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Arbitral anti-suit injunctions as a measure to tackle parallel proceedings

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Title: Arbitral anti-suit injunctions as a measure to tackle parallel proceedings
Author(s): Gran, Heidi
Contributor: University of Helsinki, Faculty of Law
Discipline: Procedural and insolvency law
Language: English
Acceptance year: 2020
Simultaneous cross-border proceedings are a familiar, yet a troublesome, phenomenon in international commercial litigation and arbitration. The anti-suit injunction, is one of many mechanisms to tackle the dilemma of parallel proceedings. The objective of an anti-suit injunction is to refrain a party from pursuing a court or arbitration proceeding. The anti-suit injunction has, however, been described as a very aggressive approach towards resolving jurisdictional conflicts, and some even find that the mechanism should play no part at all in international commercial arbitration. Nonetheless, anti-suit injunctions are a commonly used in international arbitration. This thesis focuses on anti-suit injunctions ordered by arbitral tribunals (also called “arbitral anti-suit injunctions) with the aim to disrupt court proceedings in the context of international commercial arbitration. The main objective is to examine whether anti-suit injunctions are legitimate, and whether they can be used to address the problem of parallel proceedings. The topic is relevant due to the rising amount of parallel proceedings and due to the ambiguous legal basis of arbitral anti-suit injunctions. Overall, most studies have concerned court-ordered anti-suit injunctions and to a lesser degree anti-suit injunctions ordered by arbitral tribunals. The first research question examines whether arbitral tribunals possess the jurisdiction and powers to enjoin parallel court proceedings. There is usually no direct reference to the arbitrator’s power to issue anti-suit injunctions in legal sources and thus the legal basis for issuing anti-suit injunctions is not clear. Some commentators consider that the arbitration agreement or basic principles of international arbitration provide a sufficient basis for the issuance of anti-suit injunctions. However, most commentators approach the question of legal basis through the provisions on interim measures, since anti-suit injunctions can be regarded as a type of interim measure. Consequently, existing provisions on interim measures in the arbitration agreement, possible institutional rules and the lex arbitri must be examined. The second research question considers whether anti-suit injunctions are a useful and appropriate tool in international commercial arbitration. Anti-suit injunctions are very controversial, albeit commonly used by arbitrators. Many conceive that anti-suit injunctions unrightfully interfere with the jurisdiction of state courts and deprive the party’s right to court. Others consider anti-suit injunctions as a justified tool when a party breaches the arbitration agreement, or in situations when the party initiates a court proceeding in bad faith. The question of appropriateness is also directly linked to the issue of enforcement. In conclusion, there is no definite test for assessing the legal basis of anti-suit injunctions. The legal basis and the requirements for issuing anti-suit injunctions will vary depending on the applicable rules. Also, the appropriateness of anti-suit injunctions will have to be addressed on a case-by-case basis. Nonetheless, anti-suit injunctions must be used with caution. Even though the likelihood of having an arbitral anti-suit injunction enforced within European civil law countries is rather slim, the injunction may nevertheless have a dissuasive effect especially in combination with another remedy such as damages.
Keyword(s): International arbitration anti-suit injunctions parallel proceedings interim measures

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