An alternative to the anti-suit injunction? Supreme Court considers ability to obtain damages for EU proceedings brought in breach of an exclusive jurisdiction clause

In the landmark decision Alexandros T [2013] UKSC 70, the Supreme Court has held that, where parties have agreed that disputes between them will be resolved exclusively by the English courts, a party can seek damages for breach of that agreement and related declarations if the other party commences proceedings in the courts of another EU Member State. The Supreme Court’s decision confirms that the English courts can and will hold parties to their agreement to refer their disputes to the English courts, even where related proceedings are already before the courts of another EU Member State.

In recent years, it has become all-too-common for parties to seek to frustrate exclusive jurisdiction clauses in favour of the English courts (and, indeed, in favour of the courts of other Member States) through “torpedo” litigation – i.e. pre-emptively commencing proceedings in the courts of a Member State renowned for taking considerable periods of time to hear proceedings, so as to delay the parties’ dispute being dealt with by the court named in their jurisdiction clause. Whilst it is not possible to obtain an anti-suit injunction to prevent “torpedo” proceedings in the courts of another Member State, the Supreme Court has now confirmed that EU law does not prevent a party from pursuing claims in the English courts for damages and for certain declarations in respect of such proceedings. This provides parties with a new way to fight back against “torpedo” litigation...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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