PART IV: Equitable Remedies
Latest update: 2010-Feb-16
SWEET & MAXWELL
© Sweet & Maxwell Ltd.
All rights reserved.

web site powered by Nasstar
© Nasstar Ltd
Chapter 16: Injunction
16-36

DELETE THE PARAGRAPH, AND REPLACE AS FOLLOWS:  (b) Arbitrations. If parties have expressly agreed that their disputes should be resolved under arbitration, then the effect of the Arbitration Act 1996 is to identify and limit the court's role.  Part of the court's role is to support the arbitral process:  by staying court proceedings which fall within the scope of the agreement,[NOTE 1] and by making interim orders in relation to evidence (eg its preservation or inspection), the sale of property, the granting of injunctions or the appointment of a receiver[NOTE 1a].  Another part (where the seat of the arbitration is within England and Wales or Northern Ireland) is to supervise the arbitral process:  whether by adjudicating on questions of jurisdiction[NOTE 2] or considering challenges to any award made[NOTE 2a]. The provisions of the Arbitration Act 1996 do not oust the court's jurisdiction (under s.37 of the Supreme Court Act 1981) to grant an injunction restraining the conduct of an arbitration[NOTE 3]; but they provide a powerful reason why that jurisdiction should be exercised only sparingly.  With the above in mind, the position would seem to be as follows.  In relation to foreign arbitrations (ie those whose seat is elsewhere than England Wales or Northern Ireland), the court may restrain the arbitration if two conditions are satisfied:  (i) the arbitration must be vexatious or oppressive, or have been brought in breach of contract[NOTE 3a]; and (ii) the case must be regarded as sufficiently exceptional to justify a departure from the principles of the law of international arbitration agreed under the New York Convention and recognised by the Arbitration Act 1996[NOTE 3b].  In relation to domestic arbitrations, the restraint of arbitral proceedings may also be justified in circumstances which mirror those in which the existence of an arbitration agreement would not require a stay under the 1986 Act[NOTE 4]:  ie, where the arbitration agreement is null and void[NOTE 4a]; if it is inoperative, or if it is incapable of being performed.  An injunction to restrain further proceedings in an arbitration will not be granted simply because a party has been guilty of inordinate or inexcuable delay[NOTE 4b].  Nor will an injunction normally be granted where the complaint is that the arbitrator is biased: in such a case, the appropriate remedy is to seek the arbitrator's removal[NOTE 5].

NOTE 1: Arbitration Act 1996, s.9.  The confidential nature of arbitration proceedings is such, once proceedings have been stayed under s.9, a stranger to the arbitration should not normally be permitted access to documents on the court’s file: Glidepath BV v Thompson [2005] EWHC 818 (Comm).  Section 9 applies wherever the seat of the arbitration might be:  see s.2(1) and s.2(2)

NOTE 1a: Arbitration Act 1996, s.44; Hiscox Underwriting Ltd v Dickson Mancester & Co Ltd [2004] EWHC 479 (Comm).  Section 44 applies wherever the seat of the arbitration might be:  see s.2(1) and s.2(2).

NOTE 2: Arbitration Act 1996, s.32 and s.72.  Challenges to an award on the basis of substantive jurisdiction are governed by s.67.

NOTE 2a: Arbitration Act 1996, ss.67-71.

NOTE 3: Weissfisch v Julius [2006] EWCA Civ 218; Elektrim S.A. v Vivendi Universal S.A. and others [2007] EWHC 571 (Comm); J Jarvis & Sons Ltd v Blue Circle Dartford Estates Ltd [2007] EWHC 1262 (TCC), at [40].

NOTE 3a: This is the test for "anti-suit" injunctions:  see Intermet FZCO v. Ansol Ltd [2007] EWHC 226 (Comm); also para.16-35 above.  However, that test is not sufficient in cases where the proceedings sought to be restrained are arbitral:  Elektrim SA v Vivendi Universal SA [2007] EWHC 571 (Comm), at [77].

NOTE 3b: Weissfisch v Julius [2006] EWCA Civ 218, at [33];  J Jarvis & Sons Ltd v Blue Circle Dartford Estates Ltd [2007] EWHC 1262 (TCC), at [40].

NOTE 4: Arbitration Act 1996, s.9(4).

NOTE 4a: See also Kitts v Moore [1895] 1 Q.B. 253.  For an example of an arbitration stayed on the grounds that the arbitration agreement was (at least arguably) a forgery, see Albon (t/a NA Carriage Co) v. Naza Motor Trading Sdn Bhd [2007] EWCA Civ 1124.

NOTE 4b: Bremer Vulkan Schiffbau und Maschinenfabrik v. South India Shipping Corp Ltd [1981] A.C. 909.

NOTE 5: See Weissfisch v. Julius (above), at [32] where the following points are made:  (i) it is not uncommon for arbitrators to be called on to consider submissions that they are not competent to act by reason of bias; (ii) in such circumstances the arbitrator's decision will not be final, provided that the seat of the arbitration is in a country where the courts exercise an appropriate supervisory jurisdiction, and (iii) where the arbitrator's consideration of such submissions is only a first step in determining the quesiton of bias, there is nothing untoward in the arbitrator's considering the question.  Under the Arbitration Act 1996, questions of bias are regulated by s.24: an application to remove the arbitrator may be made; but the arbitration is to remain on foot until the application has been disposed of.  If questions of bias arise in an arbitration whose seat is in a country where there is no (or no "appropriate") supervisory jurisdiction, that  fact may amount to an exceptional circumstance justifying an English court's intervention.