London's standing as a centre for international arbitration may be threatened by a recent ruling of the European Court of Justice.

On 10 February 2009, the ECJ ruled that the English courts may not prevent a party starting or continuing court proceedings in another EU Member State, even if such proceedings are in breach of an arbitration agreement. It is for the courts of the Member State in which the proceedings have been issued to decide if they have jurisdiction, the ECJ said.

The ruling, in the case of West Tankers Inc v RAS Riunione Adriatica Sicurta Spa, limits the use of the remedy of the "anti-suit" injunction (ASI). This has historically been used by the English courts to prevent a party starting or continuing proceedings in a forum other than that to which it had contractually agreed. The ECJ held some years ago (in Gasser Gmbh v MISAT, 2003 and Turner v Grovit, 2004) that ASIs could not be granted to support jurisdiction clauses. West Tankers is an extension of those rulings, but, because arbitration is expressly excluded by the Brussels Regulation on Jurisdiction and the Enforcement of Judgments, not one which was regarded as inevitable.

Whilst the ruling has brought to an end the use of ASIs by the English courts against parties who start or threaten proceedings within the EU in breach of an arbitration clause, they may still be used against parties who do so in jurisdictions outside the EU. The West Tankers case has therefore not altogether removed the ASI as an effective remedy for parties contracting internationally.

This update is not intended as a statement of law and should not be taken as such. It is for information purposes only. Its contents do not constitute legal advice and should not be regarded as a substitute for detailed advice in individual cases.