Enka Insaat Ve Sanayi AS v. OOO Insurance Co. Chubb

[2020] UKSC 38 (2020)

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Enka Insaat Ve Sanayi AS v. OOO Insurance Co. Chubb

United Kingdom Supreme Court
[2020] UKSC 38 (2020)

Facts

Turkish engineering company Enka Insaat Ve Sanayi AS (Enka) (plaintiff) was a subcontractor involved in building a power plant in Russia. The construction contract did not include a choice-of-law provision but did include an arbitration clause specifying that any disputes arising out of the contract would be determined through arbitration proceedings in London, England. In 2016, the power plant sustained serious damage in a fire. OOO Insurance Co. Chubb (Chubb Russia) (defendant), the power-plant owner’s insurer, paid the owner’s insurance claim based on the fire and assumed the owner’s rights to obtain compensation from parties who had been involved in the construction process, including Enka. Chubb Russia brought an action against Enka in a Russian court, but Enka responded by bringing an action against Chubb Russia in a United Kingdom High Court. Enka argued that Chubb Russia had violated the contract’s arbitration clause by bringing the Russian action and sought to enjoin Chubb Russia from continuing to litigate the Russian claim. The High Court dismissed Enka’s action, but the court of appeal reversed, holding that in the absence of a choice-of-law provision in the governing contract, the arbitration agreement must be governed by the law of the designated location of the arbitration proceedings. The court thus concluded that the arbitration agreement was governed by English law and that the Russian action must be enjoined. Chubb Russia appealed to the United Kingdom Supreme Court.

Rule of Law

Issue

Holding and Reasoning (Hamblen, Leggatt, J.J.)

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