Arbitration agreements set to be protected by the pending Brussels Regulation reform

On 11 October, the European Parliament's Legal Affairs Committee approved its report on reform of the Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (the Brussels Regulation). The report takes into account the general approach adopted by the European Council in June and it is therefore highly likely that the report is now very close to what the amendments to the Brussels Regulation will look like when they take effect. The Parliament is expected to vote on the report on 19 November and the Council will formally vote on the amendments thereafter.

If the committee's proposals are adopted, the controversial 'anti-arbitration' decisions in Endesa and West Tankers would be effectively reversed, and there would be an absolute exclusion of arbitration from the ambit of the Regulation. The key effect of this reversal is that parties will no longer be able to derail an arbitral process indefinitely by bringing proceedings in the court of another Member State in breach of an arbitration agreement. Also, primacy in relation to matters relating to the support of an arbitration will revert to the courts at the seat of the arbitration or the courts at the place of enforcement. For further information on these decisions please see our earlier blog posts here.

The proposals adopt the clear exclusion wording suggested by the Council and emphatically reject the Commission's proposal for a partial inclusion of arbitration within the scope of the Brussels Regulation. This position has been lobbied for by the English MoJ and the wider international arbitration community.

The report proposes that:

• the Regulation should not apply to arbitration at all;
• when a Member State court is seised of a matter in respect of which the parties have entered into an arbitration agreement it is not prevented from a) referring the parties to arbitration or b) staying/dismissing the court's proceedings in favour of arbitration;
• a Member State can, however, rule on whether an arbitration agreement is null and void, inoperative or incapable of being performed. Any such ruling shall not be subject to the recognition and enforcement rules prescribed by the Regulation. On the other hand, where a court determines that an arbitration agreement is null and void, inoperative or incapable of being performed, that court's judgment on the substance of the matter can be recognised and, as the case may be, enforced in accordance with the Regulation.
• the Regulation should not apply to any court action brought in support of arbitral proceedings, for example proceedings relating to the establishment of an arbitral tribunal, the powers of arbitrators, the conduct of an arbitration procedure, nor to any action concerning issues of challenge or enforcement.