Supreme Court confirms English courts can grant injunctions to protect arbitration agreements, even absent a current or prospective arbitration

The Supreme Court yesterday confirmed that, even where no arbitration is contemplated or afoot, English courts can grant an anti-suit injunction protecting an English law agreement to arbitrate (AES Ust-Kamenogorsk LLP v. Ust-Kamenogorsk JSC [2013] UKSC 35). Entering an arbitration agreement entails not only a positive right to refer disputes to arbitration, but also a negative obligation on contracting parties not to bring proceedings in any other forum. The Supreme Court found this negative obligation could be enforced using courts’ general discretion under the Senior Courts Act 1981 (the “1981 Act”), even absent a current or prospective arbitration.

The decision enhances the attraction of choosing an English ‘seat’ for international arbitration. The choice of seat in an arbitration agreement determines the supervisory framework which underpins the arbitral proceedings. It has a significant impact on the extent to which courts can intervene in and support the arbitral process. The Supreme Court’s judgment confirms that the English courts have a wide range of powers to support arbitrations seated in England, and are prepared to use these powers to uphold agreements to arbitrate.

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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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