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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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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 Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
The origin of ASI & indication of the concept
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
The origin of ASI & indication of the concept
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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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The Relationship between ASI & ArbitrationPresentation 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
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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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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The Relationship between ASI & ArbitrationPresentation 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
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
May judges sitting in AUT render ASIs?
§ 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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
May judges sitting in AUT render ASIs?
§ 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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
May judges sitting in AUT render ASIs?
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
May judges sitting in AUT render ASIs?
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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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The Relationship between ASI & ArbitrationPresentation RA Mag. Barbara Helene Steindl LL.M. (Columbia) MCIArb
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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