1 - austrian – polish twin conference - international commercial arbitration warsaw, 17 june 2011...

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- AUSTRIAN – POLISH TWIN CONFERENCE -INTERNATIONAL COMMERCIAL ARBITRATION

Warsaw, 17 June 2011

The Relationship between Anti-Suit Inunctions & Arbitration

Barbara Helene Steindl

Brauneis Klauser Prändl Rechtsanwälte GmbH, Attorneys at law (Vienna)

The Relationship between ASI & Arbitration

Presentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb

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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb

Setting forth the different approaches – Decisions in Equity or Law

What are the underlying policies?

ASI is equitable relief – the court is supposed to adjust decisions strictly in law that may be unfair /too harsh

When deciding on an equitable relief – the equity courts have much discretion as to what conditions to take into account to achieve fairness

Interim relief in civil law countries mostly no equitable relief – preconditions in law are interpreted acc. to rules of interpretation – thus, “discretion” very limited

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Setting forth the different approaches – Decisions in Equity & Law

Notwithstanding: civil law countries often deny enforcement of ASI

and criticize them by alleging violation of international law

Are the underlying policies strictly contradictory?UK courts restraining a party from proceeding in a non-U.K. country does not flow from “any pretension to the exercise of judicial . . . rights abroad,” but rather from the fact that the enjoined party is subject to the in personam jurisdiction of the U.K. court. Lord Portarlington v. Soulby (1834)

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The origin of ASI & indication of the concept

The origin of equity / ASIi. Distinction btw law and equity is accident of historyii. King’s law was enforced by courts of lawiii. If changes were not quick enough/decisions unfair – appeal to the King’s

mercyiv. King delegated appellate function to Chancellor (clergy) – Court of

Chanceryv. Rivalry btw courts of law/courts of Chancery – forum shoppingvi. Chancery orders prohibited court of law’s decisions [contempt of court] –

birth of ASIvii. Chief justice issued habeas corpus writs for release – birth of anti-ASI

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Indication of the concepti. ASIs may be rendered as interim or permanent injunctions

ii. UK courts grant ASIs (even) if (i) main proceedings not pending in UK, (ii) equitable – ie. necessary to prevent injustice, (iii) UK court has a strong interest in the case &(iv) non-UK proceedings vexations and oppressive. US courts grant ASIs under similar preconditions.

iii. Grounds for anti-suit injunction may be abusive litigation tactics, more precisely the breach of arbitration agreement [Guerrilla Tactics]

iv. Support for anti-suit injunctions runs counter ltd. court involvement in arbitration

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Indication of the concept

Also, in US, anti-anti-suit injunctions may be available

Reaction of arbitrators to anti-arbitration injunctionsHimpurna California Energy total (Bermuda) v Republic of Indonesia (anti-arbitration injunction with per-diem contempt fines by Jakarta [place of arbitration] District Court,1999 [overturned])

Majority arbitrators resisted threat of criminal proc./contempt fines

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Is Europe leaning towards equity now?

Turner v Grovit [2005] – ECJ: Brussels I precludes EU courts from granting anti-suit injunctions restraining from bringing/continuing parallel court proceedings within EU

West Tankers / Starlight Shipping Co v. Ta Ping Insurance Co Ltd [2007]. UK courts, however, continued to issue anti-suit injunctions where poa in UK [reason of competitiveness]

Proposal for new Regulation after Brussels I allows for ltd. anti-suit injunctions – Europe leaning towards equity?

EC considered policy issue regarding EU as poa Policy issue: Is it time to fully commit to free movement of jud. decisions &

recognition?

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Is Europe leaning towards equity now?

EC: [New proposal] obliges a court seized of a dispute to stay proceedings if its jurisdiction is contested on the basis of an arbitration agreement and an AT has been seized of the case or court proceedings relating to the arbitration agreement have been commenced in the Member State of the seat of the arbitration

This does not fully solve the problem. Critical EC statement: Member States cannot by themselves ensure that

arbitration proceedings in their Member State are properly coordinated with court proceedings going on in another Member State because the effect of national legislation is limited by the territoriality principle.

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May ASIs be granted under the 2011 ICC Arbitration Rules?

Emergency Arbitrator, Article 29

Power of Emergency Arbitrator

Power of the AT after Emergency Arbitrator

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May ASIs be granted under the 2006 Vienna Arbitration Rules?

Interim measures of protection, Article 221. Unless otherwise agreed by the parties, the sole arbitrator (arbitral tribunal) may, at the request of a party order any party, after hearing such party, to take such interim measure of protection as the sole arbitrator (arbitral tribunal) may consider necessary in respect of the subject matter of the dispute, as otherwise the enforcement of the claim would be frustrated or considerably impeded or there is a danger of irreparable harm. [ ] The parties are obliged to comply with such orders, whether or not they are enforceable by State courts. [ ] 3. Unless the parties have agreed otherwise, the measures are to be substantiated. [ ]5. The sole arbitrator (the presiding arbitrator) or, if he is prevented, another arbitrator, shall upon the motion of a party, confirm the unappealability and enforceability of the measure on a copy of the measure.

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May ASIs be granted under the 2010 Lewiatan Arbitration Rules?

Interim and Conservatory Measures, § 42 Unless the parties’ agreement provides otherwise, the arbitral tribunal may, upon a motion of a party, order the other party to comply with any orders regarding interim or conservatory measures. Issuance of an order may depend on provision of an adequate security by the applicant.

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May judges sitting in AUT render ASIs?

§ 578 AUT CPC - Court InterventionIn matters governed by this Part, no court shall intervene except

where so provided in this Part.

§ 585 AUT CPC - Arbitration Agreement & Interim Measures

by CourtIt is not incompatible with an arbitration agreement for a party to request, before or

during arbitration proceedings, from a court a preliminary or protective measure and for a court to grant such a measure.

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§ 584 AUT CPC – Arbitration Agreement & Claims before Court(1) A [AUT] court before which an action is brought in a matter which is the subject of an arbitration agreement shall dismiss the claim unless [R enters merits without objecting] to this effect. This rule does not apply if the court finds [arbitration agreement [nonexistent, incapable of being performed]. [ ]

(3) No further legal action relating to the claim shall be brought before a court or an arbitral tribunal if arbitration proceedings are pending. An action brought in the same matter shall be dismissed. This does not apply if an objection contesting the arbitral tribunal’s jurisdiction has been raised before the arbitral tribunal no later than the time at which the merits of the case are entered and a decision of the arbitral tribunal thereon cannot be obtained within a reasonable period of time.

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§ 578 AUT CPC - Court Intervention In matters governed by this Part, no court shall intervene except where so provided in this Part.

585 AUT CPC - Arbitration Agreement & Interim Measures by Court

It is not incompatible with an arbitration agreement for a party to request, before or during arbitration proceedings, from a court a preliminary or protective measure and for a court to grant such a measure.

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Basis for interim measures: §§ 378 – 382a Austrian Enforcement Act

AUT interim measures: said to aim at the protection of legal positions against actions violating or frustrating such position

Although the law’s wording does not point in either direction - case law and scholars find that purely procedural rights may not be secured by AUT interim measures

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Case law and scholars find that interim measures may not protect mere “legal sphere” or the judicial enforcement of a claim

Interim measure argued to be tied to substantive claim Based on the constitutional principle of separation of powers in AUT, AUT

interim measures may not interfere with the “area of competence” of other courts

Could § 381 AUT EA allows for ASI?

Could § 382 AUT EA which exemplarily lists the allowed security measures be employed?

Is there room for creative argument?

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May arbitrators sitting in AUT render ASIs?

§ 593 AUT Code of Civil Procedure

Section 593 - Power to Order Interim or Protective Measures

(1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, and after having heard the other party, order such interim or protective measures against the other party as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute if otherwise the enforcement of a claim would be frustrated or materially hampered, or if there would be a danger of irreparable damage. [ ]

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May arbitrators sitting in AUT render ASIs?

§§ 578, 593 AUT Code of Civil Procedure

§ 593 (3): At the request of a party, the interim or protective measure shall be enforced by the district court [Bezirksgericht] [ ]. If the measure provides for a means of protection unknown to domestic law, the court shall, upon request and after having heard the respondent, apply such other means of protection of domestic law which most closely approximates the means ordered by the arbitral tribunal. In doing so, it may, upon request, couch the means ordered by the arbitral tribunal in different terms in order to ensure that its purpose is implemented.

Arguments supporting that arbitrators sitting in AUT may render anti-suit injunctions

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In view of this – How to act?

Consider providing against parallel proceedings in the arbitration clauseHimpurna arbitration clause [UNCITRAL ad hoc / Indonesian civil code]: “[ ] In addition, the Parties agree that no Party shall have any right to commence or maintain any suit or legal proceeding concerning a dispute hereunder until the dispute has been determined in accordance with the arbitration procedure provided herein and then only for enforcement of the award rendered in such arbitration.“

Request a stay of the parallel court proceedings

Assess claiming damages

Draw negative inferences if arbitral anti-suit injunction not respected

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In view of this – How to act?

Support creative argument for an anti-suit injunction by courts or ATs – be courageous, matters are rarely carved in stone

Lobby for rule stipulating duty to arbitrate in good faith / pursue & further arbitration in your country’s Arbitration Act. [Problem procedural agreement in AUT]

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Austrian – Polish Twin Conference

Thank you very much for your attention.

RA Mag. Barbara Helene Steindl LL.M. MCIArb- bkp -

Brauneis Klauser Prändl Rechtsanwälte GmbHBauernmarkt 2, A-1010 Vienna

T + 43.1.532 12 10 14M +43.664.8532408

F + 43.1.532 12 10 20E [email protected]

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