Judgement of the Court of Justice of the European Union of 13 May 2015 in the case C-536/13; relation between the EC Regulation No 44/2001 (Brussels I) and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958 (New York Convention); jurisdiction of a member state court; precedence or subordination of an arbitral award?

The Court of Justice (Grand Chamber) had to decide in a reference for a preliminary ruling pursuant to article 267 of the Treaty on the Functioning of the European Union whether a member state’s court is prevented by the Regulation Brussels I to rule on the request for recognition and enforcement of a foreign arbitral award pursuant to the New York Convention, according to which a party is obligated to withdraw or limit certain claims to the court of this same member state (anti suit injunction).

Situation of the case: Disagreement arose between the joint shareholders Gazprom, E.ON Ruhrgas and the Republic of Lithuania. As a result, the Republic of Lithuania brought the case before a court in Lithuania on 25 March 2011.
The shareholder agreement, however, included a clause for arbitration according to which all claims, breaches of contract etc. had to be finally decided by an arbitration tribunal in Stockholm. Gazprom detected a breach of the arbitration clause, submitted a request for arbitration in Stockholm and on 31 July 2012 achieved an arbitral award which ordered the Republic of Lithuania to withdraw or limit certain claims.
The court in Lithuania, by decision of 3 September 2012, determined being the competent court of jurisdiction for the plea of 25 March 2011 and decided that the request fell under its jurisdiction and was not subject to arbitration.
Gazprom appealed to this decision and requested the recognition and enforcement of the arbitral award of 31 July 2012 before a court in Lithuania. The court rejected the request on recognition. Due to the appeal, the Supreme Court of Lithuania suspended the proceedings and submitted the case to the Court of Justice of the European Union.

The Court of Justice had decided by the judgement of 13 May 2015, quoted above, that the Regulation Brussels I had to be interpreted to the effect that it will not prevent a Member State’s court from approving or rejecting the recognition and enforcement of such an arbitral award issued by an arbitral tribunal in another Member State which prohibits a party from bringing certain claims before a court of this same Member State.

The case in question differed from the case which formed the base for the judgement of the Court of Justice in previous proceedings (Allianz and Generali v West Tankers, C-185/07). In that case, a Member State’s court had obligated a party to an arbitration to suspend the civil proceedings already initiated by that party before an ordinary court of another Member State.
There, the Court of Justice identified a breach of the Regulation Brussels I which would not allow a Member State’s court to decide on the jurisdiction of another Member State’s court.

The current case is not a disagreement of courts of different Member States but a national conflict of jurisdiction on how to execute the New York Convention.

It was irrelevant in the eyes of the Court of Justice that the arbitration tribunal whose judgement started the conflict was located in another Member State. It can be deduced from article 1, paragraph 2 d and article 71, paragraph 1 of the Regulation Brussels I that it cannot be applied to arbitration.

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