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Anti-Suit Injunctions
in International Arbitration

An Overview

Stephen M. Schwebel *

The subject of Anti-Suit Injunctions in International Arbitration is well described in the introduction
to this publication. It is a timely and serious subject. The threats to and breaches of the efficacy, the
integrity, and in some cases the very viability of international arbitration are profound.

Yet, the anti-suit enjoinder of international arbitration is a phenomenon that has generated too little
consideration, still less confrontation, and still less cure. Such case law as may be found appears
inconclusive. While the issuance of anti-suit injunctions of the arbitral process by national courts is part of
State practice in the perspective of international law, that practice is too episodic and incoherent to give rise
to rules in which the international community has acquiesced. This is particularly so because that practice
appears to violate conventional and customary international law, international public policy and the accepted
principles of international arbitration.

There have been multiple effective enjoinders of international arbitral recourse, but the legality of
those enjoinders remains very much in question. In a few instances, the enjoined arbitral tribunals have

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nevertheless proceeded to render awards. Those are exceptional cases. Scholarly analysis of the subject of
anti-suit injunctions in respect of arbitration is surprisingly scarce.

The contributions in this volume accordingly should elucidate what may fairly be characterized as
one of the gravest problems of contemporary international commercial arbitration. The question of anti-suit
enjoinder of the international arbitral process is multifaceted and subtle, as the specific topics to be
addressed by my learned colleagues suggest.

My colleagues will speak as students of anti-suit injunction of international arbitration. I should

disclose at the outset that I speak as a victim.

Not long after I retired from the International Court of Justice, I was appointed by a company to
serve as arbitrator in a dispute that had arisen over an immense investment, approaching three billion
dollars, in power generation in a developing country. The investment was made through the medium of a
company organized under the law of the host State by a consortium of foreign companies of more than one
nationality, financed internationally not only by a syndicate of forty commercial banks and a bond offering
but by governmental agencies and ministries of leading capital-exporting States. The Ministry of Finance of
the host country provided a “support letter” which was seen as a guaranty that the State power monopoly
with which the investor contracted would perform its obligations. That State power monopoly was
contractually bound to purchase all of the plant’s power production at a price tied to the dollar value of the
investment. The contract specified that disputes arising under it were to be exclusively resolved by
international arbitration in Stockholm.

Soon after the completion of the power plant, the host country experienced especially severe
difficulties arising out of the Asian economic crisis. Because of that crisis, the developing country’s
currency greatly depreciated, as did its short-term power requirements. The State power monopoly sought a
local court order holding that the contract was void ab initio by reason of corruption, overcharging for power
and inconsistency with the law of the host State. The company thereupon initiated arbitration in Stockholm
against the power monopoly. In response to the claimant’s naming an arbitrator, the power company named
its party-appointed arbitrator. But shortly thereafter a local court in the developing country issued an
injunction against the arbitral proceedings. That injunction provided for a fine of six hundred million dollars
for noncompliance with it.

When the injunction was issued, I had been about to engage in exchanges with my co-arbitrator on
the appointment of a chairman. Those exchanges never took place. The arbitral process came to a sudden
and total halt. The arbitration was to have taken place in Stockholm. But the power-generating plant would
have remained in place where built, subject to the disposition of the State which had guaranteed
performance of the contract governing the construction of the power plant and the purchase of the power
produced by it.

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Thus the foreign investor was vulnerable to pressure. Its investment, however immense, however
internationally sponsored and however nationally guaranteed, was subject to destruction by the imposition
of gargantuan fines. But the host State concerned was also vulnerable to pressure, not least because the
power-generating contract had been in part financed by governmental agencies of the very States whose
assistance was critical to its surmounting the economic crisis that enveloped it.

Nothing more was heard of international arbitration. But in the end, political leadership more
enlightened than that of the power monopoly reached a settlement with the investors, the terms of which I do
not have knowledge. But there are other notable cases of the employment of anti-suit injunctions to
immobilize international arbitration where the impasse has not been overcome by a settlement.

So much for an illustrative introduction of the sort of facts at issue. Let me now try to give an
illustrative introduction of the illegality which in my view inheres in enjoinder of international arbitration.

Anti-suit injunctions of international arbitration are a species of the genus of anti-suit injunctions, a
genus—as to be distinguished from a genius—of the common law that has spread to other legal systems.
Anti-suit injunctions have been designed to prevent vexatious or oppressive litigation by a litigant in forum
B, who is already subject to the exercise of a court’s jurisdiction in forum A. The court of forum A issues an
anti-suit injunction to protect its jurisdiction in respect of the same parties and cause of action from
interference by the exercise of a jurisdiction of a court in forum B. In these remarks, I do not address the
legality or the propriety of anti-suit injunctions in general but confine myself to injunctions of international
arbitration. Where the parties to a contract have bound themselves to international arbitration of disputes
arising under that contract, and where a court enjoins pursuit of the process of such arbitration, the multiple
illegalities that are or may be entailed encompass the following.

I. VIOLATION OF THE NEW YORK CONVENTION

The United Nations (New York) Convention on the Recognition and Enforcement of Foreign
Arbitral Awards of 1958 has been ratified to date by some 130 States, including virtually every State
consequentially engaged in international commerce. The most notable exception I believe is Taiwan.
Article II, paragraph 1, provides that each contracting State:
[S]hall recognize an agreement in writing under which the parties undertake to submit to
arbitration all or any differences which have arisen or may arise between them in respect of a
defined legal relationship . . . concerning a subject matter capable of settlement by arbitration.
At paragraph 3, that Article continues that:
The court of a contracting State, when seized of an action in a matter in respect of which the
parties have made an agreement within the meaning of this article, shall, at the request of one of
the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void,

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inoperative or incapable of being performed.

“[S]aid agreement” refers, in accordance with the principle of severability—to be discussed
shortly—not to the nullity of the contract but to the nullity of the arbitration clause, with the result that, even
if there is an allegation that the contract at issue is void, the arbitral tribunal retains jurisdiction to pass upon
that issue of voidance.
Article III of the New York Convention provides that:
Each contracting State shall recognize arbitral awards as binding and enforce them in accordance
with the rules of procedure of the territory where the award is relied upon . . . .
Article V provides that recognition and enforcement of the award may be refused only on proof of
the limited grounds there specified.
Can a State whose court issues an anti-suit injunction of an international arbitration be said to
implement the State’s obligations under the New York Convention? Not in my view. When a domestic
court acts, it acts as an organ of the State for whose actions that State is internationally responsible. When a
domestic court issues an anti-suit injunction blocking the international arbitration agreed to in the contract,
that court fails “to refer the parties to arbitration” (Art. II(3)). In substance, it fails anticipatorily to
“recognize arbitral awards as binding and enforce them,” (Art. III) and it preemptively refuses recognition
and enforcement on grounds that do not, or may not, fall within the bounds of Article V of the New York
Convention.
A party to a treaty is bound under international law—as codified in the Vienna Convention on the
Law of Treaties—to perform it in good faith. As the Vienna Convention prescribes, a party may not invoke
the provisions of its internal law as justification for its failure to perform a treaty. Internal law must be read
here as embracing a precedent on which a court relies, if that precedent has legal force. A treaty shall be
interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in
their context and in the light of its object and purpose. The object and purpose of the New York Convention
is to ensure that agreements to arbitrate and the resultant awards—at any rate, the resultant foreign
awards—are recognized and enforced. It follows that the issuance by a court of an anti-suit injunction that,
far from recognizing and enforcing an agreement to arbitrate, prevents or immobilizes the arbitration that
seeks to implement that agreement, is inconsistent with the obligations of the State under the New York
Convention. It is blatantly inconsistent with the spirit of the Convention. It may be said to be inconsistent
with the letter of the Convention as well, at any rate if the agreement to arbitrate provides for an arbitral
award made in the territory of another State. There is room to conclude that an anti-suit injunction is
inconsistent with the New York Convention even when the arbitration takes place or is to take place within
the territory of the Contracting State provided that one of the parties to the contract containing the arbitration
clause is foreign or its subject matter involves international commerce.

II. BREACH OF OTHER TREATY PROVISIONS FOR ARBITRATION

Whatever position is adopted in respect of the applicability of the New York Convention to an
anti-suit injunction of international arbitral recourse, the clarity of the law in respect of bilateral investment
treaties is simply beyond dispute. Where a State is party to a bilateral investment treaty which, as such

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treaties generally do, affords the investor the right to arbitration with the government of the host State of
disputes arising out of its investment, any issuance of an anti-suit injunction debarring recourse in the teeth
of the terms of the treaty would constitute a gross breach of the host State’s treaty obligation and hence a
violation of conventional international law. Customary as well for that matter. A given treaty provision for
arbitration that is specifically disregarded contravenes international law. If the bilateral investment treaty
further provides for respect for obligations entered into by the State party with the foreign investor, the
violation of the treaty by issuance of the anti-suit injunction is compounded. Moreover, the fact that some
2,200 bilateral investment treaties today bind, by their concordant terms, States of all continents, cultures
and legal systems has an influence on the content of customary law.

Equally, where a Contracting State and a national of another Contracting State have accepted the
jurisdiction of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), “no
party may withdraw its consent unilaterally” (Article 25, paragraph 1, of the Washington Convention of
1965, to which, to date, some 136 States are party). Under Article 26 of that Convention:
Consent of the parties to arbitration under this Convention shall, unless otherwise stated, be
deemed consent to such arbitration to the exclusion of any other remedy.

It follows that if a court of a State party to the Washington Convention were to issue an anti-suit
injunction of an ICSID arbitral proceeding, it would place that State in violation of its international legal
obligations under that Convention.

III. DENIAL OF JUSTICE

Issuance of an anti-suit injunction of an international arbitration not only may be or is a violation of a

treaty, it also is a violation of customary international law.

In customary international law, it has long been accepted that a State that refuses an alien person or
company access to its courts commits a denial of justice. That principle equally embraces the situation in
which a State refuses access not to its courts but to the arbitral process for which a contract provides. Such a
refusal may come in the form of a State’s repudiation of its own obligation to arbitrate, or that of a province
or a State agency, of which there have been a number of examples. But when a domestic court, an organ of
the State in the eyes of international law, blocks access to arbitration through issuance of an anti-suit
injunction, that too constitutes a denial of justice for which the State of which the court is part (whether or
not the judicial branch be independent) is internationally responsible. Such action may equally be assessed
as a violation of international public policy. Here I would refer to Claude Reymond’s well-known award in
the Benteler[1] case.

IV. ARBITRARY OR TORTIOUS CONFISCATION OF AN ALIEN’S CONTRACTUAL RIGHT

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Another ground of violation of customary international law by the issuance of an anti-suit injunction
of international arbitral recourse is to be found in the principle that a State is not entitled to take the property
or contractual rights of an alien within its jurisdiction by actions that are arbitrary, tortious or confiscatory.
The contractual right of an alien to arbitration of disputes arising under a contract to which it is party is a
valuable right, which often is of importance to the very conclusion of the contract. Vitiation of that right
through issuance of an anti-suit injunction attracts the international responsibility of the State of which the
issuing court is an organ.

V. GENERAL PRINCIPLES OF CONTRACTUAL LAW

A further element of illegality in the issuance of an anti-suit injunction of international arbitral

recourse lies in its conflict with a fundamental principle of the law of contracts, a principle so fundamental
and broadly accepted as to be one of the general principles of law recognized as a source of law by the
Statute of the International Court of Justice. That principle is that the expectations of the parties to a
contract as well as its provisions are critical to the interpretation and application of that contract. Where the
parties to an international contract provide for international arbitration as the exclusive means of resolving
disputes that arise thereunder, it is obvious that their expectations, as well as the contract’s terms, are
defeated by issuance of an anti-suit injunction that debars arbitration.

VI. GENERAL PRINCIPLES OF INTERNATIONAL ARBITRATION

Still another element of illegality inherent in the anti-suit injunction of international arbitration is that
it is incompatible with accepted, basic principles of international arbitration. One of those principles is that
of the severability, or separability or autonomy, of the arbitration agreement from the contract of which it is
part. Where a contract provides for arbitration of disputes arising thereunder, the invalidity, termination,
nullification or suspension of the contract does not vitiate the arbitral obligations of the parties. The
arbitration clause is treated as separable from the remainder of the contract and provides the arbitration
tribunal with the authority to pass upon allegations of the invalidity of the contract as a whole. Not
infrequently an anti-suit injunction is issued in response to a claim of the invalidity of the contract that
includes provision for international arbitration, such as by allegations of corruption leading to the conclusion
of the contract. However, such an injunction cannot be reconciled with the principle of severability of the
arbitration clause.

Another of the fundamental principles of international arbitration in point is that of compétence de la

compétence. An international arbitral tribunal is the judge of its own competence. While its judgment on
jurisdiction may be subject to the review of a national court, a national court is not entitled to prevent or
preempt exercise of that judgment by the device of enjoining the arbitration itself.

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That is my broad brush picture of anti-suit injunction of the international arbitral process. The
contributions that follow will paint with more precision, and may depict circumstances—exceptional, in my
view—in which there is or may be legal ground for issuance of such an injunction. For example, where a
party has already litigated or arbitrated and lost, arguably it would be reasonable for a national court to
enjoin pursuance of arbitration of the same matter elsewhere. But even in such a case, one may ask whether
that is the optimum procedure, or whether it should rather be left to the arbitrators in the second jurisdiction
to dismiss the duplicative proceeding.

* Former Judge (1981–2000), Vice President (1994–97) and President (1997–2000) of the International
Court of Justice; President of the Administrative Tribunal of the International Monetary Fund since 1994;
Member of the ICSID Panel of Arbitrators and ICSID Panel of Conciliators; former Burling Professor of
International Law at Johns Hopkins University School of Advanced Studies.
The author wishes to thank the general counsel of the Permanent Court of Arbitration, Mrs. Judy
Freedberg, and the assistant legal counsel of the PCA, Mr. Devashish Krishan, for their research assistance.
[1] Nov. 18, 1983 ad hoc Award, Benteler v. Etat Belge, 1984 [BEL.] JOURN. TRIB. 230, 1989 REV. ARB.
339 (note by D. Hascher).

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