Arbitration/Litigation Interface: The European Debate

Margaret Moses | January 1, 2014

In recent years, there has been a debate in the European Union over the need to provide a transparent and predictable interface between international arbitration and cross-border litigation. That debate has recently culminated in the issuance of the Recast Brussels Regulation (the Recast), effective January 10, 2015. However, the Recast has not provided a method to accomplish this interface because it does not prevent parallel proceedings. Parallel proceedings occur when a party that had agreed to arbitrate nonetheless goes to court while the other party proceeds with arbitration. These parallel proceedings undermine the effectiveness of arbitration because of increased cost, inefficiency, and delay, as well as the high risk of inconsistent judgments. Because of the global impact of international commercial arbitration, the significance of the European decision echoes beyond its borders. This Article discusses the background leading to the Recast, interpretive issues arising from the Recast—particularly in light of the explanatory Recital 12 found in the preamble to the Recast—as well as the need for a harmonized consensus on preventing parallel proceedings. It concludes by proposing various means for encouraging flexible solutions to the problem.