Court of Appeal rules on enforcement of West Tankers arbitration award

This long running dispute concerned claims arising from an allision involving the vessel FRONT CONNOR and a jetty at an oil refinery in Syracuse, Italy, operated by Erg Petroli SpA. Erg’s claim against the Owners for the resulting loss and damage arose under a charterparty which provided for London arbitration. Erg was partly indemnified for the loss by its own insurers, Allianz and others (the Insurers), but in the meantime London arbitration proceedings were commenced as between Erg and the Owners to recover the loss suffered in excess of its insurance coverage.

Subsequently, the Insurers launched their own recovery proceedings against the Owners, pursuant to their subrogation rights, in the Italian court. The result was that the same claim was being pursued in two separate venues, in the London arbitration on the one hand, and by way of litigation pursued by the Insurers in the Italian court.

In response, the Owners issued an application in the English court for an injunction to restrain the Italian litigation. Initially, the English court considered itself competent to grant such an injunction, but the House of Lords referred the matter for determination by the European Court of Justice, which went on to hold otherwise. Under the ECJ’s ruling, handed down in February 2009, it was held that only the court first seized of the matter (in this case the Italian court) could decide on the proper allocation of jurisdiction under the Regulation. The English court, therefore, could not issue an anti-suit injunction in support of an English arbitration. In the absence of an injunction, both sets of proceedings continued in parallel; the London arbitration on the one hand and the Italian litigation on the other.

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Lawyers Anthony Menzies, James Crabtree, Susannah Wakefield