## Facts

- A Turkish contractor (Enka) entered a subcontract for construction work at a power plant in Russia.
- The subcontract contained a multi-tier dispute clause culminating in ICC arbitration seated in London, with proceedings in English.
- The subcontract did not include an express governing-law clause for the contract.
- A fire occurred at the plant, and the owner’s Russian insurer (Chubb Russia), as subrogee, brought proceedings in Russian courts against Enka and others asserting liability connected to the fire.
- Enka sued in England seeking a declaration that the dispute was subject to the arbitration agreement and an anti-suit injunction to restrain the Russian litigation.
- The trial court refused an injunction; the appellate court granted it; the insurer appealed to the Supreme Court.

## Issues

1. What law governs the validity and scope of an arbitration agreement when the contract lacks an express governing-law clause and the arbitration is seated in a different jurisdiction than the project location?
2. When, if at all, does an express or implied choice of law for the main contract also determine the law governing the arbitration clause?
3. When is it appropriate for the court of the arbitral seat to grant an anti-suit injunction restraining foreign court proceedings as a breach of an arbitration agreement?

## Decision

- The Supreme Court (majority) dismissed the appeal and upheld the anti-suit injunction restraining the Russian proceedings.
- The Court held that the law governing an arbitration agreement is determined by: (i) any express choice for the arbitration agreement; failing that, (ii) the parties’ chosen law for the main contract (express or implied) will generally also govern the arbitration agreement; failing that, (iii) the law with the closest connection, generally the law of the seat.
- Applying that framework, the Court found no express or implied choice of Russian law for the contract and held the arbitration agreement was governed by English law as the law of the London seat.
- Because the Russian proceedings were brought in breach of the arbitration agreement as governed by English law, the English courts as courts of the seat could grant injunctive relief absent strong reasons to refuse.

## Legal Principles

- The governing law of an arbitration agreement is determined by a hierarchy: express choice for the arbitration clause; otherwise the chosen law of the main contract (express or implied) generally carries over; otherwise the law of closest connection, usually the seat’s law.
- A general governing-law choice for the contract will ordinarily be treated as an implied choice for the arbitration agreement, even if the seat differs, unless there is a clear indication to the contrary.
- Where the contract contains no express or implied governing-law choice, the arbitration agreement is typically most closely connected with the law of the seat, reflecting the supervisory role of seat courts.
- Courts of the arbitral seat are normally the appropriate forum to restrain foreign proceedings that contravene an arbitration agreement, and may grant an anti-suit injunction unless strong reasons justify refusal.

## Conclusion

The Court confirmed a structured conflict-of-laws method for determining the law governing arbitration agreements and held that, absent any chosen governing law for the contract, a London-seated ICC arbitration clause was governed by English law, justifying an anti-suit injunction to stop Russian court proceedings brought in breach of that clause.


Enka Insaat Ve Sanayi A.S. v. OOO Ins. Co. Chubb, [2020] UKSC 38 (UK) (2020)