English arbitration clauses and anti-suit injunctions
This Week
Arbitration
is a https://www.51lunwen.org/liuxuelunwendx/barrister at Simmons & Simmons
© Reed Elsevier (UK) Ltd 2001
Ian Gordon welcomes the recent decision in XL
Insurance Ltd v Owens Corning
In the past ten years there has been considerable growth in the practice of international commercial arbitration, that is private and consensual arbitration involving what might be called a “foreign” element.
The “foreign” element may take a variety of forms. Although the arbitration is to take place in England, the parties may not be English or the underlying facts of the case may have occurred overseas and have nothing really to do with this country. Further, an English arbitrator may be asked to determine a dispute by reference to a system of law other than English law.
Being international in nature, conflicts may sometimes arise between different systems of law, both of which are relevant to the dispute being referred to arbitration. What happens, for example, if the parties agree to an English arbitration clause but, according to the law governing the contract of which the clause forms a part, the clause is not valid (though it would be valid as a matter of English law)?
This very problem arose in an acute form in the case of XL Insurance Limited v Owens Corning(Unreported, July 28, 2000).
The facts
The claimant, XL Insurance Limited (“XL”), was a Bermudan insurance company; the defendant, Owens Corning (“Owens”), was a Delaware company. XL agreed to insure Owens against property damage and associated risks, the contract being negotiated and effected on Owens' behalf by
代写留学生论文a broker at Marsh & McLennan.
After a pre-contractual exchange of correspondence, a policy was issued in September 1998 (“the Policy”) further to which XL underwrote 10% of the risk. The Policy contained, amongst others, the following clause, “the Arbitration Clause”:
“Any dispute, controversy or claim arising out of or relating to [the] Policy or the breach, termination or invalidity thereof shall be finally and fully determined in London, England under the provisions of the Arbitration Act 1996 …”.
Although any dispute relating to the Policy was to be referred to arbitration in England, in the governing law clause it was stated that the Policy “shall be construed in accordance with the internal laws of the State of New York, United States except in so far as such laws … are inconsistent with any provision of this Policy”.
In March 2000, Owens brought an action against XL in Delaware seeking a declaration that it was liable to indemnify Owens for certain Y2K costs (“the US Proceedings”). In June 2000, XL applied to the English court for an order to restrain Owens from pursuing the claim against XL in Delaware or in any forum other than arbitration in London, relying on the Arbitration Clause which, it was said, Owens had breached.
Owens opposed XL's application, arguing that the Policy, including the Arbitration Clause, was governed by New York law. Owens was not acting in breach of contract by suing XL in Delaware because, under New York law, the Arbitration Clause was not enforceable.
The issues
The difficulty posed by XL's application was that, whilst the Arbitration Clause provided that disputes relating to the Policy were to be resolved by arbitration in London, the Policy as a whole was governed by New York law.
Under New York law (o
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