Recital 12 – Law

A largely controversial provision in the Brussels I Regulation concerning the exclusion of arbitration[1] was initially criticised for creating uncertainty in dispute resolution and creating the possibility of parallel proceedings to occur. The dissatisfaction created here concerned the possibility of the fact that various Member States had a different approach in settling disputes, thereby creating legal uncertainty, as a uniform standard was not applied across the Union. Since the inception of the Brussels regime, it has been regarded as unnecessary to include provisions in relation to arbitration, as suitable legal instruments were already in place for dealing with these matters, namely the “New York Convention”[2] and the European Convention on International Commercial Arbitration.[3] The position of the fact that the Brussels regime does not include arbitration was affirmed in the Marc Rich[4] case where it was established that in an action where the preliminary issue concerns arbitration, the Convention does not apply.[5]

 

More recently however the West Tankers[6] case raised criticism in the European Court of Justice, as the issues of the case covered arbitration, yet the court reached the conclusion that that was not the main claim of the case thereby rendering the 2001 Regulation applicable in this instance, as tortious matters were the main issue here to which the 2001 Regulation applied.[7] This application of the regulation generated a lot of criticism as it was seen as inconsistent to deliver a ruling in which arbitration was under consideration even although it is excluded from the Brussels regime.

 

During the review process of the 2001 Regulation the wording in which the arbitration exclusion was contained was deemed vague, as it had not covered any aspect of arbitral awards and agreements. In the recast regulation recital 12[8] strengthens the previous position of the exclusion of arbitration. The phrasing of the recital is such as to suggest that further consideration should be granted to the inclusion of arbitration within the regulation, however viewed substantially for what it is, it can be said that recital 12 has introduced nothing new besides what can be considered interpretive recommendations towards dealing with arbitration without the application of the regulation.[9]

[1]ibid. Article 1 (2) (d)

[2]1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards

[3]1961 European Convention on International Commercial Arbitration

[4]Case C-190/89 Marc Rich & Co. AG v. Societa Italiana Impianti PA, Court of Justice of the European Communities [1991]

[5]ibid. para [29] “Consequently, the reply must be that Article 1(4) of the Convention must be interpreted as meaning that the exclusion provided for therein extends to litigation pending before a national court concerning the appointment of an arbitrator, even if the existence or validity of an arbitration agreement is a preliminary issue in that litigation.” – The abogados de accidentes office

[6]Case C-185/07Allianz SpA and Generali Assicurazioni Generali SpA v West Tankers Inc. EU: C: 2009:69; [2009] 1 A.C. 1138.

[7]Storskrubb, Eva “Gazprom OAO v Lietuvos Republika: a victory for arbitration?” Case Comment, E.L. Rev. [2016], 41(4), 578-589

[8]Regulation (EU) No 1215/2012 Preamble, para. (12) “This Regulation should not apply to arbitration. Nothing in this Regulation should prevent the courts of a Member State, when seized of an action in a matter in respect of which the parties have entered into an arbitration agreement, from referring the parties to arbitration, from staying or dismissing the proceedings, or from examining whether the arbitration agreement is null and void, inoperative or incapable of being performed, in accordance with their national law.”

[9]Osborne Clarke LLP “Arbitration and the Brussels Regulation I Recast, Anti-Suit Injunctions and now… Brexit” [2016] Publication No. 0000000 p.3 <http://www.osborneclarke.com/wp-content/uploads/2016/11/Arbitration-and-the-Brussels-Regulation-I-Recast-Anti-Suit-Injunctions-and-now…-Brexit.pdf> Accessed: 2 March 2017