Governing law of Arbitration Agreements: Enka v. Chubb

15 October, 2020

On Friday 9 October 2020, the UK Supreme Court issued its decision in Enka Insaat Ve Sanayi AS v. OOO Insurance Co Chubb [2020] UKSC 38.  As previously posted, this was an expedited appeal from the Court of Appeal decision earlier this year. Toby Landau QC appeared for the appellant (Chubb) in the Supreme Court.

Although the Supreme Court dismissed the appeal brought by Chubb, upholding the grant of an anti-suit injunction in favour of Enka to prevent Chubb’s pursuit of proceedings before the Moscow Arbitrazh Court, the route to this outcome differed from the court below and was subject to a 3:2 split in the Supreme Court.  The written judgment runs to 114 pages.  The separate judgments repay careful reading and are not summarized here. 

In essence, and applying English common law rules to determine proper or applicable law for such purposes, the majority concluded that the arbitration agreement was governed by English law given (a) the parties’ choice of English seat for arbitration and (b) the absence of any express or implied choice of law to govern the substantive construction contract of which the arbitration agreement formed a part.  Authoritative clarification and guidance was provided to assist courts in ascertaining the proper law of an arbitration agreement contained within a substantive contract, although the answer in each case is inevitably contextual.

In addition, the Supreme Court emphasized the role of the English court in enforcing the parties’ arbitral bargain where they have chosen English seat arbitration, including through grant of anti-suit injunctive relief.  Considerations of international comity have a much lesser role to play in this contractual context.