctions were incompatible with Brussels I, even if aimed at protecting exclusive jurisdiction provisions.10Id. at 178–79.10
B. The EU Commission’s Report and Green Paper
The Commission11See Report from the Commission to the European Parliament, the Council and the European Economic & Social Committee on the Application of Council Regulation (EC) No 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, COM (2009) 174 Final (Apr. 21, 2009), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52009DC0174; see Commission Green Paper on the Review of Council Regulation 44/2001, COM (2009) 175 Final (Apr. 21, 2009), http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52009DC0175. For a list of responses to the Commission’s Report and Green Paper, see https://web.archive.org/web/20100423030801/http://ec.europa.eu:80/justice_home/news/consulting_public/news_consulting_0002_en.htmm.11 further subjected the Hess Report to discussions and comments by governments, institutions, and individuals, from which it distilled a final proposal.12In June 2010, the Commission also established an Expert Group of arbitration practitioners, this was followed by a stakeholder’s survey in December 2010; both of these events would have substantially influenced the Commission’s final proposals.12 The Commission’s Green Paper summarized the areas of concern highlighted in the Hess Report, as well as the difficulties that gave rise to these concerns.13These difficulties included the possibility of parallel proceedings involving courts and arbitral tribunals, and the use of anti-suit injunctions, which were held to be incompatible with the Regulation, etc. See COM (2009) 174 Final, supra note 52, at 9.13 The Green Paper cited the merits of a partial deletion to include the possibility of bringing supportive court proceedings in aid of arbitration within the scope of Brussels I, the strengthening of such support by allocating exclusive jurisdiction for such issues to the arbitral seat court, etc. The result of these is the formulation of a uniform conflict rule in this area, which would in turn enhance the effectiveness of arbitration agreements within the EU.14COM (2009) 175 Final, supra note 52, at 9.14 The Green Paper recognized that the ex parte variant of interim measures could be available within the Community as long as the defendant had the opportunity to contest the measure ex post facto. Amongst other recommendations, it also concurred with the suggestion that the exequatur procedure should be abolished.15Id. at 8. With regard to lis pendens and parallel proceedings, the Commission considered that “strengthening the communication and interaction” between courts involved in parallel proceedings, or the exclusion of the rule of priority in cases of negative declaratory actions, might prove a viable alternative. Id. at 7.15
Having outlined the general areas of concern, the Commission then formulated questions based on issues arising from these concerns. For arbitration, the Commission sought views on ways to strengthen the effectiveness of arbitration agreements and awards, and to achieve a harmonious relationship between arbitral and judicial proceedings. The questions regarding provisional measures revolved around the need to access such measures more freely; it invited submissions on further possibilities in this regard. In relation to the exercise of jurisdiction in order to avoid parallel proceedings—and to amend the extant lis pendens rule—the Commission sought ways of coordinating such proceedings and improving interactions amongst national courts in this respect.16Id. at 7.16
C. Respondent Views on the Arbitration Exception
In response to the Commission’s Green Paper, stakeholders proffered different views in relation to the future of the arbitration exemption and its effect on the power of courts to order provisional measures in support of arbitration proceedings. While some favored the retention of the arbitration exemption, others advocated for the expansion of the exemption. A third group suggested a partial exclusion of arbitration from the new, revised regulation. In the first group, for example, is the Chamber of Arbitration of Milan (“CAM”), which stated that no compelling reasons warranted a review of the exemption.17Chamber of National and International Arbitration of Milan, Position Paper on the European Commission’s Report and Green Paper on the Revision of Regulation EC 44/2001, ¶ 1 (June 23, 2009) [hereinafter “CAM Position Paper”], https://web.archive.org/web/20100423030801/http://ec.europa.eu:80/justice_home/news/consulting_public/news_consulting_0002_en.htm. See also International Bar Association (Arbitration Committee), Submission on Regulation (EC) No 44/2001, 10 Bus. L. Int’l 302, pp. 2, 10 & 11 [hereinafter “IBA Submission”].17 It contended that the regionalization of such international commitments (arbitration) was to encourage litigation of matters that should be arbitrated.18CAM Position Paper, supra note 58, at 2–3, ¶¶ 2, 3 & 7. The IBA raised similar objections through its Arbitration Committee. See, IBA Submission, supra note 58, at 2–7.18 It also argued that the seat court should not be granted exclusive jurisdiction, whether in relation to ancillary or preliminary proceedings.19CAM Position Paper, supra note 58, at 2, ¶ 4. The Chamber also objected to the priority jurisdiction—on issues of validity and scope—suggested for seat courts in cases of parallel proceedings.19 The Association for International Arbitration (“AIA”) had a similar view.20Association for International Arbitration, Submission of the Association for International Arbitration in Relation to the Green Paper Released in Connection with the Review of Regulation 44/2001, 10 (Jun. 25, 2009), http://arbitration-adr.org/activities/profwork/pdf_files/response_on_green_paper_Brussels_I_regulation.pdf [hereinafter “AIA Submission”].20 The AIA expressed that there would be difficulties as regards exclusive jurisdiction for national courts where non-EU parties or arbitrations are involved.21For the basis of the Association’s position, see id. at 3–7. The Danish government also opposed a review. See Denmark, Response to the Commission’s Green Paper, ¶¶ 2.5–2.6 (Jul. 20, 2009). The Spanish University of Valencia posited that forum selection agreements and arbitration contracts should be treated alike, and should be enforced in like manner even against third parties and that the seat court should have priority as regards jurisdiction. See University of Valencia, Observations on the Green Paper, § 3, ¶¶ 3.4–3.5 (June 30, 2009).21 Some individuals also favored retention without review, in the belief that such review would not serve the best interests of arbitration.22For example, Emmanuel Gaillard argued that deleting the exclusion would be “highly detrimental” to arbitration in the EU. See Emmanuel Gaillard Letter to (former) EU-Commissioner Barrot (June 29, 2010).22
Within those who advocated the expansion of the exemption is the UK, whose government’s official response suggested a total exclusion of arbitration that would “remove the entire arbitral process from the scope of the [Brussels I] Regulation.” The UK considered that this would minimize the problems associated with parallel proceedings by ensuring that such issues are resolved under the NY Convention rather than national laws.23United Kingdom (Ministry of Justice), Response to the Green Paper on the Review of the Brussels I Regulation 44/2001, ¶¶ 33–40 (Sept. 3, 2009). Specifically, the Comments recommended that national courts resolve any matters before them which have any bearing with arbitration in accordance with article II of the NY Convention.23 With regard to interim measures, the UK conceded to the usefulness of freely circulating ex parte measures so long as the defendant’s subsequent right to challenge it was guaranteed. The UK expressed reservation to the possibility that measures ordered by a national court could be subsequently altered or discharged by the court with substantive jurisdiction.24Id. ¶ 32. The Response criticized that idea on the grounds that it would lead to “legal uncertainty and additional costs,” as well as constitute a deliberate breach of the mutual trust principle.24 The UK supported protection for forum selection agreements and endorsed the view that judgments entered in breach of such agreements should not be afforded recognition.25Id. ¶¶ 17–21. This is understandable, most arbitration-friendly countries would probably support forum selection contracts, at least, based on their theoretical affinity with arbitration agreements. The UK government also supported the availability of “negative declaratory relief” in Lis Pendens cases, as a means of avoiding parallel proceedings. See, id. ¶ 27. In relation to arbitration, however, a negative declaratory relief has been criticized as likely to precipitate a race for the courts. See Gaillard, supra note 63, at 2.25 The response from the British House of Lords substantially agreed with the conclusions of the UK government. For interim measures, it advocated that the Van Uden decision—in relation to measures granted by national courts not having jurisdiction as to the substance—should be maintained.26See United Kingdom-House of Lords (European Union Committee), 21st Report of Session 2008–2009: Green Paper on the Brussels I Regulation, Report with Evidence ¶ 85 (July 27, 2009) https://publications.parliament.uk/pa/ld200809/ldselect/ldeucom/148/148.pdf.26 It also endorsed the view that the seat court should have exclusive jurisdiction to decide the validity and scope of the arbitration agreement.27Id. ¶ 96. However, the House of Lords argued against a “blanket exclusion of arbitration,” but it conceded that changes were necessary to “facilitate the resolution of disputes through arbitration….” See id. ¶ 95.27
The third group consisted mainly of those who argued that arbitration did not deserve any preferential treatment, and that seat courts and arbitral tribunals deserve no special jurisdiction with regard to the grant of provisional measures. For instance, Illmer and Steinbruck had argued that the arbitration exclusion should be retained, but with some modifications.28Martin George, Brussels I Review—Illmer and Steinbeck on the Interface between Brussels I and Arbitration, Conflict Of Laws.Net, News and Views in Private International Law, ¶¶ 21–22, June 24, 2009 http://conflictoflaws.net/2009/brussels-i-review-illmer-and-steinbruck-on-the-interface-between-brussels-i-and-arbitration/. See also Council of Bars and Law Societies of Europe (CCBE), Response to the Green Paper, 7 ¶¶ 7.3, https://www.ccbe.eu/fileadmin/speciality_distribution/public/documents/EUROPEAN_PRIVATE_LAW/EPL_Position_papers/EN_EPL_20090626_CCBE_response_to_the_green_paper_of_the_regulation_44-2001.pdf. Interestingly, the Italian Government’s short response called for exclusive jurisdiction to be vested in the seat court, in relation to the validity and scope of arbitration agreements; it also advocated a uniform conflict rule, which presumably, would avoid the deployment of the irksome anti-suit injunction. See, Italy, Response to the Green Paper, 4. Such a uniform conflict rule option has been criticized as unattainable, due to the disparity in national arbitration laws. See, for example, Luca G. Radicati Di Brozolo, Arbitration and the Draft Revised Brussels I Regulation: Seeds of Home Country Control and of Harmonisation? 7 J. Priv. Int'l L. 423, 434 (2011).28 They supported, for example, the exclusive jurisdiction of the seat court to rule on such preliminary questions as the existence of an arbitration contract.29George, supra note 69, at 2–4. A subsequent article by Illmer reiterated the conviction that the spontaneous opposition to deletion—of any degree—by the arbitration community, was based on “misconceptions” and lack of faith in the Commission’s real intentions. See Illmer, supra note 31 at 669.29
Another tempered response came from Magnus and Mankowski, who advised against any “[f]undamental changes,” but they saw the need for “certain improvements.”30Ulrich Magnus & Peter Mankowski, Joint Response to the Green Paper on the Review of the Brussels I Regulation, July 16, 2009.30 They cautioned that the complete deletion of the arbitration exclusion would be too radical and ill advised, and that it would demand a separate regime for arbitration matters within Brussels I.31Magnus & Mankowski, supra note 71, at 14.31 The authors suggested that measures granted under article 31 should be enforceable under Brussels I; but they rejected the view that exclusive jurisdiction for arbitration matters should vest in the arbitral seat court.32They concede that these were not insurmountable problems; they referred to issues such as how to determine the place of arbitration; and the issue of measures that could more practically be availed of in a different jurisdiction than that of the seat court; for example, the taking of evidence in support of the arbitration where the evidence is in a different jurisdiction. Id. at 14–15.32
On forum selection clauses, which share similarities with arbitration agreements,33See Andrew Dickinson, Brussels I Review—Interface with Arbitration, Conflict Of Laws.Net, News and Views in Private International Law June 17, 2009, http://conflictoflaws.net/2009/brussells-i-review-interface-with-arbitration/. Dickson viewed both types of agreements as similar and argued that they should be treated equally for all practical purposes.33 the four scholars (Illmer/Steinbruck and Magnus/Mankowski) disagreed. Magnus and Manskowski agreed that the designated court should have exclusive jurisdiction to “allow the wrong-footed party to regain the initiative.”34See Magnus & Mankowski, supra note 71 at 7.34 On the contrary, Illmer and Steinbruck held the view that such a harmonized jurisdictional procedure added no value to what already existed.35George, supra note 69, at ¶¶ 21–22. They cite as among the potential problems, the fact that the rule will be redundant since it is appropriate for only “a limited number of supportive measures.” Id. ¶ 2. The counter argument is that such exclusive jurisdiction rule is motivated mostly by a need to avoid delaying tactics and a reluctance to arbitrate on the part of the defaulting party. 35
The Conflict of Law Principles in Intellectual Property (“CLIP”) project of the European Max Planck Group also submitted a response to the Green Paper.36European Max Planck Group, Principles for Conflict of Laws in Intellectual Property (CLIP), Second Preliminary Draft (June 6, 2009) (Submitted as response to European Commission Green Paper). The CLIP project was meant to regulate the area of intellectual property law, https://www.ip.mpg.de/fileadmin/ipmpg/content/clip/Final_Text_1_December_2011.pdf.36 In relation to choice of court and exclusive jurisdiction, article 2:301 of the CLIP principles, is almost identical with article 25 of Brussels I bis, save for the words in italics of article 2:301 of the CLIP principles, which reads as follows:
If the parties have agreed that a court or the courts of a state are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction to decide on all contractual and non-contractual obligations and all other claims arising from that legal relationship unless the parties express an intent to restrict the court’s jurisdiction.37European Max Plank Group, Principles for Conflict of Laws in Intellectual Property (CLIP), Art. 2:301(10) (Dec. 1, 2011), https://www.ip.mpg.de/fileadmin/ipmpg/content/clip/Final_Text_1_December_2011.pdf; see also Hague Convention, supra note 45, at art. 5(1).37
The effect of the words in italics in the CLIP principles is to invest the chosen court with competence to deal with all matters arising from the disputed legal relationship, including ancillary and preliminary matters. In contrast, the Recast having retained the status quo with regard to arbitration appears to seek to achieve this—ineffectively, as contended in this article—by the addition of recital 12.38This paper argues that it is better to invest the seat court with exclusive jurisdiction even over provisional measures, in order to provide a one-stop arbitration service; provided the arbitration exemption is adjusted to mean that the arbitral tribunal and seat court should have priority in matters relating to the arbitration. This would help European arbitration centers compete favorably with others; for the view that there is fierce competition for international arbitration business. See Katherine Lynch, The Forces Of Economic Globalization: Challenges To The Regime Of International Commercial Arbitration 112 (Kluwer Law International 2003).38
The Changes Proposed by the Commission
In view of the extensive consultations and considerable resources expended towards amending Brussels I; it is worthwhile to consider how much of the Commission’s propositions eventually made it into the Brussels I Recast by the following comparison of the Commission’s Proposal with the Brussels I Recast.
The objectives of the Commission’s Proposal,1See COM (2010) 748 Final, supra note 47, at §§3.1.3.â18.104.22.168 as far as is relevant to this article, may be summarized as the improvement of the interface between arbitration and the Recast to achieve certain goals as follows. (1) to stop abusive litigation tactics; (2) to reduce or eradicate parallel proceedings and the uncertainties and inconveniences they engender; and (3) to promote the efficiency of choice of court agreements so as to avoid similar problems as arise in the arbitration-regulation interface.2Id. at §1.2.2 The Proposal also identified provisional measures as one of its specific areas of interest, with regard to clarification of the conditions under which such measures could circulate more freely within the EU.3Id. at §3.1.3 As further justification for its proposed intervention in the arbitration-regulation interface, the Commission stated that action at EU level was necessary since national courts could not control or coordinate parallel court proceedings happening outside their territories which might jeopardize arbitral proceedings within their own jurisdiction.4Id. at §3.4.4 The following discussion of the Proposal highlights what was finally accepted and introduced into the Brussels I recast, along with what was (rightly or wrongly) rejected.
A. The Proposal on the Arbitration Exemption
The Commission proposed the addition of a new recital stating that the Regulation did not apply to arbitration, and specifically, that it did not apply to any ancillary proceedings. The proposed recital reads:
This Regulation does not apply to arbitration, save in the limited case provided for therein. In particular, it does not apply to the form, existence, validity or effects of arbitration agreements, the powers of the arbitrators, the procedure before arbitral tribunals, and the validity, annulment, and recognition and enforcement of arbitral awards.5Id. at 15. See the proposed recital 11, which the Parliament remolded into the new recital 12 Brussels I bis. In the same vein, the EU Parliament left out in its entirety, the Commission’s proposed recital 20, which had proposed “special rules aimed at avoiding parallel proceedings and abusive litigation tactics.” Id. at 15–16. One of such rules should be that which indicate the seat of arbitration as that chosen by the parties or that designated by any other authority nominated by the parties. Id. at 16–17.5
Secondly, it proposed new articles 29(4) and 33(3), both of which it recommended should derogate from the arbitration exception in article 1(2)(d). The proposed new article 1(2)(d) read as follows: “arbitration, ‘save as provided for in Articles 29, paragraph 4 and Article 33, paragraph 3.’”6See, id. at art. 1(2)(d).6 Article 29(4) provides that the courts, different from the court of the seat of arbitration, should stay proceedings or decline jurisdiction (in appropriate circumstances) when jurisdiction is contested and an arbitral tribunal or arbitral seat court has jurisdiction over the proceedings—as an incidental or main question—to determine the existence or validity of the arbitration agreement.7Id. at art. 29(4).7 The proposed article 33(3) provides for the circumstances under which an arbitral tribunal could be deemed to have jurisdiction, i.e., when a party has nominated an arbitrator or when a party has requested the support of an institution, court, or any other authority for such appointment.8Id. at art. 33(3).8
In telling contrast to the foregoing, the Recast did not introduce the proposed qualification which the Commission recommended should be added to the article 1(2)(d) arbitration exemption.9The Recast regulation left that article exactly as it saw it; as it did with provisional measures, which provision it shuffled from article 31 of Brussels I to article 35 of the Brussels I bis.9 Neither did it introduce the proposed article 29(4), nor yet still a new article 33(3). The first paragraph of the Recast’s new Recital 12, which purportedly sought to redefine the baseline and outer limits of the interaction between the Regulation and arbitration, may, at best, be described as a toned-down (negative) version of its (direct and positively-worded) equivalent in the Proposal. It is a deliberate imitation in style and content of article II of the New York Convention.10See, NY Convention, supra note 5, at art. II (3).10 The paragraph reads as follows:
This Regulation should not apply to arbitration. Nothing in this Regulation should prevent the courts of a Member State, when seised of an action in a matter in respect of which the parties have entered into an arbitration agreement, from referring the parties to arbitration, from staying or dismissing the proceedings, or from examining whether the arbitration agreement is null and void, inoperative or incapable of being performed, in accordance with their national law.11See, Brussels I bis, supra note 1, at recital 12, ¶ 1.11
B. The Proposal’s Treatment of Provisional Measures
There is more agreement between the Proposal and the Brussels I bis on provisional measures than was the case with the arbitration exemption. The proposed Recital 22 declared the need to clarify the meaning of “interim measures,” which it recommended should include “protective orders aimed at obtaining information or preserving evidence,” but not measures of a non-protective nature.12Id. at recital 22.12 Similarly, the proposed Recital 25 recommended the removal of intermediate measures for the enforcement of judgments for interim measures, in order to achieve the free circulation of such interim measures.13Id. at recital 25.13 In furtherance of this object, it (Recital 25) advised the segregation of the enforcement of provisional measures ordered by the court having substantive jurisdiction, and those from other national courts having secondary jurisdiction only.14Id.14 Measures granted by the first were to be freely enforced in the EU, while those by the latter were to have effect only within their jurisdictions.15Id.15 Ex parte measures should be enforceable only after the appropriate safeguards have been complied with, i.e. the defendant must have been served notice of such measures before enforcement is sought.16Id.16
The Recast’s recitals 25 and 33 on provisional measures reflect, in substantial terms, the above recommendations of the Commission’s proposal. What may be considered the point of divergence is the actual provision in the Recast. Whilst the Proposal sought a new strategy based on cooperation and communication between courts to enhance the effect of measures granted elsewhere in support of the main proceedings, the EU Parliament and Council seemed to have thought this new strategy superfluous. Thus, article 35 of the Recast retained exactly the same provisions as those of article 31 of Brussels I.
Contrarily, the proposed article 31 charged the national court with substantive jurisdiction, and the national court entertaining the request for interim measures, to “cooperate in order to ensure proper coordination between the proceedings as to the substance and the provisional relief.”17COM (2010) 748 Final, supra note 47, at article 31.17 It specifically recommended that the court before whom the request is made should “seek information from the other court on all relevant circumstances of the case ....”18Id.18
C. The Proposal on Choice of Court Contracts
Both the Proposal and the Recast, in plain language, promote and validate any unequivocal intention of parties to have their disputes settled by courts of their own choice in an exclusive choice of court agreement. However, the language employed in both documents is somewhat dissimilar.
Whereas, the Commission-proposed article 23 starts with the words “[i]f the parties have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes…,” thus, deleting the words, “one or more of whom is domiciled in a Member State,” contained in article 23 of Brussels I; the corresponding new article 25 of the Recast interposes between “parties” and “have agreed” the phrase “regardless of their domicile.”19See Brussels I bis, supra note 1, at article 25.19 This phrasing may be interpreted as an intention to honor such agreements even if executed by non-EU parties. Although, it may also be interpreted as sanctioning such agreements regardless of domicile within the EU, it seems likely that the earlier conclusion was intended. First, the provision is not at variance with article 5(1) of the 2005 Hague Convention, a Convention that is wholly devoted to choice of court agreements.20See Hague Convention, supra note 45 at art. 5(1).20 Second, the words it replaced intended that the provision apply even where only one of the parties is domiciled in the EU. Extending that intention does not injure any would-be parties. Third, even if the proposed article 23 had been adopted without any of these alternative phrases; it in no way bars foreign parties from choosing a national court within the EU. Nor would it apply with any less vigor (presumably) in relations between parties wholly domiciled in the EU. Yet, the reverse conclusion should not be lightly dismissed.21A similar phrase was used in article 22 (article 24 Recast) in what is again susceptible to two interpretations; it may mean that one or both parties are within the EU or are outside the EU. There can be no illegality or abuse of process in a non-resident party suing another non-resident in the EU if the latter have assets constituting the subject of proceedings is within the EU.21
As pointed out earlier, the Proposal and the Recast (articles 23 and 25 respectively), adapted article 5(1) of the Hague Convention. Both articles added the following words: “as to its substance,” and “as to its substantive validity,” respectively, to the original wording in article 5(1).22See Hague Convention, supra note 45, at art. 5(1).22 Article 5(1) of the Hague Convention grants the chosen court exclusive jurisdiction, unless the agreement is null and void under the law of that State.23Id.23 The addition of “substance” and “substantive validity” may have been intended to make it more burdensome to contest the validity of the choice of court agreement. Thus, some mere procedural irregularity may be insufficient to overthrow such agreement. Support for this view may be found in the recitals relating to choice of court agreements—recitals 20–22—from which we can infer a strong resolve on the part of the EU Parliament to protect such agreements.24Article 20 reserves to the chosen national courts the exclusive jurisdiction to determine the validity of the agreement; article 21 seeks to avoid parallel proceedings and irreconcilable judgments by legislating an autonomous means of determining when an action could be deemed a lis pendens. Brussels I bis, supra note 1, at art. 20 & 21. Article 22 aims to effectively protect such agreements and avoid abusive litigation tactics, by making such exclusive choice of court contracts an exception to the lis pendens or priority rule. Id. at art. 22.24
The EU Parliament and Council did not extend to arbitration agreements the same support they gave to choice of court agreements, or perhaps, found no necessity for doing so. They probably did not share the view that the problem of the arbitration-regulation interaction is best resolved from within the EU. It may be concluded that the Recast manifested a resolve not to legislate for arbitration. We may now consider the reverse side of the coin—a comparison of the Recast provisions with the main respondent positions.
The extensive consultations towards the recasting of Brussels I elicited responses from a broad spectrum of stakeholders and policymakers; this section focuses attention on how the Recast was received by these interest groups.
A. Further Comments on the Recast Legislation
Governments and organizations responded to the invitation to proffer suggestions on the way forward, as regards the areas that needed attention in Brussels I. Within the context of their initial responses to the EU Commission’s call for views, and the divergent opinions expressed; it is relevant to examine the reaction of these respondents to the new law, especially since it appeared that some respondents had shifted from their previous hard line stance.
The Chamber of Arbitration of Milan (CAM) moved from its earlier 2009 position, which favored retention of the arbitration exclusion to the more liberal position of a partial deletion.1See CAM Position Paper, supra note 58.1 Azzali and De Santis suggested that this was due in part to the less pervasive and non-regulatory stance of the Commission’s proposal, in contrast to its Green Paper.2Stefano Azzali & Michela De Santis, Impact of the Commission’s Proposal to Revise the Brussels I Regulation on Arbitration Proceedings Administered by the Chamber of Arbitration of Milan, in Recasting Brussels I: Proceedings of the Conference Held at the University of Milan on November 25-26, 2011, 71, 73 (Fauso Pocar, et. al., eds. 2012), http://www.academia.edu/2970154/IMPACT_OF_THE_COMMISSION_S_PROPOSAL_TO_REVISE_THE_BRUSSELS_I_REGULATION_ON_ARBITRATION_PROCEEDINGS_ADMINISTERED_BY_THE_CHAMBER_OF_ARBITRATION_OF_MILAN. The authors, however, maintain that this new position represents their personal views.2 They argued that the Proposal, which sought to introduce “a few rules of coordination,” to address sundry difficulties arising from the arbitration-regulation interface, could achieve more than the Green Paper’s dogmatic attempt to impose pervasive rules.3Id. at 77.3 They suggested that the Proposal was “a compromise solution” between retention, and further expansion of the exclusion. The latter position they described as a clamor for the retention of anti-suit injunctions.4Id. at 79.4
Another view commended the Proposal as a “balancing act” that keeps arbitration partially excluded while retaining some relevance in matters of jurisdiction under the Regulation; thus allowing for more certainty and clarity in the interplay of arbitration agreements with the Regulation.5Bharat Saraf & Ashraf U. Kazi, Analyzing the Application of Brussels I in Regulating E-commerce Jurisdiction in the European Union—Success, Deficiencies and Proposed Changes, 29 Computer l. & Security Rev. 127, ¶ 3.4.1 (2013).5 Support for the Proposal is founded on provisions, which, inter alia, enjoined courts other than the arbitral seat court or arbitral tribunal to stay proceedings or decline jurisdiction once jurisdiction is challenged based on an arbitration contract, as long as such proceedings have commenced in the proper forum.6Id. According to Saraf and Kazi, the implication is that “courts cannot totally exclude arbitration.” They stated that the Proposal partially supports the Marc Rich decision. However, a further conclusion they inferred from the Proposal seems difficult to comprehend. They state that, “courts cannot entertain jurisdiction for interim reliefs or decide on the validity of anti-suit injunctions once an arbitral tribunal is appointed under the Regulation. This overrules the decisions of the ECJ in Van Uden v. Deco-Line and Allianz SpA v. West Tankers.” Although, this writer advocates “concentrated jurisdiction” in favor of the seat court, for both ancillary and supportive measures; it should be noted that nothing in the Proposal showed an intention to deprive other national courts of jurisdiction to grant interim measures. The second arm of the sentence is even more problematic. Did the authors mean that the Proposal presented an alternative to anti-suit injunctions? Whatever the authors had in mind, it is necessary to state that the Proposal neither sought to overrule the West Tankers decision nor to restore anti-suit injunctions, but to achieve the purpose of such injunctions through other means.6 Unfortunately, however, the Brussels I bis omitted these proposals.
As noted earlier, Brussels I bis did not extend the same priority it gave to forum selection clauses to arbitration contracts. Indeed, the very phrase “to avoid abusive litigation tactics,” used by the Recast in its recital 22 in support of choice of court contracts, was the exact phrase employed in recitals 19 and 20 of the Proposal dealing with forum selection contracts and arbitration agreements, respectively. But recital 12 of the Recast, addressing arbitration, did not reflect the above phrase or any alternatives that would convey a similar meaning.7See Brussels I bis, supra note 1, at recital 12.7 In addition, the article 1(2)(d) arbitration exemption retained the earlier terse and laconic reference to arbitration, as used in Brussels I. Thus, it was impossible to accommodate the proposed articles 29(4) and 33(3) in the Recast’s new article 1(2)(d), as the latter did not contain the Commission’s recommended derogation from the arbitration exception, as provided for in articles 29(4) and 33(3) of the Proposal.
The operation of the Regulation in the interaction between arbitration and the Regulation seemed to have left a lacuna that encouraged the use of tactical litigation practices aimed at either rendering the arbitration agreement ineffective or scuttling the arbitral process. As the CJEU had firmly closed the door against the use of anti-suit injunctions, we may wonder how well the substitute strategy introduced by the Recast is likely to function.
As seen earlier, the substitute safeguard is contained in recital 12 alone. One commentator considered the changes to Brussels I in relation to arbitration helpful, as having minimized “the scope for tactical litigation,” and providing protection for arbitration within the EU.8Sarah Garvey, Reform of the Brussels Regulation: Are We Nearly There Yet? Allen & Overy, Apr. 26, 2013, http://www.allenovery.com/publications/en-gb/Pages/Reform-of-the-Brussels-Regulation-are-we-nearly-there-yet.aspx. Garvey also viewed the amendments as having circumvented the difficulties imposed by the West Tankers decision.8 Another view reasoned that, although the amendments could significantly impact the arbitration-regulation area, it had clearly not introduced any radical changes—the arbitration exclusion remained in strict terms—but that on the contrary, it may still give rise to “jurisdictional clashes” within the Community.9Deyan Draguiev, Impact of Brussels I’s Recasting on Arbitration: Putting Enforcement Problems on Statutory Basis (Pt. I), Kluwer Arbitration Blog, Feb. 23, 2013, http://arbitrationblog.kluwerarbitration.com/2013/02/23/impact-of-brussels-is-recasting-on-arbitration-putting-enforcement-problems-on-statutory-basis-part-i/.9 This was the prevalent situation before efforts to review the Regulation commenced.
The non-prescriptive language (usual of EU legislative drafting), used in recital 12, paragraph 1 indicates that the Brussels I recast did not set out to achieve any radical result. Rather, the obvious intention was to maintain the exemption of arbitration matters from the Recast as much as possible. Unlike the Proposal, the Recast did not find it necessary to employ so many words to achieve this. Thus, in recital 12, paragraph 1, it merely repeated in a negative form what the New York Convention had positively provided for in its article II(3). However, the Recast provision went further than the New York Convention to give national courts the power to stay or dismiss proceedings; quite apart from the power to refer parties to arbitration. The Recast also granted national courts the power to examine the agreement in relation to validity “in accordance with their national law.” The EU Parliament and Council did not favor legislating exclusive jurisdiction to the seat court, preferring rather, that such matters be taken care of either by the New York Convention or by the CJEU.
By providing national courts with powers to also dismiss or stay the proceedings, it may be concluded that the Recast also envisaged exclusive jurisdiction in ancillary matters for seat courts, according to CJEU jurisprudence. This view is predicated on the fact that recital 12, paragraph 4 makes reference to ancillary matters. However, since such a scenario could only be inferred as implied, it can only be done by the CJEU. Secondly, the words “in accordance with their national law,”10See Brussels I bis, supra note 1, at recital 12, ¶ 4.10 suggests that the Recast legislation appreciated the reality of parallel proceedings, because where validity is determined according to each national law, different conclusions would doubtlessly result. The Recast makes allowance for this in subsequent paragraphs of recital 12, dealing with the recognition and enforcement of civil judgments vis-à-vis arbitral awards.
In recital 12, paragraph 2, the Recast deprived of recognition and enforcement any ruling by a national court regarding the validity of an arbitration agreement, whether or not such a decision was reached as a principal issue or incidental question.11This paragraph apparently supports the decision of the French Court of Appeal in Republic of Iraq v. Fincantieri-Cantieri SPA. Republic of Iraq v. Fincantieri-Cantieri SPA, Cour d’appel (CA) [regional court of appeal] Paris, June 15, 2006 (Fr.), http://www.newyorkconvention1958.org/index.php?lvl=notice_display&id=172. The Court of Appeal in Paris, denied recognition and enforcement to an Italian Court of Appeal’s declaratory judgment because that judgment did not decide the merits of the arbitration but merely decided a preliminary issue dealing with validity and scope of the arbitration agreement. The Paris Court presaged the vision of recital 12 ¶ 2, which intends to preserve the sanctity of arbitration agreements against adventurous litigants who tactically abort such contracts by bringing them before courts; such courts must then decide the validity and scope question, so as to determine their own jurisdiction.11 In contrast, recital 12, paragraph 3 extends recognition to a subsequent substantive judgment of the same court. However, the second half of paragraph 3 counter balances the first by stating that recognition of such substantive judgments is “without prejudice to the competence”12See Brussels I bis, supra note 1, at recital 12, ¶ 3.12 of other national courts to recognize and enforce arbitral awards by virtue of their contractual rights under the New York Convention. The purpose of this latter provision was confirmed by its concluding statement that the New York Convention takes precedence over the Recast. In summary, paragraph 3 implies that a parallel or subsequent arbitral award that is contrary to a judgment—being a judgment sequel to an invalidation of an arbitration agreement—is nevertheless enforceable within the territories of other member states by virtue of the “superior” New York Convention.13See id. at article 73(2) which expressly recognizes the precedence of the NY Convention in arbitration matters.13 It is to be noted, however, that the reference is to arbitral awards, and not arbitral or court ordered measures; or to other contrary court rulings validating the arbitration agreement.14It is noteworthy also that under the UNCITRAL Model Law 1985 (as amended in 2006), such arbitral interim measures could be enforced as final awards; see, UNCITRAL Model Law, supra note 39, at arts. 17 (2) & 17H(1).14
Recital 12, paragraph 4 showed an intention to legislatively flesh out parts of the CJEU decision in the Marc Rich case. The implication is that ancillary matters were to be left under the jurisdiction of the arbitral seat court.15See Case C-190/89, Marc Rich & Co AG v. Società Italiana Impianti, PA, 1991 E.C.R., ¶19 I-03855;  1 Lloyd’s Rep 342 (ECJ). In ¶ 18 of the same judgment, the CJEU adverted to the fact that the drafters of the Brussels Convention deliberately excluded arbitration because the NY Convention had already provided for such matters. Id. ¶ 18, See also, id. ¶ 17 (stating views expressed by the group of experts in relation to the exclusion of arbitration).15 Paragraph 4 further adds to the list of exempted arbitral matters the following: any action or judgment dealing with the “annulment, review, appeal, recognition or enforcement of an arbitral award.”16See Brussels I bis, supra note 1, at recital 12, ¶ 4. See generally, Simon Camilleri, Recital 12 of the Recast Regulation: A New Hope? 62 Int’l & Comp L. Q. 899 (2013).16 This has the same positive implication for arbitration as does the second half of Paragraph 3. EU national courts would have the freedom to decide arbitral matters before them in keeping with their obligations under the New York Convention and other laws, i.e., national laws, or treaties; albeit, by virtue of article 73(3) of the Recast.
Regarding arbitration, therefore, we may conclude that: whereas, article 1(2)(d) of the Recast retained the exact provision as was under Brussels I, coupled with the above observations as derived from recital 12 in view; it is tempting to conclude that the Recast sought a general compromise. Such a compromise is reflected in the retention of the arbitration exemption, but with some amendments.17The comments by Sarah Garvey viewed the new Recast as a compromise; Garvey thinks it may turn out to be a compromise that weighs more heavily against some respondents than others. See Garvey, supra note 111.17 A careful scrutiny of the above provisions suggest that the retention of the terse article 1(2)(d), while discarding the Commission’s proposed articles 29(4) and 33(3), was aimed at preserving the arbitration exemption.18See AIA Submission, supra note 61.18 Moreover, the rejected idea of exclusive jurisdiction for the seat court in arbitration matters by the Recast is an approbation of the view that opposes any preferential treatment for traditional arbitration seats within Europe.19The IBA had counseled that exclusive jurisdiction for seat courts should be restricted to ancillary measures only, etc. The Recast’s refusal to legislate for arbitration sits well with the IBA’s main position that the arbitration exception should remain; thus, making it unnecessary to examine its subsequent suggestions, see IBA Submission, supra note 58, at 311.19
The Recast legislation may have recorded only little success, depending on perspectives. By marking out boundaries beyond which the Regulation may not venture into arbitration, the Recast seemed to have avoided some of the controversies inherent in the arbitration-regulation interface. Thus, while the Recast did not provide for exclusive jurisdiction for seat courts, as suggested by Illmer and Steinbruck;20See George, supra note 69, at 2 (providing a summary of Illmer and Steinbruck’s position).20 it also did not modify the article 1(2)(d) arbitration exemption—to accommodate the proposed amendments mentioned above—as hoped for by both authors.21Id.21 In effect, the Brussels I bis plainly intended to continue the arbitration exemption.
While this may appear advantageous for arbitration, it should remain bothersome that one important problematic area—parallel proceedings—targeted by the review project, was left in no better position than it was previously. It was remarked in a recent case that the continued exclusion of arbitration from the Regulation could only give rise to conflicting judgments.22National Navigation Co. v. Endesa Generacion Sa (The Wadi Sudr),  EWHC 196 (Comm.),  1 CLC 393, ¶ 120. The West Tankers case should serve as an anecdotal example of this possibility. However, Justice Gloster may not so much have been advocating a change in the law as merely declaring the state of the law.22 These conflicts can only exacerbate with the arrival of recital 12, which reinforced the powers of all national courts to rule on validity and scope issues. The resulting possible scenario may be summarized. A non-seat court, after invalidating an arbitration agreement, might proceed to decide the case on its merits. While its ruling invalidating the agreement is not recognized or enforceable under the Recast, its substantive judgment on the merits is. In addition, the arbitral tribunal may proceed and issue an award as such invalidation was not done by a court in the arbitral seat. The subsequent arbitral award would be enforceable by virtue of the New York Convention, and would as a result be binding in all EU jurisdictions, except the invalidating jurisdiction.
Under the Recast there is a risk of parallel arbitral and court proceedings, the fear of which could precipitate a race to strike first, i.e., the first to initiate proceedings. There could also be a race to secure enforcement, where enforcement is sought before a third national court. The neutral court would then have to choose between the competing arbitral award and the judgment on the merits. The choice becomes easier if enforcement is sought before the arbitral seat court, which would most likely favor the award, depending on its policy on arbitration. However, the risk of inconsistent and conflicting decisions remains.23Alessandro Villani & Manuela Caccialanza, The Proposal for Reviewing the Brussels Regulation and the New Regulation No. 1215/2012 after the West Tankers Decision: A New Step Back for Arbitration? Kluwer Arbitration Blog, May 30, 2013, http://kluwerarbitrationblog.com/2013/05/30/the-proposal-for-reviewing-the-brussels-regulation-and-the-new-regulation-no-12152012-after-the-west-tankers-decision-a-new-step-back-for-arbitration. The authors viewed the omission of the proposed article 29(4) as unlucky for the arbitration community.23 The Recast may have, figuratively speaking, indicated a regulatory Maginot Line between arbitration and the Regulation; it remains to be seen whether that line would prove effective or follow the example of its French precursor.
B. Anti-Suit Injunctions: Alive or Dead?
The primary reason for the use of the English style anti-suit injunction is to avoid parallel proceedings or “torpedo actions” that threatens the international arbitral process as a universally recognized form of dispute resolution.24See M. Moses, Arbitration/Litigation Interface: The European Debate, 35 Nw. J. Int'l L. & Bus. 1, 10 (2014), http://scholarlycommons.law.northwestern.edu/njilb/vol35/iss1/1.24 Such injunctions are deployed in order to ensure that the essential ingredients of arbitration—speed, efficiency and legal certainty—are not jeopardized.25See Opinion of the Economic and Social Committee on the Green Paper, COM (2009) 175 Final (2010/C 255/08), (Sept. 22, 2009), ¶ 4.7.2. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C.2010.255.01.ENG&toc=OJ:C:2010:255:TOC. The Committee’s Opinion acknowledged that parallel proceedings could adversely affect a choice of court agreement, in terms of speed, legal certainty and efficiency. These three advantages, as well as the reduction of legal costs, are what the anti-suit injunction aims to achieve by discouraging parallel proceedings.25 According to one view, they are meant to act as counter measures against “abusive litigation tactics” and “parallel proceedings” which prevailed under Brussels I.26Delia Ferri, An End to Abusive Litigation Tactics within the EU? New Perspectives under Brussels I Recast, 1(1) Ir. Bus. L. Rev. 21, 24 (2013). Ferri signified that the CJEU nonetheless rejected the anti-suit injunction as an inappropriate counter measure. Id. at 24.26 In view of the controversy that trailed the CJEU decision in West Tankers, what then is the position with regard to anti-suit injunctions with the passing of the Brussels I Recast?
If the Marc Rich case was partially confirmed, what is the position with West Tankers? Kiesselbach’s view that the Proposal had neutralized the effects of the West Tankers decision was quickly followed by a denial that it had reinstated the power to order anti-suit injunctions.27See Kiesselbach, supra note 41. Kiesselbach also suggested that the Proposal had destroyed the ‘torpedo litigation’ tactics. Id.27 Di Brozolo was more specific. He asserted that the proposed (but rejected) article 29(4) essentially eliminated “the danger of parallel proceedings and abusive litigation and should put to rest the concerns of the orphans of anti-suit injunctions after West Tankers.”28See Di Brozolo, supra note 69, at 438.28 Di Brozolo was convinced that parties needed no longer to fear the derailing of their arbitration contracts by recalcitrant opponents as they had become equipped to forestall all such exigencies.29Id. Di Brozolo had stated that: “It is not clear whether…the recast Regulation will revive the use of anti-suit injunction…” See also Reform of Brussels I: An end to West Tankers and Endesa? Norton Rose Fulbright, Dec. 2012, http://www.nortonrosefulbright.com/knowledge/publications/73789/reform-of-brussels-i-an-end-to-west-tankers-and-endesa. This paper argues that the Recast did not save the anti-suit injunction, notwithstanding the clear intention to give arbitration a boost. See Juliette Huard-Bourgois and Swati Tripathi, Recast Brussels Regulation: A Brighter Future for Arbitration in the EU? King & Wood Malleson, May 21, 2015, http://www.kwm.com/en/de/knowledge/insights/recast-brussels-regulation-a-brighter-future-for-arbitration-in-the-eu-20150520. See also Gilles Muller, Comments on the CJEU Case ‘Gazprom’ OAO v Lietuvos Respublika, Transnational Notes, July 13, 2017, http://blogs.law.nyu.edu/transnational/2017/07/comments-on-the-cjeu-case-gazprom-oao-v-lietuvos-respublika.29 The views of the above authors seem to imply that efforts were directed at avoiding situations that gave rise to the use of anti-suit injunctions, and not at reinstating their use.
Thus, it may be asked whether the Brussels I bis has effectively outlawed anti-suit injunctions? Another look at article 1(2)(d) and recital 12 of the Recast, considered in conjunction with the proposed but rejected article 29(4), shows that the Commission, Parliament, and Council, all agreed with the CJEU that anti-suit injunctions were illegal. At all events, nothing in the Recast suggests an intention to overrule the decision in West Tankers, in so far as anti-suit injunctions are concerned. If West Tankers remains good law in this regard, then, it follows that such type of injunctions remains illegal within the EU. According to one view, the Recast, like Brussels I before it, elected to leave the question of anti-suit injunctions in the care of the CJEU.30Guido Carducci, Validity of Arbitration Agreements, Court Referral to Arbitration and FAA § 206, Comity, Anti-Suit Injunctions Worldwide and their Effects in the E.U. Both Before and After the New E.U. Regulation 1215/2012, 24 Am. Rev. Int’l Arb. 515, 543–44 (2013). See generally Felix Wilke, The Impact of the Brussels I Recast on Important Brussels Case Law, 11 J. Priv. Int’l L. 128 (2015).30
In West Tankers, the CJEU reasoned that the New York Convention did not provide for the use of anti-suit injunctions to protect arbitration agreements. Recital 12 of the Recast seems to have adopted this conclusion.31The simplicity of the NY Convention renders it susceptible to use as a malleable tool, see, Louise E. Tietz, The Hague Choice of Court Convention: Validating Party Autonomy and Providing an Alternative to Arbitration, 53 Am. J. Comp. L. 543, 549; see also, Jack Graves, Court Litigation over Arbitration Agreements: Is it Time for a Default Rule? 23 Am. Rev. Int'l Arb. 113, 122 (2012).31 However, there is nothing in the New York Convention to suggest that such injunctions (or any other legitimate alternative) may not be used to secure the sanctity of arbitration agreements, an aim that is central to the objectives of the New York Convention. That notwithstanding, EU national courts are bound by the decision of the CJEU in this regard. The reality that it is impossible to keep arbitration and the Regulation in parallel waters may tend to suggest that the Recast may not have brought settlement to this area.32Hess saw this as an illusion. See Burkhard Hess, Should Arbitration and European Procedural Law be Separated or Coordinated? Conflict Of Laws.Net, Feb. 14, 2010, http://conflictoflaws.net/2010/guest-editorial-hess-should-arbitration-and-european-procedural-law-be-separated-or-coordinated/. Pedro Asensio asserted that the Recast did not engineer any “significant change” in the arbitration-regulation interface. See Pedro De Miguel Asensio, El nuevo Reglamento Bruselas I bis, Dec. 10, 2012, http://pedrodemiguelasensio.blogspot.com/2012/12/.32 However, not a few think that these problems are too minor and isolated to give cause for concern.33See Di Brozolo, supra note 69 at 427; see also, the AIA Submission, supra note 61.33 The Recast seemed to have partially hinged its rejection of a “European solution” to the interface problems on this view.34Illmer, supra note 31, at 666. Illmer was of the view that once it surfaced, the interface problem of parallel proceedings presented enough challenges to afford the Commission’s Proposal a “strong support.” See id. at 647–70.34
1. The CJEU’s Gazprom Decision
The Gazprom35Case C-536/13, “Gazprom” OAO v. Lietuvos Respublika, ECLI:EU:C:2015:316,  1 Lloyd’s Rep 610 (involving a reference from the Lithuanian Supreme Court).35 decision is the latest development on the use of anti-suit injunctions, which was declared illegal by the CJEU in West Tankers, a decision that seems to have been approved by the Recast. In a nutshell, the CJEU held in Gazprom that an arbitral tribunal could order an anti-suit injunction against any parties before it, by virtue of the arbitration contract; and that this was not incompatible with the Regulation (or its decision in West Tankers), since such tribunals are not courts.36Id. ¶¶ 28, 36–39. Hartley wrote that arbitral-ordered anti-suit injunctions were outside the ambit of the Regulation, and were not covered by the West Tankers decision because arbitral tribunals lack the power to impose penalties. See Trevor Hartley, The Brussels I Regulation and Arbitration, 63 Int’l Comp. L. Q. 843 (2014).36 There were concerns expressed as to whether the Court had finally settled the issues arising from its earlier West Tankers decision in the Gazprom ruling. This was especially true, since in A-G Wathelet’s view, the Case should have been decided under the Recast as recital 12 of the Recast correctly interprets article 1(2)(d), which the Recast did not amend; notwithstanding, the case was ultimately decided under Brussels I.37See Opinion of Advocate General Wathelet in Case C-536/13 “Gazprom” OAO v. Lietuvos Respublika delivered on Dec. 4, 2014, ECLI: EU:C:2014:2414, ¶ 91, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62013CC0536. At the time, the Recast had not become operational.37 In addition, A-G Wathelet argued that recital 12 shows that arbitration matters, including court-ordered or arbitral-ordered anti-suit injunctions, were exempt from the scope of the Regulation.38Id. ¶¶ 137–41.The implication of that view was that recital 12 of the Recast reinstated anti-suit injunctions; this is a doubtful conclusion.38
The CJEU, without reference to A-G Wathelet’s Opinion, decided the case based on Brussels I.39Gazprom, supra note 138, ¶¶ 41–44.39 The court agreed that arbitral-ordered anti-suit injunctions were outside the scope of the Regulation, but it pointedly refused to decide whether the Recast approved court-ordered anti-suit injunctions, as suggested by A-G Wathelet.40Id. See Opinion of Advocate General Wathelet, supra note 140, ¶¶ 137–41.40 The Court may have deliberately ignored this issue because it did not think the case was governed by the Recast.41Some commentators think the Gazprom decision has left room for the possible overruling of West Tankers in the future. See, Stephen Lacey, Are Anti-Suit Injunctions Back on the Menu? Part 2: The CJEU’s Decision in Gazprom, Kluwer Arbitration Blog, May 14, 2015, http://arbitrationblog.kluwerarbitration.com/2015/05/14/are-anti-suit-injunctions-back-on-the-menu-part-2-the-cjeus-decision-in-gazprom/?print=pdf. However, the deliberate efforts of the Court to distinguish both cases, and its reiteration of some important ratio in West Tankers seems to suggest the contrary. See, Victoria Clark, Gazprom, Anti-Suit Injunctions and Arbitration: The Debate Goes On, Bryan Cave Leighton Paisner, May 21, 2015 www.blplaw.com/expert-legal-insights/articles/gazprom-anti-suit-injunctions-arbitration-debate-goes/.41 On the other hand, its deliberate distinguishing of the facts in West Tankers from those in Gazprom, leads to the conclusion that it did not think recital 12 overruled West Tankers.42Gazprom, supra note 138, ¶ 40. See also, Tobias Lutzi (Jan Von Hein ed.), The Protection of Arbitration Agreements within the EU after West Tankers, Gazprom, and the Brussels I Recast, Conflict of Laws.net, Jul. 17, 2015, http://conflictoflaws.net/2015/the-protection-of-arbitration-agreements-within-the-eu-after-west-tankers-gazprom-and-the-brussels-i-recast/.42 Thus, it appears that a court-ordered anti-suit order remains illegal within the EU.
It is not certain that the Gazprom decision has completely cleared the confusion (and addressed the dissatisfaction) that followed the West Tankers decision. One such potential problem is where for example, a party in breach of the arbitration agreement initiates an action in a jurisdiction that is not well disposed to arbitration as a dispute resolution mechanism.43See Darryl Kennard & Clare Hammersley, Anti-Suit Injunctions—The CJEU Decision in Gazprom, Thomas Cooper, Jun. 25, 2015, www.thomascooperlaw.com/anti-suit-injunctions-the-cjeu-decision-in-gazprom/. The authors posited that clarity had not been achieved with the Gazprom decision.43 However, it is certain that the arbitration-friendly jurisdictions would enforce such an arbitral award; at the very least, it would encourage courts in that jurisdiction to stay proceedings. The decision is, in all probability, a boost to arbitration within the EU, and a further clarification and amelioration of the effects of West Tankers, notwithstanding that it may not have smoothened out all the creases.44See Markus Burianski & Daniel Eckstein, Focus on the Practical Consequences of the ECJ’s Gazprom Decision, White & Case, June 25, 2016, https://www.whitecase.com/publications/article/focus-practical-consequences-ecjs-gazprom-decision.44
2. Choice of Court Agreements
Unlike the case with the arbitration exemption, the Recast seemed to have included a substantial portion of the suggested proposals on choice of court agreements. The fact that the EU is a signatory to the 2005 Hague Convention has reinforced the value of such agreements within the Community.45The EU signed the Hague Convention on April 1, 2009; the US signed on to it on January 19, 2009, while Mexico had previously ratified and acceded to it on September 26, 2007.45 The similarities between choice of court contracts and arbitration agreements imply that whatever strategy that works for one should equally work for the other, in a bid to discourage abusive litigation tactics. However, two realities pose a challenge to such binary application of strategies. First, arbitration is viewed as the inferior alternative to litigation in the dispensation of justice in some societies; secondly, it is a private (non-governmental) initiative.
Recitals 15 and 19, which introduced the Regulation’s current policy towards choice of court agreements, expressly anchored it on respect for party autonomy. Recital 22 altered the normal lis pendens rule by the introduction of an exception whose aim was “to enhance the effectiveness of exclusive choice of court agreements and to avoid abusive litigation tactics.”46See Brussels I bis, supra note 1, at recital 22.46 The goal was simply to give the designated seat court priority over any other court(s), to determine the validity and scope of such agreements. Thus, the court of the seat may proceed with the case irrespective of the status or stage of the case in any other court, in much the same way as an arbitral proceeding may proceed notwithstanding a parallel court proceeding.
Article 25 of the Recast provides that where parties have agreed that a member state court(s) shall have jurisdiction over any disputes in the course of their business relations, such court(s) shall exercise such jurisdiction unless: (i) the agreement is null and void as to its substantive validity under the laws of that member state; and (ii) the agreement is ipso facto to be regarded as "exclusive" unless the parties have agreed otherwise. Taken together, article 25 and the above recitals evince the Recast’s intention to vigorously enforce choice of court agreements, thus rendering abusive litigation tactics in this area unattractive.47Lukasz Gorywoda, The New Design of the Brussels I Regulation: Choice of Court Agreements and Parallel Proceedings, 19 Colum. J. Eur. L. Online Supplement 1 (2013), http://www.law.columbia.edu/sites/default/files/microsites/journal-european-law/files/gorywoda.pdf. Gorywoda saw the new provisions as “a move in the right direction.” Id. at 5.47 However, whether there still remains a loop hole to be exploited by opportunistic parties is a matter for the future.
There is no reason to suppose that the above strategy would not have ordinarily worked for arbitration if the arbitration exemption was deleted. The current state of affairs suggests that any future EU-based arbitration carries with it a potential three-way fragmentation of jurisdiction, in which arbitrators share jurisdiction with seat courts and non-seat courts. On the other hand, the typical choice of court scenario would involve two national courts from different member states. Whatever reasons there are for retaining the arbitration exemption, the fact remains that absent the New York Convention, it would have been manifestly illogical to exclude arbitration agreements from the provisions of article 25. It must, therefore, be concluded that the Recast showed a stronger interest in protecting choice of court agreements than arbitration contracts.48According to Faye Wang, one of the Commission’s proposed actions in its reform agenda for Brussels I was “to enhance the effectiveness of choice of court agreements and bring harmonization with the 2005 Hague Convention on Choice of Court Agreements….” Faye F. Wang, Regulation of Internet Jurisdiction for B2B Commercial Transactions: EU and US Compared, in Regulatory Hybridization In The Transnational Sphere, 102, (Paulius JurÄys, et al., eds. 2013). Wang canvassed for such agreements to be “supported and encouraged” as they promote “legal certainty.” Id. at 102–103.48
3. Provisional Measures in Support of Arbitration
Christian Heinze had commended the Commission’s proposals on interim measures for a number of innovations aimed at improving their circulation, recognition and enforcement within the EU.49Christian Heinze, Choice of Court Agreements, Coordination of Proceedings and Provisional Measures in the Reform of the Brussels I Regulation 75 Rabel J. Comp. & Int’l Priv. L. 581, 607 (2011).49 One of these innovations dealt with what Heinze described as “a much clearer distinction between provisional measures issued by the court with substantive jurisdiction (“primary courts”) and those from other courts (“secondary courts”)—under article 35, Brussels I bis.50Id.50 This distinction was reflected in recital 33 of the Recast, which describes the implications in terms of recognition and enforcement, for each group of measures. While measures by primary courts command recognition and enforcement throughout the EU, those from secondary courts have force only within the territory of the issuing court. Heinze further suggested the inclusion of the words in italics below, into the proposed article on provisional measures:51Id. The Commission’s Proposal did in fact include this suggestion, but the final Recast provision found in article 35 did not include the words i.e., “or an arbitral tribunal.”51
Application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the law of that State, even if under the Regulation, the courts of another Member State or an arbitral tribunal have jurisdiction as to the substance of the matter.52Id. at 608. Heinze also suggested the addition of the phrase to the CJEU’s definition in the Reichert case, viz. “…from the court or arbitral tribunal having jurisdiction as to the substance of the case.” Id. at 603. This suggestion was obviously meant to bring arbitral interim measures within the Regulation. See Case C-261/90, Reichert v. Dresdner Bank AG.  E.C.R. 1-02149, ¶ 34.52
The italicized phrase was included in the Commission's proposed article 36, but was omitted in article 35 of the Recast. The Commission’s proposal, outlining the power of a court with substantive jurisdiction to issue measures with an EU-wide circulatory effect (art. 35), was reflected in recital 33 of the Recast.
The following questions, therefore, arise in relation to the impact of the Recast on provisional measures in support of arbitration. First, because arbitration remains excluded from the Regulation to the extent described above, do the provisions dealing with provisional measures in the Regulation still apply to arbitration? Second, which court may now be considered the court with “jurisdiction as to the substance of the matter,” as stated in recital 33 and article 35 of the Recast? Is it the court with jurisdiction to entertain requests for ancillary measures under recital 12, or is it the court which could decide questions of validity and scope of the agreement? Keeping in mind that under recital 12, all courts can now decide such questions and also grant supportive measures under the Regulation and the New York Convention; and that substantive jurisdiction rests in the arbitral tribunal—a fact taken for granted by the New York Convention and most national arbitration laws.53Heinze also detected some ambiguity as to whether the court with jurisdiction as to the substance was that with jurisdiction on the merits under the Regulation, or that which by fact of being the court first seized, appropriated jurisdiction by virtue of the lis pendens rule. See Heinze, supra note 152, at 607 n.111. Heinze settled for the first possibility; citing the CJEU decision in Van Uden as support. Id.53 Third, is there an inference to be drawn from the provisions and recitals of the Recast that provisional measures could still be sought from national courts under the existing guidelines established by the CJEU?
It should be noted that unlike regular national courts that have general and specific jurisdictional powers under the Regulation (Chapter II, Sections 1–8 of the Recast), the provisions for arbitration are comparatively scant and vague. Moreover, we must also note that recitals differ from the main provisions; recitals only provide the historical and policy reasons behind the main provisions.54Although, recitals are a part of the Act, they only provide background information and reasons for the Act in “non-mandatory language.” See European Parliament, Joint Practical Guide of the European Parliament, the Council and the Commission for Persons Involved in the Drafting of European Union Legislation Within, 31–32, §§ 10.1 & 10.5.1 (Office for Official Publications of the European Union 2015), http://eur-lex.europa.eu/content/techleg/EN-legislative-drafting-guide.pdf.54 According to one view, recitals are “subordinate to operative provisions”—they neither have the power to derogate from operative provisions, nor have they any operative effect by themselves.55Tadas Klimas & Jurate Vaiciukaite, The Law of Recitals in European Community Legislation, 15 ILSA J. Int’l & Comp. L. 61, 82–83 (2008).55 Klimas and Vaiciukaite conclude that while recitals could be active in discerning the meaning and scope of an ambiguous provision, they are irrelevant where clear and unambiguous provisions are concerned. Recitals are also incapable of creating legitimate expectations of rights and obligations.56Id. at 65, 89, 91-92.56 It may be concluded, therefore, that since the detailed provisions in the Recast relating to arbitration and interim measures appeared in its recitals—rather than in its operative sections—the intention was to deprive these provisions of the legal force the operative sections would have conferred upon them. We should bear this in mind as we consider the three questions posed above.
Answers to these questions would involve adopting one of two approaches. Either we assume that the Recast intended for CJEU case law to govern relations in places it is not overruled by the Recast, and that future CJEU intervention would remedy any lacunas; or we assume that the Recast intended that arbitration (including provisional measures in support) be totally excluded from the operation of the Recast. The former appears more likely the case than the latter, as the following analysis suggests.
With regard to the first question (do the provisions dealing with provisional measures in the Regulation still apply to arbitration?), since the Recast refused to recognize arbitral tribunals under article 35 as suggested by Heinze, we must conclude that it still intended that provisional measures in support of arbitration should be sought from national courts under article 35, as was hitherto the case. First, there is nothing in the provision that positively forbids this conclusion or that tends to overrule the CJEU decisions that underscore this view, i.e., the Marc Rich, West Tankers, and Van Uden decisions. Second, when paragraphs 2 and 4 of recital 12 are read together, they suggest that while ancillary proceedings in relation to arbitration are excluded from the scope of the Recast; supportive and preliminary proceedings like interim measures are included in the scope of the Recast, in consonance with the Marc Rich and Van Uden decisions. Third, there is a good explanation as to why the Recast expressly stressed the exclusion of ancillary arbitral measures without a corresponding mention of supportive arbitral measures; this relates to the policy in favor of retaining the arbitration exclusion.
Adopting the same approach also helps answer the second question. Consistent with the Marc Rich decision, the seat court must be assumed to be the court with substantive jurisdiction—albeit, a quasi-substantive jurisdiction to the arbitral tribunal’s original jurisdiction—since it is the seat court that decides ancillary matters. To assume the contrary—that the reference is to the court that would have exercised jurisdiction in the absence of an arbitration agreement—would lead to the absurd conclusion that several courts were contemplated. Every other court could rule on validity and scope of the agreement; and having ruled the agreement invalid, such a court may then proceed to hear the case on its merits as a purely civil matter.
Recital 33 and article 35 envisage one court, not several courts, unless by some remote possibility it can be concluded that the Recast meant a national court, which having invalidated the arbitration contract now assumes substantive jurisdiction in the case. Such a tenuous possibility, however, would face the mountainous challenge of displacing a more probable conclusion; that the Recast could never have intended that measures in support of arbitration should not be sought from national courts. Had the Recast incorporated the Commission’s proposals into its recitals and main provisions, there would have been no doubts as to the court with substantive jurisdiction. There would then have been a seat court that not only decides on validity and scope, but that would also decide ancillary measures. Evidently, the seat court would then have been the court in reference under recital 33 and article 35.
The third question also invites the conclusion that a greater premium was placed on reinforcing the policy of excluding arbitration from the Recast. Hess had wisely pointed out the flaw in the thinking that arbitration and the Regulation could be completely separated.57See Hess, supra note 135.57 Looking therefore at the recitals and main provisions, their wordings appear to support the view that it was intended that CJEU jurisprudence should govern whatever interface issues remain between arbitration and the Regulation; especially in view of the terse but bluntly phrased exclusion in article 1(2)(d). From this perspective, especial reference could be made to recital 12, paragraph 4, recitals 25 and 33, article 1(2)(d) and article 35; all of which have at one point or the other come up for interpretation before the CJEU. In particular, recital 12, paragraph 4 is a legislative affirmation of the Court’s ratio in Marc Rich. Moreover, it should be observed that the Commission’s proposal and the Recast did not find it useful to give another “autonomous” definition for provisional measures; preferring instead to retain that given by the CJEU in the Reichert case.58Case Reichert, supra note 155, ¶ 34; see also, Van Uden Maritime, supra note 8, ¶ 37 (where the CJEU re-echoed the definition).58
4. The Future of Provisional Measures in Support of Arbitration
The picture depicted above shows that the problems associated with the deployment of interim measures in aid of international arbitration will endure into the foreseeable future. The Brussels I bis viewed arbitration and provisional measures as if they are mutually exclusive, due to its desire to maintain the arbitration exemption. One effect of this is that for arbitral tribunals to be able to issue provisional measures that could have EU-wide enforceability, it must be rendered as a partial award,59Article III of the NY Convention enjoins recognition and enforcement of arbitral awards by contracting states, but it made no reference to provisional measures. NY Convention, supra note 5, at art. III. However, under article 17(2) of the Model Law, interim measures may be couched as orders or awards. UNCITRAL Model Law, supra note 40, art. 17(2). Recital 12 recognizes the priority of only arbitral awards, by virtue of the NY Convention, unless we have recourse to recitals 35 and 36, which refer to prior “international commitments” and “bilateral conventions and agreements.” Brussels I bis, supra note 1, at recital 12. While the Model Law is not a convention, it may qualify as an international commitment.59 depending on where it is to be enforced, and whether or not it is competing with a contemporaneous court judgment on the merits. This is because whereas a national court judgment on the merits rendered after the invalidation of the arbitration agreement remains inferior to a final award of an arbitral tribunal in all jurisdictions save that which invalidated the contract. A provisional measure order from the same tribunal will not enjoy the same status because the Recast did not accord such measures any priority over court judgments.
With the disappearance of the exequatur procedure, if the idea of cooperation between courts, mooted in the Commission-proposed article 35, is pursued to favor the enforcement of measures issued by the seat court, it would ensure an easier circulation of provisional measures in support of arbitration. Modern information technology could enhance such cooperation and the general management of arbitral proceedings, thus making it easier to pursue arbitration and supportive measures within the same territory; in other words, in the same forum, i.e., a “concentrated jurisdiction.”60See Marketa Trimble, GAT, SOLVAY, and the Centralization of Patent Litigation in Europe, 26 Emory Int’l L. Rev. 515, 516–17(2012). Trimble concedes that this idea is, at least, theoretically possible. Id. at 516. Nevertheless, this paper argues that the mutual off-shore facilitation of arbitration across national frontiers of an integrated market like the EU would be immensely beneficial.60
On the contrary, it may be argued that privileging the seat court in this manner is contrary to the provisions of the New York Convention and the Model Law. But that argument may be countered by simply recalling that the underlying objective of these international norms is to preserve the sanctity of arbitration agreements.61See NY Convention, articles II (1) & (3).61 The principle of party autonomy underlying all contractual rights demands no less from policy makers. Thus, national courts are therefore important to the success of international arbitration. In the EU, for instance, arbitral tribunals have not the same status as regular courts.62For instance, arbitral tribunals are unable to exercise the rights of referral to the CJEU, as such can be done by national courts. See Case C-102/81, Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co. KG and Reederei Friedrich Busse Hochseefischerei Nordstern AG & Co. KG  E.C.R. I-01095, ¶¶ 10 &13. One view suggests that this could be circumvented by parties instigating an amicus curia brief through the Commission. See Emanuela Lecchi & Michael Cover, Arbitrating Competition Law Cases 74 (1) Arb. 70-71 (2008). Cf. with, Assimakis P. Komninos, Assistance to Arbitral Tribunals in the Application of EC Competition Law, in Eur. Competition L. Ann. 2001: Effective Private Enforcement of EC Antitrust Law, 361 (Claus-Dieter Ehlermann & Isabela Atanasiu, eds. 2003). While Komninos rejected the view that arbitral tribunals should have direct access to the CJEU; he suggested that a tribunal-originated reference could be indirectly routed through a national court, by virtue of the latter’s review functions. Id. at 368–70.62
Lastly, it should be noted that the idea of a “concentrated jurisdiction” is not entirely novel, as it has been suggested as a viable alternative to multi-court litigation in the resolution of patent disputes.63See Trimble, supra note 163 at 515, 516–17.63 Just like arbitration, patent litigations are not limited to simple infringement actions, but include challenges to validity and declaratory actions, which are aimed at pre-empting, stalling or otherwise legitimately defending the main infringement action. As with Arbitration, most of these actions are diversionary and tactical in nature. Their main goal is to abort the main action.64Marta P. Sender, Cross-border Injunctions in Patent Litigation: Ingenious Tactics or Misuse of Private International Rules? 37 Jura Falconis 505 (2000-2001), https://www.law.kuleuven.be/apps/jura/artikels/jaargang/37.64 Trimble saw the concentration of patent litigations in one or a few national courts as a possible way out, and in some cases, as a better alternative to a unified patents court.65See Trimble, supra note 163, at 515, 516–17. Trimble argues that even the possibility of a unified (European) Patent court, does not affect this view, as not only would this take time to fructify, but also that such a single court would be unable to deal with all the problems of patent owners. Id. at 516.65
This article examined the amendments affected by the new Brussels I bis in the areas of arbitration, provisional measures, and choice of court agreements. The paper attempted a forecast of how the revisions would impact arbitration and interim measures in support of arbitration. The choice of court contract provisions were used to highlight the contrasting attention received between that area and the arbitration and provisional measures areas.
In light of the above discussions, the article concludes that while the Recast achieved substantial improvements in the area of choice of court agreements, this was not the case with arbitration and provisional measures. The implication is that problems related to parallel proceedings, the use of tactical litigation to abort arbitral proceedings, lack of a clear demarcation at the intersection between arbitration and the Regulation, etc., would all remain potential problem areas.
The research revealed that it was difficult for the new law to provide the direction expected of it because of the multivariate interests to be accommodated. The underlying tension between the two major legal traditions in the EU, which differ markedly in their approaches to private and procedural law, is a significant contributory factor. Against the thinking that these problems are too minor to be a cause for concern, there is evidence that these areas have generated enough debates and disagreements as to merit adequate attention.1See Magnus & Mankowski, supra note 71, at 8. Cf. Andrew Dickinson, Brussels I Review—Online Focus Group, Conflict of Laws.Net, June 8, 2009, http://conflictoflaws.net/2009/brussels-i-review-online-focus-group/?print=pdf. Dickinson expressed the view that the CJEU was “insensitive to the traditions and methods of the common law.” Id. Such sentiments seem to encourage and swell the ranks of the “euro-skeptics” in England, who think that their long-term interests are best secured outside the EU; and lead to the conclusion that some stakeholders in the EU are dissatisfied with not just the arbitration exception, but also with some other aspects of the Union. See Anatole Kaletsky, Will Britain Really Leave the European Union? Reuters, Jan. 16, 2014, http://blogs.reuters.com/anatole-kaletsky/2014/01/16/will-britain-really-leave-the-european-union/. The British electorate voted to exit the EU in a referendum on June 23, 2016 (known as ‘Brexit’). With the British disengagement from the EU well under way, it is tempting to wonder whether the reasons adduced by Dickinson above is among the factors that led to this rather unfortunate decision; and which in all respects, marks the entrance of a new British foreign policy. On Brexit, see Alex Hunt & Brian Wheeler, Brexit: All You Need to Know About the UK Leaving the EU, BBC News, Nov. 10, 2016, www.bbc.com/news/uk-politics-32810887. Similar disenchantment with the decisions of the ECtHR have led to moves aimed at replacing the European Rights Act 1998 with a British Bill of Rights, see id.; see also, Lord Kerr, The Conversation between Strasbourg and National Courts—Dialogue or Dictation? (2009) 44 Ir. Jurist 1 (2009). For further discussions on the arbitration-regulation interface problems, and the Recast Regulation, see Louise Wilhelmsen, European Perspectives on International Commercial Arbitration, 10 J. Priv. Int’l L. 113 (2014).1
With arbitration issues more likely to proliferate as international trade expands, and more reliance placed on arbitral dispute resolution, the Recast Regulation should have gone further than it did to provide direction in the arbitration and provisional measures areas. Simply deferring to the NY Convention may not suffice in the long run.2The English authors, Merkin and Flannery criticized the Recast for missing “[A] golden opportunity to rectify the problems of the 2001 Regulations....,” See Robert Merkin & Louis Flannery, Arbitration Act 1996, 283 (5th ed., Routledge 2014). They described the recitals section of the Recast as “confusing,” “internally inconsistent” and “ambivalent.” Id. at 285. Cf., Philip Clifford & Oliver Browne, Reform of the Brussels Regulation—Latest Developments and the “Arbitration Exception,” Latham & Watkins, Apr. 2013, 5, www.lw.com/thoughtLeadership/Reform-of-the-Brussels-Regulation. The authors posited that the Recast “has met with positive reception” because it has improved “legal certainty” in the arbitration area and would prevent “abusive litigation tactics.” 2
While the recent CJEU decision in Gazprom provides a respite and some small comfort to the arbitration community within the EU, it has clearly not addressed all the potential trouble spots in this area. Much remains to be resolved.
The author is grateful to Professor Brian Hutchinson of the Sutherland School of Law University College Dublin, Ireland. The author also extends his gratitude to Rafael Boza, Charles ‘Chip’ Rosenberg, J. Brian Johns, Waldon Matthew, and other editing staff at the ITA in Review, for their useful suggestions and editing work. All opinions and errors remain that of the author.