Lloyd's Maritime and Commercial Law Quarterly
ARBITRATION LAW
Christopher Newman*
CASES
41. AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC 1
Arbitration—anti-suit injunction—service out of jurisdiction
The respondent ran a hydroelectric power plant in Kazakhstan pursuant to a concession agreement with the appellant company which contained a London arbitration clause. The appellant brought proceedings in a Kazakh court alleging that the respondent had failed to supply information, in breach of the agreement. The respondent obtained an interim anti-suit injunction in the Commercial Court preventing the appellant from bringing proceedings in Kazakhstan. That injunction was later made final and was upheld by the Court of Appeal. The appellant appealed to the Supreme Court. The issue was whether the English courts had power to injunct the commencement or continuation of proceedings brought in a forum outside the Brussels/Lugano regime where an arbitration agreement existed.
Decision: Appeal dismissed.
Held: (1) Where parties enter into an agreement to arbitrate disputes in a particular forum, that gives rise to a negative obligation not to commence proceedings in any other forum, and the negative obligation is as fundamental as any positive obligation under the agreement. The court’s power under the Senior Courts Act 1981, s.37 to intervene to prevent the commencement or continuation of foreign proceedings brought in breach of an arbitration agreement is not affected by anything in the Arbitration Act 1996, the provisions of which apply only when arbitral proceedings are on foot or are in contemplation. In some cases where foreign proceedings are brought in breach of an arbitration clause or exclusive choice-of-court clause, the appropriate course will be to leave it to the foreign court to recognise and enforce the agreement on forum, but in this case the Kazakh court had refused to do so on grounds that were unsustainable under English law, which governs the arbitration agreement, and there is every reason for the English court to intervene. (2) As to service of the respondent’s claim on the appellant, CPR 62.2 and CPR 62.5 are wide enough to embrace a claim under the Supreme Court Act 1981, s.37 to restrain foreign proceedings in breach of the negative aspect of an arbitration agreement.
* Barrister, 20 Essex Street, London.
1. [2013] UKSC 35; [2013] Bus LR 1357; [2013] 2 Lloyd’s Rep 281 (Lords Neuberger P, Mance, Clarke, Sumption and Toulson).
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