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Toby Landau
I. Introduction Source
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1. Court Orders
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2. Criticisms
And yet, despite the widespread use of this type of measure, in both
common law and civil law jurisdictions, “anti-suit” injunctions issued
by national court judges still attract substantial criticism, and remain
highly controversial. The key points of concern may be summarized
as follows: page "284"
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Many civil lawyers disregard such measures, on the basis that they
are unknown in civil law courts. (14) Even if, technically, such interim
measures are available to an arbitral tribunal, it is a common view
amongst both common and civil lawyers that they should not be
granted, since it forms no part of an arbitrator's authority, mandate,
or proper function to interfere in a national court process. As a
practical reality, these are issues that are not always expressed in
terms, but which, it is suggested, frequently infuse arbitrators'
thinking in this area. When asked to restrain a party from proceeding
before a national court, it takes a very robust arbitral tribunal to put
aside all concerns as to interference with a national and sovereign
legal process; interference with fundamental or constitutional rights;
expressing disrespect for a national court judiciary; seeking
extraterritorial effect for a jurisdiction determination; short-circuiting a
Court's right to determine its own jurisdiction.
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page "286"
3. A Flawed Approach
Most of the specific factors that impact upon national courts, and
that have shaped the approach to this issue, have little or no
relevance to international arbitration. In particular, national courts:
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1. Types of Measures
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As set out below, this issue has an important bearing upon the
analysis one may adopt to explain the juridical basis for such
measures.
2. Juridical Bases
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(….)
(….)
(….)
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Unlike the first basis, this second approach is not dependent upon
the law that governs the arbitration agreement, and the remedies
that may be available for breach of contract. Instead, it depends
primarily upon the law governing the arbitral proceedings, which is
likely to be far more flexible, allowing the arbitral tribunal a broad
discretion page "291" with respect to the types of procedural
measures it might impose, in order to safeguard the overall arbitral
process and the parties' expectations. This, in turn, allows for
creativity on the part of the arbitral tribunal.
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page "292"
Seen in this light, and given the totally different nature of a national
court's standing and authority as compared to that of an international
arbitral tribunal, the example of “anti-suit injunctions” issued by
national court judges is of very limited assistance.
Once one has swept away the “cobwebs” of national court practice,
and focused upon the true nature of the measures in question, there
remains the key question: When a party is pursuing its claim before
a national court or other forum, in violation of the arbitration
agreement, when is it appropriate for arbitral tribunals to grant relief
to protect their own jurisdiction and process?
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With this combination of factors, the arbitral tribunal may be the one
and only available source of help. Indeed, this is precisely the type
of help for which the parties will have contracted in choosing
international arbitration. An application for a measure to restrain a
party from proceeding before the local court is, in effect, a plea for a
final “lifeline” – and a refusal by the arbitral tribunal to throw it is then
a dereliction of duty, which may compromise the whole arbitral
process.
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In India, almost exactly the same scenario was replicated in the long
-running dispute between Dabhol and the Government of
Maharashtra/Government of India. (26) In that case, the parties had
contracted for UNCIITRAL arbitration in London, yet the focus of the
dispute soon shifted to the Indian courts, with multiple anti-
arbitration injunctions, and challenge proceedings in India (both pre-
and post- the 1996 Indian Arbitration and Conciliation Act), all of
which ultimately bound the Claimant (Dabhol page "295" Power
Company), it being a locally incorporated investment vehicle.
Ultimately, every UNCITRAL arbitration that was commenced was
ended prematurely by the action of the Indian Courts, and recourse
was then sought under a Bilateral Investment Treaty.
The examples may be multiplied, and drawn from many areas of the
World. All, however, share the same basic features.
The Hubco and Dabhol type of case is the classic instance in which
an arbitral tribunal should do all that it can to protect its own
process, and the parties' expectations. Interestingly, in each of these
cases, applications were made to each of the arbitral tribunals for
injunctions to restrain the commencement or continuation of actions
in, respectively, Pakistan and India. And yet in each case, these
applications were refused. Without embarking on a critique of each
of the arbitral tribunal's reasoning, it is instructive to note that in each
case, concerns were expressed (a) as to the power of an arbitral
tribunal to grant such relief; (b) as to the possible adverse impact
such an order might have in each country; and (c) as to the
enforceability, and thus utility, of such orders.
Issue (a) has now been laid to rest by Emmanuel Gaillard's Report.
As to issues (b) and (c), experience shows that in many such cases,
some form of restraint issued by an arbitral tribunal can be of
immense help – even if it is not enforceable in terms. (27) It can
counter arguments before local courts that the international
arbitration is an ineffective forum, or that the arbitration can be
disregarded without any difficulty. It can be a source of influence and
deterrence on local judges. It can be a source of education for local
courts on the norms of international arbitration. It can attract
international and political attention. It can also act as a deterrent on
the offending party, for in many such cases, that party will still pause
before breaching an international arbitral tribunal's order. Given the
range of possible measures, any adverse impact locally can be
minimized by the way the order, or recommendation, is crafted.
Further, in many cases, such measures are the only option left,
before the arbitration grinds to a halt.
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page "296"
2. Other Cases
With each step further away from the paradigm case, there are likely
to be less compelling reasons to issue such orders. However, the
approach in each case should be flexible, pragmatic – and robust.
Measures ought to be carefully crafted and imposed whenever there
is a need to insulate the arbitral process from any adverse impact, or
to safeguard the expectations of the parties.
*
Essex Court Chambers; M.A., B.C.L. (Oxford); LL.M. (Harvard);
FCIArb; CArb; Barrister-at-Law (London); also of the New York State
Bar.
1
Stephen M. SCHWEBEL, “Anti-Suit Injunctions in International
Arbitration: An Overview” in Emmanuel GAILLARD, ed., Anti-Suit
Injunctions in International Arbitration (Juris Publishing, Inc.) p. 5.
2
See generally: David JOSEPH, Jurisdiction and Arbitration
Agreements and their Enforcement, 1st edn., (Sweet & Maxwell
2005), Chapter 12, pp. 308-381; David W. RAACK, “A History of
Injunctions in England Before 1700”, 61 Ind.L.J. p. 539; Marco
STACHER, “You Don't Want to Go There – Antisuit Injunctions in
International Commercial Arbitration”, 23 ASA Bulletin (2005, no. 4)
at p. 640; George BERMANN, “The Use of Anit-Suit Injunctions in
International Litigation”, 28 Columbia Journal of Transnational Law
(1990) p. 593; Trevor HARTLEY, “Comity and the Use of Antisuit
Injunctions in International Litigation”, 35 American Journal of
Comparative Law (1987) p. 487.
3
This is obviously not the place to examine the precise nature of
the jurisdiction to grant this form of relief, and the criteria that are
applied. As to this, see, e.g., JOSEPH, op. cit., fn. 2.
4
See the comparative survey in JOSEPH, op. cit., fn. 2, at pp. 375-
380. With respect to the United States, both JOSEPH and
STACHER (op. cit., fn. 2) note that differences in approach have
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