The UK Supreme Court has confirmed in Ust-Kamenogorsk Hydropower Plant JSC v AES Ust-Kamenogorsk Hydropower Plant LLP that the English courts have jurisdiction to grant declarations and anti-suit injunctions restraining certain foreign proceedings brought in breach of an arbitration agreement, even where no arbitration has been commenced or is in prospect.
Giving judgment, Lord Mance drew a clear distinction between the position where the Brussels Regulation or the Lugano Convention applies, where (following the decision of the European Court of Justice in West Tankers Inc v Allianz SpA), the English courts may no longer grant an anti-suit injunction to restrain proceedings brought in another contracting state in breach of an arbitration agreement, and the position outside the European regime, which was the issue in this case, as it concerned possible proceedings before the courts of Kazakhstan.
He held that an arbitration agreement gives rise to a ‘negative obligation’ not to commence proceedings in any other forum, equating this to the effect of an exclusive choice of court clause. It was clear from the case law that, before the entry into force of the Arbitration Act 1996, the English courts had an inherent power to enforce this ‘negative obligation’ by injuncting foreign proceedings brought in breach of an arbitration agreement, even when no arbitration proceedings were on foot or in contemplation.
The question therefore became whether anything in the Arbitration Act 1996 had changed this position. The Supreme Court concluded that it had not: express legislation to this effect would have been required but was not to be found in the Arbitration Act. Therefore nothing – other than West Tankers – had fettered the power of the English courts under s.37 of the Senior Courts Act 1981 to grant an anti-suit injunction “in all cases in which it appears to the court to be just and convenient to do so”.