The Supreme Court, on 12 June 2013, dismissed the appeal of Ust-Kamenogorsk Hydropower Plant JSC (“JSC”) against the grant of an anti-suit injunction and associated declaratory relief restraining JSC from commencing or continuing proceedings in Kazakhstan in breach of an arbitration agreement, and in doing so has resolved a long-running uncertainty about the relationship between the Arbitration Act 1996 and s.37 of the Senior Courts Act 1981. Toby Landau QC and Jessica Wells, instructed by Allen & Overy LLP, acted for AES Ust-Kamenogorsk Hydropower Plant LLP (“AESUK”), the successful respondent.
The case was unusual in that AESUK had no substantive claim against JSC and therefore had no wish to commence arbitral proceedings itself: it simply wished to prevent JSC from bringing proceedings in the Kazakh courts in breach of the arbitration agreement. It was accepted that, in these circumstances, AESUK was not entitled to injunctive relief under s. 44 of the Arbitration Act 1996.
In this appeal to the Supreme Court, JSC contended that the English courts had no jurisdiction to grant either declaratory or injunctive relief, arguing, inter alia, that the Arbitration Act 1996 constitutes a comprehensive set of rules for the determination of all jurisdictional questions by the courts.
The Supreme Court conclusively rejected this appeal, reiterating that an arbitration agreement entails both a positive obligation to submit disputes to arbitration and a negative obligation not to commence proceedings in alternative fora. The courts can intervene to protect this negative obligation, irrespective of whether arbitration proceedings have been commenced or are contemplated. The judgment further clarified that the Arbitration Act 1996 does not comprise an exclusive code in relation to the court’s powers to determine the jurisdiction of an arbitral tribunal. On the contrary, there is nothing in the Act which removes the court’s general inherent power to declare rights or the jurisdiction under s. 37 of the Senior Courts Act 1981 to order injunctive relief. In this judgment, the Supreme Court has provided very significant protection for users of London arbitration.
