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Anti-suit injunctions in international arbitration: the Swiss approach (Part 1/2)

Introductory remarks

Anti-suit injunctions may take different forms: for example, a party may seek an injunction from an arbitral tribunal to prevent or restrain another party from commencing or continuing competing proceedings in national courts in breach of an arbitration agreement; a party may also seek an injunction from a court at the seat of the arbitration to prevent or restrain another party from commencing court proceedings in breach of an arbitration agreement; or, finally, a party may seek an injunction from a court to prevent or restrain a party from commencing or continuing arbitration proceedings (the so-called “anti-arbitration” injunction).

This first of two blogs on the topic of anti-suit injunctions will discuss the first of the three scenarios contemplated above.

Arbitral jurisdiction

Arbitral tribunals seated in Switzerland have the power to issue anti-suit injunctions under Article 183 of the Swiss Private International Law Act (PILA), which reads as follows: “[u]nless the parties have agreed otherwise, the arbitral tribunal may, upon request of one party, order provisional or conservatory measures”.

Article 183 PILA makes clear that, under Swiss law, anti-suit injunctions are ordered only at the request of a party. As such, arbitral tribunals are not entitled to order such measures ex officio. Anti-suit injunctions will usually take the form of a procedural order or an interim award. Under Swiss law, the parties are nevertheless free to exclude or restrict the powers of arbitral tribunals seated in Switzerland to order provisional measures.

Conditions for obtaining an anti-suit injunction from an arbitral tribunal under Swiss law

Article 183 PILA does not spell out the requirements to be fulfilled in order for a party to be granted interim relief from an arbitral tribunal in Swiss-seated arbitration proceedings. The wide discretion enjoyed by arbitrators under Swiss law is further strengthened by the fact that both learned opinion and arbitral practice lend support to the proposition that the interim measures which an arbitrator may take are not confined to those which a Swiss court could take. In particular, the arbitral tribunal may order any measures available under the procedural rules applicable to the arbitration proceedings, under the substantive law applicable to the dispute, or under the law of the country where the order will be enforced.

In general terms, the most frequently required conditions for obtaining an anti-suit injunction from a Swiss-seated arbitral tribunal are as follows:

  • Prima facie jurisdiction of the arbitral tribunal as to the merits and the interim relief being sought, that is, the anti-suit injunction.
  • The party seeking interim relief must show that it has a contractual or legal right upon a prima facie examination. With regard to anti-suit injunctions, the arbitral tribunal has to determine whether there is a right to be protected from a violation of the arbitration agreement. Such a right arises under the right of a party to an arbitration agreement not to have the dispute adjudicated upon in violation of an arbitration agreement. Such right may also arise from the parties’ duty to abstain from any conduct likely to aggravate or prolong the dispute. The right to non-aggravation was found to have been breached even in cases where a party to an arbitration had sued the other before another arbitral tribunal who might have had jurisdiction over the dispute. Further, in some cases, arbitral tribunals seated in Switzerland have granted anti-suit injunctions in spite of the fact that the action to be enjoined did not concern the very same parties as those before the arbitral tribunal (at least where the facts and claims overlapped substantially).
  • The interim relief sought must be such as to be appropriate to prevent irreparable or impending harm to the applicant. However, interim relief must not pre-empt a decision on the merits by enforcing a right, the existence of which is yet to be established. A number of Swiss commentators consider that there should be no requirement of irreparable harm where an arbitral tribunal is satisfied that an anti-suit injunction should be granted. In particular, whether or not the foreign court will refer the parties to arbitration should be deemed irrelevant. Anti-suit injunctions have been granted by arbitral tribunals sitting in Switzerland in cases in which the harm suffered by the applicant was found to consist of an inevitable increase in the parties’ costs and expenses, where there was a risk that the applicant would be forced to participate in a time-consuming taking of evidence, where there was a risk of contradictory decisions, or where the protection of business secrets or other trade secrets could be guaranteed only if the court proceedings brought in violation of the arbitration agreement were enjoined.
  • The interim relief sought must be required as a matter of urgency in view of the circumstances. The party requesting interim relief must not delay the filing of its application for interim relief. This criterion is closely connected to the criteria of irreparable harm. Some Swiss commentators consider that where the duty not to aggravate the dispute has been breached by one party, the test of urgency should always be considered as having been met. In the case of particular urgency, the author takes the view that the arbitral tribunal should be allowed to order the anti-suit injunction on an ex parte basis, that is, without hearing the other party.
  • Finally, the balance of convenience must be in favour of the party requesting interim relief. Insofar as an anti-suit injunction is ordered on a prima facie basis, the arbitral tribunal will have to take into consideration the effect of granting such injunction on the parties’ right. Such overall balancing of the parties’ interest will lead the arbitral tribunal to consider whether the balance of convenience lies in favour of granting or denying the injunction.

As is plain from the review of both arbitral practice and learned opinions, arbitral tribunals seated in Switzerland have jurisdiction to order anti-suit injunctions when confronted with a party’s attempt to submit a dispute that is covered by an arbitration agreement to a foreign domestic court. As a practical matter, the advisability of such measures will be decided in light of the circumstances of each case.

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