AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-KamenogorsK Hydropower Plant JSC
AES Ust-Kamenogorsk Hydropower Plant LLP v. Ust-Kamenogorsk Hydropower Plant JSC
Supreme Court; Lords Neuberger, Mance, Clarke, Sumption, Toulson SCJJ;  UKSC 35, 12 June 2013
WHETHER POWER TO INJUNCT IS MERELY ANCILLARY TO CURRENT OR INTENDED ARBITRATION PROCEEDINGS: WHETHER S.44 ARBITRATION ACT 1996 LIMITS THE COURT’S INJUNCTIVE POWERS UNDER S.37 SENIOR COURTS ACT 1981
Toby Landau QC and Jessica Wells (instructed by Allen & Overy LLP) for the Claimant/Respondent, AES Ust-Kamenogorsk Hydropower Plant LLP (“Operator”)
Lord Goldsmith QC and Sophie Lamb (instructed by Debevoise & Plimpton LLP) for the Defendant/Appellant, Ust-Kamenogorsk Hydropower Plant JSC (“Owner”)
The Supreme Court rejected the Owner’s further appeal on 12 June 2013, upholding both the anti-suit injunction and declaration obtained by the Operator against the Owner’s Kazakh Court proceedings in breach of a clause providing for London arbitration. For note on the Court of Appeal decision, click here: []
This note has been contributed by Justin Gan Boon Eng, LLB (Hons) (NUS), a an advocate and solicitor of the Singapore Bar
The Owner’s arguments, which were rejected, were as follows.
First, the negative obligation inherent in an arbitration agreement not to commence proceedings outside of arbitration is merely ancillary to current or intended arbitration.
The Supreme Court found this supported by neither statute nor case-law, emphasizing that (a) the arbitration clause meant that the Owner had promised not to bring proceedings elsewhere, and (b) the Operator had a legitimate interest in enforcing its contractual right not to be sued in a foreign country (e.g. arbitration clause).
Second, the Arbitration Act 1996 is, so the Owner argued, a complete and self-contained code governing jurisdictional issues in arbitration, which therefore impliedly qualifies the scope of the Senior Courts Act s.37, pursuant to which the anti-suit injunction and declaration had been granted. As the present situation (being one without ongoing or intended arbitration) fell outside the provisions of the Arbitration Act 1996 providing for the grant of such relief, the Owner asserted that the Court could not grant such relief pursuant to the less specific Senior Courts Act s.37.
The Supreme Court found it implausible that Parliament had intended to remove the previously established power to grant such relief under the Senior Courts Act s.37, having regard to the Department Advisory Committee Report of February 1996 and its reaction to the West Tankers case (fn.1).
Procedurally, the Supreme Court clarified that leave to serve the arbitration claim form out of the jurisdiction in the case at hand could be sought under CDR PD 6B 3.1(2), CPR 62.5(1)(b) and (c), and possibly CPR PD 6B(6)(c).
Fn.1  AC 1138