The Law Society has expressed disappointment at a European Court of Justice ruling on 10 February in the West Tankers case. The case revolved around a shipping accident in Italy in 2000, during which a tanker owned by West Tankers and chartered by Erg Petroli collided with Erg’s own jetty.

Erg’s insurers sought to sue West Tankers in Italy for the insurance payout, despite the fact the matter had gone to arbitration in London. The European Court overruled an injunction issued in London, ruling that it is for national courts, in the context of the litigation in question, to decide whether they had jurisdiction and how to proceed on the basis that the contentious facts were subject to an arbitration clause.
Law Society chief executive Des Hudson said of the judgement: “Today’s ruling does Europe no favours as a place to do business, not to mention London. We will have to ensure today’s ruling does not push arbitration to New York or Singapore, rather than European arbitral seats such as London.
“The advantages of choosing London as an arbitral seat remain and still more than offset the effects of this ruling.
“There should be greater recognition in Europe’s legal framework of the commercial importance of arbitration agreements. We intend to lobby for this in the forthcoming review of the Brussels I Regulation.”
David Greene, president of the London Solicitors’ Litigation Association and Law Society council member for international practice, said: “Parties enter into arbitration agreements to resolve their disputes. This decision is undoubtedly disappointing because it may encourage attempts to frustrate the process through the use of litigation.
“London remains, however, one of the primary centres for international arbitration, with the domestic courts having made it clear that they will only interfere in the arbitration process in very limited circumstances.”