United Kingdom / 23 March 2012 / England and Wales, High Court / Enercon GmbH Wobben Properties GmbH v. Enercon (India) Ltd / 2011 Folio 1399
| Country | United Kingdom |
| Court | England and Wales, High Court |
| Date | 23 March 2012 |
| Parties | Enercon GmbH Wobben Properties GmbH v. Enercon (India) Ltd |
| Case number | 2011 Folio 1399 |
| Source |
[2012] EWHC 689 (Comm) | online: BAILII |
| Languages | English |
| Summary | The claimants were German companies. The defendant, Enercon (India) Ltd (“EIL”), was an Indian company. The claimants asserted an entitlement to monies under an alleged written agreement called the Intellectual Property Licence Agreement (“the IPLA”) between the first claimant, Enercon GmbH Wobben Properties GmbH (“Enercon”) and EIL. The claimants commenced arbitration pursuant to a clause contained in the IPLA providing for arbitration under the Indian Arbitration and Conciliation Act 1996 (“the Indian Act”) with a “venue” in London. EIL objected to the tribunal’s jurisdiction on the grounds that: (i) the IPLA was not binding and (ii) in the alternative, while the arbitral clause contained in the IPLA stipulated London as the “venue”, “venue” was not synonymous with “seat” and the proper “seat” of arbitration was India. The claimants applied to the English High Court for (i) a declaration under section 32 of the Arbitration Act 1996 (U.K.) (“the U.K. Act”) to the effect that EIL was required to refer any dispute arising under the IPLA to arbitration in London, and (ii) an anti-suit injunction enjoining EIL from bringing any proceedings before the Indian courts. Before the hearing of this application, EIL applied to the Indian courts seeking (i) a declaration to the effect that the IPLA was not binding, and (ii) an anti-suit injunction enjoining the claimants from pursuing the English court proceedings (which was granted on an interim basis). Meanwhile, the parties (EIL under protest) appointed two arbitrators in the London arbitral proceedings. The party-appointed arbitrators were unable to agree on the appointment of a third arbitrator. The claimants thereafter issued fresh proceedings before the English High Court, seeking (i) the appointment of a third arbitrator under section 18(a) of the U.K. Act, (ii) an anti-suit injunction enjoining EIL from bringing any proceedings before the Indian courts and (iii) an injunction restraining EIL from interfering with the application for the appointment by the Court of a third arbitrator. Both injunctions were granted on an interim basis. The claimants subsequently made a further application for a freezing injunction against EIL, which was also granted. EIL applied to have the injunctions set aside. On the hearing of these applications, the High Court held that the English court proceedings for the appointment of a third arbitrator should be stayed pending the final determination by the Indian court as to the binding nature of the IPLA and the proper seat of the arbitration. The Court considered that it should be extremely cautious to intervene in the arbitration when the Indian court proceedings were still pending. It stated that it reached its decision out of respect for the principle of comity and in order to avoid a “recipe for confusion and injustice”, but that it did so reluctantly, noting that there had been significant delays in the Indian court proceedings. It therefore indicated that the stay would be for a limited duration only and conditional on EIL undertaking to take all necessary steps to expedite the Indian court proceedings. The Court also noted that it would have concluded that the arbitral seat was London, based on an objective reading of the IPLA and the claimants’ submissions that the parties had intentionally chosen a seat outside India, so as to render any award enforceable in India under the provisions of the Indian Act giving effect to the NYC (whereas, if the seat was in India, the award would have been a domestic award and thus not enforceable under said provisions). The Court stated that in an international contract of this type, with parties of different nationality, the desirability of enforceability of an award under the NYC was a legitimate commercial reason to construe the agreement as contended by the claimants. The Court also set aside the injunctions. |
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