Case law Developments in PIL

London Steam-Ship Owners: Extending Lis Pendens to Arbitral Tribunals?

This is the second contribution to an online symposium on the ruling of the European Court of Justice, of 20 June 2022, in London Steam-Ship Owners’ Mutual Assistance Association Ltd v Spain. The first post was contributed by Adrian Briggs. Update:other contributions to the symposium have been published in the meanwhile, authored by Antonio Leandro and François Mailhé.

The most significant consequence of the judgment of the CJEU in London Steam-Ship Owners might be the holding that the courts of the Member States requested to declare enforceable arbitral awards should verify whether the relevant arbitral tribunal respected the rule on lis pendens of the Brussels I bis Regulation.

According to the CJEU, the minimisation of the risk of concurrent proceedings, which that provision is intended to achieve, is one of the objectives and principles underlying judicial cooperation in civil matters in the European Union. Thus, a judgment on an arbitral award rendered in violation of lis pendens does not deserve deference, and should not qualify as a judgment in the meaning of Article 34(3) of the Brussels I Regulation.

Is the Objective of Avoiding Concurrent Proceedings so Essential in the EU?

As pointed out by Adrian Briggs, the CJEU rules that the rule of lis pendens should be applied by the courts of Member States in courts proceedings on arbitral awards. The CJEU suggests, it seems, that those courts should dismiss request to declare enforceable arbitral awards in case the rule on lis pendens would have been violated.

The proposition that the rule of lis pendens is so important that it should be applied by courts in exequatur proceedings of arbitral awards is very hard to reconcile with previous cases of the CJEU where the Court held that the doctrine of lis pendens is not important enough to become a ground for denying enforcement to judgments under the Brussels Regulations (I or II).

In Liberato, the CJEU held that

the rules of lis pendens in Article 27 of Regulation No 44/2001 and Article 19 of Regulation No 2201/2003 must be interpreted as meaning that where, (…) the court second seised, in breach of those rules, delivers a judgment which becomes final, those articles preclude the courts of the Member State in which the court first seised is situated from refusing to recognise that judgment solely for that reason. 

So, the doctrine of lis pendens is not important enough to exclude that a judgment which violated it be enforced in other Member States. Why does the same doctrine suddenly become so much more important in the context of arbitration?

Lis pendens and Jurisdiction Clauses: The New Rules

For the purpose of assessing the consequences of this case, it must be underscored that it was governed by the Brussels 44/2001. At the time, thanks to the (in)famous Gasser case, the rules of lis pendens fully applied to cases involving jurisdiction clauses.

As many readers will know, the rules on lis pendens were amended by the Brussels I Recast to overturn Gasser. Under Article 31(2) of the Brussels I Recast:

Without prejudice to Article 26, where a court of a Member State on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seised, any court of another Member State shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement.

So, if the judgment in London Steam-Ship Owners is to be understood as extending to arbitration agreements the mandatory rules of the Brussels regime on jurisdiction clauses and lis pendens, then Article 31(2) should give a priority to arbitral tribunals over the courts of Member States which were not chosen by the parties.

The CJEU has opened the Pandora box. Does it contain an obligation for the courts of the Member States to stay proceedings once an arbitral tribunal seated in a Member State is seised?

2 comments on “London Steam-Ship Owners: Extending Lis Pendens to Arbitral Tribunals?

  1. Marta Requejo Isidro

    I am not sure your inference regarding arbitral agreements is correct (not sure neither about its hypothetical underpinning). In any event, and just speculating: for a situation like the one you describe, the kind of analogy reasoning used by the Court could also support the application of the lis pendens rules in force in relation to third States. Finally, the objective (one of the objectives of the system) is to avoid the risk of concurrent proceedings.

  2. I think that the objective of the system is not to avoid the risk of concurrent proceedings at all costs. If that were so, the lis pendens doctrine would play a role at the stage of the enforcement of foreign judgments, but the Court has precisely ruled in Liberato that it is not the case.
    The truth is that once the issue is not anymore one of parallel proceedings, but one of a conflict of decisions (or of a conflict between proceedings and a decision: res judicata), the respective times of seizure become irrelevant.
    So, if the goal of the court is to extend the rules of the Brussels Ibis Regulation to arbitration, one wonders why lis pendens suddenly becomes relevant at the stage of enforcement. But maybe the goal of the Court is different, and it wants to establish a hierarchy between arbitration and judicial proceedings, and ensure that one prevails over the other.

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