Court grants anti-suit injunction to restrain challenge to LCIA award, and confirms the law of the seat governs the arbitration agreement where none has been nominated
The parties entered into agreements which were governed by Pakistani law but provided for LCIA arbitration (conducted in London if the dispute was over a certain amount). Following a dispute, arbitration was commenced and the parties then disagreed about whether London was the seat of the arbitration. Both the LCIA Court and the arbitrator decided that London was the seat of the arbitration by a Partial Final Award (the decision of the LCIA Court is final and binding under the 1998 LCIA Rules). The Defendant sought to challenge the Partial Final Award by way of proceedings in Pakistan and the Claimants sought a final anti-suit injunction from the English courts.
Both parties referred to the Court of Appeal's decision in C v D [2007], in which an anti-suit injunction was granted to restrain a US insurer from bringing proceedings in the US to challenge an LCIA award. The Defendant argued that the case could be distinguished on the basis that the agreements in this instance were subject to Pakistani law, which provides that the parties to a contract which is subject to the law of Pakistan cannot exclude the supervisory jurisdiction of the Pakistani courts and so the parties could not be presumed to have intended the English courts to have exclusive supervisory jurisdiction. That argument was rejected by Phillips J who held C v D had not decided that there is "merely a presumption" that by choosing London as the seat, the parties intended that proceedings on the award should be only those permitted by English law: "On the contrary, the Court of Appeal made it clear that such a result necessarily followed". Accordingly, it could not be the case that the Pakistani courts could have concurrent supervisory jurisdiction.
Nor did the court accept the Defendant's alternative argument that the seat of the arbitration had been in Pakistan. It could not be said that simply by challenging jurisdiction under the Arbitration Act 1996, the Defendant had implicitly accepted that England was the seat of the arbitration. However, the Defendant was bound by the decision of the LCIA Court as to the seat of the arbitration, and by the further rulings of the arbitrator on this issue, none of which had been challenged. The anti-suit injunction was therefore granted to restrain the Pakistani proceedings.
This ruling follows a number of cases which have held that, where there is no express choice of law, the law of the seat of the arbitration governs the arbitration agreement. There was no reference in this case to Arsanovia v Cruz City [2013], which had bucked that trend, by holding that Indian law was the implied choice of law of the arbitration agreement where the contract provided for LCIA arbitration but the contract was governed by Indian law (and queried whether a choice of London as the seat of the arbitration was enough on its own to override that conclusion). The judge in that case had distinguished earlier cases (such as Sulamerica CIA v Enesa [2012] and C v D) on the basis that they had involved insurance policies and so a reference to the governing law of a policy "might naturally be taken to connote to obligations and rights more directly relating to the insurance than the arbitration agreement". However, the present case did not involve an insurance policy and the judge upheld the decision in C v D. Another distinguishing factor in Arsanovia was that the arbitration agreement expressly excluded the application of certain parts of the Indian Arbitration and Conciliation Act and so the "natural inference [was] that [the parties] understood and intended that otherwise that law would apply".
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