The Arbitration Minute - July 2017

31 July 2017

The Dispute Resolution team of Bird & Bird France is pleased to present the July 2017 issue of The Arbitration Minute:

Will Brexit impact arbitrations with a seat in the United Kingdom?

No. Brexit should not impact arbitrations with a seat in the United Kingdom. These arbitrations will continue to be governed by the UK Arbitration Act and the United Kingdom’s exit from the European Union will have no impact on the enforcement of arbitral awards. Indeed, parties requesting the recognition and enforcement of arbitral awards do so, in general, pursuant to the New York Convention. As a reminder, there are 157 signatories to the New York Convention to date, including the United Kingdom and the 27 other Member States of the European Union.

As a result of Brexit, the UK courts may regain the power to issue anti-suit injunctions against parties engaging in parallel proceedings before courts in the European Union in violation of a forum selection or arbitration clause. Currently, the UK courts are not allowed to do so (see CJEU: Allianz SpA / West Tankers, case C-185/07; Turner / Grovit, case C-159/02) as anti-suit injunctions are deemed incompatible with the principle of mutual trust that governs the relationship between courts in Europe. As French courts recognize anti-suit injunctions issued by the courts of a non-Member State when they serve to protect a pre-existing contractual obligation (Cass, Civ. 1ere, 14 October 2009, 08-16369 08-16549), it is likely to become more difficult to ignore a forum selection or arbitration clause providing for litigation or arbitration in the United Kingdom, even in cases where there are no other links with the United Kingdom.

Taking into account that it is uncertain whether and how judgements from the UK courts can be executed in Europe post-Brexit, it may be safer to opt for arbitration instead of litigation if execution is to take place in Europe.

Judgment cited: Court of Cassation, First Civil Chamber, 14 October 2009