Sulamerica Cia Nacional de Seguros v Enesa

Appeal from Brazilian Insurance company. Insurance was for construction in Brazil. Arbitration clause included reference to exclusive jurisdiction of Brazilian courts; secondly there was mediation clause that said that in case of a dispute, parties should go to mediation and thirdly, that parties go to arbitrate in London.

Enesa sued in Brazilian Courts and argued that Sulamerica could not arbitrate in London because under Brazilian law, insured party must have consented to arbitration that was not the case here. Enesa, successfully obtained an order from Brazilian court to stop them arbitrating in London.

However, Sulamerica did not agree and started arbitration in London. They obtained injunction from English courts that would prevent Enesa to sue in Brazilian courts. Enesa appealed in English courts against the injunction, arguing that arbitration agreement should be governed by the law of Brazil because underlying contract was governed by the law of Brazil. We had reference to exclusive jurisdiction of Brazilian court – the contract matter is being performed in Brazil. Thus, under Brazilian law, injunction must have been invalidated.

Appeal was dismissed, it was stated that primary presumption was that substantive law of contract is the same as law that governs arbitration agreement UNLESS there is some contradictory evidence. English courts felt that parties wanted to arbitrate and they never agreed that the arbitration should only be permitted to be instigated by one party. If they apply, it would have been the outcome. So, in other words, it would have meant under Brazilian law that only Enesa would have had right to commence arbitration proceedings that was not the case here. Moreover, parties chose to arbitrate in London that was further indication that parties chose to arbitrate under English law.

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