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The Court of Appeal upheld the Commercial
Court decision to allow C's application for an injunction to restrain
D from taking proceedings in New York to challenge a London arbitration
award. The arbitration clause expressly referred to English law and
the Arbitration Act 1996 ("the 1996 Act"), and therefore the
parties had committed themselves to limit any challenges to the award
by reference to the 1996 Act and had accepted the supervising jurisdiction
of the English Court over arbitrations in London in accordance with
the 1996 Act.
The relevant policy between C (a US insured) and D (a US insurer) provided
for London arbitration and was governed by New York Law. D refused to
pay sums claimed under the policy and C began arbitration in London.
The Tribunal issued an award in favour of C. D applied to the Tribunal
to correct the award, stating that the Tribunal's findings constituted
a manifest disregard of New York law. C submitted that D had committed
itself to limit its challenges to the award by reference to the 1996
Act and had accepted the supervising jurisdiction of the English Court.
At first instance, the Commercial Court granted the injunction restraining
D from taking proceedings in New York to challenge the London arbitration
award. The Court held that the parties had incorporated the framework
of the 1996 Act and agreed with C that it should apply to any arbitration
between them. The agreement as to the seat of an arbitration was akin
to agreement to an exclusive jurisdiction clause, and the attempt to
invoke the jurisdiction of another Court was a breach of the contract
to arbitrate, the agreement to refer and the agreement to the curial
law.
D appealed.
The Court of Appeal held that by choosing London as the seat of the
arbitration, the parties must be taken to have agreed that proceedings
on the award should be only those permitted by English law. The parties
had incorporated the framework of the 1996 Act into the agreement between
them, and this meant that any challenges to any award had to be only
those permitted by that Act.
The fact that the 1996 Act allowed parties to contract out of its non-mandatory
provisions did not mean that the fact that the contract was governed
by New York law could constitute an "agreement to the contrary"
and thus import a method of challenge to the award not permitted by
the seat of the arbitration. Therefore, even if the arbitration clause
itself was governed by the law of New York, it would not qualify as
an "agreement to the contrary".
In addition, there were positive indications in the arbitration agreement
itself which pointed to English law governing the agreement.
The Court of Appeal held that the judge at first instance had been right
to grant an anti-suit injunction preventing D from initiating proceedings
in New York, and also preventing D from relying on New York law in any
application to enforce the award.
The appeal was dismissed.
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