UK Trends and Developments Contributed by: Tom Sprange KC, Shouvik Bhattacharya, Sadyant Sasiprabhu and Alice Konneh, King & Spalding International LLP
The clause should also deal expressly with the law governing the arbitration agreement. It should not merely identify arbitration as the chosen mechanism; it should make clear that arbitration is exclusive and that proceedings in any other forum are not permit - ted. Chubb Bermuda demonstrates the value of this specificity, as the court’s willingness to grant final relief turned in significant part on the clarity with which the parties had agreed to arbitrate in London and to submit questions as to the existence of the arbitration agreement in English law. Align dispute resolution provisions across related documents Dispute resolution provisions should be aligned across the full suite of related documents, including finance documents, guarantees, security documents and any settlement arrangements entered into during the life of the relationship. Inconsistent or conflicting dispute resolution clauses across connected material create uncertainty, which tactical litigants can exploit. Care - fully considered jurisdiction provisions also help avoid time-consuming and costly litigation processes, and make any urgent application easier to present. Act promptly when foreign proceedings are threatened or commenced Where foreign proceedings are threatened, com - menced or accelerated, parties and their counsel need to act promptly. Applicants should move promptly, gathering evidence of the arbitration agreement, the dispute and the foreign steps taken. That said, Max- amcorp confirms that a period of delay is not fatal where the applicant has been actively vindicating its rights rather than waiting to see how the foreign litiga - tion unfolds. However, courts will not readily overlook a strategic decision to keep the injunction in reserve as a fallback after an adverse foreign result.
Do not assume tactical foreign litigation will create leverage For parties contemplating tactical foreign litigation, it is important to note that foreign litigation does not always guarantee real leverage or strategic advan - tage. A judgment obtained in a foreign court in defi - ance of an English injunction or in breach of an arbitra - tion agreement may prove a hollow victory, vulnerable to an anti-enforcement order and exposing the litigant to damages and indemnity costs. Treat English injunctive relief as a seat - selection factor The availability and robustness of English injunctive relief should be treated as a seat-selection factor, and parties negotiating new agreements should give that factor appropriate consideration. It may be relevant not only to enforcement, but also to how quickly the parties can protect the agreed forum if proceedings are brought elsewhere. Conclusion The cases surveyed here show why parties continue to choose London as a seat in their international arbi - tration agreements. English courts do not hesitate to hold parties to their bargain to arbitrate, at whichever stage the threat to that bargain emerges. At the same time, the courts are prudent about the exercise of their jurisdiction and will decline to intervene where no bar - gain has in truth been broken. Looking ahead, these cases may make tactical for - eign proceedings less attractive where the underly - ing contract contains a carefully worded arbitration agreement with a London seat. A party considering proceedings abroad will need to factor in not only the risk of being restrained at the outset, but also the pos - sibility that any foreign judgment obtained in breach of the arbitration agreement may later be neutralised or rendered commercially ineffective.
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