European Parliament's Committee on Legal Affairs rejects proposed deletion of arbitration exclusion in Brussels Regulation | Practical Law

European Parliament's Committee on Legal Affairs rejects proposed deletion of arbitration exclusion in Brussels Regulation | Practical Law

An update on the European Parliament's Committee on Legal Affairs' report on the proposed reform of the Brussels Regulation, which rejects the proposal to abolish the arbitration exclusion in the Regulation.

European Parliament's Committee on Legal Affairs rejects proposed deletion of arbitration exclusion in Brussels Regulation

by PLC Arbitration
Published on 07 Jul 2010European Union
An update on the European Parliament's Committee on Legal Affairs' report on the proposed reform of the Brussels Regulation, which rejects the proposal to abolish the arbitration exclusion in the Regulation.
In April 2010, Tadeusz Zwiefka, rapporteur of the European Parliament's Committee on Legal Affairs, prepared a draft report on the European Commission's proposal to amend the Brussels Regulation (see Legal update, Committee on Legal Affairs' draft report rejects proposed deletion of arbitration exclusion in Brussels Regulation). On 23 June 2010, the Committee adopted the report, which will now be submitted to the European Parliament for discussion in plenary session in early September 2010.
The report:
  • Opposes the deletion (even partial) of the arbitration exclusion in the Regulation.
  • Considers that the arbitration exclusion should make clear that judicial procedures ruling on the validity or extent of arbitral competence, whether as a principal issue or an incidental or preliminary question, are excluded from the scope of the Regulation. This should also be clarified in a recital to the Regulation.
  • Advocates that a paragraph be added to Article 31 of the Regulation to the effect that a judgment should not be recognised if the member state court which gave the judgment disregarded a rule of the arbitration law in the member state in which enforcement is sought, unless the judgment of that member state produces the same result as if the arbitration law of the enforcing court had been applied.
The report recognises, in its recitals, the intense debate that has been generated by the Commission's proposals regarding the interface between arbitration and judicial proceedings. In particular:
  • It advises against the introduction of an exclusive head of jurisdiction for court proceedings in support of arbitration, given the lack of a common position on this issue among member states and having regard to "world competition in this area".
  • The report suggests that "national procedural devices" to protect arbitral jurisdiction should continue to be available. These would include anti-suit injunctions, declarations of validity of arbitration clauses, and the negative effect of the kompetenz-kompetenz principle. As such, the report advocates a return to the position prior to the judgment of the Court of Justice of the European Union (ECJ) in Allianz SpA v West Tankers Inc (Case C-185/07), in which the ECJ held that anti-suit injunctions in favour of arbitration were inconsistent with the Regulation.
If the report is adopted by the European Parliament, it will then be sent to the Commission, to be taken into account when it is drafting its legislative proposal for reform. It remains to be seen whether the Commission will take on board the views of the European Parliament, which appear to reflect those of many in the arbitration community.
For a summary of other jurisdiction related issues in the report, see Legal update, Brussels Regulation reforms: European Parliament's Committee on Legal Affairs adopts report.
For further discussion of the reform proposals see the following articles: