effects and enforcement of international arbitration agreements

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International Commercial

Arbitration (Third Edition)

Last Reviewed

August 2022

Bibliographic

reference

'Chapter 8: Effects and

Enforcement of

International Arbitration

Agreements (Updated

August 2022)', in Gary B.

Born , International

Commercial Arbitration

(Third Edition), 3rd edition

International; Kluwer Law

International 2021) pp. 1349

- 1422

KluwerArbitration

Chapter 8: Effects and Enforcement of International

Arbitration Agreements (Updated August 2022)

International arbitration agreements have potentially significant consequences for the

parties’ legal rights. This Chapter examines these legal effects, including both the

negative effect of denying parties the right to pursue litigation in national courts and the

positive effect of obligating them to arbitrate their disputes in good faith. The Chapter

also discusses the different mechanisms for enforcing these obligations under leading

legal systems. Finally, the Chapter addresses the related subjects of antisuit and anti-

arbitration injunctions.

§8.01 INTRODUCTION

A valid international arbitration agreement produces important legal effects for its

parties, as well as for national courts and arbitral tribunals. These effects of

arbitration agreements are both positive and negative: the positive effects include the

obligation to participate and cooperate in good faith in the arbitration of disputes

pursuant to the parties’ arbitration agreement, while the negative effects include the

obligation not to obstruct the resolution of disputes that are subject to arbitration by the

arbitral tribunal or to seek the resolution of such disputes in national courts or other

legal forums. These obligations were well described in an early Swiss judicial decision:

“[T]he principal effect of an arbitration clause is not the exclusion of

jurisdiction of state courts, but the transfer of the right of adjudication to an

arbitral tribunal: This positive effect legally arises in the state where the

arbitral tribunal is sitting according to the agreement. The negative effect, i.e.,

the exclusion of jurisdiction of state courts is nothing but a consequence of the

positive effect.”

The positive and negative effects of agreements to arbitrate are affected significantly by

the means of enforcement of those agreements under applicable international

conventions and national arbitration legislation. As discussed above, during some

historical periods, arbitration agreements were rendered ineffective because they were

not susceptible of enforcement through orders for specific performance and because

monetary damages were difficult to quantify and provided inadequate disincentives for

breaches.

Contemporary international arbitration regimes have fundamentally altered this, making

it possible, in varying degrees, to obtain orders of specific performance from national

courts of both the negative and positive obligations imposed by arbitration agreements.

These remedies vary in some respects among national legal systems, but, in

developed jurisdictions, provide broadly similar and effective means of enforcing

international arbitration agreements. Those means of enforcement include stays of

litigation, orders to compel arbitration, antisuit injunctions, actions for monetary

damages and non-recognition of judgments obtained in breach of a valid arbitration

agreement.

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§8.02 POSITIVE LEGAL EFFECTS OF INTERNATIONAL ARBITRATION

AGREEMENTS: OBLIGATION TO ARBITRATE IN GOOD FAITH

The most fundamental objective and effect of an international arbitration agreement is

to obligate the parties to participate cooperatively, diligently and in good faith in the

resolution of their disputes by arbitration pursuant to that agreement. As discussed

above, this obligation is a sui generis one – requiring parties whose underlying

commercial or other relations have deteriorated to the point of litigation to cooperate

together, in good faith, in an adjudicatory procedure that will finally resolve their

disputes, in a binding manner, either for or against one of the parties. The basis and

content of this positive obligation, which is in many respects a unique and striking one,

are detailed below.

(6)

[A] Sources of Positive Obligation to Arbitrate

The positive obligations imposed by an arbitration agreement are not expressly

recognized in either international conventions or most national legislation. Those

instruments instead generally focus on the negative effects of the arbitration agreement

(i.e., forbidding litigation of arbitrable disputes in national courts) or the remedies for

breaches of arbitration agreements (i.e., referring the parties to arbitration).

Nonetheless, the positive obligation to arbitrate disputes is a necessary implication from

the language of the relevant conventions and legislation, and forms one of the

foundations of the international arbitral process.

(7)

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More fundamentally, the positive obligation to arbitrate has its source in the parties’

agreement to arbitrate, which courts are required to recognize and enforce under both

the New York Convention and most contemporary national arbitration legislation. In

concluding an arbitration agreement, the parties do not merely negatively waive their

access to judicial remedies, but also affirmatively commit themselves to participating in

the resolution of their disputes through the arbitral process. This positive obligation to

participate cooperatively, diligently and in good faith in a mutually-established,

adjudicative dispute resolution process is central to the arbitration agreement and to

the arbitral process itself.

[1] Positive Obligation to Arbitrate Under International Arbitration Conventions

The positive obligations imposed by an arbitration agreement are only implicitly

recognized in leading international conventions. Both Article 1 of the Geneva Protocol

and Article II(1) of the New York Convention require Contracting States to “recognize”

written agreements by which parties undertake “to submit to arbitration” specified

disputes. In the words of Article II(1) of the Convention, Contracting States “shall

recognize an agreement in writing under which the parties undertake to submit to

arbitration all or any differences …”

The premise of Article 1 of the Geneva Protocol and Article II(1) of the New York

Convention is that the parties’ obligation to arbitrate includes, most importantly, the

affirmative duty to accept the submission of their disputes to arbitration (“undertake to

submit”) and to participate cooperatively and in good faith in arbitral proceedings to

resolve such disputes. By agreeing to arbitrate, the parties do not only negatively waive

their access to judicial remedies, but instead agree to participate affirmatively in

the resolution of disputes through the arbitral process, which has sui generis

characteristics. This positive obligation to participate in a mutually-established,

adjudicative dispute resolution process is at the foundation of the arbitration agreement.

The positive obligation to arbitrate is dealt with under the Geneva Protocol, New York

Convention and other international arbitration conventions by giving effect to the

parties’ agreement – that is, by requiring “recognition” of that agreement – rather than by

stating a generally-applicable and abstract “obligation to arbitrate.” This approach to

the positive duty to arbitrate is consistent with the basic consensual and contractual

character of the international arbitral process.

This approach is confirmed by Article 4 of the Geneva Protocol and Article II(3) of the New

York Convention. The former provides that, where a valid arbitration agreement exists,

the courts of Contracting States shall “refer the parties on the application of either of them

the New York Convention (and/or the European

Convention). If this argument had been accepted, it would have constituted a grave

impediment to the international arbitral process and a clear violation of Contracting

States’ obligations under Article II of the New York Convention. The argument was

correctly rejected both by English courts and well-reasoned commentary.

Moreover, EC Regulation 44/2001 was superseded by Regulation (EU) 1215/2012 in

December 2012 (“Recast Regulation”), applicable from 10 January 2015, which

appears to preclude a conclusion that EU law generally requires recognition of EU

Member State judgments that violate the New York Convention. Among other things, the

Recast Regulation provides that decisions on the existence, validity and scope of

international arbitration agreements do not fall within the scope of the Regulation

(including its rules with respect to jurisdiction, lis pendens and preclusion). The

Recast Regulation also makes clear that it does not supersede or alter the obligations of

EU Member States under the New York Convention. Under the Recast Regulation

(and particularly ¶12 of the Preamble) a Member State may recognize an arbitral award,

under the New York Convention, notwithstanding a decision by another Member State

court holding that there was no valid arbitration agreement.

Nonetheless, while the Recast Regulation provides that the New York Convention takes

precedence over the Regulation, it does not expressly address the question whether

a Member State court would be required to recognize the judgment of another Member

State court on the substance of the parties’ dispute, notwithstanding the existence of a

valid arbitration agreement covering the issue in dispute. The better view is that the

Recast Regulation would allow the judgment of an EU Member State court (in violation of

the New York Convention) to be denied recognition by another EU Member State court, as

the Convention would obligate it to do.

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[6] Antisuit Injunctions

As noted above, a party’s ability to obtain a stay of litigation is not always sufficient to

effectively enforce an arbitration agreement in the international context. That is

because a party may be able to pursue litigation of the underlying dispute in a national

court which does not honor, or fully honor, its international obligations under the New

York Convention. In that event, a stay of the underlying litigation in one (or several)

national courts, which do honor the Convention, may be only a partial, and ultimately

ineffective, remedy for enforcing the international arbitration agreement.

Accordingly, some states permit additional means of enforcement of the negative

obligation to refrain from litigating disputes that are subject to arbitration. These

remedies are ordinarily available only in common law jurisdictions, where national

courts may be prepared to issue “antisuit injunctions” to prohibit the filing or prosecution

of litigation in a foreign forum. Antisuit orders are directed against the parties to a

foreign litigation (and not the foreign court itself), but are intended to have the effect of

precluding the litigation from proceeding in the foreign court.

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[a] Antisuit Injunctions Under English Law

English courts have long exercised the power to enjoin foreign litigations which are

brought in violation of an arbitration agreement. Under English law, an antisuit

injunction may ordinarily be granted against the prosecution of a foreign litigation if it is

established that (a) the English forum has a sufficient interest in, or connection with, the

matter in question, (b) the foreign proceeding causes sufficient prejudice to the

applicant, and (c) the antisuit injunction would not unjustly deprive the claimant in the

foreign court of a legitimate advantage. One English court decision affirmed the

existence of this power in emphatic terms, in the context of a foreign litigation brought in

breach of an arbitration agreement, reasoning:

“[I]n my judgment there is no good reason for diffidence in granting an

injunction to restrain foreign proceedings [brought in violation of an

arbitration agreement] on the clear and simple ground that the defendant has

promised not to bring them. … I cannot accept the proposition that any Court

would be offended by the grant of an injunction to restrain a party from

invoking a jurisdiction which he had promised not to invoke and which it was

its own duty to decline.”

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English courts have also given consideration to notions of comity, as justifying the

withholding of an antisuit injunction against parties to a foreign litigation.

Nonetheless, as a matter of principle, proceedings resulting from a party’s unexcused

breach of its negative obligation not to litigate a dispute that is encompassed by a valid

arbitration agreement are subject, under English law, to an antisuit injunction. As

the UK Supreme Court reasoned in Ust-Kamenogorsk Hydropower Plant LLP v. Ust-

Kamenogorsk Hydropower Plant JSC:

“[O]rders restraining the actual or threatened breach of the negative aspect of

an arbitration agreement may be required both where no arbitration

proceedings are on foot or proposed, and where the case is not one of urgency

(and so not within §44(3)). They enforce the negative right not to be vexed by

foreign proceedings.”

As discussed below, however, within the European Union, where EC Regulation 44/2001

(and now the Recast Regulation) applies, the English courts’ historic antisuit authority

may not be exercised as to proceedings in other EU Member State courts. As with

many other issues, it is not clear what impact Brexit will have on the availability of

antisuit injunctions in English courts.

In England, most antisuit injunctions have been issued to prevent the litigation of claims

that are properly subject to arbitration. Nonetheless, an English court issued an

injunction against an award-debtor’s pursuit of foreign litigation aimed at challenging an

English arbitral award. In a recent case, an English court issued an injunction where

the existence of the underlying agreement containing the arbitration clause was

disputed. In another case, an English court issued an interim antisuit injunction

where there was a dispute concerning whether the underlying issues were subject to

arbitration. English courts have also issued antisuit injunctions against a third party

to the arbitration proceedings (reflecting, as discussed above, the scope of the

negative obligations arising from an arbitration agreement). English courts have also

issued anti-suit injunctions against parties seeking interim relief when foreign

proceedings would effectively leave nothing substantive for the tribunal to decide in the

arbitration. It is clear that English courts will issue injunctions against

commencement of foreign court proceedings regardless whether or not an arbitration has

been initiated.

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[b] Antisuit Injunctions in Other Common Law Jurisdictions

Courts in other common law jurisdictions, including Singapore, Canada, Bermuda, Hong

Kong, South Africa and Australia, have also issued antisuit injunctions to enforce the

negative obligations of an arbitration agreement. The Singapore High Court

explained the rationale for antisuit orders as follows:

“[An antisuit injunction] is entirely consistent with the principle that parties be

made to abide by their agreement to arbitrate. Furthermore, the New York

Arbitration Convention obliges state parties to uphold arbitration agreements

and awards. Such an agreement is often contravened by a party commencing

an action in its home courts. Once this Court is satisfied that there is an

arbitration agreement, it has a duty to uphold

that agreement and prevent

any breach of it.”

As in England, this analysis is likely to result in the issuance of an antisuit injunction

restraining pursuit of foreign litigation simply upon the showing that a party has

commenced litigation in breach of a valid, applicable arbitration agreement. The

Singaporean approach forthrightly holds parties to their commitments to arbitrate, and

rests on the obligation, under the New York Convention, of Contracting States to recognize

and enforce arbitration agreements.

Parenthetically, the willingness of many common law jurisdictions to issue antisuit

injunctions to enforce the negative obligations of an arbitration agreement stands in

some tension with the refusal of these jurisdictions to issue orders compelling

arbitration. A substantial argument can be made that antisuit injunctions, which interfere

more directly with foreign courts’ jurisdiction, should be more (not less) difficult to obtain

than orders compelling arbitration – yet, as discussed above, the former are more

readily available than the latter in many jurisdictions.

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[c] Antisuit Injunctions Under U.S. Law

U.S. courts have also been prepared to grant antisuit injunctions prohibiting parties from

proceeding with foreign litigation in violation of a valid international arbitration

agreement, but subject to significantly more demanding conditions and restrictions than

in England, Singapore and most other common law jurisdictions. In general, U.S. courts

have been reluctant to grant antisuit injunctions, even where parties have commenced

foreign litigation in violation of their agreement to arbitrate, except in compelling cases

where there is a special need for such relief.

Preliminarily, there is no question but that U.S. courts have the authority to enjoin parties

from proceeding with foreign litigation of disputes that are subject to arbitration. In one

court’s words, “[t]he power of federal courts to enjoin foreign suits in favor of arbitration

is … well-established.” Exercising this authority, U.S. courts have not infrequently

issued antisuit injunctions directing parties not to proceed with litigation in a foreign

court in violation of an arbitration agreement.

The preliminary requirements that must be satisfied in order to obtain an antisuit

injunction from a U.S. court are demonstrating that: (a) the underlying arbitration

agreement is valid, (b) the parties to the foreign litigation are the same as those

bound by the arbitration agreement, and (c) the disputes at issue in the foreign

litigation would be resolved by the arbitration. In addition, consistent with general

U.S. law on equitable relief, U.S. courts have also typically required additional showings

of (d) irreparable injury or grave hardship to the party seeking relief, and (e)

evidence that the (U.S.) forum’s public policy warrants a grant of injunctive relief.

Applying these general principles, U.S. lower courts have formulated a variety of different

standards for when an antisuit injunction may be granted to restrain foreign litigation.

Some U.S. courts grant such relief based merely upon a showing of serious inconvenience

or risk of inconsistent judgments, while others are more demanding and require a

clear showing that the foreign litigation would threaten the jurisdiction or public policies

of the U.S. forum. Courts applying the latter standard tend to regard wasted costs

and efforts, arising from a parallel litigation brought in violation of an arbitration

agreement, as insufficient grounds for issuing antisuit relief. In contrast, courts applying

the former standard are more likely to issue antisuit injunctions based on the wasted

time and expense, and potential procedural unfairness, caused by litigation in breach of

an arbitration agreement.

Even U.S. courts that are ordinarily reluctant to issue antisuit injunctions will sometimes

do so where foreign litigation is brought in violation of the parties’ agreement to

arbitrate, based on U.S. policies favoring international arbitration:

“The enjoining forum’s strong public policy in favor of arbitration, particularly

in international disputes, would be threatened if [the respondent] were

permitted to continue to pursue the [action in its home courts], particularly in

light of the court’s decision herein granting [the plaintiff’s] motion to compel

arbitration.”

Applying this analysis, one lower court reasoned broadly that “[w]hen a foreign court has

issued an order prohibiting the arbitration proceedings that the parties have agreed to

[U.S. courts have held that] ‘little else is required to authorize an injunction.’”

In approaching the question of antisuit injunctions, U.S. courts afford significant weight to

a party’s participation in the arbitral process and the results of that process. Where

parties refuse to participate in, and instead seek to frustrate, the arbitral proceedings

(i.e., by seeking anti-arbitration injunctions from a foreign court), U.S. courts are much

more likely to issue antisuit injunctions against the litigation. Where parties

participate in the arbitral process, while also commencing litigation in foreign courts

challenging the validity of the arbitration agreement, U.S. courts are less likely to enjoin

the foreign proceeding, at least until the arbitral tribunal makes an award.

U.S. courts also consider the importance of the location of the arbitral seat in deciding

whether to issue an antisuit injunction. Where the arbitral seat is in the United States, it

is more likely that an injunction will be issued. Relatedly, U.S. courts have also

considered the likelihood that a foreign judicial proceeding will provide a neutral and

competent forum for resolving challenges to the existence or validity of the arbitration

agreement.

Some U.S. courts have also granted antisuit injunctions to prevent litigation from

undermining the relief granted by an award which the U.S. court had already confirmed.

Other U.S. courts have refused to enjoin foreign proceedings aimed at frustrating

enforcement of an arbitral award, even where such proceedings were commenced

outside the arbitral seat and in clear violation of the New York Convention.

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[d] Antisuit Injunctions in Civil Law Jurisdictions

In contrast to the common law approach, civil law courts have generally refused to grant

antisuit orders, including to enforce international arbitration agreements. In most

instances, civil law courts are not even requested to order antisuit injunctive relief,

because it is clear that no such remedy is available.

As a general matter, there are grave reservations about antisuit injunctions in many civil

law systems. In one action, a German court declared that an English antisuit injunction,

aimed at restraining proceedings brought in Germany in violation of an arbitration

clause, was a violation of German public policy:

“[S]uch injunctions constitute an infringement of the jurisdiction of Germany

because the German courts alone decide, in accordance with the procedural

laws governing them and in accordance with existing international

agreements, whether they are competent to adjudicate on a matter or whether

they must respect the jurisdiction of another domestic or a foreign court

(276)

(including arbitration courts). … These rights are safeguarded by the Germany

procedural codes and, in many respects, by the [German Constitution]. The

courts must give effect to these rights. Instructions from foreign courts to the

parties concerning the manner in which the proceedings are to be conducted

and their subject-matter are likely to impede the German courts in fulfilling

this task.”

The Court upheld the refusal of the relevant

German authorities to effect service process

in the English antisuit proceeding on the respondent in Germany (as had been requested

under the Hague Service Convention).

Similarly, in a case referred by the House of Lords to the European Court of Justice, the

ECJ largely upheld the view of most civil law courts with respect to the general

impermissibility of antisuit injunctions, at least when issued within the context of the EU

(albeit not in relation to arbitration). According to the court:

“Any injunction prohibiting a claimant from bringing such an action must be

seen as constituting interference with the jurisdiction of the foreign court

which, as such, is incompatible with the system of the [Brussels] Convention.”

Despite their historic reservations regarding antisuit injunctions, some civil law

jurisdictions have in recent years issued anti-arbitration orders (albeit, as discussed

below, improperly). Given this, it is possible that the same rationale would support

an antisuit order, even in civil law jurisdictions that have historically rejected this form of

relief.

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[e] Antisuit Injunctions and EU Law

European Union legislation, and particularly EC Regulation 44/2001 (now superseded by

the Recast Regulation), have been interpreted as forbidding Member State courts from

granting antisuit injunctions against proceedings brought, in violation of a valid

arbitration clause or otherwise, in another EU Member State. The ECJ eventually

addressed that question in 2009, holding that courts in EU Member States were not

permitted to issue antisuit injunctions against proceedings in other Member States, even

when those proceedings were brought in violation of a valid arbitration agreement.

The starting point for considering the availability of antisuit injunctions in the EU has

been the rule established by the ECJ, applying Regulation 44/2001 (and, previously, the

Brussels Convention), that a Member State court may not enjoin a party from pursuing

litigation in another Member State’s courts, even when this litigation is in breach of an

exclusive forum selection clause. This rule requires consideration whether the same

prohibition against antisuit injunctions applies within the EU to orders enjoining

litigation in violation of international arbitration (as distinguished from forum selection)

agreements. Although there are obvious parallels between the two scenarios, Regulation

44/2001 contained a so-called “arbitration” exception, which arguably excluded

measures taken to enforce arbitration agreements from the effects of the Regulation.

The scope of this exception, as applied to antisuit injunctions against proceedings

in EU Member State courts, was considered and ultimately resolved in the long-running

“West Tankers” litigation.

The West Tankers dispute arose when West Tankers chartered one of its vessels to Erg, an

Italian shipper, pursuant to a charterparty that was governed by English law and that

provided for arbitration in London. During the term of the charter, the West Tankers

vessel collided with a jetty owned by Erg in Syracuse, Italy, resulting in substantial

damage and even more substantial litigation.

In subsequent proceedings, Erg both obtained an insurance payment from its insurers

(Allianz and Generali) and commenced arbitral proceedings in London, pursuant to the

charterparty, to recover excess sums from West Tankers; in response, Erg’s insurers

initiated litigation in Italy (exercising their right of subrogation) against West Tankers to

recover the sums they had paid to Erg. The insurers relied on a European litigation

tactic labelled the “Italian torpedo,” in which proceedings are initiated in Italian courts

(where binding judicial decisions cannot be expected to be issued for at least ten years)

in order to obtain settlement leverage.

West Tankers objected to the jurisdiction of the Italian courts, relying on the charter

party’s arbitration agreement (which bound the insurers, whose right of subrogation

placed them in Erg’s shoes). In order to avoid the “Italian torpedo,” and in an effort to

proceed with arbitration under the parties’ agreement, West Tankers also sought an

antisuit injunction from the English courts (in the arbitral seat) against the insurers’

continuation of the Italian litigation in fairly obvious breach of the arbitration

agreement.

The English lower courts granted the requested injunction, relying on the “arbitration

exception” to EC Regulation 44/2001 to hold that the Regulation did not prohibit antisuit

injunctions in aid of arbitration against proceedings in other EU Member State courts. On

appeal, the English Court of Appeal reasoned that Regulation 44/2001 forbid antisuit

injunctions to enforce forum selection clauses, but that the situation was different for

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injunctions to enforce international arbitration agreements:

“At least as regards those anti-suit injunctions granted in respect of breach of

jurisdiction clauses, and therefore within the ambit of Regulation 44/2001, this

approach is no longer permissible following the decision in Turner v. Grovit. …

However, the reasoning in that decision is inapplicable to anti-suit injunctions in

respect of cases involving breach of arbitration agreements which fall outside

the scope of that Regulation. … Accordingly, it is to be concluded from the

authorities binding on this court, that whatever terminology is adopted –

‘offended’, ‘affronted’ or ‘contrary to comity’ – evidence that the foreign court

would treat the order as an impermissible exercise of jurisdiction by the

English courts is, as a matter of English conflicts rules, not in itself any reason

to withhold such an order to procure compliance with an agreement to

arbitrate.”

On appeal, the House of Lords requested a preliminary ruling from the ECJ on the

question whether it is consistent with Regulation 44/2001 for a Member State court to

enjoin proceedings in another Member State on the basis of an arbitration agreement.

In response, the ECJ ruled that it would be incompatible with Regulation 44/2001 for a

Member State court to issue an order to restrain a person from commencing proceedings

before the courts of another Member State on the ground that such proceedings would be

contrary to an arbitration agreement. The ECJ reasoned that, if by means of an

antisuit injunction, the court of a Member State were prevented from examining the

validity or the effects of the arbitration agreement, the antisuit injunction could be used

as a tool to bar parties access to an EU Member State court. The Court also rejected

the argument that the arbitration exception to Regulation 44/2001 permitted the antisuit

injunction, declaring:

“[I]f, because of the subject-matter of the dispute, that is, the nature of the

rights to be protected in proceedings, such as a claim for damages, those

proceedings come within the scope of Regulation No 44/2001, a preliminary

issue concerning the applicability of an arbitration agreement, including in

particular its validity, also comes within its scope of application. … [T]he

verification, as an incidental question, of the validity of an arbitration

agreement which is cited by a litigant in order to contest the jurisdiction of

the court before which he is being sued pursuant to the Brussels Convention,

must be considered as falling within its scope.”

There were a number of post-West Tankers decisions, where English courts suggested that,

notwithstanding the existence of a valid arbitration agreement, they were barred by

Regulation 44/2001 from issuing an antisuit injunction against proceedings in another EU

Member State in violation of the arbitration agreement. At the same time, English

courts also held that antisuit injunctions in support of arbitration were still available

where proceedings have been brought in breach

of an arbitration agreement in the courts

of a non-EU state.

The ECJ’s decision in the West Tankers case attracted widespread criticism.

Commentators criticized the Court’s reasoning, as well as the fact that its decision

undercut the parties’ expectation that courts in the arbitral seat would enforce

agreements to arbitrate and impeded enforcement of the New York Convention. In the

words of one critic:

“the real concern with the West Tankers decision is that as much as the ECJ

might like the idea of uniform courts (trusting one another), uniform

procedures and uniform quality of decision making across the Member States,

that is far from being the case at present, so the system is open to inefficiency

and exploitation.”

Critics also observed that the West Tankers rule made the European Union a less

attractive location as an arbitral seat, because of the unavailability of antisuit

injunctions as a remedy against litigation in breach of arbitration agreements (and the

risk of dilatory litigation in a number of EU jurisdictions (such as the so-called Italian

torpedo)).

In response to these criticisms, a variety of proposals for reform emerged from different

EU bodies – none of which proposed perpetuating the West Tankers approach. The EU

initiated a consultation process on reforming Regulation 44/2001, which included

proposals to delete the arbitration exception or to grant exclusive jurisdiction to the

courts of the EU Member State in the arbitral seat.

In June 2012, the EU Council proposed that the arbitration exception be retained and a

new recital added to Regulation 44/2001 which would detail the scope of the exception.

In November 2012, the European Parliament voted in favor of the proposed reform

of Council Regulation (EC) on jurisdiction, recognition and enforcement of judgments in

civil and commercial matters (Recast Regulation). As discussed above, the Recast

Regulation entered into force in January 2015, replacing the prior existing EC Regulation

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44/2001.

It appears that West Tankers’ prohibition against antisuit injunctions against proceedings

in other EU Member State courts remains applicable under the Recast Regulation

(because antisuit injunctions would bar nationals of EU states access to Member State

courts). Thus, an English lower court recently confirmed that the West Tankers rules

remain applicable under the Recast Regulation. The court held:

“It may be observed that there is nothing here to undermine, or even to

address, the fundamental principles concerning the effectiveness of the

Regulation, which were affirmed in the West Tankers case and reiterated in

Gazprom. Neither the Recast Regulation itself nor its recitals say expressly

that those principles no longer apply or that an anti-suit injunction in support

of arbitration issued by a court in a member state takes precedence over

them. If the EU legislature intended to reverse the West Tankers decision, it

chose an odd way in which to do so.”

The ECJ has nonetheless held that EU Member State courts are not precluded by the

Recast Regulation from recognizing antisuit injunctions issued by arbitral tribunals (as

distinguished from Member State courts). In a 2015 decision, the Court substantially

adopted the opinion of Advocate General Wathelet concluding that

“(1) [the Brussels I Regulation] must be interpreted as not requiring the court

of a Member State to refuse to recognise and enforce an anti-suit injunction

issued by an arbitral tribunal. (2) The fact that an arbitral award contains an

anti-suit injunction … is not a sufficient ground for refusing to recognise and

enforce it on the basis of Article V(2)(b) of the New York Convention on the

Recognition and Enforcement of Foreign Arbitral Awards, signed in New York

on 10 June 1958.”

The ECJ also held that the Regulation “must be interpreted as not precluding a court of a

Member State from recognising and enforcing, or from refusing to recognize and enforce,

an arbitral award prohibiting a party from bringing certain claims before a court of that

Member State.”

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[f] Future Directions: Antisuit Injunctions in International Arbitration

Despite the controversy that the subject has caused, antisuit injunctions are, in

appropriate circ*mstances, an effective means of enforcing the negative obligations

imposed by international arbitration agreements. They are not inconsistent with the New

York Convention (because they enforce, rather than breach, international arbitration

agreements) and, used appropriately, offer important benefits. Decisions like West

Tankers, which impede or prevent use of antisuit injunctions in aid of international

arbitration (and forum selection) agreements are unfortunate and retrograde,

particularly given litigation realities in a number of European (and other) jurisdictions.

Nonetheless, the basic rule in West Tankers, forbidding EU Member State courts from

issuing antisuit injunctions against proceedings in other EU Member State courts appears

to remain in effect.

Where a party brings suit in a national court, in clear breach of the negative obligations

of an international arbitration agreement, and other mechanisms for enforcing the

parties’ agreement and the obligations of the New York Convention are not adequate, an

antisuit injunction should presumptively be available. In general, consistent with

the reasoning of English and Singaporean courts, the uncured breach of the

agreement to arbitrate through the commencement of litigation should, without more, be

sufficient to justify an antisuit injunction. In principle, the foreign forum where litigation

in violation of the Convention is pending should be given an opportunity to dismiss

wrongfully-commenced litigation and refer the parties to arbitration. Nonetheless, where

this does not occur, courts in other Contracting States may, and in most circ*mstances

should, enforce arbitration agreements and the Convention through the use of antisuit

injunctions.

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[7] Monetary Damages for Breach of Obligation Not to Litigate Arbitrable Disputes

Another means of enforcing the negative effects of an arbitration agreement is to award

monetary damages for breaches of the parties’ undertaking in their agreement not to

litigate disputes that have been submitted to arbitration. Indeed, in historical contexts

when arbitration agreements were not capable of specific performance, damages were

the only remedy that parties could obtain for their breach. It was frequently (and

correctly) remarked, however, that damages for breach of an arbitration agreement are

an uncertain and inadequate means of enforcement. That is in large part because

calculating the quantum of damages is difficult and speculative.

Nevertheless, while inadequate when considered alone, damages for breach of an

arbitration agreement can be an appropriate supplementary means of enforcing

arbitration agreements, by increasing the disincentives for such conduct. A few

contemporary judicial decisions in the United States, England and Switzerland

have either awarded damages for the breach of an arbitration agreement or

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indicated that the possibility for doing so existed. Nonetheless, some contemporary

judicial decisions deny the existence of a right to damages for breaches of arbitration

agreements (ironically, effectively resurrecting the historic hostility to arbitration

agreements, but in reverse form, as the rationale for doing so).

In the United States, some courts and commentators have concluded that the question

whether or not a breach of the arbitration agreement has occurred, is for the arbitral

tribunal to decide. When presented with claims for damages for breach of the

arbitration

agreement, a number of ICC tribunals have awarded damages provided that

the breach of the arbitration agreement was the cause of the damages.

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§8.04 COURT ORDERS ENJOINING ARBITRATION: ANTI-ARBITRATION

INJUNCTIONS

Some national courts have issued injunctive relief similar in concept to antisuit

injunctions against foreign litigation, forbidding a party from pursuing arbitral

proceedings on the grounds that the parties’ arbitration agreement was either invalid or

did not encompass the claims asserted before the arbitrators. Both the standards for

issuing such “anti-arbitration injunctions” and the effects of such orders on arbitral

tribunals raise complex issues.

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[A] Anti-Arbitration Injunctions Issued by National Courts

An anti-arbitration injunction is essentially an antisuit injunction or order, issued against

a party (or arbitrators) to preclude the initiation or continuation of an arbitration.

Typically, anti-arbitration injunctions are sought to be justified on the grounds that there

is no valid arbitration agreement, and that one party is therefore entitled to an order

preventing an illegitimate process from going forward. In many cases, anti-arbitration

injunctions are part of deliberately obstructionist tactics, typically pursued in

sympathetic local courts, aimed at disrupting the parties’ agreed arbitral mechanism.

It was formerly said that there is little authority on the topic of anti-arbitration

injunctions. That is no longer true. There is a substantial body of such authority, with

a number of national court decisions in both common law and civil law jurisdictions

enjoining (or refusing to enjoin) international arbitral proceedings. In particular, common

law courts have not infrequently affirmed their authority to enjoin international

arbitrations, including foreign-seated arbitrations, on the grounds that no valid or

enforceable arbitration agreement exists and that permitting an arbitration to proceed

in such circ*mstances would be oppressive or inequitable.

Courts in the United States have long exercised injunctive power to order parties not to

proceed with an arbitration, particularly in domestic matters. In the words of one

court, rejecting the argument that the FAA prohibits injunctions barring arbitrations: it

“should follow [from FAA’s power to compel arbitration] that the court should have a

concomitant power to enjoin arbitration where arbitration is inappropriate” and “[a]

failure to [order the arbitration to be suspended] would frustrate the goals of arbitration,

since there would be delay and increased expense as the parties litigated in both fora.”

One U.S. court suggested, in a domestic context, that it would be obligated, not just

authorized, to enjoin an arbitration brought on the basis of an invalid arbitration

agreement.

Although U.S. lower courts have most frequently enjoined domestic arbitrations, they

have also done so in a number of international cases involving arbitration agreements

subject to the New York Convention, including in some cases involving foreign-

seated arbitrations. In doing so, most U.S. courts have given little, if any, attention

to the consistency of anti-arbitration injunctions with the Convention. The U.S. Supreme

Court has also not yet considered the issue.

Although asserting the power to grant anti-arbitration injunctions against foreign-seated

arbitrations, U.S. courts have been reserved in doing so, issuing such relief only in

exceptional cases. This can be explained in part by the fact that the FAA implements a

strong public policy in favor of arbitration and in part by the relatively cautious

approach that U.S. courts take towards antisuit injunctions generally.

In particular, U.S. courts have generally declined to issue injunctive relief against

participation in arbitral proceedings that are subject to the New York Convention,

generally citing principles of comity and deference to the supervisory authority of foreign

courts. In the words of one court, “comity and the purposes of the New York

Convention do not support issuing an injunction against a foreign arbitral proceeding.”

Some U.S. courts have gone further and held that they lack the power to enjoin a

foreign arbitration subject to the Convention; as one lower court held, “the FAA does not

authorize an injunction against a foreign arbitral proceeding.”

English courts have adopted a comparable approach to that of U.S. courts, asserting the

power to issue anti-arbitration injunctions, but expressing great reluctance actually to do

so. Despite these reservations, English courts have issued anti-arbitration orders

against both English-seated international arbitrations and foreign-seated

arbitrations. For example, in one case involving the former category, an English

lower court enjoined the continuation of an English-seated international arbitration, on

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the grounds that an earlier English court decision had held that no valid arbitration

agreement bound the parties to the arbitration. The English court dismissed the

argument that its action violated the United Kingdom’s obligations under the New York

Convention, reasoning:

“No question therefore arises of the court failing to comply with obligations

undertaken pursuant to the New York Convention. In my judgment, it would be

invidious to leave it to the arbitrators to decide whether they should give

preference to their own earlier decision over that of the supervisory court on

precisely the same subject matter. The supervisory court has held in

proceeding between [the parties] that there is no basis upon which the

arbitrators have been invested with jurisdiction to determine the dispute

between those parties. That should be an end of the matter.”

English courts have emphasized that injunctions against a foreign-seated arbitration are

rarely granted, but have nonetheless occasionally exercised the authority to issue

such injunctive relief. Thus, one English decision enjoined a Texas-seated arbitration,

opining:

“[I]n exceptional cases, for example where the continuation of the foreign

arbitration proceedings may be oppressive or unconscionable so far as the

applicant is concerned, the court may exercise its power under §37 to grant

such an injunction. Those circ*mstances include the situation where the very

issue is whether or not the parties consented to a foreign arbitration, or where,

for example, there is an allegation that the arbitration agreement is a forgery.”

An English court also enjoined a Hungarian-seated arbitration on the grounds that the

validity of the putative arbitration agreement could be readily determined in English

proceedings and that there was, in addition to the alleged Hungarian arbitration

agreement, an alleged English forum selection clause. Another English court issued

an anti-arbitration injunction against arbitral proceedings seated in Singapore,

concluding that there was a risk of inconsistent judgments in respect of both the issue of

arbitral jurisdiction and the underlying dispute and holding that “[t]he balance of

convenience is in favour of granting an interim injunction to avoid unnecessary

duplication and expense, so as to put the Singapore arbitration on hold pending the

determination of the jurisdiction issue by this court.”

Other common law courts have also issued anti-arbitration injunctions, including against

arbitrations seated abroad, sometimes without the restraint generally exhibited by U.S.

and English courts. Thus, Canadian courts have also claimed (and exercised) the authority

to issue anti-arbitration injunctions against international arbitrations (including

arbitrations seated abroad). Similarly, courts in Hong Kong, India,

Pakistan, Bangladesh, Malaysia and the Caribbean have issued anti-

arbitration injunctions against international arbitral

proceedings, including arbitrations

seated abroad. Some authorities have suggested that the UNCITRAL Model Law forbids

anti-arbitration injunctions (because of the absence of any provision for such orders in

the Model Law and because of the principle of judicial non-interference). Although

there is substantial force to that suggestion, it is inconsistent with fairly uniform authority

in many Model Law jurisdictions recognizing judicial authority to issue anti-arbitration

injunctions.

At the same time, however, these decisions have emphasized the exceptional character

of anti-arbitration injunctions, particularly when issued against parties to foreign-seated

arbitrations:

“[T]he jurisdiction to grant anti-arbitration injunctions is wholly exceptional. It

must be exercised with caution and such injunctions will only be granted if the

arbitral proceedings are vexatious or oppressive or … an abuse of the legal

arbitral process.”

Despite these authorities, courts in a number of other jurisdictions (particularly with civil

law systems) refuse to issue anti-arbitration injunctions. That includes courts in France,

Switzerland and elsewhere.

It is also sometimes said that antisuit (and anti-arbitration) injunctions are unknown in

civil law jurisdictions. That is no longer true: courts in Brazil, Ethiopia,

Indonesia and Russia have issued injunctions against foreign-seated

arbitrations, often in circ*mstances involving arbitrations against local state-related

entities or the states themselves.

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[B] Future Directions: Anti-Arbitration Injunctions Under New York Convention

Anti-arbitration injunctions against international arbitrations that are putatively subject

to the New York Convention are very difficult to reconcile with the obligations imposed

on Contracting States by the Convention. Although the grounds for criticizing anti-

arbitration injunctions are complex, they argue strongly against the legitimacy, as well as

the wisdom, of such orders.

Some critics have challenged the legitimacy of any anti-arbitration injunction, on the

grounds that such relief: “appears to violate conventional and customary international

law, international public policy and the accepted principles of international arbitration.”

At first impression, this criticism appears to sweep too broadly.

It can be argued that, in principle, there is nothing in the New York Convention (or

international law generally) that forbids national courts from enjoining a party from

proceeding with purported arbitral proceedings in the absence of a valid arbitration

agreement: the Convention arguably protects valid arbitration agreements, not

nonexistent or invalid arbitration agreements. Under this view, issuance of an anti-

arbitration injunction against an arbitration pursuant to a valid international arbitration

agreement, which is protected by the Convention, is a breach of Articles II(3) and III of the

Convention – but other anti-arbitration orders would not be.

Similarly, it is difficult to accept the apparent view of Swiss courts (and some other

authorities) that anti-arbitration injunctions are irreconcilable with the principle of

competence-competence. One Swiss court explained this rationale as follows:

“These anti-suit injunctions do not hurt principles of international public law

because they respect States’ sovereignty. However, they may contradict

arbitration principles and the negative effect of the ‘competence-

competence’ principle, according to which courts cannot decide about the

jurisdiction of an arbitrator after he has already ruled on it. Even if the

negative effect of the competence-competence principle is not consecrated

by the New York Convention (Article II(3)), the doctrine considers that using an

anti-suit injunction is contestable. … [T]he petitioners cannot by a request for

interim relief … request this court to grant an anti-suit injunction, which is

contrary to the Swiss legal system ….”

It is doubtful, however, that the competence-competence doctrine can itself be sufficient

to justify a prohibition against anti-arbitration injunctions in international matters. That

is because, in most jurisdictions, national law permits courts to consider interlocutory

jurisdictional disputes concerning the existence, validity and scope of international

arbitration agreements; if the court exercises this (legitimate) authority and then

concludes that there is no valid arbitration agreement, it is impossible to see why, if only

a single legal system is concerned, an anti-arbitration injunction would not be

appropriate notwithstanding the competence-competence doctrine.

Despite these considerations, a different analysis is necessary in an international matter

subject to the New York Convention. There, the decisive point is that there are multiple

national forums to consider and legitimately decide jurisdictional objections to putative

international arbitration agreements – which, for the reasons outlined below, makes it

inappropriate for any one state to preempt such decisions by issuing anti-arbitration

orders unilaterally forbidding any arbitration at all.

The better view is that issuance of an anti-arbitration injunction against an international

arbitration subject to the New York Convention is generally contrary to the basic legal

framework established by the Convention; that conclusion applies regardless whether the

anti-arbitration order is issued by a court in the arbitral seat or otherwise. As discussed

elsewhere, the Convention’s structural regime includes no supranational authority to

interpret and give effect to the Convention’s provisions regarding international

arbitration agreements (and awards). Rather, individual Contracting States are

responsible for carrying out the Convention’s provisions regarding the recognition of

arbitration agreements and awards, including, the responsibility to do so when other

Contracting States have failed properly to fulfill their obligations under the Convention

(such as, when a Contracting State wrongfully purports to deny recognition of an

arbitration agreement or to wrongfully annul an award on jurisdictional grounds).

What the New York Convention’s structural regime implies is that Contracting States may

not interfere with the ability of one another to give effect to their respective obligations

under the Convention. That is, a state may not take steps to prevent another

Contracting State from recognizing agreements to arbitrate or arbitral awards, merely

because it would not itself accord recognition to the agreement or award. Put differently,

a Contracting State may not, through unilateral injunctive orders, preclude or hinder

other Contracting States from considering jurisdictional issues under the Convention and

from complying with their obligations under the Convention. That is particularly true

given the provisions of Article VII of the Convention, which guarantee parties the right to

more favorable national and treaty treatment than that guaranteed by the Convention

itself.

It is thus neither the competence-competence doctrine nor the existence of obligations

to recognize arbitration agreements, standing alone, that preclude a Contracting State

from issuing anti-arbitration injunctions against international arbitrations seated in other

Contracting States. Rather, it is the multilateral international legal framework under the

Convention, in which all Contracting States have mutual obligations to recognize and

enforce arbitration agreements, in good faith, pursuant to international standards, that

argues cogently against the issuance of anti-arbitration injunctions enjoining

international arbitral proceedings and award enforcement, even though such injunctions

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might well be permissible and, arguably, sensible in domestic matters.

This conclusion is underscored by the principles of international comity and mutual

cooperation underlying the Convention’s structure and obligations. In the words of the

U.S. Supreme Court,

“concerns of international comity, respect for the capacities of foreign and

transnational tribunals, and sensitivity to the need of the international

commercial system for predictability in the resolution of disputes require that

we enforce the parties’ agreement, even assuming that a contrary result would

be forthcoming in a domestic context.”

Precisely the same rationale counsels against anti-arbitration injunctions where

arbitration agreements subject to the Convention are concerned.

In any event, even if the power to enjoin arbitral proceedings were recognized in

principle to exist, that authority should be exercised with the utmost circ*mspection and

only in rare circ*mstances. In particular, injunctions against international arbitral

proceedings subject to the New York Convention (seated either locally or abroad) ought

in principle never be issued on anything other than jurisdictional grounds (e.g., the

absence of a valid arbitration agreement): claims that an arbitral tribunal is considering

meritless or time-barred claims, or that an arbitration is duplicative and vexatious, are

not proper grounds for issuing an anti-arbitration injunction or otherwise interfering with

the arbitral process. Indeed, issuing anti-arbitration orders on such grounds clearly

violates principles of judicial non-interference in the arbitral process, embodied in both

the Convention and national arbitration legislation.

Even where one party denies the existence of a valid arbitration agreement, an anti-

arbitration injunction should virtually never be issued (even assuming, contrary to the

arguments above, the power to do so under the Convention is acknowledged). That is

because of the risk of interfering with the arbitral tribunal’s assessment of its own

jurisdiction or with other national courts’ assessment of the validity of the arbitration

agreement (particularly courts in the arbitral seat). In virtually all instances, such

determinations should be permitted to be made by the arbitral tribunal, subject to

review by courts of the arbitral seat.

Moreover, any determination that a particular dispute is nonarbitrable or the subject of

mandatory national law or public policy (within the meaning of Article V(2) of the

Convention) ought never to be grounds for enjoining an arbitration. Rather, in this event, a

national court can permit litigation of the putatively nonarbitrable dispute to proceed

before it and can refuse to recognize any arbitral award dealing with the subject, without

the necessity for issuing anti-arbitration injunctive relief. That approach avoids

purporting to impose individual national conceptions of nonarbitrability and public

policies on foreign states. Such an imposition would be inconsistent with the

Convention’s treatment of these matters as exceptional escape devices from individual

Contracting States’ obligations to give effect to valid arbitration agreements and awards,

but not as grounds for more generally denying recognition to such agreements and

awards in other states.

Where the parties have agreed to arbitrate jurisdictional objections then it is per se

forbidden for national courts to issue an anti-arbitration injunction (again, even if one

assumes that such injunctions are permitted in some cases). An anti-arbitration order can

only even arguably be legitimate where the underlying agreement to arbitrate is

nonexistent, invalid, or inapplicable – conclusions which the parties’ agreement to

arbitrate jurisdictional disputes forbids a national court from reaching.

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[C] Effect of Anti-Arbitration Injunctions on Arbitral Tribunals

When a national court issues an anti-arbitration injunction, delicate issues arise as to the

arbitral tribunal’s authority to continue with the arbitration. A number of tribunals have

refused to give effect to or comply with anti-arbitration injunctions, reasoning that the

arbitrators have an independent obligation to determine their own jurisdiction. One

tribunal explained this rationale as follows:

“[W]e are of the view that it would be improper, in light of our primary duty to

the parties, to observe the injunctions issued by those courts [in the arbitral

seat], which have already significantly delayed these proceedings, given that

they have the effect of frustrating the parties’ agreement to submit disputes to

international arbitration. … [T]he Arbitral Tribunal will continue to prosecute

these arbitral proceedings in accordance with its duty to the parties, in a

manner consistent with their arbitration agreement.”

This reasoning was adopted by another tribunal, which refused to comply with an anti-

arbitration injunction issued by a court located in the arbitral seat (Indonesia), at the

behest of the respondent (the Republic of Indonesia), instead moving the situs of the

arbitral hearings to another state and continuing with the arbitration. The tribunal

correctly reasoned that the “purported injunction violates the Republic of Indonesia’s

undertakings [in the parties arbitration agreement],” and that “to prevent an arbitral

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References

The effects of arbitration agreements on the rights and duties of international

arbitrators are discussed below. See§13.02; §13.04[B].

The negative effects of an arbitration agreement include the waiver of rights of

access to public courts. As discussed above, these rights are accorded

constitutional or statutory protections in many jurisdictions. See§5.01[D].

Judgment of 2 October 1931, DFT 57 I 295 (Swiss Fed. Trib.), quoted in van Houtte,

Parallel Proceedings Before State Courts and Arbitration Tribunals: Is There A

Transnational Lis Pendens – Exception in Arbitration or Jurisdiction Conventions?, in P.

Karrer (ed.), Arbitral Tribunals or State Courts: Who Must Defer to Whom? 35, 42 (2001).

See§1.01[B][3] & §1.01[B][5]; §5.01[A]; §8.03[C][7]; Schifffahrtsgesellschaft Detlev von

Appen GmbH v. Voest Alpine Intertrading GmbH [1997] 2 Lloyd’s Rep. 279 (English Ct.

App.) (court recognized arbitration agreement on basis that “the application of the

timecharterers for an injunction [was] made to protect [their] contractual right …

that the dispute be referred to arbitration, a contractual right which equity requires

the insurance company to recognize”).

See§1.01[C]; §5.01[B]; §8.02[C]; §8.03[C].

See§1.01[B]; §1.02; §2.02.

See§1.04[A]-§1.04[B]; §2.01[A][1]; §5.01[B]; §8.03.

Geneva Protocol, Art. 1 (requiring Contracting States to recognize “the validity of an

agreement … by which the parties to a contract agree to submit to arbitration all or

any differences that may arise in connection with such contract …”) (emphasis

added); New York Convention, Art. II(1).

New York Convention, Art. II(1) (emphasis added).

As discussed above, an agreement to arbitrate does entail the relinquishment of

access to otherwise available judicial forums. See§5.01[D]; §8.02et seq. At the same

time, unlike a release of claims or a waiver of (for example) jury trial rights, an

agreement to arbitrate also entails an affirmative obligation to proceed with

dispute resolution in a different, defined manner. See§8.01et seq.

See§1.05; §2.02et seq. for a discussion of the definition of “arbitration” and

§15.01[A]-§15.01[B]; §15.07, for a description of the arbitral process.

See§1.02[A]; §1.02[B][3]; §1.04; §2.02.

Geneva Protocol, Art. 4 (emphasis added). See§1.01[C][1]; §5.01[B][1].

New York Convention, Art. II(3) (emphasis added). Article II(3)’s phrase “refer the

parties to arbitration” was based on the language of Article

4 of the Geneva

Protocol, and was included in the New York Convention without detailed discussion.

See A. van den Berg, The New York Arbitration Convention of 1958 129 (1981) (phrase

“refer the parties to arbitration” was “continued in the New York Convention without

any discussion”); §1.01[C][1]; §2.01[A]; §5.01[B][2].

Inter-American Convention, Art. 1.

European Convention, Arts. IV, V. See§1.04[A][2]; §2.01[A][1][b]; §5.01[B][3].

UNCITRAL Model Law, Art. 7(1) (emphasis added). See§2.02[B].

UNCITRAL Model Law, Art. 8(1) (emphasis added). See Bantekas, Arbitration

Agreement and Substantive Claim Before Court, in I. Bantekas et al. (eds.), UNCITRAL

Model Law on International Commercial Arbitration: A Commentary 145-47 (2020);

Beraudo, Case Law on Articles 5, 8, and 16 of the UNCITRAL Model Arbitration Law, 23 J.

Int’l Arb. 101 (2006); P. Binder, International Commercial Arbitration and Mediation

in UNCITRAL Model Law Jurisdictions 146-48 (4th ed. 2019); Cobb, Domestic Courts’

Obligation to Refer Parties to Arbitration, 17 Arb. Int’l 313 (2001); H. Holtzmann & J.

Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial

Arbitration: Legislative History and C... 302 (1989); Sanders, UNCITRAL’s Model Law on

International and Commercial Arbitration: Present Situation and Future, 21 Arb. Int’l

443, 446 (2005). See§2.01[A][2]; §5.01[C][1].

tribunal from fulfilling its mandate in accordance with procedures formally agreed by the

Republic of Indonesia is a denial of justice.” Less persuasively, the tribunal also

denied that there was any conflict (or, in its words, “struggle”) between “the Indonesian

courts and the Arbitral Tribunal”: “to the contrary … [t]he Jakarta Court’s injunction

purported to forbid pursuit of the arbitration [but] the jurisdiction of that court is

perforce limited to Indonesian territory.” Because the tribunal conducted hearings

outside Indonesia there was, in the tribunal’s view, no breach of the Indonesian

injunction.

The same rationale that supports an arbitral tribunal’s refusal to comply with an anti-

arbitration injunction, whether by a court in the arbitral seat or otherwise, also justifies a

tribunal’s refusal to stay the arbitral proceedings on lis pendens grounds pending

litigation of the parties’ jurisdictional dispute in a national court. Indeed, as

discussed below, even where the parallel litigation involves jurisdictional challenges to

the arbitral tribunal’s authority, it has an independent right – and obligation – to itself

proceed to consider and decide the jurisdictional challenges.

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10)

11)

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18)

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch13#a13_02

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch13#a13_04_B

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch05#a5_01_D

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_01_B_3

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_01_B_5

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch05#a5_01_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch08#a8_03_C_7

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_01_C

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch05#a5_01_B

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch08#a8_02_C

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch08#a8_03_C

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_01_B

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_02

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch02#a2_02

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_04_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_04_B

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch02#a2_01_A_1

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch05#a5_01_B

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch08#a8_03

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch05#a5_01_D

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch08#a8_02

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch08#a8_01

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_05

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch02#a2_02

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch15#a15_01_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch15#a15_01_B

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch15#a15_07

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_02_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_02_B_3

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_04

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch02#a2_02

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_01_C_1

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch05#a5_01_B_1

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_01_C_1

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch02#a2_01_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch05#a5_01_B_2

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_04_A_2

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch02#a2_01_A_1_b

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch05#a5_01_B_3

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch02#a2_02_B

https://www.kluwerarbitration.com/book-toc?title=International+Commercial+Arbitration+and+Mediation+in+UNCITRAL+Model+Law+Jurisdictions

https://www.kluwerarbitration.com/document/new-IPN22730

https://www.kluwerarbitration.com/book-toc?title=A+Guide+to+the+UNCITRAL+Model+Law+on+International+Commercial+Arbitration%253a+Legislative+History+and+Commentary

https://www.kluwerarbitration.com/document/new-IPN26314

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch02#a2_01_A_2

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch05#a5_01_C_1

U.S. FAA, 9 U.S.C. §4; English Arbitration Act, 1996, §9; Swiss Law on Private

International Law, Art. 7; Singapore International Arbitration Act, §6; Hong Kong

Arbitration Ordinance, §20(1); Chinese Arbitration Law, Art. 5; Indian Arbitration and

Conciliation Act, §8; Irish Arbitration Act, Art. 8; Japanese Arbitration Law, Art. 14;

Spanish Arbitration Act, Art. 11(1); Costa Rican Arbitration Law, Art. 8(1); Mauritius

International Arbitration Act, §5; Nigerian Arbitration and Conciliation Act, §4; South

African International Arbitration Act, Art. 8.

See§1.01[A][2]; §1.02 (especially §1.02[B][3]); §1.04[E]; §2.02.

See§9.01; §9.02[A]-§9.02[B] & §9.02[G].

See§10.01[A].

See§12.01[A].

See§14.01[B]; §14.03[A]et seq.

See§11.05[B][2][a].

See§15.01[A]et seq.

See§4.04[B]et seq.; §19.04[A].

See alsoDimolitsa, Arbitration Agreements and Foreign Investments: The Greek State

between Contractual Commitment and Sovereign Intervention, 5(4) J. Int’l Arb. 17, 39

(1988) (“the international principle of the inviolability of the arbitration agreement

is actually just a special application of the principle of pacta sunt servanda which,

together with the parallel application of the principle of good faith, is strictly

applied to arbitration agreements ...”); E. Gaillard & J. Savage (eds.), Fouchard

Gaillard Goldman on International Commercial Arbitration ¶627 (1999) (“The

obligation to submit disputes covered by an arbitration agreement to arbitration

results from a straightforward application of the principle that parties are bound by

their contracts. This principle, which is often expressed as the maxim pacta sunt

servanda, is probably the most widely recognized rule of international contract

law”).

SeeChapter 15.

See§1.02[B][6]; §15.02.

See Cremades, Good Faith in International

Arbitration, 6 World Arb. & Med. Rev. 217

(2012); E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on International

Commercial Arbitration ¶1165 (1999); Gaillard, Laws and Court Decisions in Civil Law

Countries, in A. van den Berg (ed.), Preventing Delay and Disruption of Arbitration /

Effective Proceedings in Construction Cases197, 203 (1991) (“By entering into an

arbitration agreement, both parties have agreed to cooperate in the arbitration

procedure”); B. Hanotiau, Complex Arbitrations: Multi-Party, Multi-Contract, Multi-

Issue – A Comparative Study ¶517 (2d ed. 2020) (“It is indeed another basic principle

of international commercial arbitration that the parties have the duty to cooperate

in good faith in the performance of their agreement as well as in the arbitral

proceedings, for example at the stage of the constitution of the arbitral tribunal”);

Peters, International Dispute Settlement: A Network of Cooperational Duties, 14 Euro.

J. Int’l L. 1, 9 (2003) (“While the dispute itself implies disagreement and non-

cooperation, some kind of cooperation, in procedure or in substance, between the

parties is needed for its resolution. Without cooperation, no settlement. Therefore a

general, customary law-based duty of cooperation with a view to a settlement is

inherent in the obligation to settle disputes peacefully”); J.-F. Poudret & S. Besson,

Comparative Law of International Arbitration ¶375 (2d ed. 2007).

See, e.g., Final Award in ICC Case No. 5485, XIV Y.B. Comm. Arb. 156, 167 (1989); Lao

Holdings NV v. Laos, Award in ICSID Case No. ARB(AF)/12/6 of 6 August 2019, ¶234

(“The principle of good faith arises in investment treaty arbitrations in various

contexts. Tribunals, of course, regularly refer to Article 31(1) of the Vienna

Convention for the rule that treaties shall be interpreted in good faith. The

obligation extends to a duty of parties to arbitrate in good faith”) (emphasis

omitted) (citing G. Born, International Commercial Arbitration 1008-14 (2d ed. 2014));

Mobil Inv. Canada Inc. v. Canada, Decision on Jurisdiction and Admissibility in ICSID

Case No. Arb/15/6 of 13 July 2018, ¶169 (“A party to a treaty is under a specific

obligation to perform its obligations under the treaty, derived from the principle

pacta sunt servanda, which can reasonably be described as one of the cornerstones

of international law”); Electrabel SA v. Hungary, Award in ICSID Case No. ARB/07/19 of

25 November 2015, ¶4.125 (“by virtue of Article 26 of the Vienna Convention (‘Pacta

sunt servanda’), States have a duty to perform in good faith obligations binding on

them under international law”); Himpurna Cal. Energy Ltd v. PT (Persero) Perusahaan

Listruik Negara, Final Award in Ad Hoc Case of 4 May 1999, XXV Y.B. Comm. Arb. 13, 58-

59 (2000) (“fundamental principle of pacta sunt servanda forms the bedrock of the

civil law of obligations everywhere”).

See, e.g., Judgment of 8 March 2006, DFT 132 III 389, 392 (Swiss Fed. Trib.); Hebei Imp.

& Exp. Corp. v. Polytek Eng’g Co., [1999] 1 HKLRD 665, 690 (H.K. Ct. Fin. App.); China

Nanhai Oil Joint Serv. Corp. Shenzhen Branch v. Gee Tai Holdings Co., [1994] 3 HKC 375,

XX Y.B. Comm. Arb. 671, 675-76 (H.K. High Ct.) (1995) (party’s obligation to arbitrate in

good faith). See also Dimolitsa, Giving Evidence: Some Reflections on Oral Evidence vs

Documentary Evidence and on the Obligations and Rights of the Witnesses, in L. Lévy

& V. Veeder (eds.), Arbitration and Oral Evidence 11, 16 (2005) (“parties’ obligation to

act fairly in the contractual relationship is extended into the dispute”).

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https://www.kluwerarbitration.com/document/KLI-KA-ICCA-HB-85-003-n

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_01_A_2

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_02

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_02_B_3

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_04_E

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch02#a2_02

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch09#a9_01

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch09#a9_02_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch09#a9_02_B

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch09#a9_02_G

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch10#a10_01_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch12#a12_01_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch14#a14_01_B

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch14#a14_03_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch11#a11_05_B_2_a

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch15#a15_01_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch04#a4_04_B

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch19#a19_04_A

https://www.kluwerarbitration.com/document/ipn11156

https://www.kluwerarbitration.com/book-toc?title=Fouchard+Gaillard+Goldman+on+International+Commercial+Arbitration

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch15

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_02_B_6

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch15#a15_02

https://www.kluwerarbitration.com/book-toc?title=Fouchard+Gaillard+Goldman+on+International+Commercial+Arbitration

https://www.kluwerarbitration.com/document/ipn27673

https://www.kluwerarbitration.com/book-toc?title=Preventing%20Delay%20and%20Disruption%20of%20Arbitration%20/%20Effective%20Proceedings%20in%20Construction%20Cases

https://www.kluwerarbitration.com/book-toc?title=Complex%20Arbitrations%253A%20Multi-party%252C%20Multi-contract%252C%20Multi-issue%20%25E2%2580%2593%20A%20comparative%20Study%20(Second%20Edition)

https://www.kluwerarbitration.com/document/ipn5501

https://www.kluwerarbitration.com/document/KLI-KA-201510103-n

https://www.kluwerarbitration.com/book-toc?title=Arbitration+and+Oral+Evidence

See§5.02[A][2][i]; §5.02[A][5][h]; Hebei Imp. & Exp. Corp. v. Polytek Eng’g Co., [1999] 1

HKLRD 665, 690 (H.K. Ct. Fin. App.); Astro Nusantara Int’l BV v. PT Ayunda Prima

Mitra,[2016] HKCA 595, ¶35 (H.K. Ct. App.) (“The principle of good faith may be

deemed enshrined in the Convention’s provisions. The legal basis would be that

Article V(1) provides that a court may refuse enforcement if the respondent proves

one of the grounds for refusal of enforcement listed in that Article. the permissive

language can be taken as basis for those cases where a party asserts a ground for

refusal contrary to good faith”) (quoting A. van den Berg, The New York Arbitration

Convention of 1958 185 (1981)); China Nanhai Oil Joint Serv. Corp. Shenzhen Branch v.

Gee Tai Holdings Co., Ltd, [1994] 3 HKC 375, 376, XX Y.B. Comm. Arb. 671, 677 (H.K. High

Ct.) (1995) (“on a true construction of the Convention there is indeed a duty of good

faith” imposed by its terms).

English Arbitration Act, 1996, §40.

French Code of Civil Procedure, Art. 1464.

See, e.g., Scottish Arbitration Act, Schedule 1, Rule 25 (“The parties must ensure that

the arbitration is conducted – (a) without unnecessary delay, and (b) without

incurring unnecessary expense”); Victoria Commercial Arbitration Act, §24B(3) (“A

party must not willfully do or cause to be done any act to delay or prevent an award

being made”); Kenyan Arbitration Act, §19A (“The parties to arbitration shall do all

things necessary for the proper and expeditious conduct of the arbitral

proceedings”); Peruvian Arbitration Law, Art. 38 (“The parties are obliged to observe

the good faith principle in all their actions and interventions during the arbitral

proceedings and to cooperate with the arbitral tribunal in the development of the

arbitration”). See also Spanish Arbitration Act, Art. 21 (“Acceptance requires

arbitrators and, as appropriate, the arbitral

institution, to comply with their

commission in good faith”); Latvian Arbitration Law, §22 (“An arbitrator shall

perform his or her duties in good faith, without being subject to any influence”).

U.N. Economic and Social Council, Draft on Arbitral Procedure Prepared by the

International Law Commission at Its Fourth Session, U.N. Doc. A/CN.4/59, Art. 1(3)

(1952) (“The undertaking [to arbitrate] constitutes a legal obligation which must be

carried out in good faith, whatever the nature of the agreement from which it

results”), Art. 15(2) (“The parties shall cooperate with one another and with the

tribunal in the production of evidence and shall comply with the measures ordered

by the tribunal for this purpose”). See also Peters, International Dispute Settlement: A

Network of Cooperational Duties, 14 Euro. J. Int’l L. 1 (2003).

Bremer Vulkan Schiffbau und Maschinenfabrik v. S. India Shipping Corp. [1981] AC 909,

983, 986 (House of Lords) (emphasis added). See also Wilson & Co. v. Partenreederei

Hannah Blumenthal [1982] 3 WLR 1149, 1160 (House of Lords); Anzen Ltd v. Hermes

One Ltd [2016] UKPC 1, ¶34 (U.K. Privy Council) (“Parties to an agreement to arbitrate

are … under mutual obligations to one another to cooperate in the pursuit of the

arbitration”). Compare Indescon Ltd v. Ogden [2004] EWHC 2326, ¶¶42-43 (TCC)

(English High Ct.) (respondent had no responsibility for delay in prosecuting claims

and had no obligation to take steps to appoint arbitrator); China Mach. New Energy

Corp. v. Jaguar Energy Guatemala LLC, [2018] SGHC 101, ¶¶194-96 (Singapore High

Ct.), aff’d, [2020] SGCA 12 (Singapore Ct. App.) (“[A]n agreement to arbitrate is an

agreement to participate in a process that requires the mutual cooperation of the

parties. A duty to cooperate in the arbitral process is therefore not so much implied

as inherent in the very nature of an arbitration agreement”) (citing G. Born,

International Commercial Arbitration 1257-59 (2d ed. 2014)).

Judgment of 10 May 1982, DFT 108 Ia 197, 201 (Swiss Fed. Trib.).

See§8.02[B].

See Bédard, Nelson & Kalantirsky, Arbitrating in Good Faith and Protecting the

Integrity of the Arbitral Process, 2010 Paris J. Int’l Arb. 737; B. Berger & F. Kellerhals,

International and Domestic Arbitration in Switzerland ¶¶1157 et seq. (4th ed. 2022);

Cremades, Good Faith in International Arbitration, 6 World Arb. & Med. Rev. 217

(2012); E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on International

Commercial Arbitration ¶¶627-34 (1999); G. Kaufmann-Kohler & A. Rigozzi,

International Arbitration – Law and Practice in Switzerland ¶3.33 (2015) (“By entering

into an arbitration agreement, the parties undertake to refrain from any acts that

may affect the integrity of the arbitral process … and to act in good faith in the

arbitration”); R. Merkin, Arbitration Law ¶¶16.1, 16.5 et seq. (1991 & Update March

2022); Peters, International Dispute Settlement: A Network of Cooperational Duties, 14

Euro. J. Int’l L. 1, 9 (2003) (“general duty to cooperate in dispute settlement”); J. B.

Racine, Droit de l’Arbitrage ¶¶649-50 (2016)(“Parties and arbitrators must act with

loyalty … under the general principle of loyalty, the parties must cooperate in good

faith in the conduct of the arbitral proceedings”); Reymond, Note sur l’Avance des

Frais de l’Arbitrage et sa Répartition, in J. Haldy, J.-M. Rapp & P. Ferrari (eds.), Études

de Procédure et d’Arbitrage en l’Honneur de Jean-François Poudret 495, 498 (1999)

(“[The] parties’ obligation to act in good faith to contribute to the organization and

furtherance of the arbitration results from [the arbitration agreement]. This means

that the arbitration agreement, in addition to the principal obligation to submit the

dispute to arbitration, gives rise to implicit rights and obligations to an extent

necessary to perform the agreement”).

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https://www.kluwerarbitration.com/document/ipn5501

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch08#a8_02_B

https://www.kluwerarbitration.com/book-toc?title=Fouchard+Gaillard+Goldman+on+International+Commercial+Arbitration

Niazi v. St. Paul Mercury Ins. Co., 121 N.W.2d 349, 356 (Minn. 1963). See also Roach v.

BM Motoring, LLC,228 N.J. 163, 175 (N.J. 2017) (“by entering into the [arbitration

agreement], [the parties] implicitly covenanted to do nothing ‘which [would] have

the effect of destroying or injuring the right of [the other party] to receive the fruits

of the [arbitration agreement]”). Compare Community Partners Designs, Inc. v. City of

Lonsdale, 697 N.W.2d 629, 635 n.4 (Minn. Ct. App. 2005); Community Duerlein v. N.J.

Auto. Full Ins. Underwriting Ass’n, 619 A.2d 664, 667 (N.J. Super. Ct. App. Div. 1993);

R.M. Bennett Heirs v. Ontario Iron Co., 426 N.W.2d 921, 924 (Minn. Ct. App. 1988).

ReliaStar Life Ins. Co. of N.Y. v. EMC Nat’l Life Co., 564 F.3d 81, 87 (2d Cir. 2009). See

also Roach v. BM Motoring, LLC,228 N.J. 163, 180 (N.J. 2017) (“defendants’ failure to

pay the AAA fees or respond to plaintiffs’ arbitration demands was not only

problematic, but also did not comport with the standards of good faith and fair

dealing”); Instinet Corp. v. Archipelago Sec., LLC, 2003 WL 22721404, at *8 (N.Y. Sup.

Ct.) (“[petitioner’s] failure or refusal to make a timely forum selection, followed by

its capricious insistence upon a perverse choice of forum, is conspicuously meant to

delay the arbitration procedures interminably and, in effect, to deny arbitration

where it was agreed upon, in violation of its obligation of good faith and fair

dealing”).

Judgment of 9 February 2022, Tagli’apau v. Amrest Holdings, Pourvoi No. 21-11.253

(French Cour de Cassation Civ. 1) (under principle of procedural loyalty to

arbitration, respondent cannot sabotage arbitration by refusing to pay its share of

advance costs and subsequently rely on arbitration agreement to challenge

jurisdiction of national courts). See alsoSociété Rocco Giuseppe e figli Spa v. Société

Agralys, 2010 Rev. Arb. 972 (Paris Cour d’Appel) (“As the applicant belatedly raised

irregularities without establishing that it did not or could not have been aware of

them at some earlier stage, the applicant failed to comply with its duty of

procedural good faith”).

See, e.g., Partial Award in ICC Case No. 3896, 110 J.D.I. (Clunet) 914 (1983) (parties have

obligation of good faith not to unduly delay arbitral proceedings); Award in ICC Case

No. 1434, 103 J.D.I. (Clunet) 978 (1976) (parties have obligation to cooperate in

evidence-taking by tribunal); Unreported Award in ICC Case, excerpted in Habegger,

Document Production: An Overview of Swiss Court and Arbitration Practice, in ICC,

Document Production in International Arbitration 21, 28-29 (2006) (parties’

disclosure obligations “correspond … to a generally acknowledged procedural rule

in international arbitration deriving from the obligation of the parties to cooperate

in good faith in the proceedings”); Lao Holdings NV v. Laos, Award in ICSID Case No.

ARB(AF)/12/6 of 6 August 2019; Libananco Holdings Co. Ltd v. Turkey, Decision on

Preliminary Issues in ICSID Case No. ARB/06/8of 23 June 2008, ¶78 (“The Tribunal

would express the principle as being that parties have an obligation to arbitrate

fairly and in good faith and that an arbitral tribunal has the inherent jurisdiction to

ensure that this obligation is complied with; this principle applies in all arbitration,

including investment arbitration, and to all parties, including States (even in the

exercise of their sovereign powers”); Methanex Corp. v. U.S., Final Award in Ad Hoc

Case on Jurisdiction and Merits of 3 August 2005, Part II, Chapter I, ¶54 (“[T]he

Disputing Parties each owed in this arbitration a general legal duty to the other and

to the Tribunal to conduct themselves

to the decision of the arbitrators.” Similarly, Article II(3) of the New York Convention

provides:

“The court of a Contracting State, when seized of an action in a matter in

respect of which the parties have made an agreement within the meaning of

this article, shall … refer the parties to arbitration ...”

Again, Article 4 of the Geneva Protocol and Article II(3) of the New York Convention

provide mechanisms for giving effect to the undertakings contained in arbitration

agreements, rather than imposing any free-standing or independent obligation to

arbitrate. In so doing, these provisions implement both the positive effects (i.e., the

parties shall be directed to proceed with (“referred to”) arbitration), as well as the

negative effects (i.e., the parties shall not be permitted to proceed with litigation in

national courts), of the arbitration agreement.

Other leading international arbitration conventions are to the same effect as the New

York Convention. Article 1 of the Inter-American Convention provides that an agreement

by parties to “submit to arbitral decision” their differences shall be treated as “valid.”

That language rests on the premise that the parties’ arbitration agreement includes a

positive obligation to “submit” their disputes to arbitration (instead of pursuing other

means of dispute resolution), and not merely a negative waiver or relinquishment of

access to judicial remedies. The European Convention also impliedly recognizes the

positive obligation to participate in arbitral proceedings, setting forth reasonably

detailed provisions regarding the constitution of tribunals and consideration of

jurisdictional objections.

Of course, an arbitration agreement does not require an aggrieved party to commence an

arbitration or to assert claims in arbitration, nor does it forbid a party from seeking or

accepting negotiated solutions to a dispute. Rather, an arbitration agreement requires a

party, if an arbitration is initiated by one of the parties to the arbitration agreement, to

participate in the arbitral process cooperatively, diligently and in good faith (i.e., the

positive effects of arbitration agreements), and to forego litigating such disputes (i.e., the

negative effects of arbitration agreements).

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[2] Positive Obligation to Arbitrate Under National Arbitration Legislation

The parties’ positive obligation to participate in arbitrating their differences is also

impliedly recognized in national legal systems, which generally parallel and implement

the approaches taken to this issue by the New York Convention. Thus, as detailed above,

Article 7(1) of the UNCITRAL Model Law defines an arbitration agreement as “an

agreement by the parties to submit to arbitration all or certain disputes …” Similarly,

Article 8(1) of the Model Law provides:

“A court before which an action is brought in a matter which is the subject of

an arbitration agreement shall, if a party so requests … refer the parties to

arbitration ...”

As with the New York Convention, these provisions do not create free-standing duties to

arbitrate, but instead give effect to the parties’ contractual obligations to submit to the

resolution of their disputes by arbitration (rather than national court litigation) and to

participate affirmatively and cooperatively in the arbitration to which the parties are

referred. Other national arbitration legislation similarly deals with the positive

obligation to arbitrate.

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[B] Content of Positive Obligation to Arbitrate

The content of the positive obligation to arbitrate is dealt with under the New York

Convention and national arbitration legislation by giving effect to the parties’ agreement

– that is, by requiring “recognition” of that agreement – rather than by stating a generally-

applicable and abstract “obligation to arbitrate.” This approach to the positive duty to

arbitrate is consistent with the contractual character of the arbitral process.

As discussed elsewhere, the contents of an agreement to arbitrate are almost entirely

matters of the parties’ choice. Party autonomy is one of the essential characteristics

and enduring attractions of international arbitration. This autonomy, and hence the

contents of the positive obligation to arbitrate, extend to the disputes to be arbitrated,

parties to the arbitration, mode of constituting the arbitral tribunal,

selection of the arbitral seat, language of the arbitration, arbitral procedures

and choice of the applicable law(s).

Importantly, the positive obligation to participate in the resolution of disputes by

arbitration also necessarily includes more general duties to participate in good faith,

diligently and cooperatively in the arbitral process. This follows both from the nature of

the arbitral process and from the general rule of pacta sunt servanda.

As noted above, an arbitration agreement is not merely a negative undertaking not to

litigate, but a positive obligation to take part in a sui generis dispute resolution process

which requires a substantial degree of cooperation (e.g., in constituting a tribunal, paying

the arbitrators, agreeing upon an arbitral procedure, obeying the arbitral procedure

(notwithstanding the absence of direct coercive powers of the arbitral tribunal) and

complying with the award). When a party agrees to arbitrate, it impliedly, but

necessarily, agrees to participate cooperatively and diligently in all of these aspects of

the arbitral process.

As already noted, one of the fundamental characteristics and attractions of arbitration is

the parties’ freedom to design cooperatively the arbitral process and procedure.

That freedom is mirrored by the implied contractual responsibility of the parties to take

part in this cooperative process, and in the other aspects of the arbitral process. Simply

put, an agreement to arbitrate necessarily entails a commitment to cooperate in good

faith in the arbitral process, with both the arbitral tribunal and other parties to the

arbitration, in resolving the parties’ disputes in a fair, objective and efficient manner.

These positive obligations are buttressed by the obligation to perform contractual

obligations in good faith – crystallized in the pacta sunt servanda doctrine – which is

recognized both internationally and in all developed national legal systems. At

the same time, as discussed elsewhere, the New York Convention itself imposes duties of

good faith on the parties in connection with agreements to arbitrate.

In some jurisdictions, obligations of cooperation, good faith and diligence are expressly

prescribed in national arbitration legislation. For example, §40 of the English Arbitration

Act, 1996, provides:

“(1) The parties shall do all things necessary for the proper and expeditious

conduct of the arbitral proceedings. (2) This includes (a) complying without

delay with any determination of the tribunal as to procedural or evidential

matters, or with any order or directions of the tribunal, and (b) where

appropriate, taking without delay any necessary steps to obtain a decision of

the court on a preliminary question of jurisdiction or law.”

Likewise, the French Code of Civil Procedure provides that “[b]oth parties and arbitrators

shall act diligently and in good faith in the conduct of the [arbitral] proceedings.” A

few other national arbitration statutes are similar, including express provisions regarding

the positive obligations to arbitrate diligently and in good faith.

Even absent such statutory provisions, national courts and other authorities have

uniformly recognized the positive obligations imposed by agreements to arbitrate.

Consistent with the pacta sunt servanda principle, and the basic character of an

arbitration agreement, national courts have repeatedly emphasized that an

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in good faith during these arbitration

proceedings and to respect the equality of arms between them, the principles of

‘equal treatment’ and procedural fairness being also required by Article 15(1) of the

UNCITRAL Rules”).

Award in ICC Case No. 8486, XXIV Y.B. Comm. Arb. 162, 171 (1999).

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See, e.g., Unreported Award in ICC Case of 2008, excerpted in Darwazeh & Greenberg,

No One’s Credit Is as Good as Cash: Awards and Orders for the Payment of the ICC

Advance on Costs, 31 J. Int’l Arb. 557, 562 (2014) (“the agreement to arbitrate is a

separate contract which differs in its nature from the contract on the merits

inasmuch as it is a contract of a procedural nature, but it is a contract nevertheless,

giving rise to a procedural obligation to provide the advance on costs”); X (Cyprus) v.

Y (Luxembourg), Z (Luxembourg), Award in ICC Case No. 17050/GZ, 29 ASA Bull.

634,¶35 (2010) (defaulting party had “an obligation to pay the advance fixed by the

ICC" and was "in breach of [its] contractual obligation”); Partial Award in ICC Case No.

11330, cited in Secomb, Awards and Orders Dealing with the Advance on Costs in ICC

Arbitration: Theoretical Questions and Practical Problems, 14(1) ICC Ct. Bull. 59, 63

(2003) (“the parties in arbitrations conducted under the ICC Rules have a mutually

binding obligation to pay the advance on costs as determined by the ICC Court,

based on Art. 30-3 ICC Rules which – by reference – forms part of the parties’

agreement to arbitrate under such Rules”); Interim Award in ICC Case of 26 March

2002, 21 ASA Bull. 802, 807-08 (2003); Partial Award in ICC Case No. 10671, 19 ASA Bull.

285 (2001); Award in ICC Case No. 10526, 126 J.D.I. (Clunet) 1179 (2001). See generally W.

Craig, W. Park & J. Paulsson, International Chamber of Commerce Arbitration ¶¶14.02

et seq. (3d ed. 2001) (“By agreeing to ICC arbitration the parties have bound

themselves to abide by the Rules. This clearly includes the payment of advances on

costs, which is the obligation of both parties”); Y. Derains & E. Schwartz, A Guide to

the ICC Rules of Arbitration 343 (2d ed. 2005) (“The parties are nevertheless generally

considered, under Article 30(3), to have an obligation, during the course of the

arbitration, to share equally in the payment of the advance fixed by the Court”);

Rohner & Lazopoulos, Respondent’s Refusal to Pay Its Share of the Advance on Costs,

29 ASA Bull. 549, 555 (2011); Secomb, Awards and Orders Dealing with the Advance on

Costs in ICC Arbitration: Theoretical Questions and Practical Problems, 14(1) ICC Ct.

Bull. 59 (2003).

Fadlallah, Payment of the Advance to Cover Costs in ICC Arbitration: The Parties’

Reciprocal Obligations, 14(1) ICC Ct. Bull. 53, 55-56 (2003).

See§1.02[B]; §1.05; §2.02et seq.

See, e.g., Nat’l Iranian Oil Co. v. Israel, Partial Award in Ad Hoc Case of 10 February

2012, discussed in Scherer & Baizeau, Swiss Federal Supreme Court Confirms NIOC vs.

Israel Award: No Review of French Court Decision to Appoint Arbitrator in Order to

Avoid International Denial of Justice, 31 ASA Bull. 400, 402 (2013) (agreement to

arbitrate imposes obligation on party to nominate arbitrator); Safond Shipping Sdn

Bhd v. E. Asia Sawmill Corp., [1993] HKCFI 151, ¶19 (H.K. High Ct.) (“All the time and

expense have been caused by (a) the defendant’s flagrant breach of its contractual

obligations to arbitrate any dispute that may arise and … to appoint an arbitrator

when called to do so and (b) its complete defiance of these proceedings brought

simply to give effect to the agreed dispute resolution mechanism”); China Ocean

Shipping Co. v. Mitrans Maritime Panama SA, XX Y.B. Comm. Arb. 282 (H.K. High Ct.

1993) (1995); Uganda Post Ltd v. R.4 Int’l Ltd, [2009] UGCADER 5 (Ugandan Ctr Arb. &

Disp. Resol.) (parties have mutual obligation to participate in constitution of

arbitral tribunal); Mvungu v. Bruno Rosiello, Misc. Civil Case No. 264/2006 (Nairobi

High Ct.) (parties obligated to suggest possible candidates for arbitrator); Müller &

Riske, Article 178 PILS, in M. Arroyo (ed.), Arbitration in Switzerland: The

Practitioner’s Guide 96 (2d ed. 2018) (“the parties to an arbitration agreement have

to do everything in their power to aid the constitution of the arbitral tribunal”);

§12.01[A]; §12.01[C][2].

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https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_02_B

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch01#a1_05

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See, e.g., Judgment of 19 December 1996, Qualiconsult v. Groupe Lincoln, 1998 Rev.

Arb. 121 (Paris Cour d’Appel). See also Gaillard, Refusal by A Party (a) to Make

Advance Deposits for the Costs of the Arbitration, and (b) to Submit A Statement of

Defence, in A. van den Berg (ed.), Preventing Delay and Disruption of Arbitration 104

(1990); A. Reiner, Das neue Österreichische Schiedsrecht: SchiedsRÄG 2006 §593, ¶101

(2006) (“The arbitration agreement, as well as the duty of cooperation and

procedural diligence deriving therefrom … give rise, in the absence of an agreement

to the contrary, to a substantive obligation [for the parties] to pay their share of the

advance on costs”); Reymond, Note sur l’Avance des Frais de l’Arbitrage et sa

Répartition, in J. Haldy, J.-M. Rapp & P. Ferrari (eds.), Études de Procédure et

d’Arbitrage en l’Honneur de Jean-Francois Poudret 495, 498 (1999) (“general obligation

to further the advancement of the arbitration results in the parties’ reciprocal duty

to cover the fees of the arbitration, not only when the final award is executed, which

is self-evident, but already by abiding to the arbitrator’s requests [to make such

payment] as the proceedings progress and as determined by the arbitrator

himself”); Wenger, Article 178 PILS, in S. Berti et al. (eds.), International Arbitration in

Switzerland ¶71 (2000) (“arbitration agreement contains the implicit obligation that

each party make an advance payment towards the prospective costs of the arbitral

proceedings in the amount ordered by the arbitral tribunal …”). Compare Juiceme,

LLC v. Booster Juice LP, 730 F.Supp.2d 1276, 1281 (D. Or. 2010) (defendant’s failure to

pay arbitration costs did not constitute “failure, neglect, or refusal of another to

arbitrate under a written agreement” under FAA); Jun, An Arbitral Tribunal’s Dilemma:

The Plea of Financially Impecunious Parties, 37 J. Int’l Arb. 479, 479 (2020) (“the

principle of pacta sunt servanda justifies binding parties to arbitrate regardless of

their financial situation. … While impecuniosity should not render an arbitration

agreement automatically ‘incapable of being performed’, an exception should be

recognized when the impecuniosity results in a breach of the rules of natural

justice”); §13.06[A].

See, e.g., English Arbitration Act, 1996, §§40(1), (2)(a) (“The parties shall do all things

necessary for the proper and expeditious conduct of the arbitral proceedings

[including] complying without delay with any determination of the tribunal as to

procedural or evidential matters”) (emphasis added); Judgment of 21 November 2003,

DFT 130 III 66, 72 (Swiss Fed. Trib.) (“parties are required – pursuant to the obligation

to act in good faith

and the prohibition of abuse of rights, which is also valid in

procedural law – to raise any objection they have with respect to the jurisdiction or

the composition of the arbitral tribunal at the earliest possible stage”). See also D.

Caron & L. Caplan, The UNCITRAL Arbitration Rules: A Commentary 671 (2d ed. 2013)

(“There are few more disruptive forces in arbitration than a party’s unwillingness to

engage in the proceedings …”); Gaillard, Unjustified Failure of A Party to Comply with

Directions of the Tribunal Relating to Timely Written Submissions and Presentation of

Evidence: Law and Court Decisions in Civil Law Countries, in A. van den Berg (ed.),

Preventing Delay and Disruption of Arbitration 203 (1990) (“By entering into an

arbitration agreement, both parties have agreed to cooperate in the arbitration

procedure …”); Müller & Riske, Article 178 PILS, in M. Arroyo (ed.), Arbitration in

Switzerland: The Practitioner’s Guide 96 (2d ed. 2018) (“the parties to an arbitration

agreement have to do everything in their power to aid the constitution of the

arbitral tribunal and for the unimpeded conduct of the arbitral proceedings up

until the moment that an award is rendered by the arbitral tribunal”); G.

Petrochilos, Procedural Law in International Arbitration 216 (2004) (“parties are under

a duty to cooperate in good faith with each other and the tribunal in order to

formulate precise rules of conduct”); §13.06[B].

See, e.g., Niazi v. St. Paul Mercury Ins. Co., 121 N.W.2d 349, 356 (Minn. 1963); Paal

Wilson & Co. AS v. Partenreederei Hannah Blumenthal [1983] 1 AC 854, 887 (House of

Lords) (“mutual obligation of co-operation between both parties” to arbitration

agreement); Bremer Vulkan Schiffbau und Maschinenfabrik v. S. India Shipping Corp.

[1981] AC 909, 983 et seq. (House of Lords) (“there are mutual obligations to be

implied into the parties’ agreement not to obstruct or frustrate the purpose of the

agreement”); Judgment of 18 February 1983, DFT 109 Ia 81, 83 (Swiss Fed. Trib.) (“one

of the purposes of arbitration is to enable the rapid settlement of disputes, so that

the parties are bound pursuant to the rules of good faith to avoid anything which

could delay without absolute necessity the normal course of the arbitration

procedure”); Judgment of 10 May 1982, DFT 108 Ia 197, 201 (Swiss Fed. Trib.); China

Machine New Energy Corp. v. Jaguar Energy Guatemala LLC, [2018] SGHC 101

(Singapore High Ct.), aff’d, [2020] SGCA 12 (Singapore Ct. App.). See also Dasser &

Gauthey, La Bonne Foi dans l’Arbitrage, 33 ASA Bull. 239, 249 (2015); Peters,

International Dispute Settlement: A Network of Cooperational Duties, 14 Euro. J. Int’l L.

1, 22 (2003) (“doctrine of non-frustration of adjudication is an important corollary to

obligations to cooperate”) (emphasis omitted).

SeeChapter 20.

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See Unreported Award in ICC Case, excerpted in Habegger, Document Production: An

Overview of Swiss Court and Arbitration Practice, in ICC, Document Production in

International Arbitration 21, 28-29 (2006) (parties’ disclosure obligations

“correspond[] to a generally acknowledged procedural rule in international

arbitration deriving from the obligation of the parties to cooperate in good faith in

the proceedings”); Award in ICC Case No. 1434, 103 J.D.I. (Clunet) 978 (1976) (parties

have obligation to cooperate in evidence-taking requested by tribunal); U.N.

Economic and Social Council, Draft on Arbitral Procedures Prepared by the

International Law Commission at Its Fourth Session, U.N. Doc. A/CN.4/59, Arts. 1(3),

15(2) (1952); Chapter 16.

Nat’l Iranian Oil Co. v. Israel, Partial Award in Ad Hoc Case of 10 February 2012

(agreement to arbitrate imposes obligation on party to nominate arbitrator),

discussed in Scherer & Baizeau, Swiss Federal Supreme Court Confirms NIOC vs.

Israel Award: No Review of French Court Decision to Appoint Arbitrator in Order to

Avoid International Denial of Justice, 31 ASA Bull. 400, 402 (2013). Compare Indescon

Ltd v. Ogden [2004] EWHC 2326, ¶42-43 (TCC) (English High Ct.) (respondent had no

obligation to take steps to appoint an arbitrator, noting that “[s]hould the applicant

still intend to prosecute its claims under the 1992 notice, it is open to it to seek the

respondent’s agreement to an arbitrator, or failing such agreement to apply

unilaterally for the appointment of an arbitrator to the Chartered Institute of

Arbitrators”).

See Peters, International Dispute Settlement: A Network of Cooperational Duties, 14

Euro. J. Int’l L. 1, 16 (2003) (“good faith relates to all stages of the settlement

procedure”).

See§21.03[C][1] (party sanctioned for misconduct of counsel in arbitration).

See§11.05[B][2]; §15.02.

See J.-F. Poudret & S. Besson, Comparative Law of International Arbitration ¶443 (2d

ed. 2007) (“parties’ obligation to remunerate the arbitrators results from the

contract with the arbitrators and is not part of the main dispute submitted to

arbitration”).

See, e.g., Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 938-39 (4th Cir. 1999) (employer

materially breached arbitration agreement “by promulgating rules so egregiously

unfair as to constitute a complete default of its contractual obligation to draft

arbitration rules and to do so in good faith”); Penn v. Ryan’s Family Steakhouses, Inc.,

95 F.Supp.2d 940, 948 (N.D. Ind. 2000), aff’d, 269 F.3d 753 (7th Cir. 2001) (same).

See§8.03[C].

See§8.03[C][6].

See§8.02[C].

Article II(1) of the Convention requires only that courts of Contracting States

“recognize” agreements to arbitrate. See New York Convention, Art. II(1). See§2.01[A]

[1][a]; §5.01[B][2].

See, e.g., N. Blackaby et al. (eds.), Redfern and Hunter on International Arbitration

¶1.14 (6th ed. 2015); Samuels, Arbitration Statutes in England and the US, 8 Arb. &

Disp. Resol. L.J. 2 (1999); A. van den Berg, The New York Arbitration Convention of 1958

129-31 (1981) (“meaning of the expression in its technical procedural sense must be

deemed to be the court directive staying the court proceedings on the merits”;

“[s]uch a court directive is unknown in the majority of countries”).

Pena Copper Mines Ltd v. Rio Tinto Co. [1911-13] All ER 209, 214 (English Ct. App.). See

also W. Tankers v. RAS Riunione Adriatica di Sicurta SpA [2007] UKHL 4, ¶19 (House of

Lords) (“The Courts of the United Kingdom have for many years exercised the

jurisdiction to restrain foreign court proceedings as Colman J did in … Pena Copper.

… It is generally regarded as an important and valuable weapon in the hands of a

court exercising supervisory jurisdiction over the arbitration. It promotes legal

certainty and reduces the possibility of conflict between the arbitration award and

the judgment of a national court”).

U.S. FAA, 9 U.S.C. §4, §206, §303 (“A court having jurisdiction under this chapter may

direct that arbitration be held in accordance with the agreement at any place

therein provided for, whether that place is within or without the United States. Such

court may also appoint arbitrators in accordance with the provisions of the

agreement.”). See also Restatement of the U.S. Law of International Commercial and

Investor-State Arbitration §§2.1(a)-(b) (2019) (arbitration agreement enforced by stay

or order compelling arbitration).

Some commentators have suggested that §206 does not contemplate orders

compelling arbitration. See A. van den Berg, The New York Arbitration

Convention of

1958 130 (1981) (“thrust of §206 is not the compulsion to arbitrate but rather the

possibility for a United States court to direct that arbitration can be held in another

country”). This view is not consistent with either the statutory language or U.S.

historical practice, or with U.S. judicial applications of the provision. See§8.02[C].

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Section 4 applies to “any United States district court which, save for [the

arbitration] agreement, would have jurisdiction under title 28, in a civil action or in

admiralty of the subject matter of a suit arising out of the controversy between the

parties.” U.S. FAA, 9 U.S.C. §4. See also Vaden v. Discover Bank, 556 U.S. 49, 71 (U.S.

S.Ct. 2009) (“Under the FAA, state courts as well as federal courts are obliged to

honor and enforce agreements to arbitrate”).

Joseph Muller Corp. Zurich v. Commonwealth Petrochemicals, Inc., 334 F.Supp. 1013,

1018 (S.D.N.Y. 1971). See also Boykin v. Fam. Dollar Stores of Michigan, LLC,3 F.4th 832,

837 (6th Cir. 2021)(§4 of FAA “allows a plaintiff to file a contract claim seeking the

specific performance of an arbitration contract”); McCormick v. Am. Online, Inc., 909

F.3d 677, 682 (4th Cir. 2018) (“The FAA makes §4 a procedural gate to arbitration,

directing courts to compel arbitration if agreed to in writing …”), abrogated on other

grounds, Badgerow v. Walters, 142 S.Ct. 1310, 1315 (U.S. S.Ct. 2022); Shye v. Bookspan

LLC, 2022 WL 721525, at *2 (E.D. Mich.) (“§4 is usually invoked by a plaintiff seeking

specific performance of an arbitration agreement”); Jolly v. Intuit Inc., 485 F.Supp.3d

1191, 1206 (N.D. Cal. 2020) (“Because courts must enforce the arbitration agreement,

not simply require arbitration as a matter of course, a court may only compel

arbitration if one party is not abiding by the terms of the agreement”); Educ. Mgt

Servs., LLC v. Tracey, 2015 WL 4041664, at *2 (W.D. Tex.) (“a motion to compel

arbitration under §4 of the FAA is a request that the court compel specific

performance of an agreement to arbitrate, and may be made in any district court

which has subject matter jurisdiction over the underlying dispute”); Hightower v.

JPMorgan Chase Bank, NA, 2014 WL 12558114, at *13 (C.D. Cal.) (“A petition to compel

arbitration ‘is in essence a suit in equity to compel specific performance of a

contract’”) (quoting Rosenthal v. Great W. Fin. Sec. Corp., 14 Cal.4th 394, 411 (Cal.

1996)); Bellingham Marine Indus. Inc. v. Del Rey Fuel, LLC, 2012 WL 12941958, at *4 (C.D.

Cal.) (“‘The right to arbitration depends upon contract; a petition to compel

arbitration is simply a suit in equity seeking specific performance of that contract’”)

(quoting Lopez v. Charles Schwab & Co., 118 Cal.App.4th 1224, 1229 (Cal. Ct. App.

2004)); Slatnick v. Deutsche Bank AG, 2006 WL 8201137, at *5 (S.D. Cal.) (“A motion to

compel arbitration ‘is simply a suit in equity seeking specific performance of that

contract’”) (quoting Lopez, 118 Cal.App.4th at 1229); Fujian Pac. Elec. Co. v. Bechtel

Power Corp., 2004 WL 2645974, at *4 (N.D. Cal.) (“‘petition to compel arbitration is

simply a suit in equity seeking specific performance of that contract’”) (quoting

Cione v. Foresters Equity Servs., Inc., 68 Cal.Rptr.2d 167 (Cal. Ct. App. 1997)).

Kulukundis Shipping Co. SA v. Amtorg Trading Corp., 126 F.2d 978, 987 (2d Cir. 1942).

See, e.g., GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA,

LLC, 140 S.Ct. 1637, 1646 (U.S. S.Ct. 2020); Answers in Genesis of Ky., Inc. v. Creation

Ministries, 556 F.3d 459 (6th Cir. 2009); Sourcing Unlimited, Inc. v. Asimco Int’l, Inc.,

526 F.3d 38 (1st Cir. 2008); Bautista v. Star Cruises, 396 F.3d 1289 (11th Cir. 2005);

Paramedics Electromedicina Comercial, Ltda v. GE Med. Sys. Info. Techs. Inc., 369 F.3d

645 (2d Cir. 2004); Smith/Enron Cogeneration LP v. Smith Cogeneration Int’l, Inc., 198

F.3d 88, 99 (2d Cir. 1999); Riley v. Kingsley Underwriting Agencies, Ltd, 969 F.2d 953

(10th Cir. 1992); David L. Threlkeld & Co. v. Metallgesellschaft Ltd, 923 F.2d 245 (2d Cir.

1991); Borden, Inc. v. Meiji Milk Prods. Co., 919 F.2d 822 (2d Cir. 1990); J.J. Ryan & Sons,

Inc. v. Rhone Poulenc Textile, SA, 863 F.2d 315 (4th Cir. 1988); Sedco, Inc. v. Petroleos

Mexicanos Mexican Nat’l Oil Co., 767 F.2d 1140 (5th Cir. 1985); Sauer-Getriebe KG v.

White Hydraulics, Inc., 715 F.2d 348 (7th Cir. 1983); Rhone Mediterranee v. Achille Lauro,

712 F.2d 50 (3d Cir. 1983); Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH,

585 F.2d 39 (3d Cir. 1978); GlobalOne Mgt Group Ltd v. Tempus Applied Solutions LLC,

2018 WL 6440890 (E.D. Va.); Terra Fin. LLC v. Acrow Corp. of Am., 2017 WL 499673

(S.D.N.Y.); Nationwide Agribusiness Ins. Co. v. Buhler Barth GmbH, 2015 WL 6689572

(E.D. Cal.); Hughes, Hooker & Co. v. Am. Steamship Owners Mut. Protection & Indem.

Ass’n, Inc., 2005 WL 1384055 (S.D.N.Y.); Magsino v. Spiaggia Maritime, Ltd, 2004 WL

2578922 (E.D. La.); Boston Telecommc’ns Group, Inc. v. Deloitte Touche Tohmatsu, 278

F.Supp.2d 1041 (N.D. Cal. 2003); Marubeni Corp. v. Mobile Bay Wood Chip Ctr, 2003 WL

22466215 (S.D. Ala.); Antillean Marine Shipping Corp. v. Through Transp. Mut. Ins., Ltd,

2002 WL 32075793 (S.D. Fla.); Federico v. Charterers Mut. Assur. Ass’n Ltd, 158 F.Supp.2d

565 (E.D. Pa. 2001); Chloe Z Fishing Co. v. Odyssey Re (London) Ltd, 109 F.Supp.2d 1236

(S.D. Cal. 2000); Siderius, Inc. v. Compania de Acero del Pacifico, SA, 453 F.Supp. 22

(S.D.N.Y. 1978); Ferrara SpA v. United Grain Growers, Ltd, 441 F.Supp. 778 (S.D.N.Y. 1977);

Antco Shipping Co. v. Sidermar SpA, 417 F.Supp. 207 (S.D.N.Y. 1976); Star-Kist Foods,

Inc. v. Diakan Hope, SA, 423 F.Supp. 1220 (C.D. Cal. 1976).

InterGen NV v. Grina, 344 F.3d 134, 142 (1st Cir. 2003). See also id. at 141 (“it clearly

appears that enforcing arbitration clauses under the New York Convention is an

obligation, not a matter committed to district court discretion”); Dean Witter

Reynolds, Inc. v. Byrd, 470 U.S. 213, 219 (U.S. S.Ct. 1985) (“[T]he Arbitration Act

requires district courts to compel arbitration. … By its terms, the Act leaves no room

for the exercise of discretion by a district court, but instead mandates that district

courts shall direct the parties to proceed to arbitration on issues as to which an

arbitration agreement has been signed”); Slinger Mfg Co. v. Nemak, 2008 WL 4425889

(E.D. Wis.) (“if the Court identifies an arbitrable issue, it must issue a stay ...”).

See§2.04[B].

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See§14.08[B][2]; Ciotola v. RSA Ins. Group, PLC, 2022 WL 188183, at *10 (M.D. Pa.)

(compelling arbitration in Canada); Strategic Asset Group, LLC v. Shabanets, 2018 WL

8131760 (C.D. Cal.) (ordering parties to arbitrate in Russia); Tierra Verde Escape, LLC v.

Brittingham Group, LLC, 2017 WL 3699554 (W.D. Mich.) (compelling arbitration in Hong

Kong under New York Convention); Dahir v. Royal Caribbean Cruises, Ltd, 275

F.Supp.3d

826 (S.D. Tex. 2017) (compelling arbitration under New York Convention);

Terra Holding GmbH v. Unitrans Int’l, Inc., 124 F.Supp.3d 745 (E.D. Va. 2015) (ordering

parties to arbitrate in Lithuania); Kastner v. Vanbestco Scandanavia, AB, 2014 WL

6682440 (D. Vt.) (ordering parties to arbitrate in Canada); Viator v. Dauterive

Contractors, Inc., 638 F.Supp.2d 641 (E.D. La. 2009) (ordering parties to arbitrate in

England); Invista N. Am. Sarl v. Rhodia Polyamide Intermediates sas, 503 F.Supp.2d

195, 207 (D.D.C. 2007) (ordering parties to arbitrate in Switzerland); Sea Bowld Marine

Group, LDC v. Oceanfast Pty, Ltd, 432 F.Supp.2d 1305, 1319 (S.D. Fla. 2006) (ordering

parties to arbitrate in Australia); Ibeto Petrochemical Indus., Ltd v. MT Beffen, 412

F.Supp.2d 285, 293 (S.D.N.Y. 2005) (ordering parties to arbitrate in England); Acosta v.

Norwegian Cruise Line, Ltd, 303 F.Supp.2d 1327, 1332 (S.D. Fla. 2003) (ordering parties

to arbitrate in Philippines); Marubeni Corp. v. Mobile Bay Wood Chip Ctr, 2003 WL

22466215, at *19 (S.D. Ala.) (ordering parties to arbitrate in Alabama); Boston

Telecommc’ns Group, Inc. v. Deloitte Touche Tohmatsu, 278 F.Supp.2d 1041, 1049 (N.D.

Cal. 2003) (ordering parties to arbitrate in Canada); Clarendon Nat’l Ins. Co. v. Lan,

152 F.Supp.2d 506, 524 (S.D.N.Y. 2001) (ordering parties to arbitrate in New York);

Hart Enters. Int’l, Inc. v. Anhui Provincial Imp. & Exp. Corp., 888 F.Supp. 587, 591

(S.D.N.Y. 1995) (ordering parties to arbitrate in China); Evans & Sutherland Computer

Corp. v. Thomson Training & Simulation, 1994 WL 593808, at *7 (S.D.N.Y.) (ordering

parties to arbitrate in New York); Filanto SpA v. Chilewich Int’l Corp., 789 F.Supp. 1229,

1241 (S.D.N.Y. 1992) (ordering parties to arbitrate in Russia); Star-Kist Foods, Inc. v.

Diakan Hope, SA, 423 F.Supp. 1220, 1223 (C.D. Cal. 1976) (ordering parties to arbitrate

in England).

As discussed below, the power of U.S. courts to order a party to arbitrate outside the

United States depends on whether the New York (or Inter-American) Convention

applies. If not, then a number of U.S. courts have held that the domestic FAA does

not permit a U.S. district court to compel arbitration outside its district (and,

therefore, outside the United States). U.S. FAA, 9 U.S.C. §4. See§14.08[B][1]. See also

Jain v. de Mere, 51 F.3d 686, 690 (7th Cir. 1995); Bauhinia Corp. v. China Nat’l Mach. &

Equip. Imp. & Exp. Corp., 819 F.2d 247, 250 (9th Cir. 1987); Energy Transp. Ltd v. MV San

Sebastian, 348 F.Supp.2d 186, 200 (S.D.N.Y. 2004); Tolaram Fibers, Inc. v. Deutsche

Eng’g Der Voest-Alpine Industrieanlagenbau GmbH, 1991 WL 41772, at *2 (M.D.N.C.);

Capitol Converting Co. v. Curioni, 1989 WL 152832 (N.D. Ill.); Oil Basins, Ltd v. Broken

Hill Proprietary Co., 613 F.Supp. 483, 488 (S.D.N.Y. 1985). See also Smith, Quintanilla &

Hines, Enforcing Agreements to Arbitrate, in L. Shore et al. (eds.), International

Arbitration in the United States 189, 201 (2017) (“As befits a provision concerned with

international arbitration agreements, the power conferred by §206 is broader than

that granted under §4 of the FAA, which permits a court to order arbitration only

‘within the district in which the petition for an order directing such arbitration is

filed’”).

See, e.g., Tierra Verde Escape, LLC v. Brittingham Group, LLC, 2017 WL 3699554 (W.D.

Mich.) (compelling arbitration in Hong Kong under New York Convention); Dahir v.

Royal Caribbean Cruises, Ltd, 275 F.Supp.3d 826 (S.D. Tex. 2017) (compelling

arbitration under New York Convention).

See, e.g., Prima Paint Corp. v. Flood & Conklin Mfg Co., 388 U.S. 395 (U.S. S.Ct. 1967);

Commercial Metals Co. v. Balfour, Guthrie & Co., 577 F.2d. 264 (5th Cir. 1978); Nat’l R.R.

Passenger Corp. v. Mo. R.R. Co., 501 F.2d 423, 425-26 (8th Cir. 1974) (“Congress

provided in 9 U.S.C. §4 an abbreviated procedure for obtaining specific

enforcement of arbitration agreements”); Spear v. Cal. State Auto Ass’n, 831 P.2d 821,

824 (Cal. 1992) (an application to compel arbitration “is in essence a suit in equity to

compel specific performance of a contract”); Crawford v. Feldman, 604 N.Y.S.2d 585

(N.Y. App. Div. 1993); State of W. Va. ex rel. Ranger Fuel Corp. v. Lilly, 267 S.E.2d 435 (W.

Va. 1980).

J. Lew, L. Mistelis & S. Kröll, Comparative International Commercial Arbitration ¶7-

84 (2003).

See, e.g., InterGen NV v. Grina, 344 F.3d 134, 142 (1st Cir. 2003) (court may enforce

order compelling arbitration by holding recalcitrant party in contempt); United Food

& Com. Workers Union, Loc. 135, 324, 770, 1167, 1428 and 1442 v. Ralphs Grocery Co.,

2020 WL 1230639, at *2-5 (C.D. Cal.) (granting motion for contempt sanctions against

party failing to comply with order compelling arbitration); Freaner v. Valle, 966

F.Supp.2d 1068, 1074 (S.D. Cal. 2013) (order to show cause for violation of order

compelling arbitration); U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., 2003 WL

23309445 (S.D.N.Y.); Lifescan, Inc. v. Premier Diabetic Serv., 2001 WL 590011 (N.D. Cal.).

See also Sternlight, Forum Shopping for Arbitration Decisions: Federal Courts’ Use of

Antisuit Injunctions Against State Courts, 147 U. Pa. L. Rev. 91, 177 (1998) (“Once the

federal court has issued an order compelling arbitration, parties would risk

sanctions such as contempt of court by refusing to follow the order”).

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This is consistent with early English common law authority, which was the source of

the general prohibition against injunctions ordering a party to arbitrate.

See§8.02[C]; Pena Copper Mines Ltd v. Rio Tinto Co. [1911-13] All ER 209, 214 (English Ct.

App.).

See, e.g., Rhone Mediterranee v. Achille Lauro, 712 F.2d 50 (3d Cir. 1983) (arbitration

before two arbitrators alleged to violate Italian law).

As discussed below, this is not a merely hypothetical risk. See§14.08[B].

This is also not only a hypothetical possibility. See§12.06[D].

See§15.06.

See§1.02[B][1] & §1.02[B][6]; §15.02; §15.06.

The nature of these limitations on national court authority is discussed in detail

below. See§15.06.

See§7.02.

See§15.06.

See§11.04[C][1].

See§15.06.

See§9.02[A]-§9.02[B].

See§7.03[A][2][c]; §7.03[E][5][d]; §7.03[I][3].

See§15.03.

See§7.03[I][3]; §9.06[A]. As discussed above, even if the parties’ arbitration

agreement does not grant the arbitrators authority to definitively decide disputes

regarding the scope of the arbitration clause, this issue is intertwined with

interpretation of the underlying contract (see§9.05[C]; §9.02[E]) and should therefore

generally be left for initial decision by the arbitral tribunal.

See§8.02[C].

See§15.08[DD].

See§12.03[C][2].

See§12.03[C][3][a]; English Arbitration Act, 1996, §17. See also Veeder, Laws and Court

Decisions in Common Law Countries and the UNCITRAL Model Law, in A. van den Berg

(ed.), Preventing Delay and Disruption of Arbitration/Effective Proceedings in

Construction Cases 169, 170-71 (1991).

See§12.03[C][3][b]; French Code of Civil Procedure, Art. 1451(3); Portuguese Law on

Voluntary Arbitration, Art. 10(4); Spanish Arbitration Act, Art. 15(2)(b); Italian Code of

Civil Procedure, Art. 809.

See§15.08[K]& §15.08[HH].

As discussed below, default awards are in principle enforceable under most

international and national arbitration regimes. See§15.08[HH]; §23.01[F]; §26.05[C][3]

[g].

See§4.04et seq.

See§8.02[C]. See also§8.03[A]; §8.03[C][1]-§8.03[C][2] (negative obligations).

There are very limited exceptions to this principle, involving provisional measures

and jurisdictional issues, where there is the possibility of concurrent jurisdiction in

both national courts

and an arbitral proceeding. See§7.03[I][3]; §17.02[E]; §17.04[C]

[4]; §27.03[B]-§27.03[D].

See§2.01[A][1]; §8.02[A][1]; New York Convention, Arts. II(1), (3).

See§8.03[C][1]-§8.03[C][2]; §27.03[D].

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https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch15#a15_06

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch09#a9_02_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch09#a9_02_B

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https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch07#a7_03_E_5_d

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch07#a7_03_I_3

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https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch09#a9_06_A

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch09#a9_05_C

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch09#a9_02_E

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https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch12#a12_03_C_2

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch12#a12_03_C_3_a

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch12#a12_03_C_3_b

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https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch15#a15_08_HH

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch23#a23_01_F

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch26#a26_05_C_3_g

https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch04#a4_04

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https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch27#a27_03_B

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https://www.kluwerarbitration.com/document/KLI-KA-Born-2021-Ch02#a2_01_A_1

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See§8.03[B][3]; §15.06; CLMS Mgt Servs. LP v. Amwins Brokerage of Ga., LLC, 8 F.4th

1007, 1015 (9th Cir. 2021) (Article II(3) “is addressed directly to domestic courts,

mandates that domestic courts ‘shall’ enforce arbitration agreements, and ‘leaves

no discretion to the political branches of the federal government whether to make

enforceable the agreement-enforcing rule it prescribes’”) (quoting Safety Natl’l Cas.

Corp. v. Certain Underwriters at Lloyd’s, London, 587 F.3d 714, 735 (5th Cir. 2009)

(Clement, J., concurring)); McDonnel Group, LLC v. Great Lakes Ins. SE, UK Branch, 923

F.3d 427 (5th Cir. 2019) (“When the Convention is applicable, courts of signatory

states must ‘at the request of one of the parties, refer the parties to arbitration,

unless it finds that the … agreement is null and void, inoperative or incapable of

being performed’”); Answers in Genesis of Ky., Inc. v. Creation Ministries, 556 F.3d 459,

469 (6th Cir. 2009) (“The language of [Article II(3)] and its statutory incorporation

provide for no exceptions. When any party seeks arbitration, if the agreement falls

within the [New York Convention], we must compel the arbitration unless the

agreement is ‘null and void, inoperative, or incapable of being performed.’”);

InterGen NV v. Grina, 344 F.3d 134, 141 (1st Cir. 2003); I.T.A.D. Assocs., Inc. v. Podar

Bros., 636 F.2d 75, 77 (4th Cir. 1981) (Article II(3) “clearly mandates the referral of …

dispute to arbitration unless one of the enumerated exceptions is applicable”);

McCreary Tire & Rubber Co. v. CEAT SpA, 501 F.2d 1032, 1037 (3d Cir. 1974) (“There is

nothing discretionary about Article II(3) of the Convention”); Soojay v. WorldVentures

Mktg, LLC, 2019 WL 2246208 (E.D. Tex.) (“the Convention requires the district court to

compel arbitration ‘unless it finds that the said agreement is null and void,

inoperative or incapable of being performed’”) (emphasis in original); Arabian

Homes for Foreign Trade v. M/V Grain Trader, 1996 WL 54412, at *1-2 (E.D. La.) (court

must grant stay where New York Convention applies); Lonrho Ltd v. Shell Petroleum

Co., IV Y.B. Comm. Arb. 320, 321 (Ch) (English High Ct. 1978) (1979) (“The effect of §1 [of

the English Arbitration Act, 1975, implementing Article II(3)] is to deprive the court of

any discretion whether a claim within a non-domestic arbitration agreement should

be arbitrated or litigated. … The Section is mandatory”); Tomolugen Holdings Ltd v.

Silica Investors Ltd, [2015] SGCA 57, ¶42 (Singapore Ct. App.) (“When Art II(3) of the

New York Convention was formulated in the 1950s, it sought principally to achieve

the limited goal of preventing Contracting States from refusing to recognise the

validity of arbitration agreements”); Hotels.com (U.S.) v. Zuz Tourism Ltd, XXXI Y.B.

Comm. Arb. 791, 794-95 (Israeli S.Ct. 2005) (2006) (“Article II(3) of the Convention

states in mandatory language that the court ‘shall … refer’ the parties to arbitration,

unless one of the exceptions listed in the section is present. It appears that the

manner in which both provisions were drafted leads to a single conclusion: that if

one of the three exceptions mentioned in Article II(3) does not appear, the court is

as a rule required to order a stay of the proceedings …”); A. Samuels, Jurisdictional

Problems in International Commercial Arbitration 195 (1989) (“Where the New York

Convention applies, it is clear that the court has no discretion as to whether to stay

proceedings brought in breach of a valid arbitral agreement”).

UNCITRAL Model Law, Art. 8(1).

See§2.04[B].

See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (U.S. S.Ct. 1985) (terms of §3

“leave no place for the exercise of discretion by a district court, but instead … [the

FAA] mandates that district courts shall direct the parties to proceed to arbitration

on issues as to which an arbitration agreement has been signed”); Asghar v. Legal

Servs. Comm’n

[2004] EWHC 1803 (Ch) (English High Ct.) (investigation by Legal

Services Commission stayed in respect of all matters which under contract should

be referred to arbitration); Kellys of Fantane Ltd v. Bowen Constr. Ltd, [2017] IEHC 357,

¶22 (Dublin High Ct.) (“If there is an arbitration clause and the dispute is within the

scope of the arbitration agreement and there is no finding that the agreement is

null and void, inoperative, or incapable of being performed then by virtue of Article

8 of the Model Law, a stay must be granted”); §1.04[B][1][b]et seq.

Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant

LLP [2013] UKSC 35, ¶1 (U.K. S.Ct.).

Id. at ¶21.

See, e.g., Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk

Hydropower Plant LLP [2013] UKSC 35, ¶21 (U.K. S.Ct.); HC Trading Malta v. Tradeland

Commodities SL [2016] EWHC 1279, ¶25 (Comm) (English High Ct.) (“the rights

conferred by an arbitration agreement included the separate and negative right not

to be sued elsewhere i.e. otherwise than pursuant to the agreement”); Vedanta Res.

Holdings Ltd v. ZCCM Inv. Holdings plc, [2019] ZAGPJHC 250 (S. Gauteng High Ct.).

Vedanta Res. Holdings Ltd v. ZCCM Inv. Holdings PLC, [2019] ZAGPJHC 250 (S. Gauteng

High Ct.).

Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant

LLP [2013] UKSC 35, ¶22 (U.K. S.Ct.) (“case-law also contains no support for JSC’s

argument that the negative aspect of an arbitration agreement is enforceable only

when an arbitration is on foot or proposed”); HC Trading Malta v. Tradeland

Commodities SL [2016] EWHC 1279, ¶25 (Comm) (English High Ct.) (“not a pre-

requisite that an arbitration had already been started or was imminent”).

See§7.02[E].

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https://www.kluwerarbitration.com/document/IPN898

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See§8.02[A]; UNCITRAL, Explanatory Note by the UNCITRAL Secretariat on the 1985

Model Law on International Commercial Arbitration as amended in 2006 ¶21 (2008)

(“Modelled on article II(3) of the New York Convention, article 8(1) of the Model Law

places any court under an obligation to refer the parties to arbitration if the court is

seized with a claim on the same subject-matter unless it finds that the arbitration

agreement is null and void, inoperative or incapable of being performed”).

See, e.g., Dell Computer Corp. v. Union des Consommateurs, [2007] 2 SCR 801, ¶149

(Canadian S.Ct.); Nanisivik Mines Ltd v. F.C.R.S. Shipping Ltd, [1994] 2 FC 662, ¶8

(Canadian Fed. Ct. App.) (“In both its ordinary meaning and in light of the object and

purpose of the Act, ‘shall’ clearly means ‘must’ not ‘may’”); Miramichi Pulp & Paper

Inc. v. Canadian Pac. Bulk Ship Servs. Ltd, [1992] 58 FTR 81, ¶16 (Canadian Fed. Ct.);

BC Navigation SA v. Canpotex Shipping Servs. Ltd, [1987] 16 FTR 79, ¶4 (Canadian Fed.

Ct.) (“[Article 8] imposes an imperative duty upon the Court to refer to the parties to

arbitration …”); City of Prince George v. A.L. Sims & Sons Ltd, [1995] WWR 503, ¶58

(B.C. Ct. App.); Kaverit Steel & Crane Ltd v. Kone Corp., XIX Y.B. Comm. Arb. 643, 645

(Alberta Ct. App. 1992) (1994) (“I am of the view that the statute commands that what

may go to arbitration shall go. No convenience test limits references”);

PetroKazakhstan Inc. v. Lukoil Overseas Kumkol BV, [2005] ABQB 789, ¶56 (Alberta

Q.B.) (“[C]ourts in this jurisdiction are required not to intervene in matters governed

by arbitration: … Article 8(1). … Accordingly, it would be inappropriate for this Court

to make any determination of [respondent’s] claims of breach of contract”); Cangene

Corp. v. Octapharma AG, [2000] WWR 606, ¶13 (Manitoba Q.B.); Tomolugen Holdings

Ltd v. Silica Investors Ltd, [2015] SGCA 57, ¶27 (Singapore Ct. App.); Coop Int’l Pte Ltd

v. Ebel SA, [1998] SGHC 425 (Singapore High Ct.) (“Art. 8 of the Model Law requires a

mandatory stay of proceedings unless the court is satisfied that the arbitration

agreement is null and void, inoperative or incapable of being performed”); New

Sound Indus. Ltd v. Meliga Ltd, [2005] HKCA 7 (H.K. Ct. App.); MAK v. LA, [2022] HKCFI

285, ¶10 (H.K. Ct. First Inst.) (“The Court has no discretion since [provision of Hong

Kong Arbitration Ordinance implementing Article 8 of the Model Law] specifies that

the court ‘shall’ refer the parties to arbitration. The authorities are also beyond

dispute, that the party applying for the stay only has to establish a good prima facie

case that the parties were bound by an arbitration clause”); Daily Win Eng’g Ltd v.

Owners of Greenwood Terrace, XXX Y.B. Comm. Arb. 168 (H.K. Ct. First Inst. 2001)

(2005); F & D Bldg Servs. Eng’g Co. v. Chevalier Ltd, XXX Y.B. Comm. Arb. 164 (H.K. Ct.

First Inst. 2001) (2005); Paladin Agric. Ltd v. Excelsior Hotel Ltd, [2001] 2 HKC 215 (H.K.

Ct. First Inst.) (“In conclusion … at each turn the court is faced with the mandatory

nature of Article 8(1)”); Kellys of Fantane Ltd v. Bowen Constr. Ltd, [2017] IEHC 357, ¶22

(Dublin High Ct.).

Dalimpex Ltd v. Janicki, [2003] 228 DLR4th 179, ¶20 (Ontario Ct. App.). See also Dell

Computer Corp. v. Union des Consommateurs, [2007] 2 SCR 801, ¶149 (Canadian S.Ct.)

(“[Article] 940.1 C.C.P. seems clear: if the parties have an agreement to arbitrate on

the matter of the dispute, on the application of either of the parties, the court shall

refer the parties to arbitration, unless the case has been inscribed on the roll or the

court finds the agreement to be null. It is well established that, by using the term

“shall”, the legislator has indicated that the court has no discretion to refuse, on the

application of either of the parties, to refer the case to arbitration when the

appropriate conditions are met”) (emphasis in original).

Coop Int’l Pte Ltd v. Ebel SA, XXVI Y.B. Comm. Arb. 832, 839 (Singapore High Ct. 1998)

(2001). See also Tomolugen Holdings Ltd v. Silica Investors Ltd, [2015] SGCA 57, ¶27

(Singapore Ct. App.) (“Specifically, under §6 of the [Singapore International

Arbitration Act], the court must stay court proceedings relating to ‘any matter’ that

is covered by an arbitration agreement upon an application for a stay by a party to

that agreement. The only exceptions are where the court is satisfied that the

arbitration agreement is ‘null and void’, ‘inoperative’ or ‘incapable of being

performed’: §6(2) of the [Act]. This regime is substantially similar to that found in Art

8(1) of the Model Law, but with some differences in phraseology”).

See A. Broches, Commentary on the UNCITRAL Model Law on International

Commercial Arbitration Art. 8, ¶3 (1990). See also Bantekas, Arbitration Agreement

and Substantive Claim Before Court, in I. Bantekas et al. (eds.), UNCITRAL Model Law

on International Commercial Arbitration: A Commentary 145 (2020); Beraudo, Case

Law on Articles 5, 8, and 16 of the UNCITRAL Model Arbitration Law, 23 J. Int’l Arb. 101

(2006); P. Binder, International Commercial Arbitration and Mediation in UNCITRAL

Model Law Jurisdictions 146-47 (4th ed. 2019); I. Dore, The UNCITRAL Framework for

Arbitration in Contemporary Perspective 106 (1993); H. Holtzmann & J. Neuhaus, A

Guide to the UNCITRAL Model Law on International Commercial Arbitration:

Legislative History and C... 302 (1989); P. Sanders, The Work of UNCITRAL on

Arbitration and Conciliation 73 (2d ed. 2004) (“In the case the validity [of the

arbitration agreement] is not contested, the court will refer the parties to

arbitration”).

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https://www.kluwerarbitration.com/document/ipn22956

https://www.kluwerarbitration.com/book-toc?title=International+Commercial+Arbitration+and+Mediation+in+UNCITRAL+Model+Law+Jurisdictions

https://www.kluwerarbitration.com/book-toc?title=A+Guide+to+the+UNCITRAL+Model+Law+on+International+Commercial+Arbitration%253a+Legislative+History+and+Commentary

See§2.03[C][2][a]; §2.04[B]; UNCITRAL Model Law, Art. 1(2); VC Rice Intertrade Co. Ltd v.

Asian Mineral Res. Pte Ltd, [2017] SGHC 32 (Singapore High Ct.); Coop Int’l Pte Ltd v.

Ebel SA, XXVI Y.B. Comm. Arb. 832, 847 (Singapore High Ct. 1998) (2001) (Article 8 “is

not restricted to agreements providing for arbitration in that State and, thus, helps

to give universal recognition and effect to the commercial arbitration agreements”);

UNCITRAL, Digest of Case Law on the Model Law on International Commercial

Arbitration 33 (2012) (“Pursuant to article 1(2) of the Model Law, the fact that the

place of arbitration is located in a foreign jurisdiction has no bearing on the

applicability of article 8”); UNCITRAL, Explanatory Note by the UNCITRAL Secretariat

on the 1985 Model Law on International Commercial Arbitration as Amended in 2006

¶21 (2008) (“since article 8 is not limited in scope to agreements providing for

arbitration to take place in the enacting State, it promotes the universal recognition

and effect of international commercial arbitration agreements”). See also Nanisivik

Mines Ltd v. Canarctic Shipping Co., [1994] 113 DLR4th 536, ¶8 (Canadian Fed. Ct. App.)

(court had “no discretion in the circ*mstances but to refer the claim” to arbitration

in London); Dalimpex Ltd v. Janicki, [2003] 228 DLR4th 179, ¶¶20-21 (Ontario Ct. App.)

(Article 8’s requirements “mandatory” where arbitration was to be held in Poland);

D.G. Jewelry Inc. v. Cyberdiam Canada Ltd, [2002] 21 CPC5th 174, ¶¶28-29 (Ontario

Super. Ct.) (staying claims so that parties could arbitrate in, among other places,

Toronto); China Merchants Heavy Indus. Co. v. JGC Corp., [2001] 3 HKC 580, 585 (H.K. Ct.

App.) (affirming decision to stay proceedings pursuant to Hong Kong version of

Article 8 and refer dispute to arbitration in Japan); Tai Hing Cotton Mill Ltd v.

Glencore Grain Rotterdam BV, [1995] HKEC 424 (H.K. Ct. App.) (staying proceedings in

Hong Kong in favor of arbitration in Liverpool); Comandate Marine Corp. v. Pan

Australia Shipping Pty Ltd, [2006] FCAFC 192 (Australian Fed. Ct.) (referring parties to

arbitration in London); Danone Asia Pac. Holdings Pte Ltd v. Fonterra Co-operative

Group Ltd, [2014] NZHC 1681 (Auckland High Ct.) (staying proceedings in favor of

arbitration in Singapore). See also Kore Meals LLC v. Feshii Dev. LLC, [2021] ONSC 2896

(Ontario Super. Ct.) (referring parties to arbitration in Chicago, noting that “test for a

stay of proceedings in the face of an arbitration clause is a relatively low one”;

“Chicago and Toronto are all on the same cyber street … No one venue is more or

less unfair or impractical than another”).

See§2.03[B][2][a], pp. 322-46; §2.04[B]; Tomolugen Holdings Ltd v. Silica Investors Ltd,

[2015] SGCA 57 (Singapore Ct. App.); Maybank Kim Eng Sec. Pte Ltd v. Lim Keng Yong,

[2016] SGHC 68 (Singapore High Ct.); New Sound Indus. Ltd v. Meliga Ltd, [2005] HKCA

7 (H.K. Ct. App.); Neo Intelligence Holdings Ltd v. Giant Crown Indus. Ltd, [2017] HKCFI

2088 (H.K. Ct. First Inst.) (referring parties to arbitration in Hong Kong); Aggressive

Constr. Co. v. Data-Form Eng’g Ltd, [2009] HKCFI 854 (H.K. Ct. First Inst.); Pac. Crown

Eng’g Ltd v. Hyundai Eng’g & Constr. Co., [2003] 3 HKLRD 440 (H.K. Ct. First Inst.);

Getwick Eng’rs Ltd v. Pilecon Eng’g Ltd, [2002] 1020 HKCU 1 (H.K. Ct. First Inst.);

Leviathan Shipping Co. v. Sky Sailing Overseas Co., [1998] 4 HKC 347, 354 (H.K. Ct. First

Inst.) (referring parties to arbitration in Hong Kong); Galgalo v. Musikali Kombo, Civil

Case No. 382/2006 (Kenyan High Ct.).

Southland Corp. v. Keating, 465 U.S. 1, 7 (U.S. S.Ct. 1984). See also Dean Witter

Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (U.S. S.Ct. 1985) (terms of §3 “leave[] no place

for the exercise of discretion by a district court, but instead … mandate that district

courts shall direct the parties to proceed to arbitration on issues as to which an

arbitration agreement has been signed”).

See, e.g., Anzen Ltd v. Hermes One Ltd [2016] UKPC 1 (U.K. Privy Council); Sodzawiczny

v. Ruhan [2018] EWHC 1908 (Comm) (English High Ct.); Asghar v. Legal Servs. Comm’n

[2004] EWHC 1803 (Ch) (English High Ct.) (investigation by Legal Services Commission

stayed in respect of all matters which under contract should be referred to

arbitration); Judgment of 2 October 1931, DFT 57 I 295, 305 (Swiss Fed. Trib.) (“negative

effect [of arbitration] is the exclusion of the State courts’ jurisdiction”); Tomolugen

Holdings Ltd v. Silica Investors Ltd, [2015] SGCA 57 (Singapore Ct. App.); Lau Lan Ying

v. Top Hill Co., [2021] HKCFI 290, ¶28 (H.K. Ct. First Inst.) (“On the policy rationale for

mandatory stay of proceedings for arbitration … ‘businessmen frequently do want

the question of whether their contract was valid, or came into existence, or has

become ineffective, submitted to arbitration and … the law should not place

conceptual obstacles in their way’”) (quoting Fiona Trust Holding Corp. v. Privalov

[2007] 1 All ER (Comm) 891 (English Ct. App.), aff’d, [2008] UKHL 40 (House of Lords)).

See UNCITRAL, Digest of Case Law on the Model Law on International Commercial

Arbitration 33 (2012) (“article 8(1) relates to the so-called ‘negative’ effect of the

arbitration agreement, which prevents the parties from commencing court actions

in relation to matters falling within the scope of the agreement”).

A. van den Berg, The New York Arbitration Convention of 1958 152 (1981). See also G.

Petrochilos, Procedural Law in International Arbitration 27 (2004) (“in truth, an

arbitration agreement is principally a derogation clause (excluding the jurisdiction

of all courts in the world), whereas a forum-selection clause is primarily a

prorogation clause (enlarging the jurisdiction of the designated court)”).

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Some institutional arbitration rules contain provisions indicating the exclusivity of

the arbitral process. See, e.g., 2021 ICC Rules, Art. 35(6) (“By submitting the dispute

to arbitration under the Rules, the parties undertake to carry out any award without

delay and shall be deemed to have waived their right to any form of recourse

insofar as such waiver can validly be made”); 2020 LCIA Rules, Arts. 22(2), 23(5) (“By

agreeing to arbitration under the Arbitration Agreement, after the formation of the

Arbitral Tribunal the parties shall be treated as having agreed not to apply to any

state court or other legal authority”); 2015 CIETAC Rules, Art. 49(9) (“Neither party

may bring a lawsuit before a court or make a request to any other organization for

revision of the award”); 2021 DIFC-LCIA Rules, Art. 23(5) (“By agreeing to arbitration

under the Arbitration Agreement, after the formation of the Arbitral Tribunal the

parties shall be treated as having agreed not to apply to any state court or other

legal authority ...”).

See§1.02[B][2].

See§1.02[B][5]; §2.03[D].

See§9.04. See also Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk

Hydropower Plant LLP [2013] UKSC 35, ¶21 (U.K. S.Ct.); Pena Copper Mines Ltd v. Rio

Tinto Co. [1911]

All ER 209, 212 (English Ct. App.) (arbitration agreement entails

“probably an express negative, but … certainly an implied negative … that they will

not sue in a foreign court”); HC Trading Malta v. Tradeland Commodities SL [2016]

EWHC 1279, ¶25 (Comm) (English High Ct.); Oppenheim v. Midnight Marine Ltd, 2010

NLCA 64, ¶¶48, 52, 54 (Newfoundland & Labrador Ct. App.) (“In England and in the

European Union generally, a valid arbitration clause in an international commercial

contract is ‘… analogous to an exclusive jurisdiction clause.’ … In the circ*mstances,

the only reasonable interpretation of these words [any dispute] is ‘every’ dispute. …

[T]he absence of the term ‘exclusive’ is not determinative of whether a clause is an

exclusive jurisdiction clause”) (quoting Shashoua v. Sharma [2009] EWHC 257 (Comm)

(English High Ct.); Trade Maritime Corp. v. Hellenic Mutual War Risks Ass’n (Bermuda)

Ltd [2006] EWHC 2530 (Comm) (English High Ct.)).

See, e.g., Gabbanelli Accordions & Imps., LLC v. Gabbanelli, 575 F.3d 693, 695 (7th Cir.

2009) (“A person who having agreed to arbitrate instead brings a suit has broken his

contract, and the breach can be pleaded as a defense to his suit”); Blatt v.

Pambakian, 432 F.Supp.3d 1141, 1162 (C.D. Cal. 2020), aff’d in part, rev’d in part, 2021

WL 4352329 (9th Cir.) (“a party can breach the ADR Agreement by refusing to

participate in the arbitration agreement” by filing an action in court); Apple Inc. v.

BYD Co. Ltd, 2016 WL 1212638 (N.D. Cal.); In re GOE Lima, LLC, 2012 WL 4634885, at *11

(N.D. Ohio) (quoting Gabbanelli Accordions & Imps., LLC, 575 F.3d at 695); Versatile

Housewares & Gardening Sys., Inc. v. Thill Logistics, Inc., 819 F.Supp.2d 230, 239

(S.D.N.Y. 2011) (“clause creates an obligation on the parties to bring all actions

falling within the clause’s scope, including this action, in the chosen forum, and that

[plaintiff] consequently breached this obligation by bringing this action in [another

forum]”) (emphasis in original); Cent. Reserve Life Ins. Co. v. Marello, 2000 WL 1474106,

at *2 (E.D. Pa.) (“Filing a lawsuit based on arbitrable claims constitutes such a

breach”), aff’d, 281 F.3d 219 (3d Cir. 2001).

See§8.03[C][1]-§8.03[C][2].

ATM Compute GmbH v. DY 4 Sys., Inc., [1995] OJ No. 1678 (Ontario Super. Ct.);

UNCITRAL, Digest of Case Law on the Model Law on International Commercial

Arbitration 34 (2012) (“Article 8 states that it applies where a court is seized of an

‘action.’ If the court is not seized of an action, article 8 is not applicable and no

referral order may be obtained”).

See, e.g., Judgment of 31 May 2007, III ZR 22/06 (German Bundesgerichtshof);

Judgment of 12 January 2006, III ZR 214/05 (German Bundesgerichtshof).

See, e.g., Re Sanpete Builders Pte Ltd, [1989] SLR 164 (Singapore High Ct.); Re S.

Materials Holding Co., [2008] HKCFI 98 (H.K. Ct. First Inst.); Hoo Cheong Bldg Constr.

Co. v. Jade Union Inv. Ltd, [2004] HKCFI 21 (H.K. Ct. First Inst.); Liu Man Wai v. Chevalier

Ltd, [2002] HKCFI 399 (H.K. Ct. First Inst.); In re Mech-Power H.K.-China Ltd, [1996]

HKCFI 307 (H.K. Ct. First Inst.).

See§17.04[E]; Timoney Tech. Ltd v. ADI Ltd, [2007] VSC 402 (Victoria Sup. Ct.)

(existence of arbitration agreement did not prevent court from ruling on application

seeking disclosure of documents in aid of arbitration). See also Judgment of 19 April

2017, XLII Y.B. Comm. Arb. 469 (Gelderland Rechtbank) (2017); N. Erk-Kubat & J. Lew

(eds.), Parallel Proceedings in International Arbitration: A Comparative European

Perspective 73 (2014) (“As an exception hereto, [Article II(3) of the New York

Convention] does not apply to court proceedings for interim or provisional relief

and to judicial proceedings initiated in support of arbitration (such as an

application to remove an arbitrator)”).

Judgment of 2 October 1931, DFT 57 I 295, 305 (Swiss Fed. Trib.).

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See, e.g., InterGen NV v. Grina, 344 F.3d 134, 141 (1st Cir. 2003); Eazy Elecs. & Tech., LLC

v. LG Elecs., Inc., 226 F.Supp.3d 68 (D.P.R. 2016); Judgment of 8 August 1990, XVII Y.B.

Comm. Arb. 545, 547 (Italian Corte di Cassazione) (1992) (referring to effects of

arbitration agreement: “its positive effects, i.e., referral of the dispute to arbitrators,

and its negative effects, i.e., exclusion of court jurisdiction in the Contracting

States”); Judgment of 16 October 2018, Lda, Case No. 2258/16.4T8CBR.C1.S1

(Portuguese Supremo Tribunal de Justiça). See also Sanders, Arbitration Law in

Western Europe: A Comparative Survey, in M. Domke (ed.), International Trade

Arbitration: A Road to World-Wide Cooperation 139-40 (1958) (“The existence of an

arbitration agreement deprives the Courts of their jurisdiction. The judge becomes

incompetent when the defendant invokes an arbitration agreement”).

See§27.02[B][3][b].

As noted above, there is an exception to this principle in the case of provisional

measures, as to which concurrent jurisdiction exists. See§8.03; §17.02[E]; §17.04[C][4].

See§7.03[I][3]; §8.03.

See§7.03et seq.

See§7.03.

See§7.03[E]-§7.03[F]. Alternatively, Article VI(3) of the European Convention provides

a variation of this approach, requiring general deference to the arbitrators’

jurisdiction, subject to an exception permitting discretionary interlocutory judicial

consideration of jurisdictional issues. European Convention, Art. VI(3). See§7.02[A][2].

Where an admittedly valid agreement to arbitrate jurisdictional disputes exists (for

example, regarding the scope of the arbitration agreement), different

considerations apply. As discussed below (see§8.04[B]), courts should not be free to

engage in judicial consideration of jurisdictional issues where the parties have

agreed to arbitrate such matters (thus giving effect to the negative obligations of

the agreement to arbitrate matters of jurisdiction); in the absence of such an

agreement, courts have discretion not to engage in judicial consideration of such

issues, even though the courts would in principle be competent to do so, where

reasons of efficiency and fairness argue for an arbitral determination.

See§3.03[A]; §7.02[F]. Most clearly, the French rule requiring judicial referral of all

jurisdictional objections to arbitration, after arbitral proceedings have commenced,

reflects a legislative preference regarding the proper allocation of initial

competence over, and the best forum for initial consideration of, such objections.

See§7.03[B].

These obligations would forbid parties from making public statements about the

dispute in an inflammatory (or unbalanced) manner that creates pressure on

participants in the arbitration process. See Biwater Gauff (Tanzania) Ltd v. Tanzania,

Procedural Order No. 3 in ICSID Case No. ARB/05/22 of 29 September 2006, ¶¶135-36

(“It is self-evident that the prosecution of a dispute in the media or in other public

fora, or the uneven reporting and disclosure of documents or other parts of the

record in parallel with a pending arbitration, may aggravate or exacerbate the

dispute and may impact upon the integrity of the procedure. This is all the more so

in very public cases, such as this one, where issues of wider interest are raised, and

where there is already substantial media coverage, some of which already being the

subject

of complaint by the parties”). See also Teinver SA v. Argentina, Decision on

Provisional Measures in ICSID Case No. Arb/09/1 of 8 April 2016, ¶¶210, 239(a);

Chevron Corp. v. Ecuador, Order on Interim Measures in PCA Case No. 2009-23 of 14

May 2010.

See§10.02[M].

See§8.03[C]; §10.02[E].

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Ipek Inv. Ltd v. Turkey, Procedural Order No. 6 in ICSID Case No. ARB/18/18 of 19

September 2019, ¶3 (“By ratifying the Convention, a State accepts that a tribunal

may grant provisional measures in an appropriate case even if that may entail some

interference with a State’s sovereign powers and enforcement duties”); Nova Group

Invs., BV v. Romania, Procedural Order No. 7 in ICSID Case No. ARB/16/19 of 29 March

2017 (“domestic criminal proceedings are not per se immune from potential

recommendation of provisional measures”); Hydro Srl v. Albania, Order on

Provisional Measures in ICSID Case No. ARB/15/28 of 3 March 2016; Lao Holdings NV v.

Laos, Ruling on Motion to Amend the Provisional Measures Order in ICSID Case No.

ARB(AF)/12/6 of 30 May 2014; Quiborax SA v. Bolivia, Decision on Provisional Measures

in ICSID Case No. ARB/06/2 of 26 February 2010; Tokios Tokelés v. Ukraine, Order No. 3

in ICSID Case No. ARB/02/18 of 18 January 2005; Paushok v. Mongolia, Order on

Interim Measures in UNCITRAL Case of 2 September 2008. See also Teinver SA v.

Argentina, Decision on Provisional Measures in ICSID Case No. Arb/09/1 of 8 April 2016,

¶200 (provisional measures warranted if there is indication of harassment or

intimidation through use of criminal process); PNG Sustainable Dev. Program Ltd v.

Papua New Guinea, Decision on the Claimant’s Request for Provisional Measures in

ICSID Case No. ARB/13/33 of 21 January 2015, ¶141 (“provisional measures would

generally be appropriate if there were credible evidence that either party had

made, directed or encouraged threats of physical harm against employees, officers

or agents of the other party”); Caratube Int’l Oil Co. LLP v. Kazakhstan, Decision

Regarding Claimant’s Application for Provisional Measures in ICSID Case No.

ARB/08/12 of 31 July 2009, ¶139 (provisional measures warranted if procedural right

to continue with arbitration is precluded by criminal investigation); Pugachev v.

Russia, Interim Award in UNCITRAL Case of 7 July 2017, ¶317 (order to suspend

extradition proceedings granted to protect claimant’s right to procedural integrity

of arbitration).

In the context of criminal proceedings, some tribunals grant provisional measures

“only reluctantly and where there is an urgent need,” such as where proceedings

have not been instituted or conducted in good faith or where they threaten the

procedural integrity of the arbitration. Gerald v. Sierra Leone, Decision on the

Claimant’s Request for Provisional Measures in ICSID Case No. ARB/19/31 of 28 July

2020,¶158. See also OOO Manolium-Processing v. Belarus, Decision on Claimant’s

Interim Measures Request in PCA Case No. 2018-06 of 7 December 2018,¶144 (“a

Tribunal should not restrict the exercise of sovereign powers, in the absence of

convincing evidence that such powers are being exercised In bad faith or In a

violation of the other party’s rights”); Italba v. Uruguay, Decision on Claimant’s

Application for Provisional Measures and Temporary Relief in ICSID Case No. ARB/16/9

of 15 February 2017, ¶118(refusing to grant provisional measures where the tribunal

was “satisfied that its functions will not be usurped by” the criminal investigation);

Churchill Mining v. Indonesia, Procedural Order No. 14 in ICSID Case No. ARB/12/14 and

12/40 of 22 December 2014, ¶72 (“the right, even the duty, to conduct criminal

investigations and prosecutions is a prerogative of any sovereign state” and “[a]n

allegation that the status quo has been altered or that the dispute has been

aggravated needs to be buttressed by concrete instances of intimidation or

harassment”).

As discussed elsewhere, corporate officers, directors and employees have often

been permitted to invoke arbitration agreements concluded by the company with

which they are associated, notwithstanding the fact that these individuals are fairly

clearly not parties to the arbitration agreement. See§10.02[M].

Teinver SA v. Argentina, Decision on Provisional Measures in ICSID Case No. Arb/09/1 of

8 April 2016, ¶210; Lao Holdings NV v. Laos, Ruling on Motion to Amend the Provisional

Measures Order in ICSID Case No. ARB(AF)/12/6 of 30 May 2014, ¶¶4, 42; Biwater Gauff

(Tanzania) Ltd v. Tanzania, Procedural Order No. 3 in ICSID Case No. ARB/05/22 of 29

September 2006, ¶¶135-36. See also Chevron Corp. v. Ecuador, Order on Interim

Measures in PCA Case No. 2009-23 of 14 May 2010; Paushok v. Mongolia, Order on

Interim Measures in UNCITRAL Case of 2 September 2008; City Oriente Ltd v. Ecuador,

Decision on Provisional Measures in ICSID Case No. ARB/06/21 of 19 November 2007;

Casado v. Chile, Decision on Provisional Measures in ICSID Case No. ARB/98/2 of 25

September 2001.

See§1.01[B][2] & §1.01[B][5]; §5.01[C][5]. In other jurisdictions, only a discretionary

stay of litigation was historically available for arbitration agreements providing for

a foreign arbitral seat. See R. Merkin, Arbitration Law ¶¶8.43-67 (1991 & Update

March 2022).

See§2.01[A][1]; §8.02[A][1].

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See§2.01[A][1][a]; §5.01[B]; §8.03[A][1]; Northrop & Johnson Yachts-Ships, Inc. v. Royal

Van Lent Shipyard, BV, 855 F.App’x 468, 472 (11th Cir. 2021) (“Under the Convention

and Supreme Court and Circuit precedent, there is a strong presumption in favor of

freely-negotiated contractual choice-of-law and forum-selection provisions, and

this presumption applies with special force in the field of international commerce.

Thus, we conduct a ‘very limited inquiry.’ Under that inquiry, ‘in the absence of an

affirmative defense, a district court must compel arbitration under the Convention

if four jurisdictional requirements are met’”); Answers in Genesis of Ky., Inc. v.

Creation Ministries, 556 F.3d 459, 469 (6th Cir. 2009) (“‘nothing discretionary

about

Article II(3) of the Convention’”) (quoting McCreary Tire & Rubber Co. v. CEAT SpA, 501

F.2d 1032, 1037 (3d Cir. 1974)); InterGen NV v. Grina, 344 F.3d 134, 141 (1st Cir. 2003)

(“Given this regime, it clearly appears that enforcing arbitration clauses under the

New York Convention is an obligation, not a matter committed to district court

discretion”); Smith/Enron Cogeneration Ltd, P’ship v. Smith Cogeneration Int’l, Inc.,

198 F.3d 88, 93 (2d Cir. 1999) (“The purpose behind this drafting choice is clear: the

courts of a signatory to the Convention should abide by its goal of enforcing

international agreements to arbitrate disputes”); Tierra Verde Escape, LLC v.

Brittingham Group, LLC, 2017 WL 3699554, at *3 (W.D. Mich.) (“So long as [the]

jurisdictional requirements are met, ‘[t]he language of the treaty and its statutory

incorporation provide for no exceptions. When any party seeks arbitration, if the

agreement falls within the convention, [the court] must compel the arbitration

unless the agreement is “null and void, inoperative, or incapable of being

performed”‘”) (quoting Answers in Genesis of Ky., Inc., 556 F.3d at 469); Davis v.

Cascade Tanks, LLC, 2014 WL 3695493, at *5 (D. Or.) (“mandatory nature of [Article

II(3)]”); Phoenix Bulk Carriers Ltd v. Oldendorff Carriers GmbH & Co., 2002 WL 31478198,

at *2 (S.D.N.Y.) (“this court must compel arbitration unless the ‘making’ of the

arbitration agreement is in question”); CanWest Global Commc’ns Corp. v. Mirkaei

Tikshoret Ltd, 804 N.Y.S.2d 549, 562-63 (N.Y. Sup. Ct. 2005); Rena K [1979] QB 377, 393

(QB) (English High Ct.) (“Section 1 of the Arbitration Act 1975, giving effect to [Article

II(3) of the Convention], compels the recognition and enforcement of convention (i.e.,

non-domestic) arbitration agreements by requiring a court, except in certain

specified cases, to stay any legal proceedings brought in respect of a matter

referred to arbitration under such agreement”); Hi-Fert Pty Ltd v. Kiukiang Maritime

Carriers Inc., 86 FCR 374, 393 (Australian Fed. Ct. 1998) (“the Court must stay the

proceedings and refer the parties to arbitration”). See Dell Computer Corp. v. Union

des Consommateurs, [2007] 2 SCR 801, ¶39 (Canadian S.Ct.) (“Article II of the

Convention provides that a court of a contracting state that is seized of an action in

a matter covered by an arbitration clause must refer the parties to arbitration. At

present, 142 countries [(164 as of June 2020)] are parties to the Convention. The

accession of this many countries is evidence of a broad consensus in favour of the

institution of arbitration”); A. van den Berg, The New York Arbitration Convention of

1958 135 (1981) (“mandatory character of the referral by a court to arbitration

pursuant to Article II(3) is an internationally uniform rule”).

See§2.03[C][1][a]; McMahon, Implementation of the United Nations Convention on

Foreign Arbitral Awards in the United States, 2 J. Mar. L. & Comm. 735, 748-49 (1971);

Paulsson, The New York Convention in International Practice: Problems of

Assimilation, in ASA, The New York Convention of 1958 100, 103-04 (1996). The only

conditions are that the arbitration agreement satisfy the jurisdictional

requirements of the New York Convention (see§2.01[B]et seq.) and that it be valid

and binding (seeChapter 5).

U.S. FAA, 9 U.S.C. §3 (“If any suit or proceeding be brought … upon any issue

referable to arbitration under an agreement in writing for such arbitration, the court

in which such suit is pending, upon being satisfied that the issue involved in such

suit or proceeding is referable to arbitration under such agreement, shall on

application of one of the parties stay the trial of the action until such arbitration

has been had in accordance with the terms of the agreement”); Morgan v. Sundance,

Inc., 142 S.Ct. 1708, 1713 (U.S. S.Ct. 2022); Dean Witter Reynolds, Inc. v. Byrd, 470 U.S.

213, 218 (U.S. S.Ct. 1985); Hughes, Hooker & Co. v. Am. S.S. Owners Mut. Protection &

Indem. Ass’n, Inc., 2005 WL 1384055, at *4 (S.D.N.Y.) (“district court has no discretion

to deny a stay if a valid agreement to arbitrate exists and the claims at issue come

within the scope of that agreement”); Double Sunrise Inc. v. Morrison Mgt Specialists

Inc., 149 F.Supp.2d 1039, 1045 (N.D. Ill. 2001); State v. Philip Morris USA, Inc., 2006 WL

3490937 (N.C. Super. Ct.). See also Restatement of the U.S. Law of International

Commercial and Investor-State Arbitration §§2.1(a)-(b) (2019) (arbitration agreement

enforced by stay or order compelling arbitration).

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English Arbitration Act, 1996, §9(4) (“court shall grant a stay unless satisfied that the

arbitration agreement is null and void, inoperative, or incapable of being

performed”); Fiona Trust & Holding Corp. v. Privalov [2007] EWCA Civ 20, ¶37 (English

Ct. App.) (“stay must be granted [if arbitration agreement exists], in the light of the

mandatory ‘shall’ in §9(4)”), aff’d, [2007] UKHL 40 (House of Lords); Capital Trust Inv.

Ltd v. Radio Design TJ AB [2002] EWCA Civ 135 (English Ct. App.); Halki Shipping v.

Sopex Oil [1998] 1 Lloyd’s Rep. 465 (English Ct. App.); Helice Leasing SAS v. PT Garuda

Indonesia (Persero) TBK [2021] EWHC 99 (Comm) (English High Ct.); Thames Valley

Power Ltd v. Total Gas & Power Ltd [2005] EWHC 2208, ¶38 (QB) (English High Ct.)

(“Provided the applicant has acknowledged the legal proceedings and has not taken

any step in them to answer the substantive claim, the court is bound to grant him a

stay unless the Arbitration Agreement is null and void, inoperative or incapable of

being performed”).

Alberta International Commercial Arbitration Act, §7; Ontario International

Commercial Arbitration Act, §9; GreCon Dimter Inc. v. J. R. Normand Inc., [2005] SCC

46 (Canadian S.Ct.); Fibreco Pulp Inc. v. Star Shipping AS, [1998] FCJ No. 889 (Canadian

Fed. Ct. App.); Nanisivik Mines Ltd v. F.C.R.S. Shipping Ltd, [1994] 2 FC 662 (Canadian

Fed. Ct. App.); Dalimpex Ltd v. Janicki, [2003] 228 DLR4th 179 (Ontario Ct. App.);

Automatic Sys. Inc. v. Bracknell Corp., [1994] 18 OR3d 257 (Ontario Ct. App.); Tanar

Indus. Ltd v. Kvaerner Enviropower Inc., [1994] ABCA 346 (Alberta Ct. App.); Kaverit

Steel & Crane Ltd v. Kone Corp., XIX Y.B. Comm. Arb. 643, 645 (Alberta Ct. App. 1992)

(1994); Gulf Canada Res. Ltd v. Arochem Int’l Ltd, (1992) 66 BCLR2d 113 (B.C. Ct. App.);

Lorneville Mech. Contractors Ltd v. Clyde Bergemann Canada Ltd, [2017] NSSC 119

(Nova Scotia Sup. Ct.); Kocur v. FirstService Corp., [2017] ONSC 6114 (Ontario Super.

Ct.); Lafarge Canada Inc. v. City of Edmonton, [2015] ABQB 56 (Alberta Q.B.). See also

Nanisivik Mines Ltd v. Canarctic Shipping Co., [1994] 113 DLR4th 536 (Canadian Fed. Ct.

App.); Gen. Entm’t & Music Inc. v. Gold Line Telemgt Inc., [2022] FC 418 (Canadian Fed.

Ct.); Dongnam Oil & Fats Co. v. Chemex Ltd, [2004] FC 1732 (Canadian Fed. Ct.); Arbella

SA v. Aghia Markella, [1995] FCJ No. 723 (Canadian Fed. Ct.); Miramichi Pulp & Paper

Inc. v. Canadian Pac. Bulk Ship Servs. Ltd, [1992] 58 FTR 81 (Canadian Fed. Ct.);

Coopers & Lybrand Ltd v. Canpotex Shipping Servs. Ltd, [1987] 16 FTR 79 (Canadian

Fed. Ct.).

Singapore International Arbitration Act, §6(2) (“The court to which an application

has been made in accordance with subsection (1) shall make an order, upon such

terms or conditions as it may think fit, staying the proceedings … unless it is

satisfied that the arbitration agreement is null and void, inoperative or incapable

of being performed”); Tomolugen Holdings Ltd

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agreement to arbitrate imposes obligations to make use of, and participate

cooperatively and diligently in, the contractual arbitral process.

For example, it is well settled under English law that there is an implied term in an

agreement to arbitrate that the parties must cooperate in accordance with the

applicable arbitral rules in the conduct of the arbitration. In a leading decision, the

House of Lords reasoned as follows:

“[T]he obligation is, in my view, mutual: it obliges each party to cooperate with

the other in taking appropriate steps to keep the procedure in the arbitration

moving, whether he happens to be the claimant or the respondent in the

particular dispute. … [I]t is in my view a necessary implication from their

having agreed that the arbitrator shall resolve their dispute, that both parties,

respondent as well as claimant, are under a mutual obligation to one another

to join in applying to the arbitrator for appropriate directions to put an end to

the delay.”

A Swiss Federal Tribunal decision adopted similar conclusions, emphasizing the parties’

obligations of good faith:

“One of the aims of arbitration is to come to a fast resolution of the disputes

submitted to it. The parties who agree to arbitration are bound by the rules of

good faith to avoid any conduct which might delay without absolute necessity

the normal conduct of the arbitral proceedings.”

Other national courts have formulated this duty of good faith, cooperation and diligence

in similar terms, as has the weight of commentary. For example, a U.S. court held

that “[p]arties to an arbitration agreement are under a duty to act in good faith – each

owes to the other the obligation to make a fair effort to carry out the provisions of the

arbitration agreement and to accomplish the real object of the contract.” As another

U.S. court reasoned, “the underlying purposes of arbitration, i.e., efficient and swift

resolution of disputes without protracted litigation, could not be achieved but for good

faith arbitration by the parties.” Similarly, French courts have applied a principle of

“procedural loyalty” to the arbitral process (“loyaute dans la conduit de la procedure

arbitrale”), under which parties to an arbitration agreement are obliged not to prevent

the arbitral process from proceeding.

Arbitral tribunals have adopted similar conclusions regarding the parties’ obligation to

arbitrate in good faith. In the words of one tribunal, “[a]ccording to good faith, the

parties to an international arbitration must in particular facilitate the proceedings and

abstain from all delaying tactics.” Similarly, several ICC awards have held that there

is a contractual obligation between the parties to pay the advance on costs for the

arbitrators’ fees and expenses. As one authority concluded, based on a review of

these awards:

“The parties cannot agree to refer their dispute to arbitration and at the same

time retain the freedom not to do whatever needs to be done to make

arbitration possible, as they would then be in breach of their obligation to act

in good faith. In fact, although this obligation is specifically laid down in

Article 30(3) of the [1998] ICC Rules, it is inherent in any arbitration

agreement.”

These decisions by national courts and arbitral tribunals reflect a general principle of

international arbitration law: absent contrary indications, an international arbitration

agreement imposes obligations of good faith and diligence requiring the parties to

cooperate in the conduct of the arbitration, refraining from obstruction of the arbitral

process, and instead complying with the agreed procedural rules and affirmatively

collaborating in fashioning an efficient and evenhanded arbitral process. The parties’

obligations to arbitrate in good faith are of particular importance because of the special

nature of an agreement to arbitrate. It is a sui generis contractual provision designed to

operate only when contracting parties have fallen into dispute, and then to regulate and

require consensual resolution of those disputes in a binding and cooperative manner. In

these circ*mstances, obligations of good faith and diligence are particularly important.

The precise contours of the obligation to participate cooperatively, diligently and in

good faith in the arbitral process are varied and potentially complex. The duties of

diligence and good faith cooperation in the arbitral process have been held to include

participating in the constitution of the arbitral tribunal, paying the arbitrators’ fees

and any required advances, cooperating with the arbitrators in relation to

procedural matters, not obstructing or delaying the arbitral process, obeying

confidentiality obligations relating to the arbitration, complying with disclosure

requests, orders and awards, appointing arbitrators and establishing the

procedural rules for the arbitration.

The duty of cooperation arguably also includes complying (and causing a party’s counsel

to comply) with applicable ethical obligations governing the conduct of counsel in the

arbitral proceedings.

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As with most other aspects of the arbitral process, these obligations to participate in the

arbitral process are the subject of party autonomy, and can be altered or elaborated

by contract. U.S. courts have also found breaches of arbitration agreements where one

party is responsible for prescribing the procedural rules for the arbitration, and it adopts

biased or unfair rules. These obligations arise from the parties’ agreement to

arbitrate, rather than from their underlying contract or dispute.

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[C] Remedies for Breach of Positive Obligation to Arbitrate

The remedies available for breach of the positive obligations of an international

arbitration agreement are complex. As discussed below, the New York Convention (and

other authorities) make it clear that the negative effects of an arbitration agreement are

capable of being enforced, principally implemented through orders directing specific

performance. That is, a national court will give effect to the parties’ commitment not to

litigate their disputes by dismissing or staying actions purporting to pursue such

litigation or by antisuit injunctions enjoining parties from pursuing litigation in

breach of the parties’ agreement to arbitrate. On the other hand, the remedies to

enforce the positive effects of arbitration agreements (e.g., the obligations to participate

cooperatively and in good faith in the arbitration) are less clear.

As noted above, Article II(3) of the New York Convention and Article 8(1) of the UNCITRAL

Model Law provide that, if a valid arbitration agreement exists, courts in Contracting

States shall “refer the parties to arbitration.” The wording of that phrase fairly

strongly suggests an obligation on national courts affirmatively to order or direct the

parties to proceed with the arbitration of their dispute (rather than merely an obligation,

like that arguably provided in Article II(1), not to permit litigation to proceed). An

obligation to “refer” parties to arbitration connotes some affirmative direction or order,

not merely a refusal to entertain litigation.

Despite that, virtually none of the Convention’s Contracting States or Model Law’s

adherents enforce arbitration agreements by way of orders directing a party specifically

to perform the positive aspects of such agreements. Rather, the consistent approach

is only to dismiss or stay litigation brought in breach of an agreement to arbitrate, and

not to affirmatively order or compel participation by a party in arbitral proceedings.

The absence of judicial authority, in many jurisdictions, to order a party to perform its

v. Silica Investors Ltd, [2015] SGCA 57

(Singapore Ct. App.); Ling Kong Henry v. Tanglin Club, [2018] SGHC 153 (Singapore

High Ct.); Gulf Hibiscus Ltd v. Rex Int’l Holding Ltd, [2017] SGHC 210 (Singapore High

Ct.); Tjong Very Sumito v. Antig Invs. Pte Ltd, [2009] 4 SLR(R) 732, 743 (Singapore High

Ct.) (“If the applicant can show that there is an applicable arbitration agreement,

then the court must grant a stay of proceedings”) (emphasis added); Coop Int’l Pte

Ltd v. Ebel SA, XXVI Y.B. Comm. Arb. 832, 839 (Singapore High Ct. 1998) (2001) (“Art. 8

of the Model Law requires a mandatory stay of proceedings unless the court is

satisfied that the arbitration agreement is null and void, inoperative or incapable

of being performed”).In a recent decision, however, the Singapore Court of Appeal

upheld a decision to lift a stay of litigation previously granted by the Singapore

High Court in Gulf Hibiscus, holding that the prospect of a potential overlapping

arbitration was “largely illusory” and that “it was ill-conceived to stay the

Respondent’s claim against the Appellants, which was not subject to any arbitration

agreement, on account of an arbitration agreement between the Respondent and a

non-party to the original dispute.” See Rex Int’l Holding Ltd v. Gulf Hibiscus Ltd,

[2019] SGCA 56 (Singapore Ct. App.).

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Hong Kong Arbitration Ordinance, §§20(1), (5) (“If the court refers the parties in

action to arbitration, it must make an order staying the legal proceedings in that

action”); Gurkhas Constr. Ltd v. Craft Façade Tech (H.K.) Co.,[2021] HKDC 1166 (H.K.

Dist. Ct.) (“absent overwhelming evidence of an unequivocal waiver, a stay in favour

of arbitration should be ordered”); Tai Hing Cotton Mill Ltd v. Glencore Grain

Rotterdam BV, [1995] HKCA 626 (H.K. Ct. App.); Leung Kwok Hung v. Johnson Controls

H.K. Ltd, [2018] HKCFI 1500 (H.K. Ct. First Inst.); Neo Intelligence Holdings Ltd v. Giant

Crown Indus., [2017] HKCFI 2088 (H.K. Ct. First Inst.); Chimbusco Int’l Petroleum

(Singapore) Pte Ltd v. Fully Best Trading Ltd, [2015] HKCFI 2196, ¶¶11-12, 19 (H.K. Ct.

First Inst.) (“As a matter of public policy, Hong Kong as a party to the New York

Convention has the duty to comply with its duties under Article II of the Convention:

to recognize and enforce an arbitration agreement and to stay actions before the

Court in breach of a valid and subsisting arbitration agreement. … Unless the point

is clear, that there is no valid arbitration agreement, the Court should not attempt

to resolve the issue, and the matter should be stayed to arbitration”); Lin Meng v.

Chen Shu Quan, [2012] HKCFI 328, ¶25 (H.K. Ct. First Inst.) (“Once the conditions of

[Article 8] are satisfied, a stay of the legal action is mandatory”); Rondabosh Int’l Ltd

v. China Ping An Ins. (H.K.) Co., [2009] HKCFI 1198, ¶5 (H.K. Ct. First Inst.); Ocean Park

Corp. v. Proud Sky Co., [2007] HKCFI 1221 (H.K. Ct. First Inst.); Good Year Prof’l Serv. Co.

v. Penta-Ocean Constr. Co., [2002] HKCFI 786 (H.K. Ct. First Inst.); F & D Bldg Servs.

Eng’g Co. v. Chevalier, [2001] 3 HKCFI 824 (H.K. Ct. First Inst.); Glencore Int’l AG v.

Bright China Int’l Ltd, [1998] HKCFI 878 (H.K. Ct. First Inst.); Orienmet Minerals Co. v.

Winner Desire Ltd, [1997] HKCFI 299 (H.K. Ct. First Inst.).

Particular issues arise where there are multiple related contracts with different

dispute resolution provisions. In these circ*mstances, Hong Kong courts will grant a

mandatory stay where satisfied that the dispute in question falls within the scope of

the arbitration clause. Houtai Inv. Holdings Ltd v. Tung, [2021] HKCFI 1504 (H.K. Ct.

First Inst.) (“where there are multiple related commercial agreements … each

containing its own provision for … mode of dispute resolution, the proper test in

ascertaining the parties’ intention on how the dispute should be dealt with is to

identify the nature of the claim, and the agreement which has the closest

connection with such dispute and claim (the agreement ‘at the centre of gravity of

the dispute’”); Zpmc-Red Box Energy Serv. Ltd v. Adkins, [2021] HKCFI 3501 (H.K. Ct.

First Inst.) (refusing to stay court proceedings in favor of arbitration when, out of

multiple agreements related to the dispute, the “center of gravity” of the dispute

was an agreement granting exclusive jurisdiction to Hong Kong courts).

Malaysian Arbitration Act, §10(1) (“A court before which proceedings are brought in

respect of a matter which is the subject of an arbitration agreement shall, where a

party makes an application before taking any other steps in the proceedings, stay

those proceedings and refer the parties to arbitration unless it finds that the

agreement is null and void, inoperative or incapable of being performed”); Press

Metal Sarawak Sdn Bhd v. Etiqa Takaful Bhd, [2016] 5 MLJ 417 (Malaysian Fed. Ct.);

CMS Energy SDN RHB v. Poson Corp., [2008] MLJ 561, 562 (Malaysian High Ct.) (“Under

§10(1) … the Court shall stay all proceedings before it in respect of matter which is

the subject of an arbitration agreement”).Malaysia’s Federal Court recently set aside

a default judgment which was obtained in breach of an arbitration agreement. See

Tindak Murni Sdn Bhd v. Juang Setia Sdn Bhd, [2020] MLJU 232 (Malaysian Fed. Ct.).

Australian International Arbitration Act, §16 & Schedule 2, Art. 8(1) (“A court before

which an action is brought in a matter which is the subject of an arbitration

agreement shall, if a party so requests not later than when submitting his first

statement on the substance of the dispute, refer the parties to arbitration unless it

finds that the agreement is null and void, inoperative or incapable of being

performed”); Rinehart v. Hanco*ck Prospecting, [2019] HCA 13 (Australian High Ct.);

Comandate Marine Corp. v. Pan Australia Shipping Pty Ltd, [2006] FCAFC 192

(Australian Fed. Ct.).

New Zealand Arbitration Act, Art. 8(1) (“A court before which proceedings are brought

in a matter which is the subject of an arbitration agreement shall, if a party so

requests not later than when submitting that party’s first statement on the

substance of the dispute, stay those proceedings and refer the parties to arbitration

unless it finds that the agreement is null and void, inoperative, or incapable of

being performed, or that there is not in fact any dispute between the parties with

regard to the matters agreed to be referred”); Zurich Australian Ins. Ltd v. Cognition

Educ. Ltd, [2014] NZSC 188 (N.Z. S.Ct.); Antipodes New Zealand Ltd v. Accel (HK) Co.,

XLVII Y.B. Comm. Arb. 1, ¶22 (N.Z. High Ct.) (2021) (“The mandatory requirement to

stay the proceedings arises under Article 8 and it is not necessary for the arbitration

clause itself to expressly prohibit the parties from having disputes determined by a

court”); Pathak v. Tourism Transp. Ltd, [2002] 3 NZLR 681 (Auckland High Ct.).

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Kenyan Arbitration Act, Art. 6(1) (“A court before which proceedings are brought in a

matter which is the subject of an arbitration agreement shall, if a party so applies

not later than the time when that party enters appearance is sought, stay the

proceedings and refer the parties to arbitration unless if finds – (a) that the

arbitration agreement is null and void, inoperative or incapable of being

performed; or (b) that there is not in fact any dispute between the parties with

regard to the matters agreed to be referred to arbitration”); ICEA Lion Life Assur. Co.

Ltd v. Jomo Kenyatta Univ. of Agric. & Tech., Civil Suit No. 121/2017 (Nairobi High Ct.);

Mugoya Constr. & Eng’g Ltd v. Nat’l Social Sec. Fund Bd of Trustees, Civil Suit No.

59/2005

(Nairobi High Ct.).

Indian Arbitration and Conciliation Act, §54 (“a judicial authority, on being seized of

a dispute regarding a contract made between persons to whom §53 applies and

including an arbitration agreement, whether referring to present or future

differences, which is valid under that section and capable of being carried into

effect, shall refer the parties on the application of either of them or any person

claiming through or under him to the decision of the arbitrators and such reference

shall not prejudice the competence of the judicial authority in case the agreement

or the arbitration cannot proceed or becomes inoperative”); Shin Etsu Chem. Co. Ltd

v. MS Aksh Optifibre Ltd, Civil Appeal No. 5048/2005 (Indian S.Ct.) (“Under [Article 54]

judicial authority has no discretion. It is mandatory for the judicial authority to refer

the parties to arbitration on the existence of conditions stipulated in the section”).

Pakistani Recognition and Enforcement (Arbitration Agreements and Foreign

Arbitral Awards) Act, Art. 4(1) (“A party to an arbitration agreement against whom

legal proceedings have been brought in respect of a matter which is covered by the

arbitration agreement may, upon notice to the other party to the proceedings,

apply to the court in which the proceedings have been brought to stay the

proceedings in so far as they concern that matter”); Ovex Tech. (Private) Ltd v. PCM

PK (Private) Ltd,PLD 2020 Islamabad 22 (Pakistani High Ct.) (“Where parties have

agreed to refer a dispute to arbitration, and one of them notwithstanding that

agreement commences an action to have the dispute determined by a Court, prima

facie, the learning of the Court would be to stay the action and leave the plaintiff to

the tribunal to which he has agreed. This consideration is stronger in cases where

there is an agreement to submit the disputes arising under a contract to a foreign

arbitral tribunal”); Cummins Sales & Serv. Ltd v. Cummins Middle E., FZE 2013 CLD 291

(Pakistani High Ct.);.

See authorities cited in §2.01[A][1][a]; §5.01[B][2]; §8.03[A][1]; §8.03[C][1]. A few courts

have suggested (wrongly) that the obligation to refer parties to arbitration is only

discretionary. See, e.g. Hi-Fert Pty Ltd v. Kiukiang Maritime Carriers Inc., 12(7) Mealey’s

Int’l Arb. Rep. C-1 (Australian Fed. Ct. 1997) (1997); CTA Int’l Pty Ltd v. Sichuan

Changhong Elec. Co., [2002] VSC 374, ¶17 (Victoria Sup. Ct.) (dicta referring to

Australian International Arbitration Act, 1974, §7, which omitted “only” from text of

local enactment of Article 8); Australian Granites Ltd v. Eisenwerk Hensel Bayreuth

Dipl.-Ing. Burkhardt GmbH, [2001] 1QdR 461 (Queensland Sup. Ct.). See also M. Jacobs,

International Commercial Arbitration in Australia: Law and Practice ¶8.70 (1992);

Governors Balloon Safaris Ltd v. Skyship Co. Ltd, Civil Case No. 461/2008 (Nairobi

High Ct.) (suggesting that court may exercise discretion in choosing whether to stay

litigation “if it is in the interest of justice and judicial process”).

See§7.03[E][6]; §7.03[I][3]; §9.02; §10.01[A].

French Code of Civil Procedure, Art. 1448(1) (“When a dispute subject to an

arbitration agreement is brought before a court, such court shall decline

jurisdiction, except if an arbitral tribunal has not yet been seized of the dispute and

if the arbitration agreement is manifestly void or manifestly not applicable”); E.

Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on International Commercial

Arbitration ¶666 (1999).

Swiss Law on Private International Law, Art. 7 (“if the parties have concluded an

arbitration agreement with respect to an arbitrable dispute, the Swiss court before

which such dispute is brought shall must decline jurisdiction unless …”) (emphasis

added); Judgment of 6 August 2012, DFT 4A_119/2012, ¶3.2 (Swiss Fed. Trib.) (“When a

jurisdictional defense based on the arbitration agreement is raised before the state

court … [t]he court must deny jurisdiction unless a summary review of the

arbitration agreement leads to the conclusion that it is void, inoperative, or

incapable of being performed. … This ensures that the decision of the arbitral

tribunal as to its own jurisdiction … is not prejudged by the decision of the state

court”); Müller-Chen, in M. Müller-Chen & C. Lüchinger (eds.), Zürcher Kommentar zum

IPRG Art. 7, ¶35 (3d ed. 2018) (“In the case it has been established that there is a

binding arbitration agreement concerning an arbitrable dispute, a judge who is

nevertheless addressed with a claim has to deny the court’s jurisdiction …”).

German ZPO, §1032(1) (“Where an action is brought before a court in a matter that is

the subject of an arbitration agreement, the court is to dismiss the action as

inadmissible, provided that the respondent has raised a corresponding objection

prior to the commencement of the hearing on the merits of the case, unless the

court finds that the arbitration agreement is null and void, ineffective, or incapable

of being performed”); Geimer, in R. Zöller (ed.), Zivilprozessordnung §1032, ¶7 (34th

ed. 2022).

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Netherlands Code of Civil Procedure, Art. 1022 (“A court seized of a dispute in

respect of which an arbitration agreement has been concluded shall declare that it

has no jurisdiction if a party invokes the existence of the said agreement before

submitting a defense, unless the agreement is invalid”) (emphasis added).

Belgian Judicial Code, Art. 1682(1) (“The Court before which is brought a dispute that

is also the object of an arbitration agreement shall declare itself without

jurisdiction at the request of a party, unless the arbitration agreement is invalid

with regard to this dispute or has ceased to exist”).

Peruvian Arbitration Law, Art. 16(1) (“If an action is brought in a matter that is

subject to arbitration, such circ*mstance may be pleaded as an objection to the

jurisdiction of the court, even if the arbitration has not commenced”).

Danisco AS v. Novo Nordisk AS, 2003 WL 282391, at *2 (S.D.N.Y.) (quoting WorldCrisa

Corp. v. Armstrong, 129 F.3d 71, 74 (2d Cir. 1997)). See also Amizola v. Dolphin

Shipowner, SA, 354 F.Supp.2d 689, 697 (E.D. La. 2004) (“Because all of the elements to

compel arbitration are met, the motion to stay the litigation and to compel

arbitration is granted”); A. Sanderson & Son v. Armour & Co. [1922] SC 117 (House of

Lords) (“If the parties have contracted to arbitrate, to arbitration they must go”);

Capital Trust Inv. Ltd v. Radio Design TJ AB [2002] EWCA Civ 135, ¶54 (English Ct. App.)

(“On an application under [§9] the court shall grant a stay unless satisfied that the

arbitration agreement is null and void, inoperative, or incapable of being

performed”); Union of India v. Lief Hoegh & Co., IX Y.B. Comm. Arb. 405, 410 (Gujarat

High Ct. 1982) (1984) (“I do not think … that there is any discretion which the Court

enjoins when it is called upon to decide whether the proceedings in the suit

pertaining to a contract containing a foreign arbitral clause should be stayed under

§3 of the Foreign Awards Amendment Act except in those contingencies which are

specified in §3 itself. The said contingencies are that the agreement is null and void,

inoperative or incapable

of being performed, or in fact there is no dispute between

the parties pertaining to the matter agreed to be referred under the agreement”);

Hotels.com (U.S.) v. Zuz Tourism Ltd, XXXI Y.B. Comm. Arb. 791, 794-95 (Israeli S.Ct.

2005) (2006).

See§1.01[B][4]-§1.01[B][5].

See§1.01[C]; §1.04[A][1]; §2.01[A][1][a]; §5.01[B].

Anaconda v. Am. Sugar Refining Co., 322 U.S. 42, 45 (U.S. S.Ct. 1944). See also Standard

Magnesium Corp. v. Fuchs, 251 F.2d 455, 458 (10th Cir. 1957) (“If the agreement

provides that where one party refuses or fails to submit to arbitration, that an

arbitrator may be appointed and that the arbitration may proceed ex parte, and

further provides for the procedure to be followed in such an ex parte proceeding,

there is no occasion to invoke the remedy of §4. Such a remedy is necessary only in

those cases where one party refuses to participate in the arbitration and a court

order is necessary in order for the arbitration to proceed ex parte”).

See§8.03[C][1].

See, e.g., Clyde Bergemann Canada Ltd v. Lorneville Mech. Contractors Ltd, [2018]

NSCA 14, 30 (Nova Scotia Ct. App.); Penncorp Life Ins. Co. v. Mirza, [2016] MBQB 233, ¶9

(Manitoba Q.B.); United Labs., Inc. v. Abraham, [2002] 62 OR3d 26 (Ontario Super. Ct.);

Kolinker Indus. Equip. Ltd v. Longhill Indus. Ltd, [2004] HKDC 65 (H.K. Dist. Ct.);

Judgment of 5 October 2006, D. Andrés v. Díez Carrillo SL, Decision No. 170/2006

(Palma de Mallorca Audiencia Provincial); Judgment of 17 April 2007, Hrvatsko

Mirovinsko Osiguranje v. EDIS, Case No. XLVII Pž-6756/04-3 (Croatian High Comm. Ct.);

Judgment of 29 April 2001, Case No. VTS RH Pž-5168/01 (Croatian High Comm. Ct.).

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See, e.g., GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA,

LLC, 140 S.Ct. 1637, 1645 (U.S. S.Ct. 2020) (“The text of Article II(3) states that courts of

a contracting state “shall ... refer the parties to arbitration” when the parties to an

action entered into a written agreement to arbitrate and one of the parties requests

referral to arbitration”); In re Pharm. Benefit Managers Antitrust Litg., 700 F.3d 109,

116 (3d Cir. 2012); Marzano v. Proficio Mortg. Ventures, LLC, 942 F.Supp.2d 781, 799

(N.D. Ill. 2013) (“Absent a request to compel arbitration and a showing that Plaintiffs

have refused to arbitrate, this Court will not compel arbitration sua sponte”);

Lopardo v. Lehman Bros., Inc., 548 F.Supp.2d 450, 457 (N.D. Ohio 2008) (“court may

not sua sponte force parties to enforce an arbitration agreement”); Walker & Zanger

(W. Coast) Ltd v. Stone Design SA, 4 F.Supp.2d 931 (C.D. Cal. 1997) (refusing to reverse

default judgment because respondent failed to invoke arbitration clause); Standard

Tallow Corp. v. KIL-Mgt AS, 901 F.Supp. 147 (S.D.N.Y. 1995) (finding parties’ agreement

to arbitrate valid but refusing to provide relief because respondents had not filed

petition to compel arbitration); Boyd v. Cook, 906 N.W.2d 31, 42 (Neb. 2018)

(“Arbitration provisions are not self-executing. It is improper for a court to try to

enforce such a contractual right on behalf of the parties. … Because no party has

sought to enforce the arbitration agreement, it was error for the district court to do

so on its own accord”); Mercury Ins. Group v. Super. Ct. of San Bernardino County, 965

P.2d 1178, 1185 (Cal. 1998) (“A trial court is not obligated to force [the parties] to

contractual arbitration sua sponte. Indeed, from all that appears, it is not

authorized to do so”); Dalian Hualiang Enter. Group Co. v. Louis Dreyfus Asia Pte Ltd,

[2005] SGHC 161, ¶17 (Singapore High Ct.) (“a court before which an action is brought

in a matter which is the subject of an arbitration agreement shall, if a party so

requests not later than when submitting his first statement on the substance of the

dispute, refer the parties to arbitration”) (emphasis added).

Schaefer, Borrowing and Cross-Fertilising Arbitration Laws: A Comparative Overview of

the Development of Hong Kong and Singapore Legislation for International

Commercial Arbitration, 16(4) J. Int’l Arb. 41, 62 (1999) (“The Model Law speaks of

referring ‘the parties to arbitration’; this is technically done in a common law

jurisdiction by means of stay of court proceedings. A civil law jurisdiction, such as

Germany, adopts a different mechanism. The Courts in Germany do not stay the

proceedings, but do not accept the suit; they reject the action as inadmissible”);

Veeder, Laws and Court Decisions in Common Law Countries and the UNCITRAL Model

Law, in A. van den Berg (ed.), Preventing Delay and Disruption of Arbitration/ Effective

Proceedings in Construction Cases 169, 170-71 (1991).

See§8.03[C][1]; Sanders, Arbitration Law in Western Europe: A Comparative Survey, in

M. Domke (ed.), International Trade Arbitration: A Road to World-Wide Cooperation

137-38 (1958) (“The existence of an arbitration agreement deprives the court of its

jurisdiction. Courts lose their competence when the defendant relies on an

arbitration agreement”).

See§8.03[C][1]; Katz v. Cellco P’ship, 794 F.3d 341, 347 (2d Cir. 2015) (“while we

recognize the impetus for a rule permitting dismissal, we conclude that the text,

structure, and underlying policy of the FAA mandate a stay of proceedings when all

of the claims in an action have been referred to arbitration and a stay requested”);

Cont’l Cas. Co. v. Am. Nat’l Ins. Co., 417 F.3d 727, 732 n.7 (7th Cir. 2005) (“proper course

of action when a party seeks to invoke an arbitration clause is to stay the

proceedings pending arbitration rather than to dismiss outright”); Bushley v. Credit

Suisse First Boston, 360 F.3d 1149, 1153 n.1 (9th Cir. 2004) (preferring stay of litigation

over dismissal); Lloyd v. Hovensa, LLC, 369 F.3d 263, 268-69 (3d Cir. 2004) (“plain

language of §3 affords a district court no discretion to dismiss a case where one of

the parties applies for a stay pending arbitration”); Asia Mar. P. Chartering Ltd v. A.

Cayume Hakh & Sons, 2020 WL 1865800, at *2 (S.D. Fla.) (“a stay pending arbitration,

rather than a dismissal, is appropriate”); China Media Express Holdings, Inc. by Barth

v. Nexus Executive Risks, Ltd, 182 F.Supp.3d 42 (S.D.N.Y. 2016) (“FAA directs the

district court, ‘on application of one of the parties,’ to enter a stay in a case where

the asserted claims are ‘referable to arbitration’”); Precision Press Inc. v. MLP U.S.A.,

Inc., 620 F.Supp.2d 981, 995 (N.D. Iowa 2009) (“plain text of §3 provides a district

court no authority to dismiss a case”); Boateng v. Gen. Dynamics Corp., 473 F.Supp.2d

241, 252 (D. Mass. 2007) (“Defendants urge the Court to dismiss in favor of arbitration.

The Court declines to do so. … Among other things, given the possibility that the

arbitrator may conclude that arbitration was in fact waived, and therefore may

return the case to this Court, the Court elects to stay the proceedings pending

arbitration”); Doleman & Sons v. Ossett Corp. [1912] 3 KB 257, 267 (English Ct. App.).

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See, e.g., Brittania-U Nigeria, Ltd v. Chevron USA, Inc., 866 F.3d 709 (5th Cir. 2017)

(affirming lower court’s decision to dismiss

case on basis of arbitration agreement);

Sourcing Unlimited, Inc. v. Asimco Int’l Inc., 526 F.3d 38, 48 (1st Cir. 2008) (“Given the

history of this case and the delay occasioned, dismissal of the underlying complaint

is appropriate. There is no basis for the district court to supervise an arbitration

which will occur in China.”); Alford v. Dean Witter Reynolds, 975 F.2d 1161, 1164 (5th

Cir. 1992) (“The weight of authority clearly supports dismissal of the case when all of

the issues raised in the district court must be submitted to arbitration”); Acosta v.

Fair Isaac Corp., 669 F.Supp.2d 716, 724 (N.D. Tex. 2009) (dismissing action with

prejudice because all claims were subject to valid arbitration agreement);

RoadTechs Inc. v. MJ Highway Tech., Ltd, 79 F.Supp.2d 637, 640 (E.D. Va. 2000) (“it is

within the district court’s discretion whether to dismiss or stay an action after

referring it to arbitration”); SATCOM Int’l Group plc v. ORBCOMM Int’l Partners, LP, 49

F.Supp.2d 331, 337 n.4 (S.D.N.Y. 1999) (“[T]here was previously an open question as to

whether the court that orders arbitration under the Convention must dismiss the

action or may retain jurisdiction in aid of arbitration. Nonetheless, it now appears

that the Court may retain jurisdiction and stay the action under its inherent power

to control its docket”), aff’d, 205 F.3d 1324 (2d Cir. 1999).

See Katz v. Cellco P’ship, 794 F.3d 341, 342 (2d Cir. 2015) (“In an effort to more

efficiently manage their dockets, some district courts in this Circuit will dismiss an

action after having compelled arbitration pursuant to a binding arbitration

agreement between the parties. … By dismissing the case, however, the District

Court made the matter immediately appealable as a final order, provoking

additional litigation. … Accordingly we vacate the District Court’s dismissal of the

action, and remand with instructions to stay the action pending arbitration”);

Chamois v. Countrywide Home Loans, 2003 WL 23022033, at *5 (S.D.N.Y.) (electing to

stay litigation pending arbitration, rather than dismiss it, because “granting a stay,

which is an unappealable interlocutory order, is preferable to dismissing an action

because ‘[u]nnecessary delay of the arbitral process through appellate review is

disfavored’”) (quoting Salim Oleochem. v. M/V Shropshire, 278 F.3d 90, 93 (2d Cir.

2002)). See also Ibeto Petrochemical Indus., Ltd v. M/T Beffen, 412 F.Supp.2d 285, 292

(S.D.N.Y. 2005) (same).

See, e.g., LaPrade v. Kidder Peabody & Co., 146 F.3d 899, 892 (D.C. Cir. 1998) (retaining

jurisdiction after staying litigation permitted court to sanction attempts by litigant

to obstruct arbitration); Brandon, Jones, Sandall, Zeide, Kohn, Chalal & Musso, PA v.

MedPartners, Inc., 312 F.3d 1348, 1355 (11th Cir. 2002) (retaining jurisdiction after

staying litigation permitted court to confirm award and award attorneys’ fees).In

contrast, other courts have, apparently incorrectly, held that staying litigation

would serve no purpose if all claims were subject to arbitration. See, e.g., Next Step

Med. Co., Inc. v. Johnson & Johnson Int’l, 619 F.3d 67, 71 (1st Cir. 2010) (district court

has discretion to dismiss action “if all claims asserted in the case are found

arbitrable”); Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992).

Compare Lloyd v. Hovensa, LLC, 369 F.3d 263, 269 (3d Cir. 2004) (Section 3 of FAA

requires a stay).

Some U.S. lower courts adopted a so-called “intertwining doctrine,” which provided

that “[w]hen arbitrable and nonarbitrable claims arise out of the same transaction,

and are sufficiently intertwined factually and legally, [a] district court … may in its

discretion deny arbitration as to the arbitrable claims and try all the claims

together in federal court.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 216-17 (U.S.

S.Ct. 1985).

See Gergel v. High View Homes, LLC, 996 P.2d 233, 234 (Colo. App. 1999) (“The purpose

of the intertwining doctrine is to prevent inconsistent determinations by different

forums. If the factual and legal issues are inextricably intertwined, then the claims

must not be severed because severance could result in an arbitrator infringing upon

a court’s duty to decide the non-arbitrable claim”), overruled, Ingold v.

AIMCO/Bluffs, LLC Apts., 159 P.3d 116, 125 (Colo. 2007) (“The intertwining doctrine

unreasonably interferes with the parties’ decision to arbitrate their disputes,

because it allows the trial court to negate the effect of an arbitration clause without

a statutory basis for doing so”).

See, e.g., Lim v. Offshore Specialty Fabricators, Inc., 404 F.3d 898 (5th Cir. 2005);

Sedco, Inc. v. Petroleos Mexicanos Mexican Nat’l Oil Co., 767 F.2d 1140 (5th Cir. 1985);

Minn. Supply Co. v. Mitsubishi Caterpillar Forklift Am. Inc., 822 F.Supp.2d 896 (D. Minn.

2011) (FAA’s mandate of enforcement of arbitration agreements requires arbitration

even if it results in inefficient piecemeal proceedings in different fora); Wellman,

Inc. v. Square D Co., 620 S.E.2d 86 (S.C. Ct. App. 2005).

See§2.01[B][1]; §8.03[B][1] ; §8.02[C].

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Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 217 (U.S. S.Ct. 1985). See also KPMG LLP

v. Cocchi, 565 U.S. 18 (U.S. S.Ct. 2011) (“[The FAA] has been interpreted to require that

if a dispute presents multiple claims, some arbitrable and some not, the former

must be sent to arbitration even if this will lead to piecemeal litigation. … From this

it follows that state and federal courts must examine with care the complaints

seeking to invoke their jurisdiction in order to separate arbitrable from

nonarbitrable claims. A court may not issue a blanket refusal to compel arbitration

merely on the grounds that some of the claims could be resolved by the court

without arbitration”). For an anomalous U.S. lower court decision, in unusual

circ*mstances, staying arbitration of disputes concededly subject to arbitration, see

Oracle Am., Inc. v. Myriad Group AG, 2011 WL 3862027 (N.D. Cal.) (ordering stay of

arbitration of claims subject to arbitration on grounds that there was “some

uncertainty” as to precisely what claims were arbitrable), rev’d, 724 F.3d 1069 (9th

Cir. 2013).

Baggesen v. Am. Skandia Life Assur. Corp., 235 F.Supp.2d 30 (D. Mass. 2002); Bro Tech

Corp. v. Euro. Bank for Reconstruction & Dev., 2000 WL 1751094 (E.D. Pa.).

See§8.03[C][4]; In re Cotton Yarn Antitrust Litg., 505 F.3d 274, 293 n.12 (4th Cir. 2007);

AgGrow Oils, LLC v. Nat’l Union Fire Ins. Co., 242 F.3d 777 (8th Cir. 2001); Havard v.

Offshore Specialty Fabricators, LLC, 2019 WL 6218648, at *3-4 (E.D. La.) (“as a

threshold matter[,] … Havard as a nonsignatory is bound by the arbitration

agreement between Steamship and OSF”; staying litigation and compelling

arbitration); SteppeChange LLC v. Veon Ltd, 354 F.Supp.3d 1003, 1045 (N.D. Cal. 2018);

Jaffe v. Zamora, 57 F.Supp.3d 1244, 1248 (C.D. Cal. 2014) (“Where some litigants are

not parties to the arbitration agreement, the court may nonetheless stay the entire

action if arbitration of claims against a party to an arbitration agreement is likely to

resolve factual questions coextensive with claims against nonparties to that

arbitration agreement”); Axa Equitable Life Ins. Co. v. Infinity Fin. Group, LLC, 608

F.Supp.2d 1330 (S.D. Fla. 2009); Sunopta, Inc. v. Abengoa Bioenergy New Techs., Inc.,

2008 WL 782656 (E.D. Mo.); Filson v. Radio Advertising Mktg Plan, LLC, 553 F.Supp.2d

1074 (D. Minn. 2008); Toledano v. O’Connor, 501 F.Supp.2d 127, 154 (D.D.C. 2007); Geo

Vantage of Ohio, LLC v. Geovantage, Inc., 2006 WL 2583379 (S.D. Ohio); Ballard v.

Corinthian Colleges, Inc., 2006 WL 2380668 (W.D. Wash.); MPA Constr., Inc. v. XL

Specialty Ins. Co., 349

F.Supp.2d 934 (D. Md. 2004); Humbarger v. Law Co., 2002 WL

436772 (D. Kan.); Nissan Fire & Marine Ins. Co. v. Fortress Re, Inc., 2002 WL 737789, at *5

(M.D.N.C.) (granting discretionary stay of trial proceedings, but not discovery).

Dodwell & Co. v. Moss Sec., XIX Y.B. Comm. Arb. 615 (Australian Fed. Ct. 1990) (1994).

See also CTA Int’l Pty Ltd v. Sichuan Changhong Elec. Co., [2002] VSC 374 (Victoria Sup.

Ct.) (granting discretionary stay of all litigation where some or most claims were

clearly subject to arbitration); Hotels.com (U.S.) v. Zuz Tourism Ltd, XXXI Y.B. Comm.

Arb. 791, 795 (Israeli S.Ct. 2005) (2006) (“existence [in a national court litigation] of a

party who is not a party to the arbitration agreement, does not make the existing

arbitration agreement between the other parties, whether in whole or in part, null

and void, inoperative or an agreement incapable of being performed”). For an

anomalous Australian decision holding that “a court may also exercise a discretion

to impose terms that the arbitration of the arbitrable claims not proceed prior to

the determination of the non-arbitrable claims where the arbitrable claims are

seen to be subsidiary to or significantly less substantial than, but overlapping with,

the non-arbitrable claims,” see Recyclers of Australia Pty Ltd v. Hettinga Equip. Inc.,

[2000] FCA 547 (Australian Fed. Ct.).

See authorities cited in §2.01[A][1][a]; §5.01[B][2]; §7.03; §8.03[C][1].

Fibreco Pulp Inc. v. Star Dover, [1998] FCJ No. 889 (Canadian Fed. Ct. App.); City of

Prince George v. A.L. Sims & Sons Ltd, (1995) WWR 503 (B.C. Ct. App.); BWV Invs. Ltd v.

Saskferco Prods. Inc., (1994) 119 DLR4th 577 (Saskatchewan Ct. App.); Kaverit Steel &

Crane Ltd v. Kone Corp., (1992) ABCA 7 (Alberta Ct. App.); Canada (AG) v. Marineserve

MG Inc., [2002] NSSC 147 (Nova Scotia Sup. Ct.); Boart Sweden AB v. NYA Stromnes AB,

[1988] 41 BLR 295 (Ontario Super. Ct.). Canadian courts have also held that where the

parties have agreed to arbitrate some, but not all, of the disputes between them,

they will stay litigation of all such matters pending outcome of the arbitral

proceedings. Nanisivik Mines Ltd v. F.C.R.S. Shipping Ltd, [1994] 2 FC 662 (Canadian

Fed. Ct. App.). See also Comtois Int’l Exp. Inc. v. Livestock Express BV, [2014] FC 475

(Canadian Fed. Ct.).

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In one Canadian decision, the court held that arbitration would not be required in a

dispute where some, but not all, parties to a Canadian litigation were subject to an

arbitration agreement. The court reasoned, incorrectly, that “all of these issues will

have to be faced again when either party brings its recognition and enforcement

application.” Kaverit Steel & Crane Ltd v. Kone Corp., XVIII Y.B. Comm. Arb. 346, 352

(Alberta Q.B. 1991) (1993). That decision was reversed on appeal. Kaverit Steel &

Crane Ltd v. Kone Corp., XIX Y.B. Comm. Arb. 643 (Alberta Ct. App. 1992) (1994). See

also du Port Ferroviaire de Baie-Comeau – Hauterive v. Jean Fournier Inc., [2010] QCCA

2161 (Québec Ct. App.) (reversing lower court decision that joined employer in court

proceedings between contractor and sub-contractor, stating that issue of validity of

penalty clause for delays in completion of works contained in contract between

employer and contractor should be decided exclusively by arbitration and that

presence of employer as third party in proceedings was not necessary to decide

dispute between contractor and sub-contractor); Société de Cogénération de St-

Félicien v. Indus. Falmec Inc., [2005] QCCA 441 (Québec Ct. App.) (where some parties

were bound by arbitration agreement and some were not, dismissing claim based

on lack of valid arbitration agreement between parties involved); Décarel Inc. v.

Concordia Project Mgt Ltd, Case No. J.E. 96-1612 (Québec Ct. App. 1996) (affirming

lower court decision which referred to arbitration two companies that were parties

to arbitration agreement, as well as two individuals, who were directors and main

shareholders of first company, but who were not party to contract; concluding that

dispute between two companies and dispute between two individuals and second

company were so closely related that they could not be decided in separate

proceedings); Location Imafa, Sec. v. FedEx Ground Package Sys. Ltd, [2010] QCCS

2829 (Québec Super. Ct.) (referring parties to arbitration; holding that only

exceptional circ*mstances can justify decision not to respect parties’ choice of

forum and fact that rights of third parties could be affected by arbitral award is not

grounds not to refer parties to arbitration).For an anomalous decision, in unusual

circ*mstances, see Griffin v. Dell Canada Inc., [2010] 64 BLR4th 199 (Ontario Ct. App.)

(in domestic case where 70% of class action claimants were consumers, whose

arbitration agreements were held unenforceable under Consumer Protection Act,

2002, refusing to stay litigation of claims by remaining 30% of non-consumer

claimants on grounds of efficiency).

See, e.g., Sopac Italiana SpA v. Bukama GmbH, II Y.B. Comm. Arb. 248 (Milan

Tribunale 1976) (1977); Governors Balloon Safaris Ltd v. Skyship Co. Ltd, Civil Case No.

461/2008 (Nairobi High Ct.).

UNCITRAL Model Law, Art. 8(2).

Spanish Arbitration Act, Art. 11. See also Cairns, The Spanish Application of the

UNCITRAL Model Law on International Commercial Arbitration, 22 Arb. Int’l 573, 584

(2006); A. López-Ibor, P. Henriquez de Luna & V. Jover, Arbitration Procedures and

Practice in Spain: Overview (2018).

See§7.03[E][6]; §7.03[F].

See§7.02[A][2]; European Convention, Art. VI(3) (“Where either party to an arbitration

agreement has initiated arbitration proceedings before any resort is had to a court,

courts of Contracting States subsequently asked to deal with the same subject-

matter between the same parties … shall stay their ruling on the arbitrators’

jurisdiction until the arbitral award is made, unless they have good and substantial

reasons to the contrary”).

See cases cited §8.03[C][4]. See also Alghanim v. Alghanim, 828 F.Supp.2d 636, 664

(S.D.N.Y. 2011) (discretionary stay of litigation is usually appropriate where

arbitrable and nonarbitrable claims arise out of same set of facts); AJA Registrars

Ltd v. AJA Euro. Ltd [2020] EWHC 883, ¶37 (Ch) (English High Ct.) (ordering stay of

litigation involving nonparties to avoid parallel proceedings); Lifestyle Equities CV v.

Hornby Street (MCR) Ltd [2020] EWCA Civ 51(English Ct. App.) (granting stay of

litigation, finding non-signatory appellant trademark as signees were bound by

arbitration agreement); Fibreco Pulp Inc. v. Star Shipping AS, [1998] FCJ No. 297

(Canadian Fed. Ct.) (discretionary stay of litigation involving nonparties, for reasons

of judicial economy); Kvaerner Enviropower Inc. v. Tanar Indus. Ltd, (1994) 24 AltaLR3d

365 (Alberta Ct. App.); Condominiums Mont St.-Sauveur Inc. v. Les Constructions Serge

Sauvé ltée., [1990] RJQ 2783 (Québec Ct. App.); Gorman v. Kosowan, [2016] ONSC 4371

(Ontario Super. Ct.).

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See, e.g., Hill v. G.E. Power Sys. Inc., 282 F.3d 343, 348 (5th Cir. 2002) (“We have long

held that if a suit against a nonsignatory is based upon the same operative facts

and is inherently inseparable from the claims against a signatory, the trial court has

discretion to grant a stay if the suit would undermine the arbitration proceedings

and thwart the federal policy in favor of arbitration”); Am. Home Assur. Co. v. Vecco

Concrete Constr. Co., 629 F.2d 961, 964 (4th Cir. 1980); C. Itoh & Co. v. Jordan Int’l Co.,

552 F.2d 1228 (7th Cir. 1977); Sam Reisfeld & Son Imp. Co. v. SA Eteco, 530 F.2d 679 (5th

Cir. 1976); Hilti, Inc. v. Oldach, 392 F.2d 368 (1st Cir. 1968); Nederlandse Erts-

Tankersmaatschappij NV v. Isbrandtsen Co., 339 F.2d 440 (2d Cir. 1964); Haasbroek v.

Princess Cruise Lines, Ltd, 286 F.Supp.3d 1352, 1361 (S.D. Fla. 2017) (quoting Lawson v.

Life of the S. Ins. Co., 648 F.3d 1166, 1170 (11th Cir. 2011)) (“a nonparty may force

arbitration if the relevant state contract law allows him to enforce the agreement to

arbitrate”); Sharp Corp. v. Hisense USA Corp., 2017 WL 6017897 (N.D. Cal.); Jones v.

Singing River Health Sys., 2016 WL 3351291 (S.D. Miss.); A.O.A. v. Doe Run Res. Corp.,

2011 WL 6091724, at *5 (E.D. Mo.) (“Even if a stay is not mandatory under the theory of

direct-benefits estoppel, it could still be granted as a discretionary matter”);

Alghanim v. Alghanim, 828 F.Supp.2d 636 (S.D.N.Y. 2011); Starlight Consumer Elecs.

(USA), Inc. v. Petters Consumer Brands, LLC, 2008 WL 11508647, at *2 (S.D. Cal. 2008)

(“Under the ordinary contract principles which bind an intended third party

beneficiary, an agent, or an assignee, a non-party may be bound by an agreement to

arbitrate”); Armco Steel Co. v. CSX Corp., 790 F.Supp. 311 (D.D.C. 1991); Dale Metals

Corp. v. Kiwa Chem. Indus. Co., 442 F.Supp. 78, 81-82 (S.D.N.Y. 1977) (stay is

appropriate “even though it affects parties who are not bound to arbitrate”).

Compare Am. Shipping Line, Inc. v. Massan Shipping Indus., Inc., 885 F.Supp. 499

(S.D.N.Y. 1995) (refusing to stay litigation of nonarbitrable claims, on grounds that,

although common issues were involved, nonparty to arbitration would not be bound

by award); Montauk Oil Transp. Corp. v. S.S. Mut. Underwriting Ass’n (Bermuda) Ltd,

859 F.Supp. 669 (S.D.N.Y. 1994) (refusing to stay action pending arbitration where

action involved nonparty).

As U.S. courts have concluded, a stay of litigation under §3 of the FAA can only bind

persons that are party to an arbitration agreement. See IDS Life Ins. Co. v. Sun Am.,

Inc., 103 F.3d 524, 530 (7th Cir. 1996); Coastal (Bermuda) Ltd v. E.W. Saybolt & Co., 761

F.2d 198, 203 (5th Cir. 1985) (“[Section 3] cannot be the source of the district court’s

authority to stay a claim between [nonparties]”).

Fibreco Pulp Inc. v. Star Shipping AS, [1998] FCJ No. 297 (Canadian Fed. Ct.); Navionics

Inc. v. Flota Maritima Mexicana SA, [1989] 26 FTR 148 (Canadian Fed. Ct.); Kvaerner

Enviropower Inc. v. Tanar Indus. Ltd, (1994) 24 AltaLR3d 365 (Alberta Ct. App.); Gorman

v. Kosowan, [2016] ONSC 4371 (Ontario Super. Ct.); Danone Asia Pac. Holdings Pte Ltd

v. Fonterra Co-operative Group Ltd, [2014] NZHC 1681 (Auckland High Ct.); On Line Int’l

Ltd v. On Line Ltd, [2000] HC Christchurch CP2/00 (Christchurch High Ct.).

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See, e.g., Rainier DSC v. Rainier Capital Mgt LP, 828 F.3d 356 (5th Cir. 2016) (“It is

undisputed that the only signatories to arbitration agreements with the Investors

were some of the Rainier parties, and they proceeded to arbitration. A stay of the

other parties’ litigation was therefore subject to the district court’s discretion and

was only warranted if: (1) the arbitrated and litigated disputes involved the same

operative facts; (2) the claims asserted in the arbitration and litigation were

‘inherently inseparable’; and (3) the litigation had a ‘critical impact’ on the

arbitration”); Crawford Prof’l Drugs, Inc. v. CVS Caremark Corp., 748 F.3d 249, 257 (5th

Cir. 2014) (“whenever the relevant state law would make a contract to arbitrate a

particular dispute enforceable by a nonsignatory, that nonsignatory is entitled to

request and obtain a stay under §3 and an order to compel arbitration under §4

because that dispute is ‘referable to arbitration under an agreement in writing’”)

(quoting Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (U.S. S.Ct. 2009)); Am. Recovery

Corp. v. Computerized Thermal Imaging, 96 F.3d 88 (4th Cir. 1996) (decision to stay

nonarbitrable claims is at trial court’s discretion); Collins Radio Co. v. Ex-Cell-O

Corp., 467 F.2d 995, 1000 (8th Cir. 1972) (granting discretionary stay of litigation of two

nonarbitrable claims pending arbitration of related claim); Neukranz v. Conestoga

Settle. Servs., LLC, 2020 WL 4679542, at *6 (N.D. Tex.), report and recommendation

adopted, 2020 WL 4673076 (N.D. Tex.) (“a discretionary stay of all claims should be

entered pending resolution of the scope issue in the arbitration”); Maritima de

Ecologia, SA de CV v. Sealion Shipping Ltd, 2011 WL 1465744 (S.D.N.Y.) (granting

discretionary stay pending arbitration of issues that would have significant bearing

on litigation); Cobra N. Am., LLC v. Cold Cut Sys. Svenska, 639 F.Supp.2d 1217 (D. Colo.

2008) (granting discretionary stay of actions related to ongoing arbitration in

Sweden because arbitral tribunal’s decision would likely be helpful to national

court); Chempower, Inc. v. McAlpine, Ltd, 849 F.Supp. 459, 461 (S.D. W. Va. 1994) (“‘it is

true that the arbitrator’s findings will not be binding as to those not parties to the

arbitration, [but] considerations of judicial economy and avoidance of confusion

and possible inconsistent results nonetheless militate in favor of granting a stay of

the entire action’”) (quoting Am. Home Assur. Co. v. Vecco Concrete Constr. Co., 629

F.2d 961, 964 (4th Cir. 1980)); Home Life Ins. Co. v. Kaufman, 547 F.Supp. 833, 835

(S.D.N.Y. 1982) (ordering stay of litigation of nonarbitrable issues where: “the party

seeking the stay can demonstrate that he will not hinder the arbitration; that the

arbitration will be concluded within a reasonable time; and that the delay will not

work an undue hardship on the party opposing the stay”). But see Armco Steel Co. v.

CSX Corp., 790 F.Supp. 311, 316 (D.D.C. 1991) (“presumption that ‘the arbitration and

the lawsuit will each proceed in its normal course’”) (quoting Pensacola Constr. v. St.

Paul Fire & Marine Ins. Co., 705 F.Supp. 306, 308 (W.D. La. 1988)).

See, e.g., Simmonds Capital Ltd v. Eurocom Int’l Ltd, [1998] 144 FTR 230 (Canadian

Fed. Ct.) (confirming inherent authority to stay claims not subject to arbitration,

pending related arbitration, but declining to exercise power); Cont’l Res. Inc. v. E.

Asiatic Co., XX Y.B. Comm. Arb. 278 (Canadian Fed. Ct. 1994) (1995); Shanghai Constr.

(Group) Gen. Co. Singapore Branch v. Tan Poo Seng, [2012] SGHCR 10 (Singapore High

Ct.) (exercising inherent jurisdiction to stay proceedings pending “intended

arbitration”); Casaceli v. Natuzzi SpA, [2012] FCA 691 (Australian Fed. Ct.); Recyclers of

Australia Pty Ltd v. Hettinga Equip. Inc. [2000] FCA 547 (Australian Fed. Ct.) (“In the

event that a proceeding includes matters that are not capable of being referred to

arbitration, but the determination of which is dependent upon the determination of

the matters required to be submitted to arbitration, a court may, in the exercise of

its discretion, stay the whole proceeding”).

See, e.g., Judgment of 7 July 1987, 1988 Rev. Arb. 649 (Paris Cour d’Appel) (after court

dismissed respondent’s application to annul tribunal’s interim decision on

jurisdiction and tribunal declined respondent’s request to suspend arbitral

proceedings pending application, court dismissed subsequent application to

simultaneously annul interim decision and decision not to suspend arbitral

proceedings); E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on

International

Commercial Arbitration ¶1659 (1999) (“Paris Court of Appeals was

asked to set aside the arbitrators’ decision not to stay proceedings pending the

outcome of an action to set aside their interim award on jurisdiction”).

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See, e.g., In re Cotton Yarn Antitrust Litg., 505 F.3d 274, 293 n.12 (4th Cir. 2007) (“In

some cases … it may be advisable to stay litigation among the nonarbitrating

parties pending the outcome of the arbitration. That decision is one left to the

district court … as a matter of its discretion to control its docket”) (quoting Moses H.

Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 20 n.23 (U.S. S.Ct. 1983)); Nat’l

Iranian Oil Co. v. Mapco Int’l, Inc., 983 F.2d 485, 491 (3d Cir. 1992); Webb v. R. Rowland

& Co., 800 F.2d 803, 808 (8th Cir. 1986); Nederlandse Erts-Tankersmaatschappij NV v.

Isbrandtsen Co., 339 F.2d 440 (2d Cir. 1964); Neukranz v. Conestoga Settle. Servs., LLC,

2020 WL 4679542, at *4 (N.D. Tex.), report and recommendation adopted, 2020 WL

4673076 (N.D. Tex.) (“The district court’s authority to issue a discretionary stay of

litigation pending arbitration, even as to claims between non-arbitrating parties,

lies in the court's inherent power to control its docket”); Banks v. Cotter Corp., 2019

WL 1426259 (E.D. Mo. 2018) (“‘The decision to grant or deny a stay is within the

discretion of a district court’”) (quoting Webb, 800 F.2d at 808); Phyllis Schlafly

Revocable Trust v. Cori, 2017 WL 5478501, at *6 (E.D. Mo.); AJA Registrars Ltd v. AJA

Euro. Ltd [2020] EWHC 883 ¶37 (Ch) (English High Ct.); Fibreco Pulp Inc. v. Star

Shipping AS, [1998] FCJ No. 297 (Canadian Fed. Ct.); Navionics Inc. v. Flota Maritima

Mexicana SA, [1989] 26 FTR 148 (Canadian Fed. Ct.); Kvaerner Enviropower Inc. v. Tanar

Indus. Ltd, (1994) 24 AltaLR3d 365 (Alberta Ct. App.); Danone Asia Pac. Holdings Pte

Ltd v. Fonterra Co-operative Group Ltd, [2014] NZHC 1681 (Auckland High Ct.) (granting

stay of related litigation, not subject to arbitration agreement, because permitting

litigation to proceed would “be oppressive …, unnecessarily duplicative and

contrary to the interests of justice”).

See cases cited in §7.03[E][6]; §8.03[C][4].

Some national courts have raised this issue without deciding it. See Philip Alexander

Sec. & Futures Ltd v. Bamberger [1996] CLC 1757 (English Ct. App.); Aggeliki Charis

Compania Maritime SA v. Pagnan SpA [1995] 1 Lloyd’s Rep. 87, 94 (English Ct. App.).

See§1.04[A][1]; §2.01[A][1][a]; §5.01[B][2]; New York Convention, Arts. II(1), (3). See

also§26.05[C][1][a].

WSG Nimbus Pte Ltd v. Bd of Control for Cricket in Sri Lanka, [2002] 3 SLR 603, ¶86

(Singapore High Ct.).

Id. at ¶65.

Judgment of 19 December 1997, Compañia Minera Condesa SA v. BRGM-Pérou sas, DFT

124 III 83, 86-87 (Swiss Fed. Trib.). See Geisinger & Lévy, Lis Alibi Pendens in

International Commercial Arbitration, in ICC, Complex Arbitrations 53, 56 n.15 (2003);

Perret, Parallel Actions Pending Before An Arbitral Tribunal and A State Court: The

Solution Under Swiss Law, in P. Karrer (ed.), Arbitral Tribunals or State Courts: Who

Must Defer to Whom? 65, 70-72 (2001).

Judgment of 19 December 1997, Compañia Minera Condesa SA v. BRGM-Pérou SAS, DFT

124 III 83, 86-87 (Swiss Fed. Trib.). The Swiss Federal Tribunal based its ruling on

dictum in one of its previous decisions, holding that the lis pendens provision of

Article 9 of the Swiss Law on Private International Law could also be applied by

analogy to arbitral proceedings. Judgment of 20 December 1995, DFT 121 III 495 (Swiss

Fed. Trib.). See§27.02[B][2]. The application of the priority principle under Article 9

to cases of parallel proceedings between a foreign court and an arbitral tribunal

sitting in Switzerland was subsequently confirmed by the Swiss Federal Tribunal in

the Fomento decision. Judgment of 14 May 2001, Fomento de Construcciones y

Contratas SA v. Colon Container Terminal SA, DFT 127 III 279 (Swiss Fed. Trib.).

See§27.02[B][2]; §27.03[B][2][d].

Iraq Middle Market Dev. Found. v. Harmoosh, 947 F.3d 234 (4th Cir. 2020) (“a court may

decline to recognize a foreign judgment if ‘[t]he proceeding in the foreign court was

contrary to an agreement between the parties under which the dispute was to be

settled out of court’”); Montebueno Mktg, Inc v. Del Monte Corp.-USA, 570 F.App’x 675

(9th Cir. 2014) (“the Philippine litigation that produced the foreign judgment was

‘contrary to’ an arbitration agreement between Montebueno and Del Monte”); Am.

Constr. Mach. & Equip. Corp. v. Mechanised Constr. of Pakistan, Ltd, 828 F.2d 117 (2d

Cir. 1987); CBS Corp. v. WAK Orient Power & Light Ltd, 168 F.Supp.2d 403 (E.D. Pa. 2001)

(“WAK’s expressed intention to attempt to obtain and register in the courts of the

[U.S.A.], without leave of this court, a foreign judgment arising from a subject matter

relating to the arbitral award would run afoul of this court’s judgment enforcing the

Arbitral Award as well as the fundamental principles undergirding the Convention”).

AdActive Media Inc. v. Ingrouille [2021] EWCA Civ 313, 57 (English Ct. App.) (U.S.

judgment “cannot be enforced in England” when U.S. proceedings were brought in

violation of arbitration agreement); Tracomin SA v. Sudan Oil Seeds [1983] Lloyd’s

Rep. 384 (English Ct. App.); Spliethoff’s Bevrachtingskantoor BV v. Bank of China Ltd

[2015] EWHC 999, ¶136 (Comm) (English High Ct.) (“Under §32, a foreign judgment

arising out of proceedings brought without agreement and in breach of a jurisdiction

or arbitration clause against a party will not be recognised by the United Kingdom,

provided that that party has not counterclaimed or otherwise submitted to the

jurisdiction of the foreign court”). See also English Civil Jurisdiction and Judgments

Act, 1982, §32.

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See, e.g., Judgment of 15 June 2006, Legal Dep’t of Iraqi Ministry of Justice v. Sté

Fincantieri Cantieri Navali Italiani, 2007 Rev. Arb. 87, 89-90 (Paris Cour d’Appel)

(refusing to enforce judgment of Italian court that exercised jurisdiction despite

arbitration clause that was not manifestly null and void or incapable of being

performed). See also Judgment of 15 June 2006, 2007 Rev. Arb. 90, 94 (Paris Cour

d’Appel), Note, Bollée; Debourg, Imbroglio d’Outils de Résolution des Inconciliabilités

de Décisions: Ordre Public International, Autorité de Chose Transigée et Perte de

Fondement Juridique, 2013 Rev. Arb. 420, 432. But see Judgment of 28 March 2013, Sté

Emirates Telecommc’ns Corp. v. Sté Planor Afrique, 2013 Rev. Arb. 411, 415 (French

Cour de Cassation) (refusing to consider arbitration agreement in determining

enforceability of Burkinabe judgments rendered in alleged violation of arbitration

agreement).

German courts do not seem to have

taken a uniform approach on this issue.

Compare Judgment of 25 March 1987, 1988 NJW 653 (Oberlandesgericht Hamm)

(denying enforcement because debtor had raised valid arbitration agreement as

defense in foreign court proceedings) with Judgment of 29 January 1986, 5 O 203/82

(Landgericht Essen) (leaving open question whether foreign judgment in breach of

valid arbitration agreement can be enforced).

See, e.g., Through Transp. Mut. Ins. Ass’n (Eurasia) Ltd v. New India Assur. Ass’n Co.

[2004] EWCA Civ 1598 (English Ct. App.); Aggeliki Charis Compania Maritima SA v.

Pagnan SpA [1995] 1 Lloyd’s Rep. 87, 94 (English Ct. App.); L. Collins et al. (eds.), Dicey,

Morris and Collins on The Conflict of Laws ¶16-093 (15th ed. 2012 & Update 2018).

EU Regulation No. 1215/2012.

Id. at Preamble ¶12 (“A ruling given by a court of a Member State as to whether or

not an arbitration agreement is null and void, inoperative or incapable of being

performed should not be subject to the rules of recognition and enforcement laid

down in this Regulation, regardless of whether the court decided on this as a

principal issue or as an incidental question”).

Id. (“Nothing in this Regulation should prevent the courts of a Member State, when

seised of an action in a matter in respect of which the parties have entered into an

arbitration agreement, from referring the parties to arbitration, from staying or

dismissing the proceedings, or from examining whether the arbitration agreement is

null and void, inoperative or incapable of being performed, in accordance with

their national law”); id. at Art. 73(2) (“This Regulation shall not affect the application

of the 1958 New York Convention”).

Camilleri, Recital 12 of the Recast Regulation: A New Hope?, 62 Int’l & Comp. L.Q. 899,

908 (2013) (concluding that Recast Regulation does not require arbitral tribunal

seated in Member State to give effect to judgment of another Member State

regarding validity of arbitration agreement: “the very fact that [¶]12 states that the

determination of a Member State court that an arbitration agreement is invalid is

not a judgment which is subject to the [Regulation’s] recognition and enforcement

regime means that it is not one, under English conflict of laws rules, which the

arbitral tribunal must recognize”).

See EU Regulation No. 1215/2012, Preamble, ¶12 & Art. 73(2).

Camilleri, Recital 12 of the Recast Regulation: A New Hope?, 62 Int’l & Comp. L.Q. 899,

909-10 (2013) (concluding that Recast Regulation does not require EU Member State

courts to recognize “substantive judgment” on merits of parties’ dispute by another

Member State court where recognition court concludes that foreign arbitral award

on same issues was entitled to recognition under New York Convention).

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For commentary, see Ali et al., Anti-Suit Injunctions in Support of International

Arbitration in the United States and United Kingdom, 1 Int’l Arb. L. Rev. 12 (2008);

Baltag, Anti-Suit Injunctions and Other Means of Indirect Enforcement of an

Arbitration Agreement, in S. Brekoulakis et al. (eds.), The Evolution and Future of

International Arbitration 251 (2016); Bédard, Anti-Suit Injunctions in International

Arbitration, in L. Shore et al. (eds.), International Arbitration in the United States 289

(2017); Bédard & Mascarenhas, Comverse, Inc.: Methodological Issues in Anti-Suit

Injunctions, 22(2) Mealey’s Int’l Arb. Rep. 29 (2007); Bermann, The Use of Anti-Suit

Injunctions in International Litigation, 28 Colum. J. Transnat’l L. 589 (1990); Collins,

Anti-Suit Injunctions and the Arbitration Process, in P. Karrer (ed.), Arbitral Tribunals

or State Courts: Who Must Defer to Whom? 85 (2001); Davies & Kirsey, Anti-Suit

Injunctions in Support of London Seated Arbitrations Post-Brexit: Are All Things New

Just Well-Forgotten Past?, 33 J. Int’l Arb. 501 (2016); Donatelli, A Multi-Factor Test for

Anti-Suit Injunctions in ICSID Arbitration, 30 Am. Rev. Int’l Arb. 303 (2019); E. Gaillard

(ed.), Anti-Suit Injunctions in International Arbitration (2005); Hascher, Injunctions in

Favor of and Against Arbitration, 21 Am. Rev. Int’l Arb. 189 (2010); Lamb, Price &

Williams, The Relationship Between Anti-Suit Relief, EU Law and the New York

Convention, in N. Lavarnos & J. Mata Dona (eds.), International Arbitration and EU Law

(2021); Phull, U.S. Anti-Suit Injunctions in Support of International Arbitration: Five

Questions American Courts Ask, 28 J. Int’l Arb. 21 (2011); Smith & Freeman, Anti-Suit

Injunctions in Europe: Another Advantage of Arbitration, 20(3) Mealey’s Int’l Arb. Rep.

45 (2005); Stacher, You Don’t Want to Go There: Antisuit Injunctions in International

Commercial Arbitration, 23 ASA Bull. 640 (2005); Tan, Enforcing International

Arbitration Agreement in Federal Courts: Rethinking the Court’s Remedial Powers, 47

Va. J. Int’l L. 545 (2007); Vishnevskaya, Anti-Suit Injunctions from Arbitral Tribunals in

International Commercial Arbitration: A Necessary Evil?, 32 J. Int’l Arb. 173 (2015).

See§8.02[C].

See§5.01[C][6].

See generally G. Born & P. Rutledge, International Civil Litigation in United States

Courts 551 et seq. (6th ed. 2018); L. Collins et al. (eds.), Dicey, Morris and Collins on The

Conflict of Laws ¶¶12-078 to 093 (15th ed. 2012 & Update 2018). The standards for

obtaining an antisuit injunction vary from jurisdiction to jurisdiction, but typically

require a showing of an identity of parties and issues, in the domestic and foreign

forums, together with some showing of oppression, violation of public policy, or the

like. Id.

G. Born & P. Rutledge, International Civil Litigation in United States Courts 567 (6th

ed. 2018). Arbitral tribunals also occasionally issue antisuit injunctions. See§17.02[G]

[4][j].

Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant

LLP [2013] UKSC 35, ¶21 (U.K. S.Ct.); Enka Insaat ve Sanayi v. OOO Ins. Co. Chubb [2020]

EWCA Civ 574 (English Ct. App.); Tracomin SA v. Sudan Oil Seeds Co [1983] 3 All ER 140

(English Ct. App.); Pena Copper Mines Ltd v. Rio Tinto Co. [1911-13] All ER 209, 212

(English Ct. App.) (enjoining English party not to proceed with suit in Spain against

Belgian party in violation of arbitration agreement: “It is beyond all doubt that this

Court has jurisdiction to restrain the Rio Tinto Co. from commencing or continuing

proceedings in a foreign court if those proceedings are in breach of contract”); UAC

v. HVB [2021] EWHC 1548 (Comm) (English High Ct.) (enjoining suit in Equatorial

Guinea in breach of exclusive jurisdiction arbitration clause, commenting that

argument that suit was for interim relief that did not engage jurisdiction clause was

a “hopeless” one, “bearing in mind that [interim relief] was squarely based upon an

alleged substantive right under the parties’ contract”); ZHD v. SQO(Previous Sky)

[2021] EWHC 1262 (Comm) (English High Ct.); Daiichi Chuo Kisen Kaisha v. Chubb

Seguros Brasil [2020] EWHC 1223 (Comm) (English High Ct.); RiverRock Sec. Ltd v. Int’l

Bank of St Petersburg [2020] EWHC 2483 (Comm) (English High Ct.) (enjoining

bankruptcy proceedings in Russian Federation for avoidance claims when there was

“no sufficient countervailing public policy … to override the clear policy of English

law of upholding arbitration agreements”); Times Trading Corp. v. Nat’l Bank of

Fujairah (Dubai Branch) [2020] EWHC 1078 (Comm) (English High Ct.); Seniority

Shipping v. City Seed Crushing Indus., [2019] EWHC 3541 (Comm) (English High Ct.); HC

Trading Malta v. Tradeland Commodities SL [2016] EWHC 1279, ¶25 (Comm) (English

High Ct.). See also Collins, Anti-Suit Injunctions and the Arbitration Process, in P.

Karrer (ed.), Arbitral Tribunals or State Courts: Who Must Defer to Whom? 85 (2001).

See Airbus Indus. GIE

v. Patel [1998] 1 Lloyd’s Rep. 631 (House of Lords). Moreover, the

party that brings a claim in a non-contractual forum has the burden to prove that it

has “strong reasons” for doing so. Donohue v. Armco Inc. [2001] UKHL 64 (House of

Lords); Dell Emerging Markets v. IB Maroc [2017] 2CLC 417 (Comm) (English High Ct.)

(“anti-suit injunctions based upon an exclusive jurisdiction clause are granted

unless there are strong reasons not to do so”).

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Aggeliki Charis Compania Maritima SA v. Pagnan SpA [1995] 1 Lloyd’s Rep. 87, 96

(English Ct. App.). See also Sulamérica Cia Nacional De Seguros SA v. Enesa

Engenharia SA [2012] EWCA Civ 638 (English Ct. App.) (injunction restraining Brazilian

litigation based on English arbitration agreement); AES Ust-Kamenogorsk

Hydropower Plant LLP v. Ust-Kamenogorsk Hydropower Plant JSC [2011] EWCA 647

(English Ct. App.) (injunction restraining Kazakhstan litigation based on English

arbitration agreement), aff’d, [2013] UKSC 35, ¶23 (U.K. S.Ct.) (“Both prior to the

Arbitration Act 1996 and indeed subsequently – until the present case – the negative

aspect was well recognised, and it was well established that the English courts

would give effect to it, where necessary by injuncting foreign proceedings brought in

breach of either an arbitration agreement or an exclusive choice of court clause.

Further, such relief was treated as the counterpart of the statutory power to grant a

stay of domestic proceedings to give effect to an arbitration agreement”); Midgulf

Int’l Ltd v. Groupe Chimiche Tunisien [2010] EWCA Civ 66 (English Ct. App.) (issuing

antisuit injunction against proceedings in Tunisia); VTB Bank (PJSC) v. Mejlumyan

[2021] EWHC 3053 (Comm) (English High Ct.) (issuing antisuit injunction against

proceedings in Armenia); Aline Tramp SA v. Jordan Int’l Ins. Co. [2016] EWHC 1317

(Comm) (English High Ct.); Ecom Agroindustrial Corp. Ltd v. Mosharaf Composite

Textile Mill Ltd [2013] EWHC 1276 (Comm) (English High Ct.) (“Where foreign

proceedings are brought in breach of an arbitration clause, the court will ‘ordinarily’

grant an anti-suit injunction to restrain those proceedings unless there are ‘strong

reasons’ not to do so. The burden of proof is on the party in breach of the arbitration

clause”); Starlight Shipping Co. v. Tai Ping Ins. Co. [2007] EWHC 1893 (QB) (English High

Ct.) (issuing antisuit injunction to prevent litigation of merits of dispute in Chinese

courts before jurisdictional challenges could be considered by arbitral tribunal in

English-seated arbitration); C v. D [2007] EWHC 1541, ¶53 (Comm) (English High Ct.)

(issuing antisuit injunction against action in U.S. courts to annul award made in

England, where insurance policy was governed by New York law but disputes were to

be “finally and fully determined in London, England under the provisions of the

English Arbitration Act”; no right to seek to annul award in New York: “Such a

challenge usurps the function of the English court which has power to grant

injunctions to protect its own jurisdiction and the integrity of the arbitration

process. In such a case there is an infringement of the legal right of [the Claimant]

(both contractual and statutory rights) under English law and an abuse of the

process of this court in the usurpation of its exclusive jurisdiction to supervise

arbitrations with their seat in this country”); Elektrim SA v. Vivendi Universal SA [2007]

EWHC 571, ¶52 (Comm) (English High Ct.) (“court has jurisdiction … to grant an

injunction to restrain a party from engaging in court proceedings in another

jurisdiction, in breach of an English arbitration clause”); XL Ins. Ltd v. Owens Corning

[2000] 2 Lloyd’s Rep. 500 (QB) (English High Ct.); Toepfer Int’l GmbH v. Societe Cargill

France [1997] 2 Lloyd’s Rep. 98 (QB) (English High Ct.).

World Pride Shipping Ltd v. Daiichi Chuo Kisen Kaisha [1984] 2 Lloyd’s Rep. 489, 498

(QB) (English High Ct.) (“[T]he American court has not yet ruled on the joint motion

for continuance [of litigation]. … [I]t would be much better that the [U.S.] District

Court should itself rule on the motion for continuance and, if it thinks fit, stay all

further proceedings on [the counterclaim] … rather than I should seek to preempt,

and perhaps even seem to dictate the decision of a foreign Court”); L. Collins et al.

(eds.), Dicey, Morris and Collins on The Conflict of Laws ¶12-083 (15th ed. 2012 &

Update 2018). See also A v. OOO “Ins. Co. Chubb” [2019] EWHC 2729 (Comm) (English

High Ct.) (refusing to grant interim injunctive relief requiring party to withdraw claim

and stay proceedings in Russia), rev’d, Enka Insaat ve Sanayi v. OOO Ins. Co. Chubb

[2020] EWCA Civ 574 (English Ct. App.); U&M Mining Zambia Ltd v. Konkola Copper

Mines plc [2013] EWHC 260 (Comm) (English High Ct.) (refusing to issue antisuit

injunction to restrain action in Zambian courts for interim relief, notwithstanding

existence of English arbitration).

See, e.g., Welex AG v. Rosa Maritime Ltd [2003] 2 Lloyd’s Rep. 509, ¶48 (English Ct.

App.) (“party suing in the non-contractual forum must show strong reasons for

[breaching the arbitration agreement] or he faces the prospect of an injunction

being granted against him”) (quoting Donohue v. Armco Inc. [2001] UKHL 64, ¶24

(House of Lords)); §8.03[C][6][a].

Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant

LLP [2013] UKSC 35, ¶46 (U.K. S.Ct.). See also Dell Emerging Markets v. IB Maroc [2017]

2CLC 417 (Comm) (English High Ct.) (“The reason why the jurisdiction clause can be

enforced by an injunction ... is that it would be inequitable or oppressive and

vexatious for a party to a contract ... to seek to enforce a contractual claim arising

out of that contract without respecting the jurisdiction clause within that contract”).

See§8.03[C][6][e].

See Davies & Kirsey, Anti-Suit Injunctions in Support of London Seated Arbitrations

Post-Brexit: Are All Things New Just Well-Forgotten Past?, 33 J. Int’l Arb. 501 (2016);

Scherer & Howe, The London Court of International Arbitration (LCIA): An Old

Institution with New Rules, SchiedsVZ 299 (2020) (“Brexit might enable the English

courts to issue EU-wide anti-suit injunctions again, thereby rendering London

arbitration even more attractive”).

C v. D [2007] EWHC 1541 (Comm) (English High Ct.).

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Times Trading Corp. v. Nat’l Bank of Fujairah (Dubai Branch) [2020] EWHC 1078

(Comm) (English High Ct.).

RiverRock Sec. Ltd v. Int’l Bank of St Petersburg [2020] EWHC 2483 (Comm) (English

High Ct.) (enjoining bankruptcy proceedings in Russian Federation for avoidance

claims when there was “no sufficient countervailing public policy … to override the

clear policy of English law of upholding arbitration agreements”).

See §8.03[B][3].

Joint Stock Asset Mgt Co. Ingosstrakh-Invs. v. BNP Paribas SA [2012] EWCA Civ 644

(English Ct. App.). A recent English decision refused to extend an interim anti-suit

injunction against a non-party to arbitration agreement, holding

that the foreign

court was “the proper and natural forum” for that party’s claims. See Evison Holdings

Ltd v. Int’l Co. Finvision Holdings [2019] EWHC 3057 (Comm) (English High Ct.).

Aquavita Int’l SA v. Indagro SA [2022] EWHC 892 (Comm) (English High Ct.) (granting

antisuit injunction against Brazilian court proceedings which were an “attempt to

outflank the arbitration agreement and, as a matter of substance, to obtain relief

which would be final in effect from the [Brazilian court] rather than the arbitration

tribunal”).

Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant

LLP [2013] UKSC 35, ¶48 (U.K. S.Ct.) (“Where an injunction is sought to restrain foreign

proceedings in breach of an arbitration agreement – whether on an interim or a

final basis and whether at a time when arbitral proceedings are or are not on foot or

proposed – the source of the power to grant such an injunction is to be found not in

§44 of the 1996 Act, but in §37 of the 1981 [Senior Courts] Act. Such an injunction is

not ‘for the purposes of and in relation to arbitral proceedings’, but for the purposes

of and in relation to the negative promise contained in the arbitration agreement

not to bring foreign proceedings, which applies and is enforceable regardless of

whether or not arbitral proceedings are on foot or proposed”). See also SAS Institute

Inc. v. World Programming Ltd [2020] EWCA Civ 599 (English Ct. App.) (issuing anti-

enforcement injunction against U.S. judgment which included judgment concerning

debts due from customers to counterparty, where counterparty and its customers

had agreed to submit their disputes to arbitration seated in London).

See BC Andaman Co v. Xie Ning Yun, [2017] SGHC 64, ¶62 (Singapore High Ct.) (“such

injunctions could be granted on another ground, viz, to protect the substantive

contractual rights … to enforce the arbitration agreements”); WSG Nimbus Pte Ltd v.

Bd of Control for Cricket in Sri Lanka, [2002] 3 SLR 603 (Singapore High Ct.); AIG Ins.

H.K. Ltd v. Lynn McCullough and William McCullough [2019] HKCFI 1649 (H.K. Ct. First

Inst.) (“an anti-suit injunction will ordinarily be granted to restrain a party from

suing in a non-contractual forum unless there are strong reasons to the contrary”);

Dickson Valora Group (Holdings) Co. v. Fan Ji Qian, [2019] HKCFI 482 (H.K. Ct. First Inst.)

(granting antisuit injunction when claim by non-party was “clearly one ‘arising out of

or relating to’ the contract” and “justiciable only in accordance with that

contractual mechanism”); Arjowiggins HKK2 Ltd v. Shandong Chenming Paper

Holdings Ltd, [2018] HKCFI 93, ¶29 (H.K. Ct. First Inst) (“The grant of an injunction is an

exercise of the Court’s discretionary powers. … [T]he Respondent has at the same

time displayed complete disrespect for the arbitration agreement and the arbitral

process to which it had voluntarily agreed”); Ever Judger Holding Co. v. Kroman Celik

Sanayii Anonim Sirketi, [2015] HKCFI 602, ¶45 (H.K. Ct. First Inst.) (“the court in this

jurisdiction should ordinarily grant an injunction to restrain the pursuit of foreign

proceedings brought in breach of an agreement for Hong Kong arbitration, at any

rate where the injunction has been sought without delay and the foreign

proceedings are not too far advanced, unless the defendant can demonstrate strong

reason to the contrary”); Skandia Int’l Ins. Co. v. Al Amana Ins. & Reins. Co., XXIV Y.B.

Comm. Arb. 615, 615 (Bermuda S.Ct. 1994) (1999) (“this Court has jurisdiction to

restrain foreign legal proceedings brought in breach of an arbitration agreement”);

Vedanta Res. Holdings Ltd v. ZCCM Inv. Holdings plc, [2019] ZAGPJHC 250 (S. Gauteng

High Ct.) (“If a party to an arbitration agreement seeks to litigate a dispute to which

the agreement relates in a court outside the country of the seat of arbitration … his

opposing party may seek an injunction to restrain him from bringing or continuing

that suit”).

WSG Nimbus Pte Ltd v. Bd of Control for Cricket in Sri Lanka, [2002] 3 SLR 603, ¶91

(Singapore High Ct.). See also Tjong Very Sumito v. Antig Invs. Pte Ltd, [2009] SGCA 41

(Singapore Ct. App.).

The Singaporean approach rests on the view that the New York Convention

affirmatively obligates states to enjoin litigations brought in violation of valid

arbitration agreements, referring to “a duty to uphold [such] agreement[s].” WSG

Nimbus Pte Ltd, [2002] 3 SLR 603, ¶91 (Singapore High Ct.).

See§8.02[C].

Amaprop Ltd v. Indiabulls Fin. Servs. Ltd, 2010 WL 1050988, at *4 (S.D.N.Y.). See also

Restatement of the U.S. Law of International Commercial and Investor-State

Arbitration §2.29(d)(i) & Reporters’ Note c(ii) (2019).

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See, e.g., Microsoft Corp. v. Motorola Inc., 696 F.3d 872 (9th Cir. 2012); LAIF X SPRL v.

Axtel, SA de CV, 390 F.3d 194 (2d Cir. 2004); Paramedics Electromedicina Comercial,

Ltda v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645 (2d Cir. 2004) (“It is beyond

question that a federal court may enjoin a party before it from pursuing litigation in

a foreign forum”); Citigroup Inc. v. Sayeg Seade, 2022 WL 179203, at *10 (S.D.N.Y.)

(“Given the Court’s order herein compelling arbitration and its finding of a

likelihood that at least some claims in the Mexican Action are reserved for the

Arbitration, the Court expands the preliminary injunction to require that Sayeg

withdraw any claims in the Mexican Action that fall within the scope of the

Arbitration and extends the preliminary injunction pending the completion of the

Arbitration”); Espiritu Santo Holdings, LP v. L1bero Partners, LP, 2019 WL 2240204

(S.D.N.Y.); Keep on Kicking Music, Ltd v. Hibbert, 268 F.Supp.3d 585 (S.D.N.Y. 2017); BAE

Sys. Tech. Sol. & Servs., Inc. v. Korea’s Def. Acquisition Program Admin., 195 F.Supp.3d

776, 803 (D. Md. 2016); APR Energy, LLC v. First Inv. Group Corp., 88 F.Supp.3d 1300

(M.D. Fla. 2015); Travelport Global Distrib. Sys. BV v. Bellview Airlines Ltd, 2012 WL

3925856 (S.D.N.Y.); Stolt Tankers BV v. Allianz Seguros, SA, 2011 WL 2436662 (S.D.N.Y.);

Amaprop Ltd v. Indiabulls Fin. Servs. Ltd, 2010 WL 1050988 (S.D.N.Y.) (granting antisuit

injunction and motion to compel arbitration where respondent had procured ex

parte orders enjoining arbitration in its home courts in India, which was not arbitral

seat); Affymax, Inc. v. Johnson & Johnson, 420 F.Supp.2d 876 (N.D. Ill. 2006); SG Avipro

Fin. Ltd v. Cameroon Airlines, 2005 WL 1353955 (S.D.N.Y.); Empresa Generadora de

Electricidad ITABO, SA v. Corporación Dominicana de Empresas Eléctricas Estatales,

2005 WL 1705080 (S.D.N.Y.); Ibeto Petrochemical Indus., Ltd v. M/T Beffen, 412

F.Supp.2d 285 (S.D.N.Y. 2005). See also Bedard & Mascarenhas, Comverse, Inc.:

Methodological Issues in Anti-Suit Injunctions, 22(2) Mealey’s Int’l Arb. Rep. 29 (2007);

Restatement of the U.S. Law of International Commercial and Investor-State

Arbitration §2.29 (2019) (antisuit injunction in aid of arbitration).

Restatement of the U.S. Law of International Commercial and Investor-State

Arbitration §2.29(a) & comment b (2019).

Paramedics Electromedicina Comercial, Ltda v. GE Med. Sys. Info. Techs., Inc., 369 F.3d

645, 652 (2d Cir. 2004). See also Answers in Genesis of Ky. Inc. v. Creation Ministries,

556 F.3d 459, 471 (6th Cir. 2009) (determination to order antisuit injunction should

depend on whether “an injunction is necessary to protect the jurisdiction of a

federal court or if allowing the foreign litigation to continue would allow a party ‘to

evade the forum’s important policies’”) (quoting Gau Shan Co. v. Bankers Trust Co.,

956 F.2d 1349, 1355-57 (6th Cir. 1992)); China Trade & Dev. Corp. v. MV Choong Yong, 837

F.2d 33, 35 (2d Cir. 1987) (agreeing with general approach of first “inquiring (1)

whether the parties to

positive obligation to arbitrate can be traced to historic English common law hostility to

arbitration agreements, and in particular to the rule that arbitration agreements were

not specifically enforceable. Thus, a 1911 English appellate decision held:

“The parties could not be compelled to go to arbitration. They cannot now; but

an appeal to the courts can be stopped and that indirectly enforces the

arbitration clause. Therefore the status of an arbitration clause in England is

that it will not be specifically enforced, but by proper proceedings you can

prevent the other party from appealing to the English courts in respect of any

matter which by contract ought to be decided by arbitration.”

In substance, the English court held that it would give effect to the negative obligations of

an agreement to arbitrate (i.e., by refusing to permit litigation of an arbitrable dispute),

but that it would not directly enforce the positive obligations of that agreement (i.e., by

ordering a party affirmatively to arbitrate). The same position is almost uniformly

followed today by Contracting States to the New York Convention.

The only major exception to this approach is the United States, where the FAA provides

for the issuance of orders affirmatively compelling arbitration (under §4, §206 and §303

of the FAA). These provisions empower a U.S. court to grant what amounts to an

injunction requiring a party to arbitrate pursuant to its arbitration agreement. In the

words of one U.S. lower court, a request for affirmative relief under §4 (or §206 and §303)

“is simply a request for an order compelling specific performance of part of a contract.”

U.S. courts have explained (rightly) that there are important differences between a stay

of litigation and an order affirmatively compelling arbitration:

“The first merely arrests further action by the court itself in the suit until

something outside the suit has occurred; but the court does not order that it

shall be done. The second … affirmatively orders that someone do (or refrain

from doing) some act outside the suit.”

Pursuant to §4, §206 and §303 of the FAA, U.S. courts have frequently ordered recalcitrant

parties to international arbitration agreements to comply with their positive arbitration

obligations. In so doing, they have emphasized that the issuance of such an order is

not a matter of discretion, but a mandatory legal right (guaranteed by the FAA) on the

part of the party invoking the arbitration clause:

“So long as the parties are bound to arbitrate and the district court has

personal jurisdiction over them, the court is under an unflagging,

nondiscretionary duty to grant a timely motion to compel arbitration and

thereby enforce the New York Convention as provided in chapter 2 of the FAA,

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even though the agreement in question requires arbitration in a distant

forum.”

As discussed above, the FAA applies equally in this regard to agreements to arbitrate

in the United States and agreements to arbitrate abroad. Thus, U.S. courts have issued

orders compelling arbitration in arbitrations seated in both the United States and in

other countries. U.S. courts have also held that they have the authority both to

compel arbitration while staying (rather than dismissing) pending litigation of claims that

are subject to arbitration.

The grant of an affirmative order compelling arbitration is (again, correctly)

characterized by U.S. courts as a matter of specific performance of the parties’

agreement to arbitrate. Some commentators have remarked that “specific

performance is … not an appropriate remedy” for breach of an arbitration agreement and

that “[i]t is not practical to force a party to take part in arbitration proceedings.” That

observation is not correct.

It is, in fact, eminently practical in many cases to direct parties to take part in arbitration

proceedings: that is the most important point of arbitration agreements, and orders to

compel a party to arbitrate merely crystallize such agreements and enhance their

enforcement mechanisms, as with orders requiring specific performance of other

contractual obligations. Moreover, the experience with orders to compel arbitration in

the United States is that they are, in practice, of real efficacy in ensuring compliance with

arbitration agreements. This results from the existence of contempt of court sanctions for

failure to comply with such orders. The availability of such enforcement mechanisms

can be especially important in the international context, where courts in some countries

may not reliably give effect to the negative effects of arbitration agreements, thus

making orders enforcing the positive obligation of an arbitration agreement significantly

more important than in purely domestic contexts.

Nonetheless, ordering arbitration in a foreign arbitral seat arguably creates the risk of

judicial intrusion in the arbitral process or of conflicts between the court’s order and the

laws of the seat. For example, arbitration might be compelled in a foreign seat pursuant

to an agreement specifying procedures that violate the arbitral seat’s law.

Moreover, in most international arbitrations, orders compelling arbitration could

potentially be issued by the courts of several nations, creating the risk of conflicting or

inconsistent orders. Inconsistent obligations would be an even greater risk if national

courts purported in such orders to select an arbitral seat, to appoint or remove

arbitrators in a foreign arbitration, or to specify the arbitral rules, procedures, or

language. These possibilities would also conflict with one of the principal objectives

of international arbitration, being to minimize the role of national courts in dispute

resolution (particularly the role of national courts outside the seat). Given these

potential conflicts, it would arguably be preferable for national courts outside the seat

simply to stay litigation on the merits of an arbitrable dispute and let arbitration take its

course (whether in contested proceedings or in a default scenario), rather than to

affirmatively compel arbitration.

Although there is force to this observation, it ultimately misses the essential point. The

decisive point is that an order compelling arbitration need not – and, in virtually all

cases, should not – specify the applicable rules or other procedural aspects of a foreign

arbitration. In most instances, it violates the competence-competence doctrine,

prohibitions against judicial interference in the arbitral process and the primary

supervisory competence of the courts of the arbitral seat, for foreign courts to

address such procedural issues. As discussed elsewhere, there is virtually never any

justification for making such orders.

Similarly, as discussed below, the scope of a party’s positive obligation to submit

disputes to arbitration is defined by the scope of its arbitration agreement. A party is

obligated to arbitrate only those disputes which it has agreed to arbitrate, not others;

conversely, an arbitral tribunal only has jurisdiction over those disputes which the

parties have submitted to it, not others.

As discussed above, however, under most national laws, an arbitral tribunal’s jurisdiction

presumptively includes competence-competence to decide disputes regarding the

tribunal’s own jurisdiction, particularly where interpretation of the scope of the

arbitration clause is concerned (generally subject to subsequent judicial review), and

procedural authority to specify the arbitral procedures. Accordingly, where an order

compelling arbitration is issued, it ordinarily should not address issues of either

jurisdiction or arbitral procedure, because doing so would intrude on the arbitral

tribunal’s competence. Rather, a court should merely compel arbitration in

accordance with the parties’ arbitration agreement without defining

both suits are the same and (2) whether resolution of the case

before the enjoining court would be dispositive of the enjoined action”); Alstom

Chile SA v. Mapfre Compania de Seguros Generales Chile SA, 2013 WL 5863547, at *3

(S.D.N.Y.); Travelport Global Distrib. Sys., BV v. Bellview Airlines, Ltd, 2012 WL 3925856,

at *6 (S.D.N.Y.).