Enka v Chubb

Introduction

In Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb,1 the “ultimate question”2 for the court was whether to issue an anti-suit injunction to stop proceedings in Russia. In order to answer that question, however, it was necessary to determine and set out the proper approach which a court must take when faced with what might be termed, in the present context, the “Governing Law Question”, viz: what national law governs the validity and scope of the arbitration agreement when the law applicable to the contract containing it differs from the law of the seat of the arbitration? In Enka, the contract was governed by Russian law;3 London was the chosen seat.

The Supreme Court4 sharply divided on the answer to be given, likely reflecting the difficulty of the Governing Law Question. This note cannot, and does not, consider all of the points made by the Justices. Instead, it summarises the (majority of the) Supreme Court’s approach and answer to the Governing Law Question. It then provides some short analysis of the reasons which underpin that answer. That the Supreme Court has given a clear answer is to be welcomed but, reflecting the sharpness of the divide between majority and minority, the answer given will not commend itself to all.

Clearing the ground

Where an English court is asked to determine the law which governs a contract, it must normally apply the rules of the Rome I Regulation.5 Article 1(2)(e) thereof excludes