Jurisdiction Under The Brussels Convention To Hear Applications For Interim Relief In Aid Of Arbitration Proceedings

Van Uden Maritime BV (trading as Van Uden Africa Line) v Kommanditgesellschaft in Firma Deco-Line and Another (Case C-391/95) (ECJ), [1998] All ER (D) 591

Commentary

The decision brings a useful clarification of the scope of application of art 1 and art 24 of the Brussels Convention on Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters of 1968 ('the Brussels Convention'). While arbitration is generally excluded from the scope of the Brussels Convention by art 1(4), it is now clear that the Brussels Convention does apply to applications for provisional or protective measures under art 24 in aid of arbitration proceedings, albeit conditional upon there being a real connecting link between the interim measures sought and the territorial jurisdiction of the state of the court to which the application was made. Applications for interim payment can fall under art 24 subject to certain conditions. The decision is of interest to parties to English arbitration proceedings seeking interim relief before the national courts of another EC member state and to parties to foreign arbitration proceedings seeking the assistance of English courts. It ties in with section 44(2) of the Arbitration Act 1996, which sets out the powers which the English courts can exercise in support of arbitral proceedings and integrates these powers into a jurisdictional framework at European level.

Decision

The court found that, where the parties had entered into an arbitration agreement validly excluding the jurisdiction of the courts over a contractual dispute and instead referred their dispute to arbitration, no court had jurisdiction over the substance of the dispute. An order granting provisional or protective measures could therefore not be based on art 5(1) of the Brussels Convention.

However, art 24 of the Brussels Convention could apply and confer jurisdiction on the courts to grant interim relief even where the substantive proceedings were to be conducted before arbitrators provided there existed a real connecting link between the subject matter of the provisional measures sought and the territorial jurisdiction of the court to which the application is made. An order for interim payment of contractual consideration could only be classified as a provisional measure within the meaning of art 24 if (i) repayment to the defendant of the sum awarded was guaranteed if the plaintiff was unsuccessful with regard to the substance of his claim and (ii) the provisional measure sought related only to specific assets of the defendant located within the territorial jurisdiction of the court to which the application was made.

Background

The dispute arose on a charter agreement between the Dutch plaintiff and German defendant. The defendant failed to pay certain invoices and the plaintiff commenced arbitration proceedings in the Netherlands. Additionally, the plaintiff also applied to the Dutch courts for interim relief and sought payment of some of the debts due under the agreement. The German defendant challenged the jurisdiction of the Dutch courts. The matter ultimately went to the Hoge Raad (the Dutch Supreme Court) on appeal, which stayed the proceedings and referred to the ECJ for a preliminary ruling interalia the question whether the Dutch courts had jurisdiction to hear applications for interim relief under art 5(1) (contract) and art 24 (interim relief) of the Brussels Convention. The provision of the Netherlands Code of Civil procedure on which the plaintiff based its application was one of the exorbitant grounds of jurisdiction 'black listed' in art 3 of the Brussels Convention.

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