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Christoph Zarth Riga, 26 June 2014 - 3 rd DIS Baltic Arbitration Days 2014

The revised Brussels-I-Regulation (No 1215/2012 ) and its impact on arbitration and the ' West Tankers ' judgement of the ECJ. Christoph Zarth Riga, 26 June 2014 - 3 rd DIS Baltic Arbitration Days 2014. ' Brussels -I'.

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Christoph Zarth Riga, 26 June 2014 - 3 rd DIS Baltic Arbitration Days 2014

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  1. The revised Brussels-I-Regulation (No 1215/2012) and its impact on arbitration and the 'West Tankers' judgement of the ECJ Christoph Zarth Riga, 26 June 2014 - 3rd DIS Baltic Arbitration Days 2014

  2. 'Brussels-I' • 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters • Council Regulation (EC) No 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial matters • Regulation No 1215/2012 of the European Parliament and of the Council on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial matters (recast) Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  3. Brussels-I and Arbitration Article 1 para. 2 no. 4 of the Convention Article 1 (2) (d) of the Regulation This [Convention/Regulation] shall not apply to: […] arbitration. Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  4. Landmark Cases of the ECJ 'Marc Rich', C-190/89, July 1991 • litigation pending before a national court concerning the appointment of an arbitrator: ancillary proceedings excluded from scope 'Van Uden Maritime', C-391/95, November 1998 • court action seeking provisional or protective measures in support of a claim being subject to arbitration: within the scope, if the the subject-matter relates to a question falling within the scope rationemateriaeof the Convention 'West Tankers', C-185/07, February 2009 • court order restraining a person from commencing / continuing court proceedings in another Member State on the ground that such proceedings would be contrary to an arbitration agreement: incompatible with Regulation Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  5. Recast of Brussels-I: Preparatory Work • 'Heidelberg Report' (Hess/Pfeiffer/Schlosser, 2007): • National reports show a principal tendency not to extend the Regulation to arbitration. • Nevertheless, the interfaces between the Regulation and arbitration should be addressed in a more sophisticated way. Possible avenue: (i) to include a specific provision on supportive proceedings to arbitration and (ii) to address the situation of concurring litigation on the validity of the arbitration agreement in different Member States. • CommissionProposal, COM(2010) 748 final, December 2010: • The interface between arbitration and litigation needs to be improved. • Articles 29 (4) and 33 (3)on lispendensproposed. Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  6. Recast of Brussels-I: Regulation No 1215/2012 • Article 1 (2) (d): 'arbitration' excluded from the scope • Article 73 (2): Regulation 'shall not affect the application' of the 1958 New York Convention • Recital (12): four paragraphs addressing various subjectsregarding the interface between arbitration and the Regulation Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  7. A. The 'West Tankers' case of the ECJ In 2000, the "Front Comor" (owned by West Tankers) collided with a jetty in Syracuse owned by Italian charterers. Charter party: English law, London arbitration Tribunale di Siracusa(as of July 2003): Compensation claim against the owners High Court of Justice (as of Sep. 2004): Declaratory action: Dispute on compensation to be settled by arbitration Application for anti-suit injunction Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  8. A. The 'West Tankers' case of the ECJ • The subject matteroftheHigh Courtproceedingsisthearbitrationagreement. Therefore, they are not within the scopeof the Regulation (para. 23). • The subject matteroftheItalianproceedingsisa claimfordamagesfollowing a collision. Therefore, there are within the scope of the regulation (para. 26). • The question of the applicability of the arbitration agreement (including its validity) is a preliminary issue in the Italian proceedings and as preliminary issue comes withinthe scope of the regulation (para. 27). • Accordingly, the anti-suit injunction amounts to stripping the Tribunale di Siracusaof the power to rule on its own jurisdiction under the Regulation (para. 28). This would undermine the effectiveness of the Regulation (para. 24). Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  9. B. 'National Navigation': Implementation of the 'West Tankers' principles 'National Navigation', [2009] EWCACiv1397, December 2009 The "WadiSudr" (owned by National Navigation) was arrested in Almeria in order to secure claims under a bill of lading. Disputedissue: Charter partywith 'London arbitration' incorporated? Almeria Mercantile Court: Cargo claim. Ruling: Arbitration clause was not incorporated. English Courts: Declaratory action: Dispute on cargo claim to be settled by arbitration Application for anti-suit injunction Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  10. B. 'National Navigation': Implementation of the 'West Tankers' principles • The proceedings brought in the Almeria court claiming damages for breach of the bill of lading would come within the Regulation. • However, theAlmeria judgement was not on the merits but only on the preliminary issue whether an arbitration clause had been incorporated. The question is whether such judgment must be recognised and enforced under the Regulation (para. 32). • According to 'West Tankers', such preliminary is itself to be categorised as within the Regulation (para. 40 and 46). • Following 'West Tankers', the English court is bound to recognise the decision of the Almeria court, there is simply no room for any argument that in some way public policy is being infringed. The English court in such circumstances is not entitled to examine for itself whether the clause is incorporated and that is the end of the matter (para. 62). Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  11. C. Recital (12) ofthenew Regulation Para. 2: A ruling given by a court of a Member State as to whether or not an arbitration agreement is null and void, inoperative or incapable of being performed should not be subject to the rules of recognition and enforcement laid down in this Regulation, regardless of whether the court decided on this as a principal issue or as an incidental question. London High Court Almeria Mercantile Court Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  12. C. Recital (12) ofthenew Regulation Para. 3, 1stsentence: […] where a court of a Member State, exercising jurisdiction under this Regulation or under national law, has determined that an arbitration agreement is null and void, inoperative or incapable of being performed, this should not preclude that court’s judgment on the substance of the matter from being recognised or, as the case may be, enforced in accordance with this Regulation.  'Van Uden Maritime', 'West Tankers' Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  13. C. Recital (12) ofthenew Regulation Para. 3, 2ndsentence: This should be without prejudice to the competence of the courts of the Member States to decide on the recognition and enforcement of arbitral awards in accordance with the [1958 New York Convention]which takes precedence over this Regulation. Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  14. D. Anti-suit injunctions back to life? • ASIundermine the effectiveness of the Regulation (effet utile). • Why? Because they strip the court of the power to rule on its jurisdiction under the Regulation. • Why? The ruling on the objection against jurisdiction based on an alleged arbitration agreement falls within the scope of the Regulation as incidental question ('West Tankers'). • Impact of recital (12) Para. 2: The ruling on the incidental question should not be subject to the rules of recognition and enforcement laid down in the Regulation. • Is the national court's power to rule on the applicability of the arbitration agreement still a power under the Regulation? Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  15. Christoph Zarth Rechtsanwalt CMS Hasche Sigle Stadthausbrücke 1-3 20355Hamburg Germany T +49 40 37630 320 E christoph.zarth@cms-hs.com Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

  16. Zarth: The revised Brussels-I-Regulation and its impact on arbitration | 26 June 2014

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