COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION, COMMERCIAL COURT
MR JUSTICE BURTON
2009 FOLIO 1035
Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE WILSON
LORD JUSTICE STANLEY BURNTON
| AES Ust-Kamenogorsk Hydropower Plant LLP
||Claimant / Respondent
|- and -
|Ust-Kamenogorsk Hydropower Plant JSC
||Defendant / Appellant
Mr Bernard Eder QC & Ms Jessica Wells (instructed by Allen & Overy LLP) for the Respondent
Hearing dates : Monday 13th & Tuesday 14th & Friday 17th December 2010
Crown Copyright ©
Lord Justice Rix :
"2. The [owner] cannot bring the claim, the subject matter of the proceedings before the Specialized Inter-District Economic Court of the Eastern Kazakhstan Region commenced by the [owner] against the [operator] on 12 June 2009 ("the Kazakhstan Proceedings"), or any other claim arising out of or in connection with any matter or thing in relation to the provisions of the Concession Agreement dated 23 July 2007 (as amended), save only in those claims or matters which fall to be determined in accordance with Clauses 17.8 and 17.9 of the Concession Agreement, otherwise than by commencing arbitration proceedings in the International Chamber of Commerce in London and pursuant to its Rules.
3. The [owner] is restrained from bringing the claim, the subject matter of the Kazakhstan Proceedings, or any other claim arising out of or in connection with any matter or thing in relation to the provisions of the Concession Agreement dated 23 July 1997 (as amended), save only for those claims or matters which fall to be determined in accordance with Clauses 17.8 and 17.9 of the Concession Agreement, otherwise than by commencing proceedings in the International Chamber of Commerce in London and pursuant to its Rules."
The exception within clauses 17.8 and 17.9 was for tariff issues and will be referred to below.
The arbitration clause
17.8.1 If, in its reasonable opinion, the Company and/or the Concession Company believes that the Tariffs and the level of payment defaults by its Customers makes it impracticable to carry out all or any of the Investment Programme or other Commitments the Company and/or the Concession Company will be entitled to refer the matter to the Republic by Notice with a view to agreeing to:
17.8.2 an appropriate immediate adjustment of the Tariffs; or
17.8.3 an adjustment of the level or terms of the Commitments in which case the Company's obligations will be suspended or adjusted until resolution of these matters; or
17.8.4 agreements are reached in writing between the Parties as to off-sets or other mutually acceptable methods of achieving resolution of all such matters.
17.9 If no agreement can be reached, the Republic and the Company will refer the matter to an independent Expert (not being a national of Kazakhstan or the US) agreed by the Parties, or in default of agreement, to one (1) Expert appointed by the President or Vice-President for the time being of the International Chamber of Commerce of London who shall act as an expert, but not as an arbitrator, and whose Costs (in an amount and manner agreed by both Parties) shall be borne by the Company and whose decision shall be binding on all Parties…
32. Dispute Resolution
32.1 Subject to the provisions contained in Clauses 17.8 and 17.9, should any dispute or difference arise out of or in connection with any matter or thing in relation to the provisions of this Agreement and the transactions contemplated by the Parties, then the Party or Parties shall issue a Notice to the other Party or Parties, and shall supply full details of the dispute or difference.
32.2 In the event of any such dispute or difference being notified pursuant to Clause 32.1, the Authorised Persons of each of the Parties shall promptly meet together and negotiate in good faith and take all practicable steps in order to try and resolve the same as quickly and economically as possible.
32.3 Should the Parties not have resolved the dispute or difference at the expiry of a period of one (1) month (unless otherwise extended by agreement of the Parties in writing) from the date of any Notice issued in accordance with Clause 32.1 such dispute or difference shall be settled by arbitration in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce in force at the relevant time.
32.4 In accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce ("Rules"), the Parties have agreed that there shall only be one (1) arbitrator who shall be appointed by mutual agreement between the Parties. If the Parties fail to reach agreement as to the identity of the arbitrator to be appointed within thirty (30) Days of the expiry of the one (1) month period referred to in Clause 32, the arbitrator shall be appointed upon the application of any party to the dispute or difference by the President or Vice-President for the time being of the International Chamber of Commerce of London and the arbitration shall be commenced and carried out as soon as is possible.
32.5 The arbitration shall be carried out and conducted in London, England and shall be in the English language.
32.6 The finding of the arbitration shall be final and binding on the Parties and by way of appeal or otherwise no dispute or difference shall be referred to the courts or to arbitration (other than in compliance with the requirements of this Clause 32 in the case of arbitration). Only the arbitrator shall have the power to terminate the contract, in accordance with the powers granted to him or her under the Rules, in which case the provisions in Schedule 2 shall apply.
32.7 Each of the Parties hereby represents and warrants that it can validly and unconditionally consent under Kazakhstan Legislation to the referral of matters as set out in this Agreement to an Expert, to the arbitration agreement contained in Clause 32, as well as the other dispute resolution mechanisms referred to in this Agreement.
32.8 The Parties hereto agree to exclude any right of application or appeal to any court which would otherwise have jurisdiction in the matter in connection with any question of law arising in the course of the Expert or arbitration reference or out of the award. However, the Parties may make an application to any court for enforcement of any Expert decision or arbitral award (including execution of any judgement), including enforcement of any such decision or award granting interlocutory relief against a Party, and for the obtaining of any evidence (whether by discovery of documents, interrogatories, affidavits or testimony of witnesses or whatsoever) which the Expert or arbitrators shall direct shall be admitted in the Expert or arbitral proceedings."
The Kazakhstan Supreme Court decision and the Kazakhstan Proceedings
"a ruling of the court to dismiss a petition on lack of jurisdiction…is classified as a ruling that may not be appealed in a court appeal separately from the decision of the court on the substance of the dispute…Accordingly, if the court dismisses an application objecting to jurisdiction, the defendant de facto has no other choice than to participate in the court hearing of the substance of the dispute and to appeal a decision of the court on jurisdiction in accordance with Article 344 of the Civil Procedural Code only after the decision on the merits has been reached. I would also note that [the operator] took part in the hearing of the substance of the dispute, subject to the unequivocal and unambiguous reservation of its right to arbitrate."
The Civil Jurisdiction and Judgments Act 1982
"32.–(1) Subject to the following provisions of this section, a judgment given by a court of an overseas country in any proceedings shall not be recognised or enforced in the United Kingdom if –
(a) the bringing of those proceedings was contrary to an agreement under which the dispute in question was to be settled otherwise than by proceedings in the courts of that country; and
(b) those proceedings were not brought in that court by, or with the agreement of the person against whom the judgment was given; and
(c) that person did not counterclaim in the proceedings or otherwise submit to the jurisdiction of that court.
(2) Subsection (1) does not apply where the agreement referred to in paragraph (a) of that subsection was illegal, void or unenforceable or was incapable of being performed for reasons not attributable to the fault of the party bringing the proceedings in which the judgment was given.
(3) In determining whether a judgment given by a court of an overseas country should be recognised or enforced in the United Kingdom, a court in the United Kingdom shall not be bound by any decision of the overseas court relating to any of the matters mentioned in subsection (1) or (2).
(4) Nothing in subsection (1) shall affect the recognition or enforcement in the United Kingdom of –
(a) a judgment which is required to be recognised or enforced there under the 1968 Convention…"
33.–(1) For the purposes of determining whether a judgment given by a court of an overseas country should be recognised or enforced in England and Wales or Northern Ireland, the person against whom the judgment was given shall not be regarded as having submitted to the jurisdiction of the court by reason only of the fact that he appeared (conditionally or otherwise) in the proceedings for any one or more of the following purposes, namely –
(a) to contest the jurisdiction of the court;
(b) to ask the court to dismiss or stay the proceedings on the ground that the dispute in question should be submitted to arbitration or to the determination of the courts of another country;
(c) to protect, or to obtain the release of, property seized or threatened with seizure in the proceedings…"
The Arbitration Act 1996
"The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and equitable to do so."
"1. The provisions of this Part are founded on the following principles, and shall be construed accordingly –
(a) the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense;
(b) the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest;
(c) in matters governed by this Part the court should not intervene except as provided by this Part."
"This Part" of the AA 1996 there referred to is Part I, which is headed "Arbitration pursuant to an arbitration agreement". The question is raised by the submissions before the court as to whether section 1(c)'s principle, when stating that "the court should not intervene", is referring to intervention in "arbitration", "arbitration agreement", or "arbitration proceedings".
"(1) Unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction, that is, as to –
(a) whether there is a valid arbitration agreement,
(b) whether the tribunal is properly constituted, and
(c) what matters have been submitted to arbitration in accordance with the arbitration agreement.
(2) Any such ruling may be challenged by any available arbitral process of appeal or review or in accordance with the provisions of this Part."
"(1) A person alleged to be a party to arbitral proceedings but who takes no part in the proceedings may question –
(a) whether there is a valid arbitration agreement,
(b) whether the tribunal is properly constituted, or
(c) what matters have been submitted to arbitration in accordance with the arbitration agreement,
by proceedings in the court for a declaration or injunction or other appropriate relief.
(2) He also has the same right as a party to the arbitral proceedings to challenge an award –
(a) by an application under section 67 on the ground of lack of substantive jurisdiction in relation to him, or
(b) by an application under section 68 on the ground of serious irregularity (within the meaning of that section) affecting him;
and section 70(2) (duty to exhaust arbitral procedures) does not apply in his case."
"The tribunal may in any case, and shall if the parties so agree, stay proceedings whilst an application is made to the court under section 32 (determination of a preliminary point of jurisdiction)."
"(1) Unless otherwise agreed by the parties, the court has for the purposes of and in relation to arbitral proceedings the same power of making orders about the matters listed below as it has for the purposes of and in relation to legal proceedings.
(2) Those matters are –
(a) the taking of the evidence of witnesses;
(b) the preservation of evidence;
(c) making orders relating to property which is the subject of the proceedings -…
(d) the sale of any goods the subject of the proceedings;
(e) the grant of an interim injunction or the appointment of a receiver.
(3) If the case is one of urgency, the court may, on the application of a party or proposed party to the proceedings, make such orders as it thinks necessary for the purpose of preserving evidence or assets.
(4) If the case is not one of urgency, the court shall act only on the application of a party to the arbitral proceedings (upon notice to the other parties and to the tribunal) made with the permission of the tribunal or the agreement in writing of the other parties.
(5) In any case the court shall act only if or to the extent that the arbitral tribunal, and any arbitral or other institution or person vested by the parties with power in that regard, has no power or is unable for the time being to act effectively."
"(a) under Civil Procedure Rule 62.5(1)(b), because [the operator] seeks an order under section 44 of the Arbitration Act 1996; or in the alternative;
(b) under Civil Procedure Rule 62.5(1)(c), because [the operator] requires a question to be decided by the Court under section 37 of the Supreme Court 1981 affecting an arbitration, and the seat of the arbitration is within the jurisdiction of the English Courts; and
(c) under Civil Procedure Rule 6.36, Practice Direction B, paragraph 3.1(20), because [the operator] seeks an order under section 44 of the Arbitration Act 1996 or, alternatively, under section 37 of the Supreme Court Act 1981."
The first issue: the jurisdiction issue
"I therefore say nothing about section 37 except this. The relationship between the powers of the court under section 37 of the SCA and section 44 of the 1996 Act will at some stage require detailed consideration because there is a tension (to put it no higher) between the apparently wide powers conferred on the court by section 37 and the much narrower powers conferred on the court by section 44. The resolution of that tension must await another day."
"47. The issue raised by the application to the Court in the arbitration claim form in these proceedings is clearly a question as to the substantive jurisdiction of the arbitrators within the meaning of s. 30 (see the definition in s. 82(1)). If the owners had appointed an arbitrator, it is also clear, as was accepted by the owners, that the Court would not have had jurisdiction to determine the issue, as the conditions in s.32(2) were not satisfied. The owners, however, contended that the conditions contained in s. 32(2) were not applicable to these proceedings because they have not appointed an arbitrator, and they are not a party to arbitral proceedings. They are therefore entitled to bring the arbitration application.
48. I do not accept the submission. The Court is given guidance as to the circumstances in which it should intervene in relation to arbitration by the terms of s. 1 in Part I of the Act… "(c) in matters governed by this Part the court should not intervene except as provided by this Part."
49. It is clear from the DAC Report that this principle was included because of international criticism that the Courts of England and Wales intervened more than it was thought they should in the arbitral process, and this was a discouragement to the selection of London as a forum for arbitration.
50. The provisions of Part I of the Act regulate all matters not only after constitution of the tribunal by the appointment of an arbitrator but prior to that; see for example s. 9, s. 12 and s. 44(5) which all relate to the powers to be exercised prior to the appointment of the arbitral tribunal.
51. In my view therefore the present application for the determination of whether there is an arbitral agreement is a matter regulated by Part I of the Act and in accordance with s. 1(c), the Court must approach the application on the basis it should not intervene except in the circumstances specified in that part of the Act.
52. I accept the owners' submission that the use of the word "should" as opposed to the word "shall" shows that an absolute prohibition on intervention by the Court in circumstances other than those specified in Part I was not intended. That submission seems to me to have force as the view is expressed in the DAC Report that a mandatory prohibition in terms similar to art. 5 of the Model Law was inapposite. However it is clear that the general intention was that the Courts should usually not intervene outside the general circumstances specified in Part I of the Act.
53. The circumstances in this case which the owners say are ones in which the Court should intervene cannot have been unanticipated by the draftsmen of the Act. It is very uncommon for a person who is alleged to be a party to an arbitration agreement but denies that he is, to make his position clear before an arbitrator is appointed by the person contending that there is a binding arbitration agreement. Thus the argument of the owners must be premised on the assumption that the draftsmen of the Act intended to allow a party to an arbitration agreement recourse to the Courts without any conditions, if he took that step prior to the appointment of an arbitrator, but imposed the conditions in s. 32 if he had appointed an arbitrator. If the owners are right, then the parties to an arbitration agreement which is disputed can obtain the decision of the Courts without being subject to the restrictions by the simple step of not appointing an arbitrator.
54. I do not consider that this can have been the intention. The Act sets out in very clear terms the steps that a party who contends that there is another party to an arbitration agreement should take. First he should appoint an arbitrator. If the other party appoints an arbitrator, then s. 31(1) makes it clear that his appointment of an arbitrator does not prevent him challenging the substantive jurisdiction of the tribunal. If the other party does not appoint an arbitrator, then the default provisions (s. 17) or failure of appointment procedures (s. 18) apply. Once the arbitral tribunal is constituted, then in accordance with the policy of the Act it is for that tribunal to rule on its own jurisdiction, save in the circumstances specified in s. 32. Any award made can then be changed [sc challenged] under s. 67. The rights of the party who challenges the existence of the arbitration agreement and takes no part are protected by s. 72; he is given the right of recourse to the Courts in the circumstances set out. Those provisions, in my view, provide a clear and workable set of rules which the owners should have followed in this case. I can see no reason which would justify the Court intervening in the circumstances of this particular case, as it is no different from many others.
55. The owners contended that it would be in the overall interest of justice for the Court to hear this application because it would generally be convenient to do so and that the argument over the validity of the arbitration agreement was bound to arise at a later stage. However this argument fails to take into account one of the underlying principles of the Act that the parties should resolve their dispute by the methods they have chosen and the Court's intervention should be limited…
60. Thus, subject to the reservation I have made, I conclude that for this still further reason the Court has no jurisdiction to allow this arbitration application against the brokers."
"Where the specific power most appropriate to the grant of an injunction pending an arbitration is not available by the rules of private international law, it seems to me that, if only as a matter of judicial restraint, such an injunction should not be granted under the more general power…But the Channel Tunnel contract involves a delicate balance of power between the municipal law of two sovereign States. We should be careful not to exercise jurisdiction except where to do so is within the spirit as well as the letter of our laws."
Staughton LJ also said (at 676G):
"In the result I conclude that, whether or not there is jurisdiction, at least as a matter of judicial restraint an interim injunction should not be granted under s. 37 of the Supreme Court Act when the parties have agreed to arbitrate in some place outside England and Wales, and there is an arbitrable dispute."
Despite the language "whether or not there is jurisdiction", Staughton LJ had so far dealt with the issues under the heading of "jurisdiction".
"The fact that the specialist powers conferred by the Arbitration Acts are not available in a case such as the present does not entail that the general powers of the court can never be deployed: although, again, this is undoubtedly a powerful reason why the courts should approach their use with great caution".
Therefore, I do not consider that Channel Tunnel assists Mr White in the present case on the question of jurisdiction.
"I can see no good reason not to exercise the [Angelic Grace] jurisdiction in this case. I recognize the inconvenience to Owens Corning of not being able to sue all their insurers in the same proceedings, but that is a consequence of having different contracts with them. It is not a good reason for depriving XL of its contractual rights…
Under the arbitration clause and the provisions of the Act, it will be for the arbitration tribunal to rule on the validity of the arbitration agreement, if Owens Corning challenges its jurisdiction on that ground, unless the matter is referred to the Court for determination under s. 32. I am satisfied that in the meantime justice requires that an injunction should be granted restraining Owens Corning from continuing with its litigation against XL in Delaware."
"It is important to bear in mind that the judge [Thomas J] was faced with the propriety of an action brought by a person who was seeking to assert that there was an arbitration agreement, and that the alleged counterparty was a party to that agreement. He held that the proper course for the claimant in his case (a party asserting there was an agreement) was not to commence court proceedings but was to commence the arbitration and utilise the arbitration procedure, if necessary invoking section 30. It was in that context that he reinforced the principle that the arbitration mechanism was to be respected. However, in the course of his judgment he said two things which are particularly germane to the present case. The first was in para 52:
52. I accept the owners' submission that the use of the word "should" [in section 1(c), quoted above] as opposed to the word "shall" shows that an absolute prohibition on intervention by the court in circumstances other than those specified in Part I was not intended.
That demonstrates that I cannot treat section 1(c) as imposing some sort of absolute bar, a point which becomes important when considering the question of a stay under section 9.
13. The second was in para 54. In that paragraph he sets out:
…the steps that a party who contends that there is another party to an arbitration agreement should take.
He describes the appointment of an arbitrator, and subsequent steps. He points out that the arbitral tribunal can then determine its jurisdiction, and then refers to two safeguards available to the other party (who is, presumably, challenging the jurisdiction). The first is to challenge the award under section 67. Then:
The rights of the party who challenges the existence of the arbitration agreement and takes no part are protected by section 72; he is given the right of recourse to the courts in the circumstances set out.
It is plain, therefore, that what he has said about the primacy of the arbitral process does not apply to such a challenge. They are obviously intended to apply to positive claims that there is an arbitration agreement."
"51. I do not intend to explore generally the question of whether the court has any jurisdiction at all under section 37 of the SCA to grant either interim or final injunctions to restrain arbitrations that are subject to the 1996 Act. I must assume that there is such a jurisdiction, given the comments of the court of appeal in the cases of Cetelem SA v Roust Ltd  2 Lloyd's Rep 494 at para 74 per Clarke LJ; and Weissfisch v Julius  1 Lloyd's Rep 716 at para 33(v) at page 722 per Lord Phillips CJ. Nevertheless, I must consider whether the jurisdiction is wide enough to provide a base on which an injunction might be granted on the facts of this case.
52. There is no dispute of course that the court has jurisdiction to invoke section 37 to grant an injunction to restrain a party from engaging in court proceedings in another jurisdiction, in breach of an English arbitration clause in a contract by which the parties are bound [citing The Angelic Grace]. But in this case Mr Millett urges the court to use section 37 for a very different purpose. It is to grant a final injunction to restrain an arbitration whose seat is in England…
68. In my view the whole structure of Part 1 also suggests that the scope for the court to intervene by injunction before an award is made by arbitrators is very limited. First, section 44(2)(e), is the only express provision in Part 1 giving the courts the power to grant interim injunctions in aid of an arbitration, but the scope for obtaining one is limited…
69. Secondly, the only other express reference to the court granting an injunction is in section 72…
70. Thirdly, Part 1 of the Act contemplates that once matters are referred to arbitration, it is the arbitral tribunal that will generally deal with issues of their jurisdiction and the procedure in the arbitration up to an award…"
" I too must work on the same basis as Aikens J [in Elektrim] that s 37 remains available to the court in a situation such as the present, whether or not s 44 of the later Act could also be brought into play. In exercising any discretion under s 37 of the earlier Act, I would have regard to matters which arise under s 44 of the 1996 Act…
 By virtue of the decision in the Cetelem case at  – , the court, on a proper construction of s 44 of the 1996 Act, can grant an interim injunction, '[i]f the case is one of urgency', 'for the purpose of preserving…assets'. The Court of Appeal held this to include the preservation of a contractual right, as a chose in action. That must include the contractual right to have disputes referred to arbitration…
 The question therefore is simply whether or not the arbitrators could within the relevant timescale produce a final award on the subject…In these circumstances, the requirement of urgency is plainly made out for the purpose of s 44(3). The injunction is plainly necessary to preserve the owners' right to arbitrate the dispute with the cargo owners and the insurers. Furthermore, the arbitral tribunal are unable for the time being to act effectively so that the requirements of s 44(5) are also met. In these circumstances, where other discretionary requirements are satisfied and there is no strong reason not to make the interim order, the court will do so, to cover the position up to such time when the arbitration tribunal can itself determine this matter and make a final award in relation to the restraining orders sought…
 While the ability or otherwise of the arbitrators to deal with the dispute and to make a final order is a relevant consideration in the context of the discretion under s 37, it does not appear to me to govern the position under s 37 in the way that it operates under s 44. In circumstances where the cargo owners and the insurers both maintain that the arbitration clause is ineffective in the bill of lading, so far as they are concerned, and the insurers have commenced proceedings in China on the substantive claim under the bill, it does not lie in their mouths to contend that the court should refuse to exercise its s 37 jurisdiction in favour of allowing the arbitrators to do so. The likelihood must be that, if the arbitrators did make an award against the cargo owners and the insurers, an objection would then be taken to the arbitrators' jurisdiction and an application would then be made to this court under s 67 of the 1996 Act.
 Given that the situation is straightforward with regard to the ambit of the arbitration clause, there is therefore every reason for this court to exercise its jurisdiction now and thus avoid unnecessary further proceedings before the arbitrator and later here again."
"So also the principle that a tribunal in an international commercial arbitration has the power to consider its own jurisdiction is no doubt a general principle of law. It is a principle which is connected with, but not dependant upon, the principle that the arbitration agreement is separate from the contract of which it is normally a part. But it does not follow that the tribunal has the exclusive power to determine its own jurisdiction, nor does it follow that the court of the seat may not determine whether the tribunal has jurisdiction before the tribunal has ruled on it. Nor does it follow that the question of jurisdiction may not be re-examined by the supervisory court of the seat in a challenge to the tribunal's ruling on jurisdiction…"
"After all, a contract cannot give an arbitral body any power, much less the power to determine its own jurisdiction, if the parties never entered into it."
"96. The consistent practice of the courts in England has been that they will examine or re-examine for themselves the jurisdiction of arbitrators. This can arise in a variety of contexts, including a challenge to the tribunal's jurisdiction under section 67 of the 1996 Act, or in an application to stay judicial proceedings on the ground that the parties have agreed to arbitrate. Thus in Azov Shipping Co v Baltic Shipping Co  1 All ER 476 Rix J decided that where there was a substantial issue of fact as to whether a party had entered into an arbitration agreement, then even if there had already been a full hearing before the arbitrator the court, on a challenge under section 67, should not be in a worse position than the arbitrator for the purpose of determining challenge. This decision has been consistently applied at first instance (see, eg, Peterson Farms Inc v C & M Farming Ltd  1 Lloyd's Rep 603) and is plainly right.
97. Where there is an application to stay proceedings under section 9 of the 1996 Act, both in international and domestic cases, the court will examine the issue of whether there ever was an agreement to arbitrate: see Al-Naimi (trading as Buildmaster Construction Services) v Islamic Press agency Inc  1 Lloyd's Rep 522 (Court of Appeal: English arbitration) and Albon (trading as NA Carriage Co) v Naza Trading Sdn Bhd (No 4)  1 Lloyd's Rep 1 (Malaysian arbitration). So also where an injunction was refused restraining an arbitrator from ruling on his own jurisdiction in Geneva arbitration, the Court of Appeal recognised that the arbitrator could consider the question of his own jurisdiction, but that would only be a first step in determining that question, whether the subsequent steps took place in Switzerland or England: see Weissfisch v Julius  1 Lloyd's Rep 716, para 32."
"This was perhaps a case where the parties might well have come to Court, either by agreement or upon the application by one side or the other for the Court to determine the issues of jurisdiction, on the ground that it was likely to produce substantial savings in cost and that there was good reason why the matter should be decided by the Court. With hindsight it seems to me that even if the parties could not agree on that course, the Court would be persuaded to allow such a determination if, of course, the tribunal had given its own permission, which is a sine qua non in the absence of the agreement of the parties. It might be assumed that the arbitrator may have been the more willing to give his agreement inasmuch as the question of jurisdiction in this case involved the prior question of whether Azov had ever become a party to the agreement as a whole…
I can quite see that there is an interest in encouraging parties to put their arguments on jurisdiction before the arbitrator himself under s. 30. In many cases, and perhaps in the ordinary and normal case of such a challenge, where, for instance, there is simply an issue as to the width of an arbitration clause and no issue as to whether a party is bound to the relevant contract in the first place, the arbitrator's view may be accepted. If it is not, a challenge to the court is likely to be a limited affair raising, essentially, a point of construction on the clause and thus no problem arises. Where, however, there are substantial issues of fact as to whether a party has made the relevant agreement in the first place, then it seems to me that, even if there has been a full hearing before the arbitrators the Court, upon a challenge under s. 67, should not be placed in a worse position than the arbitrator for the purpose of determining that challenge…"
"Secondly, to reflect the interests of comity and in recognition of the possibility that an injunction, although directed against a respondent personally, may be regarded as an (albeit indirect) interference in the foreign proceedings, an injunction must be necessary to protect the applicant's legitimate interest in English proceedings."
Mr White submitted that without existing English proceedings to protect, one of the essential conditions for the grant of an anti-suit injunction was absent. Mr Eder submitted, on the other hand, that if that is what I was suggesting, then it was inconsistent with what Lord Hobhouse said in Turner v. Grovit  1 WLR 107 at paras 27/28. It is clear from the context of my remarks, however, that I was seeking to expound, rather than to depart from, Lord Hobhouse's analysis. Lord Hobhouse spoke of the requirement of a legitimate interest, which was to be found in either a contractual right not to be sued in the courts of a foreign country (by reason of an arbitration clause or an exclusive English jurisdiction clause) or unconscionable conduct in which case the "legitimate interest must be the existence of proceedings in this country which need to be protected". In the present case, the legitimate interest was to be found in the English arbitration agreement, and, Mr Eder submitted, there was no need for existing proceedings in England. It is always difficult for a judge to interpret his own remarks, but I believe that I was intending to remain faithful to Lord Hobhouse's analysis, and stressing the importance of "a legitimate interest in English proceedings" in the context of the interests of comity. It seems to me that in context my phrase was intended to cover both of Lord Hobhouse's alternatives, and that an English arbitration clause or exclusive jurisdiction clause plainly represents a "legitimate interest in English proceedings", which need not be current. I see nothing in Mr White's submission to suggest that there is any jurisdictional condition precedent which the operator is lacking in this case.
"The Vale do Rio decision is nevertheless without prejudice to the right of a person claiming to be party to an arbitration agreement to seek a declaration or an anti-suit injunction preventing another alleged party from pursuing judicial proceedings in some other jurisdiction, even if there is a dispute as to the jurisdiction of the arbitrators. In such a case the English court is not being required to determine the jurisdiction of the arbitrators, but rather is allowing the question of jurisdiction to be put to the arbitrators in accordance with the agreement of the parties"
citing XL v. Owens Corning.
"However, where foreign court proceedings are competing with English arbitration proceedings, the English courts have shown no hesitation in granting declarations as to the validity of English arbitration clauses, without reference to section 32, even after the Arbitration Act 1996 came into force. The argument that sections 1(c) and 32 of the Arbitration Act 1996 preclude the grant of such declarations outside the narrow confines of section 32 appears not to have been raised. In the circumstances, it is unclear whether the court's existing practice can be sustained, even though requiring section 32 to be complied with would produce impractical consequences, as it introduces delay and also cannot be triggered before the tribunal has been appointed.
It could be argued that a declaration as to the validity of an arbitration clause is distinguishable from a declaration as to the jurisdiction of a tribunal; but this argument is rather artificial. By declaring that an arbitration clause is binding and covers certain disputes the court will, in effect, be declaring that any arbitration tribunal appointed under the clause over those disputes will have jurisdiction. If, therefore the English courts wish to preserve the existing freedom with which declarations are granted to protect English arbitrations against foreign litigation, the current case law on the preclusive effect of section 32 of the Arbitration Act 1996 may need to be reviewed."
See also the end of footnote 17, where this is said:
"The better answer may be that, as is suggested elsewhere in relation to anti-suit injunctions, the court's ability to grant remedial measures, including declarations, in support of an arbitration is an implied exception to the preclusive scope of the arbitration clause: See Ch 7, §§7.36 to 7.38."
At paras 7.36 to 7.38 the author rejects the concept that an arbitration clause prevents access to the court for the purpose of obtaining an anti-suit injunction.
21. I am however concerned to underline the submission of Mr White, which Mr Eder fully accepted, and which lay behind the judgment of Thomas J in Vale do Rio, namely that there should not be usurpation or ouster of the very arbitration jurisdiction which [the operator] is anxious to enforce and engage. It is that to which, in my judgment, s 1(c) of the 1996 Act is primarily directed, together with such provisions as s 30 and s 32. I bear in mind particularly the warning of Clarke LJ in Cetelem at paragraph 71 that the court "must take great care not to usurp the arbitral process". The declaration to which [the operator's] claim should be limited, and which chimes with its intention, is that there be a declaration that [the owner] cannot bring the claim, the subject matter of the present Kazakhstan proceedings, or any other claim arising out of or in connection with any matter or thing in relation to the provisions of the Concession Agreement (as amended), otherwise than by commencing arbitration proceedings in the International Chamber of Commerce in London, and pursuant to its Rules: and that the injunction should be similarly directed to enjoining the present proceedings and the bringing of other claims, as above described, otherwise than in ICC Arbitration."
A party may commence arbitration, and thus be compelled to do so, without prejudice to that party's stance that the arbitral tribunal lacks substantive jurisdiction: see section 31(1).
"54. I therefore dismiss the jurisdiction challenge, but I have done so on the basis that the declaratory and injunctive relief should be limited as set out in paragraph 21 above…I am satisfied that there is, as I have said, at least a good arguable case that it is in an ICC arbitration (and if necessary by further reference, whether under s 32 or s 67) that any remaining issues can and should be canvassed, including any question going to the jurisdiction of the arbitrators.
55. It is in that context that I turn to consider the substantive claim, now in the notional absence of Mr White…the reality of the dispute between these parties does not relate to the present Kazakhstan proceedings, but relates to the forum in which any other outstanding disputes may fall to be resolved arising in respect of this 20-year concession. I am satisfied that any prima facie dispute falling within Clause 32 ought to be pursued by [the owner] in ICC Arbitration, and as I have said, in and during such arbitration there will be the opportunity, if so advised, for any proper challenge to be made to the jurisdiction of the arbitrators or the applicability of the arbitration clause. I am satisfied however that, on the facts before me, the relief should be granted, and on a final basis."
Issue 2: the gateway issue
"(1) In this Section of this Part "arbitration claim" means –
(a) any application to the court under the 1996 Act;
(b) a claim to determine –
(i) whether there is a valid arbitration agreement;
(ii) whether an arbitration is properly constituted; or what matters have been submitted to arbitration in accordance with an arbitration agreement;
(c) a claim to declare that an award by an arbitral tribunal is not binding on a party; and
(d) any other application affecting –
(i) arbitration proceedings (whether started or not); or
(ii) an arbitration agreement."
"(1) An arbitration claim form must –
(d) specify under which section of the 1996 Act the claim is made;…
(f) specify either –
(i) the persons on whom the arbitration claim form is to be served, stating their role in the arbitration and whether they are defendants; or
(ii) that the claim is made without notice under section 44(3) of the 1996 Act and the grounds relied on."
"(1) The court may give permission to serve an arbitration claim form out of the jurisdiction if –
(a) the claimant seeks to –
(i) challenge; or
(ii) appeal on a question of law arising out of,
an arbitration award made within the jurisdiction…
(b) the claim is for an order under section 44 of the 1996 Act; or
(c) the claimant –
(i) seeks some other remedy or requires a question to be decided by the court affecting an arbitration (whether started or not), an arbitration agreement or an arbitration award; and
(ii) the seat of the arbitration is or will be within the jurisdiction or the conditions in section 2(4) of the 1996 Act are satisfied."
"59. The owners also argued that the terms of par. 2.1 of CPR PD49G (set out at par. 21 of this judgment) supported their contention. That paragraph defines the term "arbitration application" as including not only an application to the Court under the Arbitration Act but proceedings to determine whether there is a valid arbitration agreement. They therefore submitted that the fact that the practice direction contemplated proceedings to determine whether there was a valid arbitration agreement as a separate category from an application to the Court under the Arbitration Act showed that it was contemplated by the draftsman of these provisions there would be applications such as the present which did not lie under the terms of the Act. I cannot accept that argument. The short answer to it is that the definition of an "arbitration application" was intended to be all embracing and no doubt the draftsman, out of an abundance of caution, included sub-par. 2 of par. 2.1 to spell out the terms of the Act (or just possibly to cater for an oral arbitration agreement). It cannot possibly affect the construction of the Act."
"3.1 The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where -
(20) A claim is made
(a) under an enactment which allows proceedings to be brought and those proceedings are not covered by any of the other grounds referred to in this paragraph…"
"The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where -
(6) A claim is made in respect of a contract where the contract –
(c) is governed by English law."
"In our judgment, if the draftsman of a pleading intended to be served out of the jurisdiction under Ord. 11, r. 1(1)(f) (or indeed any other sub-paragraph) can be reasonably understood as presenting a particular head of claim on one specific legal basis only, the plaintiff cannot thereafter, for the purpose of justifying his application under Ord. 11, r. 1(1)(f), be permitted to contend that that head of claim can also be justified on another legal basis (unless, perhaps, the alternative basis has been specifically referred to in his affidavit evidence, which it was not in the present case). With this possible exception, if he specifically states in his pleading the legal result of what he has pleaded, he is in our judgment limited to what he has pleaded, for the purpose of an Order 11 application. To permit him to take a different cause would be to encourage circumvention of the Order 11 procedure, which is designed to ensure that both the court is fully and clearly apprised as to the nature of the legal claim with which it is invited to deal on the ex parte application, and the defendant is likewise apprised as to the nature of the claim which he has to meet, if and when he seeks to discharge an order for service out of the jurisdiction."
"It may be that M & R's claims against one or both defendants could be framed in quasi-contract and might be brought within Ord. 11, r. 1(1)(d) or (e). However, no such claim has been pleaded or referred to in the evidence supporting M & R's claim for leave to serve out of the jurisdiction. It cannot in our judgment be relied on in this court for the reasons already stated and for the further reason that the application is based solely on Ord. 11, r. 1(1)(f)."
"But if proceedings fall within one or more of the clauses it is not permissible to litigate any other cause of action which does not fall within one of the clauses [of the text's Rule 27 ie gateways]. Where permission to serve out of the jurisdiction is based on one cause of action it cannot be treated as permission based on some other cause of action [citing Parker v. Schuller]. Nor, if a claim has been put forward on one legal basis, can the claimant subsequently justify permission on another legal basis, unless, perhaps, that other legal basis has been referred to in the evidence in support of the application [citing Metall & Rohstoff at 436]."
"18. The question of whether the case fell within paragraph (h) was fully debated before Small J and the Board has no doubt that if objection had been made, the judge would have given leave to amend the summons. The Board therefore considers that Small J was right to consider the application under both paragraphs."
See also The Ikarian Reefer (No 2)  2 Lloyd's Rep 621 at 630/1, upheld in this court at  1 WLR 603 at 616/7.
"…it is clear that Mr Justice Steyn thought that the question whether the service should be allowed to stand was a matter within his discretion, unless a line of authorities which were cited to him obliged him to set it aside. The judge was referred to the first three of those decisions, but since then there have been three more to which we were also referred. The full list is: Parker v. Schuller (1901) 17 TLR 299 (CA); In re Joggia  1 WLR 484; J H Rayner (Mincing Lane) Ltd v. Department of Trade and Industry 7th May 1987 (unreported CA); Metall & Rohstoff AG v. Donaldson Lufkin and Jenrette Inc  1 QB 391 (CA); Trafalgar Tours Limited v. Henry  2 Lloyd's Rep 298 (CA), and BSQ Property Co Ltd v. Lotus Cars Ltd, 27th June 1990 (unreported CA).
Having carefully considered the five most recent authorities since the case was before us last Thursday and notwithstanding Mr Tomlinson's claim that they have brought about a sea change, as he put it, in the court's approach, I think it clear that each has applied, while none has extended, the principle of Parker v. Schuller itself. The principle is that, where leave to serve out is obtained in respect of a claim based on one cause of action, it cannot be treated as leave in respect of a claim based on some other cause of action….
…I also agree that in a case where leave is sought under paragraph (c) of rule 11(1), the reason why it is said that the defendant out of the jurisdiction is a necessary or proper party to the action is part of the "grounds" on which the application is made for the purposes of rule 4(1)(a) and must be stated in the affidavit accordingly. But the principle of Parker v. Schuller does not apply to the substitution of one such reason for another and so to apply it would undoubtedly be to extend it…
In my view Mr Justice Steyn was entirely correct in holding that the principle of Parker v. Schuller ought not to be extended to cover this case and, on that footing, to allow the service of the writ to stand…The facts of this case well demonstrate that there may in many other cases be good reasons for allowing the leave to stand and not insisting on the application of some stricter principle."
Balcombe and Leggatt LJJ gave concurring judgments.
"The Court of Appeal upheld the judgment of Steyn J on the ground that the principle applied in the authorities such as Metall & Rohstoff and DSO Property Co Ltd as well as the earlier Court of Appeal decision in Parker v. Schuller, supra, was confined to changes in the cause of action and did not extend to other changes in the "grounds" under Ord 11, rule 4(1)(a) and (d)."
Issue 3: the validity issue.
"It is clear that the parties to the insurance policy bargained for English law. This Court should therefore give effect to that intention, unless it would be contrary to English public policy (which includes international public policy) to give effect to the enforcement of the jurisdiction clause which is otherwise valid.
Although the insurance policy has a very close connection with Australia, that is not a decisive factor in considering the particular question of public policy before the Court…
In my judgment therefore this Court should give effect to the bargain of the parties and their freely negotiated choice of law and jurisdiction. It should not, as a matter of comity, give effect to the decision of the High Court of Australia that overrode that bargain and that choice."
"20. The obligations of the Club under the contract of insurance are governed by English law and accordingly, Finnish legislation will not be recognized in this country as effective to modify them. It follows that if New India wishes to pursue a claim against the Club, it must do so in accordance with the terms of the contract under which it arises. That includes the arbitration clause. It follows that in my view the Court had jurisdiction in this case to give permission to serve the claim form out of the jurisdiction…and that it has jurisdiction to grant an injunction to prevent the continuation of proceedings contrary to the terms of the arbitration clause."
"Whatever country it is to the courts of which the parties have agreed to submit their disputes is the country to which comity is due. It is not a matter of an English court seeking to uphold and enforce references to its own courts; an English court will uphold and enforce references to the courts of whichever country the parties agree for the resolution of their disputes. This is to uphold party autonomy not to uphold the courts of any particular country."
"39…Payment of any sums ordered to be paid by the arbitrators would, in TNEB's submission, be illegal and give rise to offences in India punishable with penal sanctions falling on the directors as well as TNEB and ST-CMS.
40. The fallacy in this argument is that to which I have already referred. Whatever the changes in the substantive law of India, which constitutes the proper law of the PPA, and whatever Indian issues of policy inform those changes, that cannot effect the proper construction of the separate arbitration agreement which is governed by English law and which will take no account of such changes unless matters of English policy so require."
Issue 4: the submission issue
"43. The Economic Court went straight on to deal with the merits at the hearing on 5 August (which [the operator], armed with the benefit of Andrew Smith J's Order…sought unsuccessfully to adjourn). At the same time as presenting its application to this Court, [the operator] put in under protest…a defence on the merits. It is also common ground that at Kazakhstan law there is no such thing as a protest to the jurisdiction. The court will take no notice of it. [The owner's] second expert, Dr Mukhamedshin said in his report as follows:
"96…Kazakh law simply does not allow a defendant to not submit to the jurisdiction of a Kazakh court once the court finds it has the jurisdiction to adjudge the case.
97. It is the cornerstone principle of Kazakh law that a court judgment that comes into force must be complied with by all. The concept of reserving the right to arbitrate and thereby to disobey or disregard the judgment which declares the arbitration clause invalid is simply alien and non-existent in Kazakh law. The law in Kazakhstan simply does not allow the parties to reserve the right to arbitrate a dispute regardless of the outcome of the court case."
45. The conclusion of Professor Suleimonov, is:
"98. In my view, the actions of [the operator] described above clearly demonstrate that [the operator] did all it could to contest the jurisdiction of the Kazakhstani court with respect to this case at each stage of the judicial proceedings…
99…If the court dismisses an application objecting to jurisdiction, the defendant de facto has no other choice than to participate in the court hearing of the substance of the dispute and to appeal a decision on jurisdiction in accordance with Article 344 of the Civil Procedural Code only after the decision on the merits has been reached. I would also note that [the operator] took part in the hearing of the substance of the dispute subject to the unequivocal and unambiguous reservation of its right to arbitrate."...
49. Although there is no Kazakh law put in expressly on the point, Mr White suggests that [the operator] could have taken the course of not appearing at the merits hearing, instead of doing what they did…and still have been able thereafter to appeal, if not the merits then in any event the jurisdiction case. I have already set out in paragraph 45 Professor Suleimenov's opinion that [the operator] had de facto no other choice than to take the course it did. Mr White, while accepting that…
51. It is clear that even if Dr Mukhamedshin rather than Professor Suleimenov is right as to the effect in Kazakh law of what occurred, I am not bound by the characterisation by a Kazakh court (per Thomas J [in Akai at 96/97], quoted in paragraph 48 above). In my judgment the significant fact is the simultaneity and combination of the three steps referred to in paragraphs (i), (ii) and (iii) above [the launch of the English proceedings before Andrew Smith J, the Response prefaced by the continued reservation as to the Kazakh's court jurisdiction and its right to arbitrate in London, and the motion of 4 August to suspend the hearing in the light of the anti-suit injunction of Andrew Smith J], coupled with the fact that even the appearance at the merits hearing under cover of the purportive protest was accompanied by production of and reliance upon, Andrew Smith J's order. The purpose of all this was in my judgment still to continue to protest the jurisdiction, notwithstanding the defeat at what was then a first instance court. Mr White understandably described what occurred as [the operator] trying 'to have their cake and eat it', but in my judgment when they took the steps in question they were still pursuing arbitration, and the three passages referred to above in paragraph 47 from Dicey, Morris and Collins can be simply distinguished by reference to the fact that in this case [the operator] did not fail and then go on [my underlining] to defend the case on the merits". During the period 28 July to 4 August 2009 it was at all times still endeavouring to contest the jurisdiction, and its revelation of its case on the merits in the course of that, and prior to its unsuccessful appeal, did not in my judgment amount to a submission.
52. For the purposes of Mr White's challenge to the jurisdicition, there is the issue whether the relevant test is, as he submits, a good arguable case, or a serious issue to be tried (see paragraph 17(vi) above). Without resolving that issue, I am satisfied that Mr Eder has at least a good arguable case that there was no submission or waiver, and that [the operator] is still entitled to pursue its arbitration claim" (original emphasis).
"If his challenge to the jurisdiction of the foreign court is successful, no question of submission arises. If it is unsuccessful and he goes on to contest the case on the merits, he will have submitted to the jurisdiction of the foreign court" (at para 14-063).
"If the defendant in the foreign court fails on any of these issues, but nevertheless goes on to defend the case on the merits, he will be regarded as having submitted" (at para 14-064).
"Some systems of law require or allow a defendant to plead to the merits at the same time as, and as an alternative to, an objection to the jurisdiction...[That] should not now be so regarded [as a submission], provided at least that, having lost on the issue of jurisdiction, the defendant does not put forward his case on the merits…The House of Lords has held, in the context of submission to the jurisdiction of the English court, that a step in the proceedings only amounts to a submission when the defendant has taken some step which is only necessary or only useful if the objection to the jurisdiction has been waived…" (citing Williams & Glyn's Bank v. Astro Dinamico  1 WLR 438 (HL), applied in Akai)(at para 14-066).
"In that case the Swiss court held that an arbitration clause had not been incorporated, although by its applicable law, English law, the English court would have held otherwise. The judge said that the sellers had voluntarily appeared and argued the point and indeed appealed in Switzerland and the Swiss court had a jurisdiction that would be recognised by an English court. He held that it was clear beyond doubt that the Swiss court had held that the arbitration was not incorporated and the decision on that issue qualified for issue estoppel. He held the judgment on that issue was final and conclusive on the merits. He held that the fact that the decision was based on Swiss law (as opposed to the applicable law, English law) was no obstacle…The judge would have held the sellers estopped from challenging the question of incorporation but for the coming into force of the Civil Jurisdiction and Judgments Act 1982 and the application of section 32(1) and (3) and section 33."
That reasoning was left undisturbed in this court. Although the Swiss defendant there was a Sudanese party, the point that Swiss law otherwise had jurisdiction over it, and that, subject to the 1982 Act, that jurisdiction would have been recognised by an English court would appear to be in principle relevant to point (a) above, but was regarded as irrelevant to the application of sections 32/33. In that case, however, there was nothing similar to points (b) and (c) above.
"Counsel were unable to refer us to any authority on this point. Nevertheless the answer to the question seems to me to be quite clear. Once Marc Rich had submitted to the jurisdiction of the Italian Courts to try the merits of the case, the submission covered the whole proceedings. After submission Marc Rich could no longer have disputed any earlier interlocutory orders in the proceedings. Nor could they any longer challenge the validity or competence of any earlier decision in those proceedings.
It follows that in my view the judgment of the Corte di Cassazione was the judgment of a competent Court. Marc Rich must be regarded as having submitted to the jurisdiction of the Court. The condition in (c) in s. 32(1) cannot therefore be satisfied. Accordingly Marc Rich are bound by the decision that the contract did not contain an arbitration agreement."
Woolf and Scott LJJ agreed.
"It is clear from the decision of the Court of Appeal in The Atlantic Emperor (No. 2) (at p. 633 of the report) that if a party who has merely challenged the jurisdiction of a Court later takes steps that amount to a submission of the merits to the jurisdiction of that Court (without reserving the position on jurisdiction), then that submission will be a submission to the whole of the proceedings; that party cannot thereafter maintain his challenge to the jurisdiction" (emphasis added).
"Harada submits there is no clear authority to the effect that a party can participate in a full trial on the merits and still maintain his objection to the court's jurisdiction. Following Elefanten I find that unsurprising: it is surely obvious. If authority is needed, however, let this be it" (emphasis added).
And at para 45 Simon Brown LJ said that it did not matter whether permission to appeal was refused, or granted with the appeal being dismissed. Therefore, if the Practice Direction (Citation of Authorities)  1 WLR 1001 is relevant, it seems to me that Harada is within its permissive scope.
"29. In other words the court does not have jurisdiction even if the defendant makes submission on the merits provided only that the challenge to jurisdiction is made either before or at the same time as (and not merely after) the argument on the merits. There is nothing there to have given Harada cause for concern: it clearly has contested jurisdiction from the outset; it raised its jurisdictional objection in its very first appearance."
"34. I fail to see how Harada can derive the least comfort from that decision. True it is…that nothing overtly had been said in Marc Rich's second defence to constitute a submission to the jurisdiction. But it is equally clear that nothing can have been said to reserve Marc Rich's position with regard to their jurisdictional objection else the second pleading could not have been described as "a plain and unequivocal submission to the jurisdiction". The contrast with the facts of the present case could hardly be more striking. Here, of course, Harada had from first to last been urging and maintaining its objection to jurisdiction and, indeed, would only have been engaging in the merits because the courts had forced it to do so in the teeth of all its objections."
See also Mance LJ at para 51.
"125. In my view these are essentially three different ways of putting the same point, namely, that at common law it is contrary to public policy to recognise a foreign judgment given in proceedings which, in the eyes of English law, have been pursued in contravention of a valid arbitration agreement. Important though arbitration agreements undoubtedly are, I think that puts the matter rather too high. It is not, I think, contrary to public policy to recognise a judgment of a foreign court of competent jurisdiction simply on the grounds that that an English court would have come to a different decision. For example, if a foreign court purporting to apply English law to a contract with the aid of expert witnesses were to reach a conclusion that an English court would think wrong, it would not be contrary to public policy to enforce the judgment and it is difficult to see why for this purpose arbitration agreements should be given a status above other obligations. Whether a foreign judgment will be recognised depends primarily upon whether under English conflict of laws rules the court in question is regarded as having jurisdiction over the parties. In my view the question whether the courts of this country should recognise a foreign judgment given in proceedings taken in breach of an arbitration agreement is also essentially one of jurisdiction. There is apparently no common law authority on the point (see Dicey, Morris and Collins, para 14-091, but if the court in question is regarded as being of competent jurisdiction (for example, because both parties were resident within the jurisdiction) I do not think that it would be contrary to public policy to recognise the judgment, even if the English court would have held that the parties had agreed to refer the dispute to arbitration. Different considerations might arise if the judgment had been obtained through conscious wrongdoing, for example by pursuing proceedings in defiance of an injunction, but that is not this case.
126. It may be partly for these reasons that it was considered desirable to make specific provision in section 32 of the Civil Jurisdiction and Judgments Act 1982 in respect of the recognition of foreign judgments made in proceedings brought contrary to an agreement under which the dispute in question was to be settled otherwise than by proceedings in the courts of that country. These provisions protect both exclusive jurisdiction clauses and arbitration clauses and the ordinary rules relating to the recognition of foreign judgments are excluded by subsection 32(3). Provisions of that kind would not be necessary at all if there were a clearly established rule of public policy that foreign judgments obtained contrary to arbitration clauses were not to be enforced in this country…"
"A broad test is to be applied as to the purpose of the steps taken in the foreign Court and submission is not to be inferred from the fact that the defendant appeared in foreign proceedings in circumstances obviously and objectively inconsistent with a submission to the jurisdiction."
Lord Justice Wilson :
Lord Justice Stanley Burnton :
Sections 32 and 33 of the Civil Jurisdiction and Judgments Act 1982
"Even in arbitrations, where a protest is made against jurisdiction, the party protesting is not bound to retire; he may go through the whole case, subject to the protest he has made."
Section 37 of the Senior Courts Act 1981 and sections 1 and 44 of the Arbitration Act 1996
"As part of the redefinition of the relationship between arbitration and the Court, … the powers we have given to the Court are intended to be used when the tribunal cannot act or act effectively …
… the philosophy behind these provisions [is]: if a given power could possibly be exercised by a tribunal, then it should be, and the parties should not be allowed to make unilateral applications to the Court. If, however, a given power could be exercised by the tribunal, but not as effectively, in circumstances where, for example, speed is necessary, then the Court should be able to step in."
This does not suggest that the Court should not be able to act when there is no arbitral tribunal and no reason for it to be established.
The gateway issue
Note 3 However, as a matter of case management, the court may choose under its inherent jurisdiction to order a stay for arbitration pending the determination by the arbitrators of a factual issue which the court is unable to decide on affidavit. See Al-Naimi v. Islamic Press Agency Inc  1 Lloyd’s Rep 522 at 525 (right hand column), referred to by Lord Collins in Dallah at para 97 (cited at para 80 above). [Back]
Note 3 However, as a matter of case management, the court may choose under its inherent jurisdiction to order a stay for arbitration pending the determination by the arbitrators of a factual issue which the court is unable to decide on affidavit. See Al-Naimi v. Islamic Press Agency Inc  1 Lloyd’s Rep 522 at 525 (right hand column), referred to by Lord Collins in Dallah at para 97 (cited at para 80 above). [Back]