Kruppa v Benedetti & Anor
2014
COMMERCIAL COURT
United Kingdom
CORAM
- MR JUSTICE COOKE
Areas of Law
- Alternative Dispute Resolution
- Contract Law
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
The case addressed whether a 'Governing Law and Jurisdiction' clause requiring an attempt at 'Swiss arbitration' before resorting to English courts constituted an 'arbitration agreement' under the Arbitration Act 1996. The court held that the clause did not mandate binding arbitration but merely suggested an attempt at arbitration, leading to the dismissal of the defendants' application to stay the proceedings.
Judgment
Mr Justice Cooke:
The defendants in this action apply to stay the proceedings pursuant to section 9 of the Arbitration Act 1996 . The sole question which arises is whether or not a “Governing Law and Jurisdiction” clause in the three material agreements (in identical terms) constitutes an “arbitration agreement” within the meaning of section 6(1) of that Act. By that sub-section “An arbitration agreement means an agreement to submit to arbitration present or future disputes (whether they are contractual or not).”
The relevant clause reads as follows:
“G overning law and jurisdiction
Laws of England and Wales. In the event of any dispute between the parties pursuant to this Agreement, the parties will endeavour to first resolve the matter through Swiss arbitration. Should a resolution not be forthcoming the courts of England shall have non-exclusive jurisdiction.”
I was referred to a large number of authorities in relation to different forms of dispute resolution clauses, none of which, it was accepted, assisted much in the construction of this clause but which illustrated principles which were said to be those upon which the court should proceed. It was accepted by Mr Paul Stanley QC, for the defendants, that if the reference in the second sentence of the clause to “Swiss arbitration” was in truth not a reference to arbitration at all, but to some other form of dispute resolution procedure, the court could not enforce such an alternative dispute resolution procedure. The simple question therefore was whether or not the clause did constitute an arbitration agreement within the meaning of the Act and many of the authorities cited did not therefore fall for consideration.
Mr Paul Sinclair, for the claimant, submitted that the authorities gave rise to the following propositions:
In a clause of this kind should be construed in the same way as any other clause in a contract, the aim being to ascertain the intention of the parties and what a reasonable person would have understood the parties to have meant, with all the relevant background knowledge that they had at the time.
Dispute resolution clauses can be arbitration agreements when the word “arbitration” is not used and need not be arbitration agreements even when the word is used.
Where a contract contains an exclusive jurisdiction clause and a mandatory arbitration clause, there is an assumption that the parties intend any dispute to be heard by the same tribunal and the court’s policy i